Opposition Brief — Pillsbury Co. v. Port of Corpus Christi Authority

No. 95-1467

In The

Supreme Court of the United States

October Term, 1995

THE PILLSBURY COMPANY, INC.,

Petitioner,

V.

THE PORT OF CORPUS CHRISTI AUTHORITY,

Respondent.

On Petition For Writ Of Certiorari

To The United States Court of Appeals

For The Fifth Circuit

RESPONDENT’S BRIEF IN OPPOSITION

David E. Black

Counsel of Record

Edward D. Burbach

George H. Lugrin, IV

GRIGGS & HARRISON, P.C

1301 McKinney, Suite 3200

Houston, Texas 77010

Telephone: (713) 651-0600

Facsimile (713) 651-1944

Attorneys for Respondent

i

QUESTION PRESENTED

Is The Port of Corpus Christi Authority, a single-state

entity created and governed by the Texas Constitution

and related Texas Legislation, entitled to sovereign

immunity from suit in federal court under the Eleventh

Amendment?

il

RULE 29.1 STATEMENT

No amendments are necessary to make the list of parties

in Petitioner’s petition for writ of certiorari currently accurate

with respect to Respondent.

ill

TABLE OF CONTENTS

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Statement of Jurisdiction ........................... 2

Ee 2

Reasons to Deny the Writ .......................... 5

I. Implication of the State Treasury is Not the Sole

Eleventh Amendment Requirement under Hess ... 5

IT. The Fifth Circuit’s Opinion is Not in Conflict

with the Fourth Circuit or Other Circuits......... 6

IIT. HESS Did Not Alter Existing Fifth Circuit

Precedent Respecting Single-State Entities ....... 9

IV. The Fifth Circuit’s Opinion is Consistent with

Hess and Lake Country Estates ............... 1]

V. Smoke and Mirrors; Pillsbury’s Real

Complaint is Not with the Law But

Wih the Application of the Facts to the Law ..... 12

a Nag a rrr 14

iV

TABLE OF AUTHORITIES

FEDERAL CASES

Boatmens First National Bank of Kansas City v. KPERS,

oT Fok ee a Ae) hbk bo vk od de oe eee 8

Christy v. Pennsylvania Turnpike Comn,

D0 Fe he APD, fa oc oo Wowi caw 8

Grant v. Niagara Frontier Transportation

Authority, et. al, 1996 WL 107116

(W.D.N.Y. 1996) (not reported in F.Supp.) ....... 8

Gray v. Laws,

DAT oe eS BOOED dw ecadchven Kens 6, 7

Helvering v. Gerhardt,

Pe ee ee oe as etre eae 13

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

513 U.S. __, 115 S. Ct. 394 (1994) ... 2,5, 7, 8, 9,

10, 11

Jacintoport Corp. v. Gr. Baton Rouge Port Com'n,

Fad Vise Boe CH WG BPD So Ch ski e ie ies 63 11

Kamani v. Port of Houston Authority,

FUE FA OLE Gas BTS he Se eR o's 3,11

Lake Country Estates v. Tahoe Planning Agency,

ie Ei a) OOP CEES Ce eT errr rere 9

POI Ae,

Vv

Matter of Merchants Grain, Inc.,

39 F.36 G30 (7m Cir, 1995); . ww. ccc eens 5,8

McCrea v. Harris County Houston Ship Channel

Nav. District,

423 © A CUS CO Ce, 1970) nc ccc cc cccnssce 3

McDonald v. Board of Mississippi Levee Commissioners,

S55 Whe Pen CU OW. EMOT) ch kcccvcesss 4,11

Mireles v. Waco,

Te, AR REI Ac ei a Re ree 13

Ristow v. South Carolina Ports Authority,

er oe toot (OCW, 1988) onc veces 6,8

Seminole Tribe of Florida v. Florida et. al.,

__ US. __, 1996 WL 134309 (1996) ........... 5

Thomas v. FAG Bearings Corp.,

PE ae Pe Cs BOD oo iin vc con vecans 6,8

STATE CASES

Guillory v. Port of Houston Authority,

845 S.W.2d 812 (Tex. 1993) ............. 3,4, 11

FEDERAL STATUTES

PRG ee yh as a 2

Vi

STATE STATUTES

TEX. CONST, ART. Seva aoe. cdededveteev svi Loveeawae

EX. WATER CODE ANN. § 62.101 (Vernon 1988) ....... 3

TEX. WATER CODE ANN. §§ 62.102, 62.078 (Vernon 1988). .4

TEX. CIV. PRAC & REM. CODE § 15.001 et seq.,

§ 101.102(a),§ 101.023 ........ ry Ore Cre i

No. 95-1467

In The

Supreme Court of the United States

October Term, 1995

THE PILLSBURY COMPANY, INC..

Petitioner,

v.

THE PORT OF CORPUS CHRISTI AUTHORITY,

Respondent

On Petition For Writ Of Certiorari

To The United States Court of Appeals

For The Fifth Circuit

RESPONDENT’S BRIEF IN OPPOSITION

TO THE UNITED STATES SUPREME COURT

Respondent, The Port of Corpus Christi Authority (the

“Port”), presents this Brief in Opposition to the Petition for

Writ of Certiorari by The Pillsbury Company, Inc

(“Pillsbury”). The Port requests that this Court deny

Pillsbury’s Petition for Writ of Certiorari.

2

STATEMENT OF JURISDICTION

This Court has jurisdiction under 28 U.S.C. §1254(1).

STATEMENT OF THE CASE

Petitioner, The Pillsbury Company, Inc., requests that

this Court overturn years of jurisprudence affording Texas

Constitutional Ports immunity from suit in federal court

pursuant to the Eleventh Amendment arm-of-the-state doctrine.

In support of its Petition, Petitioner argues that the Fifth

Circuit’s arm-of-the-state doctrine is inconsistent with this

Court’s precedent and that a “conflict” exists between the

Fourth and Fifth Circuit Courts. As explained herein, the Fifth

Circuit’s circuit arm-of-the-state doctrine is consistent with this

Court’s precedent and no inter-circuit conflict exists. The

Petition should be denied.

This Court recently addressed the Eleventh Amendment

arm-of-the-state doctrine in Hess v. Port. Authority

Trans-Hudson Corp., 513 U.S. __, 115 S. Ct. 394 (1994).

There is no novel or important reason why this Court should

address this doctrine again.

A careful and fair reading of Pillsbury’s Petition brings

one to its central proposition. Either:

l. Hess stands for the proposition that protection

of the state treasury is the only consideration

when examining a single-state entity to

determine Eleventh Amendment immunity

—

ah

—

Pres

3

status (Pillsbury further argues that the Fourth

Circuit has recognized this proposition while

the Fifth Circuit has not); or,

2. Pillsbury is asking this Court to re-examine the

factual basis for the Fifth Circuit’s decision

The Port respectfully suggests that this Court and the

Fourth Circuit have made it abundantly clear that the former is

incorrect. Rather, the Eleventh Amendment has a dual purpose

in the single-state entity context; protection of the state treasury

and protection of state dignity. Accordingly, Pillsbury must be

asking this Court to re-examine the factual determinations

made by the courts below. Such a unfavored reason for review

by this Court is simply not justified in this case.

The Port is a wholly Texas created entity born of the

Texas Constitution and operating pursuant to Texas

Legislation. The Port’s mission is to address the interests of

the people of the State of Texas in the conservation and

development of Texas’ natural resources. TEX. CONST. ART

XVI, § 59; TEX. WATER CODE ANN. § 62.101 (Vernon 1988)

The highest court in Texas has held that these single-state

Texas Constitutional Ports were carefully structured by the

State of Texas to perform entirely governmental functions and

to enjoy the protection of the Eleventh Amendment. Guillor)

v. Port of Houston Authority, 845 S.W.2d 812 (Tex. 1993)

The Fifth Circuit has long agreed. McCrea v. Harris Count)

Houston Ship Channel Nav. Dist., 42? F.2d 605 (Sth Cir

1970), cert. denied, 400 U.S. 927 (197); Kamani v. Port of

4

Houston Authority, 702 F.2d 612 (5th Cir. 1983); McDonald v.

Board of Mississippi Levee Commissioners, 832 F.2d 901 (Sth

Cir. 1987).

Pillsbury misrepresents the factual findings of the

courts below and ignores the unassailed proposition that the

Port, as a Texas Constitutional Port, is factually and legally

indistinguishable from the Port of Houston Authority which is

entitled to Eleventh Amendment immunity. Judgments against

the Port, while not paid directly from the state treasury, have

practical consequences on the Texas state treasury. Ultimate

control over the Port remains in the Texas Legislature through

its continual amendment of the statutes by which the Texas

Constitutional Ports operate. The Port is part of a network of

Constitutional Ports which work in harmony to achieve a

statewide purpose. The Texas Legislature expressly defines

Texas Constitutional Ports as “governmental agencies” with

the powers of government. TEX. WATER CODE ANN.

§§62.102 (Vernon 1988). The Texas Supreme Court

characterizes Texas Constitutional Ports as state “agencies"

and recognizes that thev are different from municipal ports

because they are created for general statewide public

purposes. Guillory, 845 S.W.2d at 814.

While the Port may sue and be sued in its own name in

State court, the State of Texas has not consented to suit against

the Port in its own name in federal court. TEX. WATER CODE

ANN. §§ 62.102, 62.078 (Vernon 1988). The Port is entitled to

the sovereign immunity of the State of Texas. Texas structured

the Port to enjoy its Eleventh Amendment immunity. A

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5

ruling that it is not entitled to immunity would be an affront to

the dignity of the State of Texas.

REASONS TO DENY THE WRIT

I. IMPLICATION OF THE STATE TREASURY IS

NOT THE SOLE ELEVENTH AMENDMENT

REQUIREMENT UNDER HESS

Pillsbury argues that Hess stands for the proposition

“that because the fundamental purpose of the Eleventh

Amendment was to protect state treasuries, a governmental

entity is not entitled to Eleventh Amendment immunity if a

judgment against the entity would not affect the treasury.”

Petition, pg. 5 citing to Hess, 115 S.Ct. at 404-06. Such a

statement is dead wrong. Not only can this be ascertained from

a superficial reading of Hess, but this Court, on March 27,

1996, expressly stated:

The Eleventh Amendment does not exist solely

in order to “preven[t] federal court judgments

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

also serves to avoid “the indignity of subjecting

a State to the coercive process of judicial

tribunals at the instance of private parties,”...

Seminole Tribe of Florida v. Florida et.al., U.S. _ , 1996

WL 134309, *7 (1996) (quoting Hess, 115 S.Ct. at 400 and

Puerto Rico Aqueduct and Sewer Authority v. Metcalf & Eddy,

Inc., 506 U.S. 139, 146 (1993)) (internal quotations marks and

citations omitted); see also Matter of Merchants Grain, Inc., 59

6

F.3d 630 (7th Cir. 1995) (citing Hess and holding single-state

entity entitled to Eieventh Amendment immunity despite the

fact that it did not receive funds from state treasury); Thomas

v. FAG Bearings Corp., 50 F.3d 502, 506 (8th Cir. 1995)

(citing Hess and holding that coercive joinder of single-state

entity undermines Missouri’s dignity).

IT. THE FIFTH CIRCUIT’S OPINION IS NOT IN

CONFLICT WITH THE FOURTH CIRCUIT OR

OTHER CIRCUITS

To support its contention that there is an inter-circuit

conflict between the Fourth and Fifth Circuits, Pillsbury

asserts: “The Fifth Circuit concluded that Hess applies only to

bi-state entities” and “[t]his position directly conflicts with the

well-reasoned conclusion of the Fourth Circuit in two recent

decisions”. Petition, pg. 11 citing Gray v. Laws, 31 F.3d 426,

431-33 (4th Cir. 1995) and Ristow v. South Carolina Ports

Authority, 58 F.3d 1051, 1053 n.5 (4th Cir. 1995), cert. denied

116 S.Ct. 514 (1995). Pillsbury’s interpretation of these

opinions is misplaced. There is simply no inter-circuit conflict

between the Fourth and Fifth Circuits.

Gray recognized that “the same general principles

identified in [Hess] must also apply...” in the single-state

context. Gray, 51 F.3d at 432. These general principles are the

Eleventh Amendment’s twin reasons for being - - protection of

the state treasury and protection of state dignity’. Jd. (citing

' The Gray Court referred to state “dignity” as state “sovereignty”

throughout the opinion.

7

Hess, 115 S.Ct. at 404). Gray also recognizes that Hess

instructs that there is no state dignity concern in the bi-state

conte: because of the nature of the entity itself. Jd at 433

(citing Hess, 115 S.Ct. at 401). Thus, one understands the

reasons for the Hess presumption against immunity and the

inquiry into the state treasury purpose when examining a bi-

state entity.

Gray recognized that this is not the case in the single-

state context. /d at 433-34. Rather, analysis of single-state

entities may require exploration of the Eleventh Amendment’s

other reason for being; protection of state dignity. Jd. at 433.

Gray realized that in the single-state context, if a judgment is

to be paid directly from the state treasury, this fact alone “is

largely, if not wholly, dispositive” of the issue. Jd The

opposite is not true as suggested by Pillsbury. Where the state

treasury will not be affected in the single-state context, Hess

instructs that the general principle of protection of the state’s

dignity remains the Court’s guide. Jd. at 434.

Pillsbury avers that Ristow serves to reaffirm Gray.

Petition, pg. 11. The Port agrees.” Ristow concluded that the

South Carolina Port Authority (“S.C. Port”) was entitled to

Eleventh Amendment immunity because a judgment against it

2 Even if Ristow somehow conflicts with Gray, Gray remains the

law under stare decisis, as Gray pre-dates Ristow by some three months.

8

would affect the state treasury.* Ristow, 58 F.3d at 1054. |

Accordingly, Ristow was not required to perform the state

dignity analysis because the state treasury factor was met.

Since the Hess opinion, other circuits have recognized

the continued applicability of precedent as did the Fifth Circuit

below. Matter of Merchants Grain, Inc., 59 F.3d 630 (7th Cir.

1995) (citing Hess and holding single-state entity entitled to

Eleventh Amendment immunity despite the fact that it did not

receive funds from state treasury); Jhomas v. FAG Bearings

Corp., 50 F.3d 502, 506 (8th Cir. 1995) (citing Hess and

holding that coercive joinder of single-state entity undermines

Missouri’s dignity); Christy v. Pennsylvania Turnpike Com’n,

54 F.3d 1140, 1145 (3rd Cir. 1995) (recognizing that Hess

reiterated prior law and the continued viability of prior

precedent in light of Hess); Boatmen’s First Nat. Bank of

Kansas City v. KPERS, 57 F.3rd 638, 641 n.8 (8th Cir. 1995)

(noting that Hess‘ holding concerns a bi-state railway); Grant

v. Niagara Frontier Transportation Authority, et. al, 1996 WL

107116, *2 n.1 (W.D.N Y. 1996) (not reported in F.Supp.)

(distinguishing Hess as inapposite since it addresses bi-state

entity).

Pillsbury ignores the fact that Hess cited approvingly

to the precedents of the First, Third, Fifth, Sixth, Seventh and

Eighth Circuits on Eleventh Amendment immunity. Hess, 115

>The Fourth Circuit made this determination despite the fact that

there was no legal obligation, in the strictest sense, by the State of South

Carolina to pay the debts of the S.C. Port. Ristow, 58 F.3d at 1054.

—— we

9

S.Ct. at 404-05. There is plainly no conflict between the

Circuit Courts.

fil HESS DID NOT ALTER EXISTING FIFTH

CIRCUIT PRECEDENT RESPECTING SINGLE-

STATE ENTITIES

This Court’s opinion in Hess essentially contributes to

existing arm-of-the-state doctrine in three ways. First, it

reiterates the long standing general principles that the Eleventh

Amendment has a dual purpose: protection of a state’s treasury

against federal judgments and protection of a state’s dignity

against the coercive process of the federal tribunal. Hess, 115

S.Ct. at 400. Second, it creates a presumption against

immunity for Compact Clause, or bi-state, entities unless there

is “good reason” to believe that the States structured an agency

to enjoy the State’s immunity and Congress consented to such

a structure. Jd. at 402. Third, it declares that examination of

a state’s dignity interest is generally unnecessary when

analyzing bi-state entities. Suit in federal court is not an

affront to either of the states’ dignity since the entity was born

by agreement of two states with the consent of Congress. This

leaves protection of the state treasury as the overriding factor

in the bi-state context. Jd. at 401.

Beyond these three areas, existing precedent in the

circuits has not changed. This Court was careful to note that its

Hess opinion was not only consistent with Lake Country

Estates v. Tahoe Planning Agency, 440 U.S. 391 (1979), but

also with the precedent existing in the First, Third, Fourth,

10

Fifth, Sixth, Seventh and Eighth Circuits. Hess, 115 S.Ct. at

404-05.

Pillsbury attempts to persuade this Court that should

Hess be interpreted as not changing existing precedent relating

to single-state entities, it would have only a very limited effect

because of the large number of single-state entities as

compared to the small number of bi-state entities.‘ Petition at

pg. 6-7. The Port contends this is exactly the effect this Court

desired. In fact, the first paragraph of the opinion states “[w]e

granted certiorari to resolve an inter-circuit conflict” between

the Second and Third Circuits regarding whether the Port

Authority Trans-Hudson Corporation (“PATH”) is entitled to

Eleventh Amendment immunity. Jd. at 397. PATH sat in both

circuits and each circuit had reached an opposite conclusion

regarding its immunity status using essentially the same legal

analysis but reaching different factual conclusions. Jd at 399-

400. A rare inter-circuit conflict, indeed. This is not the

situation herein.

Pillsbury erroneously compares the Port to

municipalities and counties. Pillsbury ignores the fact that the

highest court in Texas has recently recognized that, unlike

municipalities and counties, Texas Constitutional Ports, were

structured by the State of Texas to perform entirely

governmental functions, address statewide concerns and to

‘Pillsbury vastly overstates the number of “potential Eleventh

Amendment claimants” in Texas. See Pillsbury’s Petition at p.6, fn. 2.

Pillsbury’s comparison of a Texas Constitutional Port, such as the Port, with

school boards, municipalities, etc. is misplaced.

'

i

i

1]

enjoy the protection of the Eleventh Amendment. Guillory v.

Port of Houston Authority, 845 S.W.2d 812 (Tex. 1993). Hess

does not alter this precedent.

IV. THE FIFTH CIRCUIT’S OPINION IS CONSISTENT

WITH HESS AND LAKE COUNTRY ESTATES

The Fifth Circuit rested its holding that the Port is

entitled to Eleventh Amendment immunity on Kamani v. Port

of Houston Authority, 702 F.2d 612 (5th Cir. 1983), and

Jacintoport Corp. v. Gr. Baton Rouge Port Com'n, 762 F.2d

435 (Sth Cir. 1985), cert. denied, 478 U.S. 1057 (1986). °

Petition, App. A at A4, fn. 5. Pillsbury apparently argues that

this Fifth Circuit precedent was overruled by Hess. Petition,

pgs. 5, 7. On the contrary, Hess implicitly and/or expressly

approved of these decisions. Hess expressly approved of

Jacintoport and Lake Country Estates. Hess, 115 S.Ct. at 404-

0S.

In McDonald v. Board of Mississippi Levee

Commissioners, 832 F.2d 901 (5th Cir. 1987), the Fifth Circuit

expressly recognized Jacintoport’s continued applicability and

reaffirmed the precedental value of Kamani. McDonald, 832

F.2d at 906-08. Jacintoport was expressly based upon the

principles set forth in Lake Country Estates. Jacintoport, 762

F.2d at 437. Accordingly, Hess does not overrule Fifth Circuit

precedent, rather, it approves of it.

> In the opinion below, the Fifth Circuit explained that if it were

to apply the Jacintoport analysis to the Port, in lieu of the clear Kamani

precedent, the Port would satisfy the analysis and still be entitled to

immunity. Petition, App. A at A4, fn. 5.

12

V. SMOKE AND MIRRORS; PILLSBURY’S REAL

COMPLAINT IS NOT WITH THE LAW BUT WITH

THE APPLICATION OF THE FACTS TO THE LAW

Since there is no inter-circuit conflict as explained

above, the Fifth Circuit’s decision does not pose any threat to

interstate or international commerce, nor does it make litigants

more likely to forum shop as Pillsbury suggests.° Petition,

pgs. 13-15. Furthermore, an off-hand reference to a Federai

Maritime Commission (“FMC”) regulation and an untrue

implication that the Port’s tariffs (which must be approved by

the FMC) exculpates it from liability for its own negligence in

no way should justify the abrogation of the Eleventh

Amendment to the U.S. Constitution. Jd The mountain

labored and brought forth a mouse.

Pillsbury seemingly makes these assertions in an

awkward attempt to make this case look more important in the

eyes of this Court. However clothed, Pillsbury’s real complaint

appears to be a simple disagreement on facts. The Port belongs

to a special class of Texas Constitutional entities that serve a

*In fact, it makes litigants less likely to forum shop. Ironically, it

was Pillsbury which forum shopped in this case in an attempt to avoid the

provisions of Texas law. In its Complaint, Pillsbury asserts breach of

contract, breach of bailment, and negligence claims. The Texas legislature

has consented to allow suit against the Port only in the state courts of

Nueces County, Texas and has placed limits upon tort recoveries against the

Port. TEX. CIV. PRAC. & REM. CODE § 15.001 et seq., § 101.102(a),

§ 101.023. Rather than bringing suit in the proper venue (or even in the

federal district court sitting in Corpus Christi), Pillsbury filed suit over 200

miles to the north in Houston.

13

statewide purpose and were intentionally structured to enjoy

Eleventh Amendment immunity. The Fifth Circuit, Texas

Supreme Court, Texas Constitution and Texas Legislature all

recognize the uniqueness of these entities as compared to

others such as municipal ports, cities and counties. It seems

that Pillsbury, a foreign corporation, is alone in its refusal to

accept this structural sovereign choice of the State of Texas.’

A ruling against the Port, as well as against all other Texas

Constitutional Ports, in the face of such evidence would be an

affront to the dignity of the State of Texas.

Pillsbury alternatively asks this Court to summarily

reverse the Fifth Circuit. The exercise of such an extraordinary

disposition is in no way warranted in this case. Fifth Circuit

precedent remains intact after the Hess opinion. See Section IV

infra. Moreover, the Fifth Circuit correctly applied the law to

the facts and reached the just result. This case in no way

presents the rare and exceptional circumstances which warrant

summary reversal. Petition, pg. 17-18 (citing Mireles v. Waco,

502 U.S. 9, 15 (1991) (Scalia, J., dissenting).

” See Helvering v. Gerhardt, 304 U.S. 405, 427 (1938) (Black, J.,

concurring) ("The genius of our government provides that, within the sphere

of constitutional action, the people -- acting not through the courts but

through their elected legislative representatives -- have the power to

determine as conditions demand, what services and functions the public

welfare requires.").

14 }

CONCLUSION .

Pillsbury’s petition for writ of certiorari should be -

denied. a

§ ‘

Respectfully submitted,

4

David E. Black E

Counsel of Record ;

Edward D. Burbach F

George H. Lugrin, IV r.

GRIGGS & HARRISON, P.C. Be

1301 McKinney, Suite 3200 f

Houston, Texas 77010 ! i

Telephone: (713) 651-0600 ,

Facsimile (713) 651-1944 4

Attorneys for Respondent <

April 12, 1996