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Is a state university medical center immune from punitives?
Greetings Colleagues,
Can you help?
My Question:
Is a state university medical center a governmental unit within the meaning of 11 U.S.C. 101(27) for 106(a)(3) purposes?
Why I Care:
A state university medical center violated the automatic stay (many times) and the discharge injunction (a few times) in spite of repeated cease and desist requests. Due to the particularly egregious nature of the violations we want to get punitive damages.
Some Relevant Information:
A. The Statute
matic stay) and 524 (violations of the discharge injunction) actions against a governmental unit, but 106(a)(3) excludes the award of punitive damages against a governmental unit.
B. Some Key Cases
In Central Virginia Community College v. Katz, 546 U.S. 356 (2006) the Supremes held that a state school could not use a sovereign immunity defense in a trustee's action to avoid a preferential transfer. The gist was that
Moreover, "not all state-created or state-managed entities are immune from suit in federal court . . . an entity may be organized or managed in such a way that it does not qualify as an arm of the state entitled to sovereign immunity." Durning v. Citibank, N.A., 950 F.2d 1419, 1423 (9th Cir. 1991).
And in Mitchell v. Los Angeles Community College Dist., 861 F.2d 201 (9th Cir. 1988) the Ninth Circuit put forth a five part test to determine whether an entity is "an arm of the state" as understood in State Hwy Comm'n v. Utah Constr. C., 278 U.S. 194, 199 (1929).
On the other hand, in Regents of the Univ. of Calif. v. Doe, 519 U.S. 425 (1997) the Supremes reversed the Ninth Circuit's application of its five part Mitchell test. The Ninth Circuit had focused its first prong analysis on the fact that the federal government had agreed to indemnify Lawrence Livermore Labs - meaning that the State of California would not be on the hook financially if the case went badly. The Supremes said that legal liability rather than financial liability was the relevant issue. Interestingly, the Supremes did not reject the test, but restricted their ruling solely to the question of whether federal indemnification was sufficient to preclude a sovereign immunity defense, and held that it did not.
In sum, I would like to find a recent case in which a state university department - not necessarily the school as a whole - was found not to be an arm of the state in some federal litigation (bankruptcy or otherwise). If any of you have come across anything on point please email me it to me directly. Thanks.
All the best,
Nick
Nicholas Gebelt, Ph.D., J.D.
Law Offices of Nicholas Gebelt
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