Petition for Writ of Certiorari — Paschal v. Didrickson

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> . Supreme Court, U.S

G1- bye FILED. |

No.

| OCT? 199)

OFFIGE OF THE cuss |

IN THE

Supreme Court of the United States

OCTOBER TERM, 1991

BONITA PASCHAL, DANIEL DODSON,

PAUL BUCASAS and all others similarly situated,

Petitioners,

Vv.

LOLETA DIDRICKSON, the Director of the Illinois Department

of Employment Security; STELLA CUTHBERT, the Commissioner

of the Illinois Department of Employment Security;

LYNN MARTIN, the Secretary of the United States Department of

Labor; ROBERTS T. JONES, the Assistant Secretary for the

Employment and Training Division of the United States Department

of Labor; and the UNITED STATES DEPARTMENT OF LABOR,

Respondents.

Petition for Writ of Certiorari to the United

States Court of Appeals for the Seventh Circuit

PETITION FOR WRIT OF CERTIORARI

Jeffrey B. Gilbert

Counsel of Record

Karyn Glass

Robert E. Lehrer

Legal Assistance Foundation of Chicago

343 South Dearborn Street

Chicago, Illinois 60604

(312) 341-1070

Attorneys for Petitioners

Midwest Law Printing Co., Chicago 60611, (312) 321-0220

QUESTIONS PRESENTED

1. In a case challenging the conduct

of state officials as violative of the Due

Process Clause of the Fourteenth Amendment

to the United State Constitution, does the

Eleventh Amendment to the United States

Constitution bar a judgment for restitution

of funds that would be fully paid by the

federal government?

2. In a case challenging the conduct

of state officials as violative of the Due

Process Clause of the Fourteenth Amendment

to the United States Constitution, does the

Eleventh Amendment to the United States

Constitution bar a judgment for restitution

of funds that are segregated by law from the

state's general revenues?

Ds Should Hans v. Louisiana, 134 U.S.

1 (1890) and the reach of the Eleventh

Amendment to the United States Constitution

be confined to suits in which states or their

officials are alleged to have violated state

law, thereby limiting the jurisdictional bar

against such suits in federal court to state

law claims but preserving a common law

sovereign immunity defense for states and

their officials against federal claims?

PARTIES TO THE PROCEEDINGS

A. Petitioners are:

1. Bonita Paschal, Daniel Dodson

on their own behalf and on behalf of the

certified plaintiff class they represent,

defined as: "all persons who have made, are

making or will make claims to the Illinois

Department of Employment Security ("IDES")

for federal supplemental compensation pursuant

to Pub. L. 97-248 (as amended) and who have

been, are being, or will be denied federal

supplemental compensation by IDES on the

ground that they have been unavailable for

and/or failed actively to seek work", see

Partial Settlement Order (App. 518)‘; and

2. Paul Bucasas on his own behalf

and on behalf of the certified plaintiff class

he represents, defined as: "all persons who

have made, are making or will make claims to

IDES for extended benefits pursuant to the

+ We cite the separate appendix file

herewith as "App.".

iii

Federal-State Extended Unemployment

Compensation Act of 1970, 26 U.S.C. §

3304(a) (11), note Pub. L. 91-373, §§ 201-207

(as amended), and who have been, are being

or will be denied extended benefits by IDES

on the ground that they have been unavailable

for and/or failed actively to seek work," see

Partial Settlement Order (App. 518) .?

B. Respondents are:

1. The Director of IDES in her

official capacity, a position now occupied

by Loleta Didrickson; the Commissioner of IDES

in her official capacity, a position now

occupied by Stella Cuthbert; and

2. The Secretary of the United

States Department of Labor, in her official

capacity, a position now occupied by Lynn

2 We refer to Bonita Paschal, Daniel

Dodson and the class of persons who applied

for FSC benefits as the "FSC claimants;" Paul

Bucasas and the class of persons who applied

for EB as the "EB claimants;" and all three

of the named plaintiffs and the members of

both classes as the "claimants."

Martin; the Assistant Secretary for the

Employment and Training Division of the United

States Department of Labor, a position now

occupied by Roberts T. Jones; and the United

States Department of Labor.’

3 We refer to the Director and the

Commissioner of the Illinois Department of

Employment Security as "IDES;" and the

Secretary of the United States Department of

Labor, the Assistant Secretary for the

Employment and Training Division of the United

States Department of Labor, and the United

States Department of Labor as "USDOL."

TABLE OF CONTENTS

OPINIONS BELOW ........

JURISDICTION ......2.446-s.

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED ..

STATEMENT OF THE CASE .....

I. THE STATUTORY FRAMEWORK .

A. The Two Unemployment

Insurance Programs At

Issue oe © @

B. The Funding Of Unem-

ployment Insurance

MOMBESGS « « oc ec

II. THE PETITIONERS' CLAIMS

AND THE DISPOSITION OF

THE CASE . . «© © © « «

REASONS FOR GRANTING THE

PETITION a ee ae a

I. THE SEVENTH CIRCUIT'S

RULING CONFLICTS WITH

TWO LINES OF DECISIONS IN

OTHER CIRCUITS

II. THE SEVENTH CIRCUIT'S

RULING DECIDES AN IMPORTANT

QUESTION OF CONSTITUTIONAL

LAW IN A WAY THAT CONFLICTS

WITH APPLICABLE DECISIONS

OF THIS COURT

PAGE

III. HANS v. LOUISTANA SHOULD

BE CONFINED TO CASES IN

WHICH STATES ARE ALLEGED

TO HAVE VIOLATED STATE

LAW BECAUSE THE PLAINTIFF

IN HANS IN FACT PRESENTED

ONLY A STATE LAW CLAIM,

AND BECAUSE THAT READING

OF HANS WOULD VINDICATE

THE SUPREMACY OF FEDERAL

LAW AND CURE THE

INCOHERENCY THAT NOW

ATTENDS SOVEREIGN IMMUNITY

JURISPRUDENCE ....+ + «+ « 32

CONCLUSION ...-+-++ 26¢ © «© « « 52

vil

CASES:

Vv , 612 F. Supp.

223 (D.C. N.C. 1985), aff'd,

792 F.2d 451 (4th Cir. 1986),

cert. denied, 479 U.S. 1091

SGT ek & 6 we 8

Janklow, 676 F.2d 1177

(8th Cir. 1982) ..+ +s «

Smith, 110 S. Ct. 2323

(1990) ... - oN Se er ee ee

Scanlon, 473 U.S. 234

(1985) . . «© © © © © © © «

. . . . . . . . . . . ad . 41-2,

Vv , 472 U.S. 115

tc TS ¢ ¢ ¢ 6 2 « « «3s

v. Whi , 865 F.2d

1395 (3d Cir. 1989), cert

denied, 492 U.S. 920

(1989) . « «© «© «© © « »«

Vv it s

ulture,

490 F.2d 718 (D.C. 1973),

cert. denied, 414 U.S. 1104

1973) —— . es @ 6 ¢ =

Blake v. Kline, 612 F.2d 718

(3d Cir. 1979), cert.

denied, 447 U.S. 921 (1980)

viii

PAGE (S)

49-50

Vv ive Vi :

111 S. Ct. 2578 (1991) 34, 43, 44

, 487

U.S. 879 (1988) . 19

, 660 F.2d

pom (4th Cir. 1981),

denied, 459 U.S. 1150

755; are i oP 24

California v. Java, 402 U.S.

[one 2 «¢ © & & & 8 6 9

Vv. wling, 562 F. Supp.

1012 (N.D. Ill. 1983) . «@ 14

Vv. , 479 F.2d 1084

(3d Cir. 1973), cert. denied,

414 U.S. 1094, 1103 (1973) 23

Chisholm v. Georgia, 2 Dall.

See Cuvens 6 ee 6 oe 40

Vv. aprotnik,

485 U.S 112 (1988) ...+.-. ; 49

Wi , 554 F. Supp.

539 (D. Vt. 1982), aff'd

‘Rou » ver

F.2d 57 (2d Cir. 1983) . 24

Vv , 863 F.2d

1241 (6th Cir. 1988),

cert. denied, 110 S. Ct.

835 (1990). . 24

Dellmuth v. Muth, 491 U.S. 223

(1989) ° 35

Edelman v. Jordan, 415 U.S.

651 (1974) ae ee ee . 2 a

eda” eX de ae 33, 43, 46-7

Esparza v. Valdez, 862 F.2d

788 (10th Cir. 1988), cert.

denied, 492 U.S. 905

ee. . 6 «6 #6 6&6 le els 26-7

V. sey, 487 U.S. 131

Department of Labor, 798

F.2d 1371 (llth Cir. 1986),

cert. denied, 479 U.S. 1072

+ 3) Pre ee ee ee ee ee 27

Fitzpatrick v. Bitzer, 427 U.S.

Gan Cewrer «© ce te eo 6 8 ee 8 HM, 43968

Foggs v. Block, 722 F.2d 933

(lst Cir. 1983), rev'd sub.

nom., Atkins v. Parker, 472

U.S. 115 (19808) ... «oe 23

104 Ill. 2d 383, 472 N.E.2d

434 (1984) > ae a eee 13

Great Northern Life Ins. Co. v.

Read, 322 U.S. 47 (1944) ... 20

Griffen v. Coler, 667 F. Supp.

bees 46.8. Beas S006) 4 se 31

Hans v. Louisiana, 134 U.S. 1

(3690) . «© «© © © © © © « « 33°51 passin

Howlett v. Rose, 110 S. Ct. 2430

Ct . : Pa ee ae ee ee ee 46

a isti =

Georgia, 111 S. Ct. 2439

[ane 6 6 © 6© 6 &© 6 © 6 8 6% 30, Sa

Jenkins v. Bowling, 691 F.2d 1225

i ee eg eo a me

Kennecott Copper Corp. v. State

Tax Comm'n, 327 U.S. 573

TS ar kg

Klaips v. Bergland, 715 F.2d 477

[ame Gal. BOOS) 2s 0 ec ew ee

Lake Country Estates, Inc. v.

S60 G.8. BOR CANTO) tc te

Louisville & Nashville R. Co. v.

Mottley, 211 U.S. 149 (1908)

Toll Highway Authority, 567

F.2d 323 (7th Cir. 1977)...

Missouri v. Jenkins, 491 U.S.

a Seen. com « «© «© © © a

Monell v. New York City Dep't.

of Social Services, 436 U.S.

a Can 4 Go a 64 ee

Mt. Healthy City Board of

Education v. Doyle, 429 U.S.

ee re ee en ee we

Nort) Pipelj . bie

: M t) Pj Line

Company, 458 U.S. 50 (1982)

Payne v. Tennessee, 111 S. Ct.

gt ae

U.S. 89 (1984) . . .-..- 21,

oe ee © © © ow ow 6 ww 0 tOKGQ,

Vv. j i OF

491 U.S. 1 (1989) .

. . . . . . . . - . . . 43,

S. Ct. 1868 (1990) ..... -»

Ross v. Horn, 598 F.2d 1312

a a See. 5 ke ee 8 8

, 519 F.2d 257

(Sth Cir. 1975) ...-«« «

Smith v. Allwright, 321 U.S. 649

(1944) . * *. >. . * . _ . . * .

U.S. 772 (1981) . «© «© « «© « «

Verlinden B. V. v. Central Bank

ia, 461 U.S. 480

(1983) ET ee te tg ae ee

Welch v. Texas State Dep't. of

Highways & Public Transpor-

tation, 483 U.S. 468 (1987)

. . . . . . . . . . . . . . 44,

Will v. Michigan Dept. of State

Police, 491 U.S. 58 (1989) .

” ,

ee yee |

Missouri, 479 U.S. 511

SE 4S ee eee

xil

28, 34,

41, 47

35, 42,

47, 49

6, 10

38, 41

35, 42,

47, 48

CONSTITUTIONAL PROVISIONS AND

STATUTES:

U.S. CONST. art. I. § 10 ...

U.S. CONST. art. III, § 2

U.S. CONST. art. VI, Gl. 2

U.S. CONST. amend. XI .....

U.S. CONST. amend. XIV, § 1,

Gis Bs 6 6 © ¢ 6 6 es a

Federal-State Extended Unemploy-

ment Compensation Act of 1970,

26 U.S.C. § 3304 (1988), note

Pub. L. 91-373 (as amended),

$6 201 oF gpm. . s+ @ eo

§ 202(a) (1)

§ 202(a) (2)

§ 202(a) (3) (A) (ii)

§ 202(a)(3)(E) ..

§ SORCRI(A) » 2 ew ts

§ 203(a) (1)

§ 203(a) (2)

§ 203(c)

§ 203(d)

§ 203(d) (1)

§ 203(d) (2)

§ 204

Xill

passim

Federal Supplemental Compensa-

tion Act of 1982, 26 U.S.C.

§ 3304 (1988), note Pub. L.

97-248 (as amended), §§ 601

et seq. <= 6 =e 6 ss «2 6 & @ 4-5,

§ 602(b) (1)

§ 602(d) (2)

eo: e

eee ee eee

ee En ae eee

Federal Unemployment Tax Act,

26 U.S.C. §§ 3301 et seg.

(1988 and Supp. I 1989)

26 U.S.C. § 3301

oe Se lr

26 U.S.C. § 3302(c)(3) .. 10,

96 U.8.C. § 3803 ...

26 U.S.C. § 3304

26 U.S.C. § 3304(a)(3) .. 9,

26 U.S.C. § 3304(a) (4)

26 U.S.C. § 3304(a) (9) (A)

26 U.S.C. § 3304(c)

Xiv

Social Security Act §§ 301

et seg. (1988), 42 U.S.C.

oe ree lg kt 5

§ 301, 42 U.S.C. § 501 .. 9, 11

§ 302, 42 U.S.C. § 502 .. 9, 10

§ 303, 42 U.S.C. § 503... 10

§ 303(a), 42 U.S.C.

DE cg gk ee ee 11

§ 303(a) (3), 42 U.S.C.

§ 503(a)(3) .« «© « « « 14

§ 303(a) (4), 42 U.S.C.

BS Gepemeees wk tt te 11

§ 303(a) (5), 42 U.S.C.

Eee eee 11

Social Security Act §§ 961 et

seq., 42 U.S.C. §§ 1101 et

seg. (1988) 5

§ 901(c) (1) (A) (1),

42 U.S.C. § 1101(c)-

(1) (A) (1) °° 8, 9

§ 903(c)(2), 42 U.S.C.

S&S BAGS(G) (8) «§ «© « © @ i)

§ 904, 42 U.S.C. § 1104. . i)

28 U.S.C. § 1254(1) (1988 and

Supp. I 1989) . . «© « «© « « 3

26 U.S.C. § 1333 (3968) .. .4, 15, 38, 40

26 U.S.C. 4337 (1988) . « © «© « « 15

28 U.S.C. § 1343(3) (1988) se 6 « 15

28 U.S.C.S. § 1367 (Supp. 1991)

Fed. R. Civ. P.

(1966) . « «

41(b), 28 U.S.C.

42 U.S.C. § 1983 (1988) ....

Illinois Unemployment Insurance

Act §§ 100 et seg., Ill. Rev.

Stat. 44 300 et seg. . «. -

§ 403.B,

ch. 48

Ill. Rev. Stat.

» 4 463.Be 20 2

§ 409., Ill. Rev. Stat.

ch. 48, « 409... . . .

§ 409.A.1., Ill. Rev. Stat.

ch. 48

§ 409.A.2

ch. 48

§ 409.A.3

ch. 48

§ 409.C.,

ch. 48

§ 409.F.,

ch. 48

§ 2100.,

ch. 48

§ 2100.A.

ch. 48

6 2aGk«.

ch. 48

§ 2103.,

ch. 48

, q 409.A.1. . .

-, Ill. Rev. Stat.

, 4 409.A.2. ..

-, Ill. Rev. Stat.

, § 409.A.3. . .

Ill. Rev. Stat.

» 4 409.Ce 2 ©

Ill. Rev. Stat.

» F 4QB.Fe 2 2

Ill. Rev. Stat.

’ q 660. . . . .

, Ill. Rev. Stat.

, 4 660.A. ..

Ill. Rev. Stat.

» FY 661. « « « «

Ill. Rev. Stat.

, € 663. . . - .

xvi

§ 2900., Ill. Rev. Stat. .

on. 48, 4 790. . . - « 12, 20

OTHER AUTHORITIES:

Burnham, Taming the Eleventh

Wi Vv ulin

Hans v. Louisiana, 40 Case

W. Res. L.Rev. 931 (1990) » « 37-8,

: <= -» » © © © © « e 48, 49

Jackson, The Supreme Court,

t, and

State Sovereign Immunity,

98 Yale L. J. 1 (1988) .... 48

XxVii

No.

IN THE

SUPREME COURT OF THE UNITED STATES

October Term 1991

Bonita Paschal, Daniel Dodson, Paul Bucasas

and all others similarly situated,

Petitioners,

Vv.

Loleta Didrickson, the Director of the

Illinois Department of Employment Security;

Stella Cuthbert, the Commissioner of the

Illinois Department of Employment Security;

Lynn Martin, the Secretary of the United

States Department of Labor; Roberts T. Jones,

the Assistant Secretary for the Employment

and Training Division of the United States

Department of Labor; and the United States

Department of Labor,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

The petitioners, Bonita Paschal, Daniel

Dodson and Paul Bucasas, on behalf of

themselves and the plaintiff classes they

represent, petition for a writ of certiorari

to review the judgment and opinion of the

United States Court of Appeals for the Seventh

Circuit in this case.

OPINIONS BELOW

Petitioners seek review of the court of

appeals' judgment and opinion below holding

that restitution of unemployment insurance

benefits that the petitioners lost because

of IDES's unconstitutional conduct is barred

by the Eleventh Amendment to the United States

Constitution, U.S. CONST. amend. XI. That

judgment and opinion (App. 1) is reported at

936 F.2d 940. The court of appeal's earlier

opinion on the merits of the petitioners’

Claims (App. 38) - as to which petitioners

do not seek review here - is reported at 843

F.2d 967. The opinion of the district court

on the Eleventh Amendment issue (App. 24),

which was affirmed by the court of appeals,

is reported at 741 F. Supp. 740. The district

court's opinion on the merits of the

petitioners' claims (App. 133), which was

reversed, in part, by the court of appeals

is reported at 625 F. Supp. 619.

JURISDICTION

The judgment of the court of appeals was

entered on July 9, 1991. No petition for

rehearing was filed. The jurisdiction of this

Court is invoked under 28 U.S.C. § 1254(1).

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

Article III, Section 2 of the United

States Constitution provides, in relevant

part, that:

The judicial power shall extend to all

Cases, in Law and Equity, arising under

this Constitution, the Laws of the United

States, and Treaties made, or which shall

be made, under their Authority; ... to

Controversies ... between a State and

Citizens of another State; ... and

between a State ... and foreign States,

Citizens or Subjects.

II. The Supremacy Clause of the United States

Constitution, U.S. CONST. art. VI, cl. 2,

provides, in relevant part, that:

This Constitution, and the Laws of the

United States which shall be made in

Pursuance thereof ... shall be the

supreme Law of the Land; and the Judges

in every State shall be bound thereby,

any Thing in the Constitution or laws

of any State to the Contrary

notwithstanding.

III. The Eleventh Amendment to the United

States Constitution, U.S. CONST. amend. XI,

provides 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.

IV. 28 U.S.C. § 1331 provides that:

The district courts shall have original

jurisdiction of alli civil actions ...

aris{ing] under the Constitution, laws,

or treaties of the United States.

V. The full texts of the other statutory

provisions involved in this case are

voluminous and, therefore, are included in

a separate appendix. Those provisions are:

The Federal Unemployment Tax Act, 26 U.S.C.

§§ 3301-3304 (1988 and Supp. I 1989); The

Federal-State Extended Unemployment

Compensation Act of 1970, 26 U.S.C. § 3304

(1988), note Pub. L. 91-373, §§ 201-207 (as

amendedgd) ; The Federal Supplemental

Compensation Act of 1982, 26 U.S.C. § 3304

(1988), note Pub. L. 97-248, §§ 601-606 (as

amended) ; The Social Security Act, §§ 301-303,

42 U.S.C. §§ 501-503 (1988); The Social

Security Act, §§ 901-905, 42 U.S.C. §§ 1101-

1105 (1988); The Illinois Unemployment

Insurance Act, §§ 403.B., 409., 2100., 2101.,

2103. and 2900., Ill. Rev. Stat. ch. 48, 44

403.B., 409., 660., 661., 663., 790. (1990).

STATEMENT OF THE CASE

I. THE STATUTORY FRAMEWORK

A. The Two Unemployment Insurance

Programs At Issue

This case concerns two types of

unemployment insurance benefits. The first

is extended benefits ("EB"). See The Federal-

State Extended Unemployment Compensation Act

of 1970 ("EUCA"), 26 U.S.C. § 3304, note Pub.

L. 91-373, §§ 201-207 (as amended) (App. 289-

315); Section 409 of the Illinois Unemployment

Compensation Act ("IUIA"), Ill. Rev. Stat.

ch. 48, ¢ 409. (App. 472). The second is

federal supplemental compensation ("FSC")

benefits. See The Federal Supplemental

Compensation Act of 1982 ("FSC Act"), 26

U.S.C. § 3304, note Pub. L. 97-248, §§ 601-606

(as amended) (App. 318-341).

Unemployment insurance is "a cooperative

federal-state program of benefits to

unemployed workers." St. Martin Evangelical

Lutheran Church v. South Dakota, 451 U.S. 772,

775 (1981). In Illinois, claimants can

receive a maximum of 26 weeks of regular

benefits. Ill. Rev. Stat. ch. 48, 4 403.B.

(App. 471). During sufficiently severe

recessions, however, EUCA provides up to 13

additional weeks of EB to individuals who have

exhausted their rights to receive regular

benefits. EUCA, § 202(a) (1), (b)(1) (App.

289,299); Ill. Rev. Stat. ch. 48, 44 409.C.,

F. (App. 478, 483). EB are only available

in a state when it is experiencing a recession

severe enough to trigger an "indicator" that

switches EB "on" in that state. EUCA, §

203(a) (1), (c), (a) (1) (App. 302, 303-304);

Ill. Rev. Stat. ch. 48, 9 409.A.1., 2. (App.

472-473). Conversely, when economic

conditions in a state reach a point prescribed

by EUCA, EB switches "gee." EUCA, §

203(a) (2), (a)(2) (App. 302, 304-305); Ill.

Rev. Stat. ch. 48, § 409.A.1., 3. (App. 472,

473-474). EB has not been "on" in Illinois

since June, 1983.

The FSC program was a temporary program

that provided additional weeks of unemployment

insurance for individuals who had exhausted

both regular benefits and any EB that they

were entitled to receive. See FSC Act, §

602(b) (1) (App. 318-319). Except to exhaust

pending claims, FSC benefits have not been

payable for any week beginning after March

31, 1985. FSC Act, § 602(f)(2) (App. 334-

335).

B. The Funding Of Unemployment

Insurance Benefits

The first two questions presented for

review ask whether the Eleventh Amendment to

the United States Constitution bars a federal

court from ordering restitution of EB and FSC

benefits even though such relief would not

"come from the general revenues of the State

of Illinois." Edelman v. Jordan, 415 U.S.

651, 665 (1974). FSC benefits are funded

entirely by the federal government. For each

state that entered into an agreement to

participate in the FSC program, the federal

government advanced or reimbursed 100 percent

of the FSC paid to individuals by the state.

FSC Act, §§ 603(a), 604 (App. 336,338). In

addition, the FSC Act authorized funds to be

appropriated "for purposes of assisting the

States ... in meeting the costs of the

administration of ... [the Fsc program]."

FSC Act, § 604(c) (App. 339-440); see 42

U.S.C. § 1101(c) (1) (A) (i) (App. 429-430).

One half of EB are also reimbursed from

the federal treasury. See EUCA, § 204 (App.

306).° Like all of regular unemployment

insurance benefits, the other half of EB are

paid from the unemployment trust fund. 42

U.S.C. § 1104 (App. 457); 26 U.S.C. §

3304(a)(3) (App. 266-267); see California v.

Java, 402 U.S. 121, 126 (1971). But even the

money in the unemployment trust fund is not

the state's money.

“ The federal government also assists

the states in meeting their costs of

administering the EB program. See 42 U.S.C.

§§ 501, 502, 1101(c) (1) (A) (i), 1193(c) (2),

Ill. Rev. Stat. ch. 48, 4 663. (App. 399, 429-

430, 453, 512). If federal money is

insufficient to cover administrative costs

for any of IDES's unemployment insurance

programs, additional funds are available to

IDES in its "special administrative account"

which is comprised of interest and penalties

collected from employers who fail to make

timely contributions. Ill. Rev. Stat. ch.

48, 4 661. (App. 506). Like all of the money

used in the state's unemployment insurance

program, the federal funds for administering

the program and the funds in the special

administrative account are kept "separate and

apart from all other State moneys." Id. at

€ 663. (App. 512).

The trust fund is financed by a federal

excise tax paid by the nation's employers

based on the total wages each paid to its

employees. Federal Unemployment Insurance

Tax Act ("FUTA"), 26 U.S.C. § 3301 (App. 216);

St. Martin, 451 U.S. at 775 n. 3. Employers

do not normally pay their whole FUTA tax,

however, because those who pay contributions

to a state unemployment insurance program that

complies with federal law® enjoy a credit

against their federal unemployment’ tax

obligations. 26 U.S.C. §§ 3302, 3303 (App.

216, 249). Under the federal law, the

contributions collected by IDES are

immediately turned over to the federal

government.® 26 U.S.C. § 3304(a) (3) (App.

° The Secretary of Labor certifies

whether each state has complied with FUTA.

26 U.S.C. § 3304 (App. 266). See 42 U.S.c.

§§ 502, 503 (App. 399, 401).

* A detailed description of the accounts

used to transfer contributions to and from

IDES and the federal unemployment trust fund

is described in the court of appeals' opinion

(App. 7-13).

266-267); 42 U.S.C. § 503(a)(4) (App. 402);

Ill. Rev. Stat. ch. 48, 4 660. (App. 494).

And, though they are then credited to

Illinois' account in the unemployment trust

fund, IDES may requisition them "solely for

the payment of benefits" or related expenses.

26 U.S.C. § 3304(a) (4) (App. 267); 42 U.S.C.

§ 503(a)(5) (App. 402-404); Ill. Rev. Stat.

ch. 48, 4 660. (App. 494). Moreover, to

assure that employers in Illinois receive FUTA

credit, IDES must comply with all federal

requirements governing the unemployment

insurance programs. 42 U.S.C. §§ 501, 503 (a)

(App. 399, 401-406); 26 U.S.C. §§ 3302(c) (3),

3304(c) (App. 225-227, 284-286). Thus,

Illinois merely acts as the _ federal

government's agent for collecting and

dispersing part of the revenues necessary to

operate the country's unemployment insurance

progran.

Even if the money in the federal

unemployment trust fund could properly be

characterized as Illinois' money, it is not

the state's general revenues. All money used

by IDES for payment of benefits or for

administration of its unemployment insurance

program must be kept "separate and apart from

all public moneys or funds of th{e] State."

Ill. Rev. Stat. ch. 48, 4q 660.A., 663. (App.

495-96, 513); see id. | 660.A. (App. 500,

502). And Illinois assures both that the

money in the accounts that it uses to fund

its unemployment insurance program "shall not

be commingled with other State funds," id.

at 4 660.A. (App. 502), and that those

accounts are "administered by the Director

[of IDES] exclusively for the purposes of...

(the IUIA]." Id. at App. 496. Moreover, the

state's general revenues could never be used

to pay unemployment insurance benefits because

"(tjhe monies payable under [the IUIA}

Shall be the sole and exclusive source for

the payment of benefits payable under [that

Act)." Id. at 44 790. (App. 6517).

Accordingly, the Illinois Supreme Court has

repeatedly "reject(ed] th{e] argument ... that

the enforced contributions made under the

[IUIA] should be recognized as a [state] tax

rather than an insurance program." Garland

v. Department of Labor, 104 I1l. 2d 383, 390-

92, 472 N.E.2d 434, 437 (1984) (collecting

authorities).

II. THE PETITIONERS' CLAIMS AND THE

DISPOSITION OF THE CASE BELOW

Petitioners are Illinois citizens who

represent two classes of unemployment

insurance claimants: those who filed claims

for EB with IDES, and those who filed claims

for FSC with IDES. The petitioners brought

this case pursuant to 42 U.S.C. § 1983 to

challenge policies and practices that IDES

used to determine whether EB and FSC claimants

had “actively engaged in seeking work" as

required by both BUCA, § 202(a) (3) (A) (il),

(E) (App. 296), and the FSC Act, § 602(d) (2)

(App. 321). As relevant here, the petitioners

claimed that IDES violated the Due Process

Clause of the Fourteenth Amendment to the

United States Constitution, U.S. CONST. amend.

XIV, sec. 1, cl. 3, and the "fair hearing"

Clause of Section 303(a)(3) of the Social

Security Act’, 42 U.S.C. § 503(a) (3) (App.

403).

’ The "fair hearing" clause requires

that state unemployment insurance statutes

provide an "(o)pportunity for fair hearing,

before an impartial tribunal, for all

individuals whose claims for unemployment

compensation are denied." 42 U.S.C. §

503(a)(3) (App. 402). Like other federal

courts, the Seventh Circuit in this case

treated the "fair hearing" requirement as one

"tested by the same standards as

constitutional due process." App. 98 (quoting

Vv , 562 F. Supp. 1012, 1020

(N. D. Ill. 1983) (citing Ross v. Horn, 598

F.2d 1312, 1318 n.4 (3d Cir. 1979)). This

appeal raises questions about the relief

available for violations of the fair hearing

and due process provisions, but it does not

present any question about whether those two

provisions are tested by the same standards.

For convenience, therefore, we use the term

"due process" to mean both the statutory fair

hearing requirement and the constitutional

due process requirement.

The petitioners invoked the district

court's jurisdiction under 28 U.S.C. §§ 1331,

1337, 1343(3). In the earlier appeal, the

court of appeals affirmed the district court's

holding that it had jurisdiction over the

dispute under 28 U.S.C. § 1331. App. 68-74.

After the district judge dismissed the

case under Fed. R. Civ. P. 41(b), App. 133-

215, the court of appeals reversed, in part,

holding that petitioners had presented

sufficient evidence to prove that IDES had

violated the claimants' due process rights

by giving them inadequate notice of their work

search responsibilities and of the issues to

be raised at the hearings at which the

claimants' compliance with the work search

requirements were adjudicated. App. 99-116.

"Because the district court terminated the

trial after the plaintiffs presented their

case, [the court of appeals] remand (ed) to

give the defendants an opportunity to rebut

the plaintiffs' evidence...." id. at App.

115.

The case was not retried, however.

Instead, the parties entered into a Partial

Settlement Order. App. 518-22. The

settlement is "partial" in that it provides

only prospective relief and only for the EB

Claimants. App. 525-529. No prospective

relief was provided to the FSC Claimants,

because FSC was paid pursuant to a temporary

program that has ended. FSC Act, § 602 (f) (2)

(App. 334-335). And even the prospective

relief for the EB program is contingent

because the EB program lies dormant until the

program is triggered "on" by adverse economic

conditions. See EUCA, § 203(d) (App. 303-

305).

The Partial Settlement Order also

provided, however, that the parties would

litigate questions regarding petitioners'

remaining Claims for retroactive relief. App

530-531.° After the district judge approved

the settlement, IDES moved to dismiss those

claims on the ground that the Eleventh

Amendment to the United States Constitution,

U.S. CONST. amend. XI, deprives a federal

court of the jurisdiction to award the

claimants retroactive relief. The district

court granted IDES's motion holding that the

case was controlled by Edelman v. Jordan, 415

U.S. 651 (1974) even though a judgment for

unemployment insurance benefits would not

affect the state's general revenues and, at

least as to FSC benefits, a judgment would

be wholly paid by the federal government.

App. 24-37. The district judge reasoned that

since "[r]jetroactive relief would bind the

state in its role as the sovereign," it did

8 Specifically, petitioners sought "a

declaratory judgment, payment of lost EB and

FSC benefits, re-adjudication of their claims

to EB and/or FSC, notice relief, and/or such

other retroactive relief as the [District]

Court would allow." Partial Settlement Order

q IV.A.2. (App. 530-531).

not matter "(t]jhat Illinois could recoup the

outlay from someone else...." Id at App.

32.

The district court "enter{ed] a final

judgment approving the {partial} consent

decree and otherwise dismissing the complaint

on the basis of the eleventh amendment." Id.

at App. 37. On petitioners' appeal, the court

of appeals affirmed. Id at App. 22-23. The

case, therefore, comes to this Court from a

final order.

The court of appeals rejected tie

teaching of what it characterized as

"admittedly ample authority that recognizes

that a lawsuit is not against the sovereign

when the relief has no impact upon the state

itself." App. 15. Instead, the court of

appeals "preferf{red] an approach that

disregards the source of state funds" because,

it said, to consider the source of the funds,

"forces courts ... to determine whether the

defendant department or subdivision is indeed

'the state.'" Id. at App. 18.

The court of appeals acknowledged not

only that the federal treasury pays for all

of FSC and one half of EB, id. at App. 11-12,

but also that, since the other half of EB is

financed from the unemployment trust fund,

all of EB is "financed entirely with federal

funds." Id. at App. 6. The court of appeals

also acknowledged that the federal government

assists states in paying the costs of

administering those programs. Id. at App.

12-13. Furthermore, since the federal

government has waived its sovereign immunity

against suits for such expenses, it is

amenable to suits by states seeking

reimbursement of these funds. Bowen v.

Massachusetts, 487 U.S. 879 (1988).

Nonetheless, the court of appeals held that

"cijn an era of mandatory budget reduction

and rising unemployment rates, there is no

guarantee that the federal government will

continue to be 'Johnny-on-the-spot' with ready

cash in hand." App. 19.

The court of appeals relied on this

Court's decisions in Kennecott Copper Corp.

v. State Tax Comm'n, 327 U.S. 573 (1946) and

Great Northern Life Ins. Co. v. Read, 322 U.S.

47 (1944), which concerned state tax revenue

destined for the states' general revenues but

separated from them while a dispute concerning

the assessments was resolved. App. 19-20;

see Kennecott Copper, 327 U.S. at 576; Great

Northern Life Ins. Co., 322 U.S. at 53. In

contrast, the funds segregated for payment

of unemployment insurance in Illinois are "the

scle and exclusive source for the payment of

{unemployment insurance] benefits." Il]. Rev.

Stat. ch. 48, 4 790. (App. 517). Therefore,

while judgments against the states in the

cited cases would have diminished their

general revenues, a judgment ordering payment

of unemployment insurance benefits from IDES

could never affect Illinois' general revenues.

The court of appeals acknowledged that

this Court's decision in Pennhurst State

School & Hospital v. Halderman, 465 U.S. 89

(1984) “recognizes a need to balance the

supremacy of federal law against’ the

constitutional immunity of the states." App.

21. It also acknowledged, implicitly, that,

since the EB program will trigger "on" again

only if economic conditions in Illinois

deteriorate substantially and the FSC program

is now defunct, restitution of EB is the

principle, and restitution of FSC is the only

means by which the individuals in the two

respective groups can vindicate their federal

rights. Id. at App. 21.

The court of appeals characterized "(t]he

question {it was] asked to resolve ... [as]

whether the accrued unemployment compensation

benefits sought here will have to be paid out

of {the general revenues of the state]." Id.

App. 5-6. The court of appeals then

acknowledged that restitution of EB and FSC

would not "inevitably come from the general

revenues of the State of Illinois," Edelman,

415 U.S. at 665, or indeed, from the state's

revenues at all. App. 11-14. Nonetheless,

it held that the claimants' interest in

"seeking vindication of their federal rights

through a retroactive damage award ... is

insufficient to override the command of the

eleventh amendment." Id. at App. 22.

REASONS FOR GRANTING THE PETITION

I. THE SEVENTH CIRCUIT'S RULING CONFLICTS

WITH TWO LINES OF DECISIONS IN OTHER

CIRCUITS

This case presents this Court with an

opportunity to resolve two conflicts among

the courts of appeal as to the scope of the

immunity state officials enjoy under the

Eleventh Amendment to the United States

Constitution.

A. The circuits are split as to whether

judgments for those public benefits which are

fully funded by the federal government but

paid through programs administered by the

states, are barred by the Eleventh Amendment.

The First, Third, Tenth and the D.C. Circuits

hold that "retroactive relief {is available]

against [a state agency] at least to the

extent that [the agency] will be reimbursed

by the United States." Bennett v. White, 865

F.2d 1395, 1408 (3d Cir. 1989), cert. denied,

492 U.S. 920 (1989). Accord, Foggs v. Block,

722 F.2d 933, 941 n.6 (1st Cir. 1983), rev'd

F.2d 477, 484 (10th Cir. 1983); Bermudez v.

United States Department of Agriculture, 490

F.2d 718 (D.C. 1973), cert. denied, 414 U.S.

1104 (1973); Carter v. Butz, 479 F.2d 1084

(3d Cir. 1973), cert. denied, 414 U.S. 1094,

1103 (1973). With the decision below,

however, the seventh Circuit joined the Second

and Sixth Circuits in holding that, ina suit

against a state official, any judgment for

recovery of money, even for benefits that are

fully funded by the federal government, is

barred by the Eleventh Amendment. Cotton v.

Mansour, 863 F.2d 1241, 1245-47 (6th Cir.

1988), cert. denied, 110 S. Ct. 835 (1990);

Colbeth v. Wilson, 554 F. Supp. 539, 544 (D.

vt. 1982), aff'd Colbeth v. O'Rourke, 707 F.2d

57 (2d Cir. 1983) (per curiam).

B. The circuits are also split as to

whether judgments payable from funds that are

segregated by law from a state's general

revenues - which include not only the

unemployment trust fund, but other segregated

funds as well - are barred by the Eleventh

Amendment. Thus, the Fourth Circuit has

upheld a judgment payable from the

unemployment trust fund. Brown v. Porcher,

660 F.2d 1001, 1006-1007 (4th Cir. 1981),

cert. denied, 459 U.S. 1150 (1983),

Lal 1 Ind Lal Relati C Soon q

Missouri, 479 U.S. 511 (1987). Similarly,

the Fourth, Fifth and Eighth Circuits have

held that the Eleventh Amendment does not bar

monetary relief from state funds that are

segregated by law from the state's general

revenues. Almond v. Boyles, 612 F. Supp. 223,

227-8 (D.C. N.C. 1985) (a judgment payable

from the North Carolina State Retirement

System not barred by the Eleventh Amendment),

aff'd, 792 F.2d 451, 456 (4th Cir. 1986),

cert. denied, 479 U.S. 1091 (1987); American

Re-Insurance Co. v. Janklow, 676 F.2d 1177,

1184-85 (8th Cir. 1982) (remanded to determine

whether a fund created to pay leases was

sufficiently segregated from the state's

general revenues that an award from the fund

would not be barred by the Eleventh

Amendment); Schiff v. Williams, 519 F.2d 257,

262 (5th Cir. 1975) (an award from a fund

composed of solely of student activities fees

collected at a state university not barred

by the Eleventh Amendment). And the Third

Circuit has held that whether funds are

segregated from the state's general revenues

is the "most important factor" in determining

whether a judgment for monetary relief ina

suit against state officials is barred by the

Eleventh Amendment. Blake v. Kline, 612 F.2d

718, 723-24 (3d Cir. 1979) (remanded to

determine whether a judgment against funds

held to pay pensions by the Public School

Retirement Board of Pennsylvania is barred

by the Eleventh Amendment), cert. denied, 447

U.S. 921 (1980).

In contrast, in addition to the Seventh

Circuit's decision below, the Tenth and

Eleventh Circuits hold that the Eleventh

Amendment bars a judgment in federal court

for unemployment insurance benefits.’ Esparza

* Prior to the ruling below, the Seventh

Circuit had upheld judgments payable from both

the unemployment trust fund, j

Bowling, 691 F.2d 1225, 1235 (7th Cir. 1982),

. i 4 , 80 C 928 (N.D. Ill.

1982), and from the Illinois Toll Highway

Trust Fund, which is also segregated from the

state's general revenues. Miller-Davis v.

- yall - ity, 567

F.2d 323 (7th Cir. 1977). Thus, although the

court of appeals did not expressly say so,

(continued...)

v. Valdez, 862 F.2d 788, 794 (10th Cir. 1988),

cert. denied, 492 U.S. 905 (1989); Fincher

v. State of Florida Department of Labor, 798

F.2d 1371, 1372 (11th Cir. 1986), cert.

denied, 479 U.S. 1072 (1987).

11+ TNEORTANT QUESTION OP CONSTITUTIONAL LAW

IN A WAY THAT CONFLICTS WITH APPLICABLE

DECISIONS OF THIS COURT

The court of appeals held that the source

of the funds from which a judgment would be

paid is irrelevant to whether the judgment

is barred by the Eleventh Amendment. App.

17-18. Thus, under the court of appeals'

analysis, that the defendants are state

officials is decisive as to whether monetary

relief is barred by the Eleventh Amendment

even if neither the state nor its officials

4 .

(...continued)

its decision below can only be understood as

overruling the Eleventh Amendment holdings

in those decisions. See App. 14-18.

will actually pay the judgment. Id. at App.

18.

This Court's decisions, however, belie

this "case caption" understanding of the

Eleventh Amendment and confirm that, contrary

to the decision below, the source of the funds

from which a judgment would be paid is the

decisive factor in determining whether a

judgment for money is barred by the amendment.

For instance, this Court has repeatedly held

that whether a federal court can enter a

judgment payable by a municipality depends

on whether the state's general revenues are

the source of the funds from which the

judgment would be paid. See Pennhurst State

School & Hospital v. Halderman, 465 U.S. 89,

123 n. 34 (1984) (collecting authorities) ;

compare Mt. Healthy City Board of Education

v. Doyle, 429 U.S. 274, 280 (1977) (Eleventh

Amendment does not bar judgment against

municipal corporation when funds would not

be paid from the state's general revenues)

with Edelman v. Jordan, 415 U.S. 651 (1974)

(Eleventh Amendment bars a judgment for

welfare benefits against not just state, but

also county officials since the benefits are

paid from the state's general revenues).

Similarly, this Court has held that

judgments against interstate agencies are not

barred by the Eleventh Amendment if, “instead

of the state treasury being directly

responsible for judgments against [the

interstate agency], [the relevant state

statute] expressly provides that the

obligation of [the agency) shall not be

binding on either state." Lake Country

Estates, Inc. v. Tahoe Regional Planning

Agency, 440 U.S. 391, 401-402 (1979) (emphasis

in original); see Port Authority Trans-Hudson

Corporation v. Feeny, 110 S.Ct. 1868, 1878-80

(1990) (Brennan, J., concurring) (A judgment

against an interstate agency whose liabilities

are not paid from the states' general revenues

is not against "one of the United States"

within the meaning of the’ Eleventh

Amendment) .*° See also, Fitzpatrick v.

Bitzer, 427 U.S. 445, 459-60 (1976) (Stevens,

J., concurring) (Edelman does not restrict

a federal court's "power to enter a judgment

payable immediately out of trust assets ...

(but instead is] limited to the situation in

which the award is payable directly from state

funds...."); cf., Missouri v. Jenkins, 491

U.S. 274, 290 (1989) (O'Conner, J., dissenting

in part) ("The Eleventh Amendment does not,

of course, provide a State with across-the-

board immunity from all monetary relief.").

Furthermore, with regard to whether

federal funding for the benefits at issue

10 °

The unemployment insurance program

is, in essence, an interstate compact

U.S. CONST. art. I. sec. 10, ms ' FUTA

requires that a state's unemployment insurance

statute provide that "compensation shall not

be denied or reduced to an individual solely

because he files a claim in another State.

or because he resides in another State

pond oe he files a claim for unemployment

nsation. 26 U.S.C.

a ae § 3304(a) (9) (A)

removes the bar of the Eleventh Amendment,

at least one district court, after observing

that this Court did not question its

jurisdiction to consider the merits of the

claim in Atkins v. Parker, 472 U.S. 115

(1985), treated that decision as “implicit

authority for a federal court's power to

consider the merits of claims for all forms

of requested relief [in cases against state

officials involving benefits fully financed

by federal funds]." V. er, 667

F. Supp. 1233, 1242, 1239-42 (C.D. Ill. 1986).

If that understanding of Atkins is correct,

then the decision below conflicts with this

Court's decision in Atkins, too. And, if

Griffen's understanding of Atkins is

inco rect, then Griffen demonstrates that this

Court's Eleventh Amendment rulings leave the

lower federal courts uncertain as to whether

the Eleventh Amendment bars relief against

state officials that will be paid wholly from

federal funds. See Section I.A., supra.

III. HANS v. LOUISIANA SHOULD BE CONFINED TO

CASES IN WHICH STATES ARE ALLEGED TO HAVE

VIOLATED STATE LAW BECAUSE THE PLAINTIFF

IN HANS IN FACT PRESENTED ONLY A STATE

LAW CLAIM, AND BECAUSE THAT READING OF

HANS WOULD VINDICATE THE SUPREMACY OF

FEDERAL LAW AND CURE THE INCOHERENCY THAT

NOW ATTENDS SOVEREIGN IMMUNITY JURIS-

PRUDENCE

The text of the Eleventh Amendment

prohibits federal courts from asserting

jurisdiction in "suit{s] ... 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. The amendment would, therefore, appear

to bar federal jurisdiction only in suits

based on a claim that the state defendant

violated state law. See Atascadero State

Hospital v. Scanlon, 473 U.S. 234, 262 (1985)

(Brennan, J., dissenting) ("A plaintiff

seeking federal jurisdiction against a State

under the state-citizen or state-alien

diversity clauses would be asserting a cause

of action based on state law, since a federal

question... claim would provide an

independent basis for jurisdiction that did

not depend on the identity of the parties.").

This is a case in which citizens of

Illinois claim that [Illinois officials

violated federal law. Accordingly, the text

of the Eleventh Amendment does not appear to

bar restitution regardless of whether the

benefits petitioners seek are paid from the

state's general revenues. Nonetheless, if

restitution would come from Illinois' general

revenues, the Eleventh Amendment would bar

a federal court from hearing petitioners’

claim. man v. Jordan, 415 U.S. 651

(1974). That is so because, "“rfdjespite the

narrowness of its terms, since Hans _v-

Louisiana, 134 U.S. 1 (1890), [this Court)

ha({s] understood the Eleventh Amendment to

stand not so much for what it says, but for

the presupposition of our constitutional

structure which it confirms: that the States

entered the federal system with their

sovereignty intact; that the judicial

authority in Article III is limited by this

sovereignty." Blatchford v. Native Village,

111 S.Ct. 2578, 2581 (1991). Put differently,

as Hans and its progeny are currently

interpreted, states are immunized from

judgments for monetary relief “even {in}

federal claims that otherwise would be within

the jurisdiction of the federal courts."

Pennhurst State School _ & Hospital vv.

Halderman, 465 U.S. 89, 120 (1984).

The third question presented asks this

Court to hold that: (a) Hans is not properly

read to bar federal jurisdiction over claims

for monetary relief against state officials

for violations of federal law; and that (b)

consistently, while the Eleventh Amendment

establishes that state officials enjoy a

constitutional immunity that bars federal

jurisdiction in state law Claims, those

officials retain only a common law sovereign

immunity defense against federal law claims.

Thus, aside from this Court's resolution of

the other questions presented for review,

under the reading of Hans that we urge, the

court of appeals' conclusion that the

Constitution barred it from hearing

petitioners' claims would be erroneous, since

petitioners present claims for violations of

federal, not state law.

Petitioners recognize that this Court

has reconsidered Hans in four recent cases.

Pennsylvania v. Union Gas Co., 491 U.S. 1

(1989) ; Dellmuth v. Muth, 491 U.S. 223

(1989); Welch v. Texas State Dep't. of

Highways & Public Transportation, 483 U.S.

468 (1987); Atascadero State Hospital v.

Scanlon, 473 U.S. 234 (1985). But plaintiffs

in those cases sought to have Hans overruled.

In contrast, as explained more fully below,

petitioners submit that not only Hans itself,

but also much of its progeny, were correctly

decided since Hans and many of the cases

decided under its authority are properly

understood to have concerned state law claims

over which the Eleventh Amendment does bar

federal jurisdiction.

Moreover, had this Court overruled Hans

in any one of those four recent cases, the

result would have been to confine the reach

of the Eleventh Amendment to its literal

terms, i.e. to diversity cases. In contrast,

the petitioners' position is that the

amendment bars federal jurisdiction in all

state law claims against states or their

officials, regardless of the jurisdictional

basis on which such claims would otherwise

be heard in federal court. See, e.g, 28

U.S.C. § 1367 (supplemental jurisdiction over

state claims). Finally, under petitioners’

theory, though the Eleventh Amendment would

be confined to state law claims, the states

would retain their common law immunity,

thereby meeting some, though concededly not

all, .! the concerns animating the current

rule that the states enjoy a constitutional

CW Or + re a ee ee

immunity that bars federal jurisdiction in

federal claims for monetary relief.

The reasons for reconsidering whether

Hans and the Eleventh Amendment should be read

to bar a federal court from asserting

jurisdiction over federal claims against state

officials, and for doing so in this case, are

compelling:

A. Although the plaintiff in Hans

invoked the federal court's jurisdiction

because the case arose under federal law

within the meaning of Article III of the

Constitution, he actually presented only a

state lawclaim. Specifically, Hans concerned

a state law contract claim in which a federal

question arose only in reply to the state's

defense, i.e., that the state provision

purporting to repudiate the debt violated the

Contracts Clause of the Constitution. 134

U.S. at 10, 15; see Burnham, Taming the

Vv m Wi ve

v. Louisiana, 40 Case W. Res. L.Rev. 931, 948-

55, 977-80 (1990).

Hans, however, was decided in 1890.

Eighteen years later, in Louisville &

Nashville R. Co. v. Mottley, 211 U.S. 149

(1908), this Court first held that, unlike

the “arising under" language in Article III,

that same language in the statute creating

federal-question jurisdiction (now 28 U.S.c.

§ 1331) only provides for federal jurisdiction

over cases in which "the federal question...

appear([s) on the face of a well-pleaded

complaint and ... [did] not enter in

anticipation of a defense." Verlinden B. Vv.

vy. Central Bank of Nigeria, 461 U.S. 480, 494

(1983) (citing, inter alia, Mottley, 211U.s.

at 149). Prior to Mottley, however, and thus

when Hans was decided, the Court treated a

state law claim in which the plaintiff alleged

that a defense was unconstitutional as a case

“arising under" féderal law within the meaning

of the federal-question statute. See Hans,

134 U.S. at 10, 15.

This Court has correctly held that the

Eleventh Amendment bars federal jurisdiction

in any suit in which the plaintiff alleges

that a state or its officials violated state

law even if the plaintiff seeks to invoke

federal jurisdiction on a basis other than

diversity of the parties. Pennhurst State

School & Hospital v. Halderman, 465 U.S. 89

(1984). Pennhurst is premised on an

appreciation that there is no “greater

intrusion on state sovereignty than when a

federal court instructs state officials on

how to conform their conduct to state law."

Id. at 106. Yet if the amendment was

construed to extend only to diversity cases,

any plaintiff with a state law claim who could

find a basis other than diversity for invoking

federal jurisdiction could circumvent “the

principles of federalism that underlie the

Eleventh Amendment." Id."

The Constitution's treatment of federal

jurisdiction over state law claims like the

one in Hans, where the Court properly held

that the suit was barred by the Eleventh

Amendment, is to be contrasted with its

treatment of claims for violation of federal

law. The Constitution gives Congress the

power to allow federal courts to hear federal-

question claims. U.S. CONST. art. III, sec.

2. And Congress has exercised that option

to permit federal courts to hear claims for

violations of federal law. 28 U.S.C. § 1331;

= Indeed, although the Eleventh

Amendment was enacted to overrule Chisholm

Vv. Georgia, 2 Dall. 418 (1793), before

Mottley, any interpretation of the Eleventh

Amendment that did not bar federal

jurisdiction in all state law claims would

have permitted federal courts to hear suits

indistinguishable from Chisholm since any

plaintiff in Chisholm's position could, like

Hans, have urged that the state's refusal to

pay its debt violated the Contracts Clause

and, thus, that the case arose under the

Constitution.

»e Verlinden B. V., 461 U.S. at 494;

Mottley, 211 U.S. 149.

Moreover, while the Eleventh Amendment

confirms that a federal court cannot

"instruct[] state officials on how to conform

their conduct to state law," Pennhurst, 465

U.S. at 106, the Supremacy Clause confirms

that "({not]hing in the Constitution and Laws

of any State," including a state's sovereign

immunity doctrine, can limit a federal court

from providing effective remedies for a state

official's violation of the "Constitution and

the Laws of the United States" since those

are "the supreme Law of the Land." U.S.

CONST. art. VI, cl. 2. Therefore, that part

of the Court's Eleventh Amendment doctrine

that extends the amendment's jurisdictional

bar to claims for violation of federal law

"is inconsistent with the essential function

of the federal courts - to provide a fair and

impartial forum for the uniform interpretation

and enforcement of the supreme law of the

land...." Atascadero, 473 U.S. at 255-7

(Brennan, J., dissenting).

B. Reading Hans as holding that the

Constitution bars claims for violation of

federal law not only undermines the Supremacy

Clause, it results in substantial inscoherence

in the constitutional jurisprudence of

sovereign immunity. See Union Gas Co., 491

U.S. at 25 (Stevens, J. concurring)

(describing Hans as having "departed from the

plain language, purpose and history of the

Eleventh Amendment," and relating that

departure to the "Court's inability to develop

a coherent doctrine of Eleventh Amendment

immunity...."); Welch, 483 U.S. at 519 & n.

19 (Brennan, J., dissenting) ("progeny of Hans

has produced erratic and irrational

results.").

This incoherency can be understood by

juxtaposing two sets of this Court's rul ings.

One set proclaims that the United States

Constitution bars federal courts from

asserting jurisdiction over federal claims

against states. See Blatchford, 111 S. Ct.

at 2581 (judicial authority of federal courts

under Article III is limited by the Eleventh

Amendment); Edelman, 415 U.S. at 673-4

(Eleventh Amendment bars federal courts from

hearing federal law claims against states for

welfare benefits). The other set ignores

commonly understood dictates of any such

constitutional rules -- for example, that

parties cannot invoke federal jurisdiction

by consent or that Congreés cannot override

a constitutional limit on federal jurisdiction

-- by treating the state's immunity as if it

were based in the common law. See Atascadaro

State Hospital, 473 U.S. at 238 (state may

waive Eleventh Amendment immunity to suit and

so confer jurisdiction on federal court) }

Union Gas Co., 491 U.S. at 13-19 (Congress

may override the Eleventh Amendment in

exercise of its authority under commerce

clause). See also Fitzpatrick v. Bitzer, 427

U.S. 445, 459 (1976) (Stevens, J. concurring)

(Since the Eleventh Amendment applies by its

terms to “any suit in law or equity," any

"construction of the Eleventh Amendment which

acknowledges the federal court's jurisdiction

of a case and merely restricts the kind of

relief the federal court may grant [is

proh.iometic]."). Moreover, part of the “crazy

qu..it ,uttern of the Hans doctrine," Welch

483 U.S. at 519 & n. 19 (Brennan, J.,

dissenting), is that some cases are part of

both sets. See Blatchford, 111 S. Ct. 2578

(treating state's immunity both as preexisting

the Constitution and surviving its

ratification "intact," id at 2581, and yet

as grounded in the Constitution itself.) .

If this Court accepted petitioners’

understanding of Hans and the reach of the

Eleventh Amendment, it would resolve the

incoherence in the jurisprudence of sovereign

immunity, while assuring the supremacy of

federal law and preserving a measure of the

immunity to suit in federal court that states

now enjoy. For example, if the Constitution's

jurisdictional bar against suits in federal

court was limited to state claims, that

jurisdictional bar could neither be waived

by the parties to a suit nor abrogated by

Congress. In contrast, however, if the

Eleventh Amendment did not bar federal

jurisdiction over claims against state

officials for violation of federal law, the

states could interpose their common law

sovereign immunity defense against federal

claims, but that defense, like any non-

constitutional defense, could be waived.

Moreover, the extent to which a state's common

law sovereign immunity defense succeeded would

turn on whether it "so interfere({d] with and

frustrate(d] the substantive right Congress

enacted that, under the Supremacy Clause, fit]

must yield to the federal interest." Felder

Vv. sey, 487 U.S. 131, 151 (1988). Accord,

Howlett v. Rose 110 S. Ct. 2430 (1990)

(unanimous).

C. To the extent that Hans is

understood to extend a constitutional bar to

the assertion of federal jurisdiction over

Claims for monetary relief based on violations

of federal law, it is not merely confusing;

it represents the kind of “unworkable or...

badly reasoned [decision that] 'this Court

has never felt constrained to follow [as]

precedent.'" Payne v. Tennessee, 1115S. Ct.

2597, 2609 (1991) (quoting Smith v. Allwright,

321 U.S. 649, 665 (1944)). Indeed, for

precisely that reason, this Court's decisions

extending the Eleventh Amendment's

jurisdictional bar to suits challenging state

officials' violations of federal law have been

"decided by the narrowest of margins, over

spirited dissents challenging the basic

underpinnings of those decisions." Id. at

2611. See e.g., Edelman v. Jordan, 415 U.S.

at 678 (Douglas, J., dissenting); id. at 687

(Brennan, J. dissenting); id. at 688

(Blackmun, J., dissenting) ; Atascadero State

Hospital, 473 U.S. 234, 247-302 (1985)

(Brennan, J., dissenting);° id. at 302-04

(Blackmun, J., dissenting); id. at 304

(Stevens, J., dissenting) .*”

D. Some members of this Court have been

reluctant to overrule Hans because it has been

cited as dispositive in many subsequent cases.

onset te, 491 U.S. at 34-5 (Scalia, J.,

dissenting in part) (citing Welch, 483 U.S.

at 494 n.27 (plurality opinion)). Under

petitioners' Eleventh Amendment theory,

however, Hans itself and much of its progeny

would be reaffirmed, not overruled. For

example, Pennhurst, 465 U.S. at 97-106, in

which the Court held that state law claims

against state officials that are brought in

12 Academics have also been sharply

critical of those decisions. See e.g., Union

Gas Co., 491 U.S. at 24on. 1 (Stevens,

concurring) (collecting authorities) ;

Atascadero, 473 U.S. at 258 n. 11 (Brennan,

J., dissenting) (same).

federal court under the pendent jurisdiction

doctrine are barred by the Eleventh Amendment,

would be reaffirmed under our theory. Indeed,

"(a}) close analysis of (the) cases {listed

by Justice Powell in Welch, 483 U.S. at 494

n. 27] indicates | that the stare decisis

problems involyég in a revised reading of

Hans, while serious, are not nearly as grave

as they would be if the Court overruled Hans."

Burnham, supra, 40 Case W. Res. L. Rev. at

977; see id. at 976-84 (analyzing all of the

cases cited by Justice Powell in footnote 27

in Welch); Jackson, The Supreme Court, The

Eleventh Amendment, and State Sovereign

immunity, 98 Yale L. J. 1, 119-124 (1988)

(same) .*?

- In Will v. Michigan Dept. of State

Police, 491 U.S. 58 (1989), this Court held

that, except in suits for prospective

injunctive relief, states and their officials

are not "persons" within the meaning of 42

U.S.C. § 1983, thus interpreting § 1983

coextensively with the Eleventh Amendment.

Under that analysis, narrowing the limits of

Eleventh Amendment immunity would expand §

(continued...)

E. Some members of this Court have been

concerned about the possible reliance of the

states and of Congress on the understanding

that Hans extended a constitutional and

jurisdictional bar to suits against state

officials even for violations of federal law.

See, e.g., Union Gas Co., 491 U.S. at 34-5

(Scalia, J., dissenting in part). Those

supposed reliance problems can be overstated.

See Burnham, supra, 40 Case W. Res. L. Rev.

at 990-95. But in any event, purely

prospective application of the new Eleventh

Amendment rule that petitioners urge can

protect the reliance interests of both the

states, see American Trucking Assns. v. Smith,

13. ..continued)

1983's definition of "person" to include some

forms of relief against states through suits

against their officials. But a state's

liability would still be limited to

deprivations caused by unlawful official

policies, customs or usages; states would not

be liable merely by virtue of unlawful acts

of their agents. See City of St. Louis v.

Praprotnik, 485 U.S 112, 121-27 (1988); Monell

436 U.S. 658, 691 (1978).

110 S. Ct. 2323 (1990) (plurality opinion) ;

James B. Beam Distilling Co. v. Georgia, 111

S. Ct. 2439, 2448 (1991) (White, J.,

concurring); id. at 2452 (O'Connor, J.,

dissenting), and the Congress, see Northern

Pipeline Construction Co. v. Marathon Pipe

Line Company, 458 U.S. 50, 87-88 (1982)

(staying judgment declaring the grant of

jurisdiction to the bankruptcy courts

unconstitutional to apply the decision

prospectively only and thus to "afford

Congress an opportunity to reconstitute the

bankruptcy courts or to adopt other valid

means of adjudication, without impairing the

interim administration of the bankruptcy

laws.").

{ Moreover, this Court can afford relief

to the petitioners even if a new Eleventh

Amendment rule is announced prospectively.

Under this course, the new Eleventh Amendment

rule (limiting the reach of the amendment to

state law claims) would not be applied even

to the petitioners. Rather relief would be

extended to them based on their alternative

and narrower theory that, even the current

understanding of the Eleventh Amendment does

not bar restitution from federal funds or from

funds that are segregated by law from a

state's general revenues. See Sections I.

and II., supra. This narrower ruling would

then be applied retroactively, i.e., to

petitioners themselves and to all other

litigants similarly situated. This result,

while protecting legitimate reliance

interests, would respect the view that legal

rules applied to litigants before the Court

must always be applied retroactively. See

; B. Beam Distilling Co., 111 S. Ct. 2439

(Souter, J., announcing judgment of the

Court).

CONCLUSION

The petition for certiorari should be

granted.

Respectfully submitted,

Jeffrey B. Gilbert

Counsel of Record

Karyn Glass

Robert E. Lehrer

Legal Assistance Foundation

of Chicago

343 South Dearborn Street

Chicago, IL 60604

(312) 341-1070

Attorneys for Petitioners

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