« "Positive Pluralism Now": A Review of John Inazu's "Confident Pluralism" | Main | Judge Wood is not happy with Jeff Sessions and other appellees »

Tuesday, July 11, 2017

Colllege football coaches and diversity jurisdiction

Here is an interesting diversity jurisdiction puzzle, for anyone looking for one (and you know you are).

Penn State sued Bob Shoop, its former defensive coordinator, to recover close to $ 1 million on the buyout clause, after Shoop left PSU to take a similar job at Tennessee. Penn State filed in Pennsylvania Commonwealth Court, then Shoop removed to the Middle District of Pennsylvania, based on diversity. And this confused me. Penn State is a state university. And a "state" is not a "citizen of a state" for diversity purposes; when a state brings a non-federal claim against a citizen of another state to federal court, original jurisdiction rests with SCOTUS (concurrent with state courts). The case thus should not be removable, because the district court lacked subject matter jurisdiction. This looked to me on all fours with a case from about ten years ago--involving West Virginia University's attempt to enforce a buyout clause against its former head football coach--in which the university filed in its state courts and the coach removed, but the district court remanded for lack of jurisdiction because the university was the state.

It turns out that Penn State (along with the larger public universities in Pennsylvania, such as Pitt and Temple) is a "state-related" university, as opposed to a state university. Although I am not sure of all the differences, state-related universities receive less funding and are entities created by state law that maintain affiliations with the state (sufficient to make them act under color for Fourteenth Amendment and § 1983 purposes), but are not treated as alter-egos of the state. District courts in Pennsylvania have held that Pennsylvania's state-related schools do not enjoy Eleventh Amendment immunity.

This matters because most circuits use the same analysis to identify an entity as an arm of the state for Eleventh Amendment purposes as for § 1332 purposes--that is, if an entity is an arm of the state entitled to Eleventh Amendment immunity, it is an arm of the state and not a citizen of the state for diversity purposes. That is how the federal court involved the West Virginia case. Because the prevailing view is that Penn State does not enjoy Eleventh Amendment immunity, it should follow that the district court has jurisdiction in this case.

I am curious to see if Penn State at least tries to move to remand or if it knows it will lose on the point. A recent possible comparison is Haywood v. University of Pittsburgh, a suit brought in federal court by--you guess it--the former football coach. Haywood included three claims--two for breach of contract (with jurisdiction under § 1332) and one for a violation of due process (with jurisdiction under § 1331); Pitt did not contest jurisdiction and the court reached the merits. This would suggest that a state-related university can be sued in federal court on diversity. But Haywood may be of limited use. The due process claim gave the district court original jurisdiction, with supplemental jurisdiction over the state claims, all regardless of diversity (Haywood did not assert § 1367 in the Complaint, which may just be unwise drafting). So it may have been that Pitt knew there would be jurisdiction anyway, regardless of the basis, so there was no point in contesting. The Penn State case squarely presents the question of the university's status for § 1332 purposes.

Posted by Howard Wasserman on July 11, 2017 at 10:36 AM in Civil Procedure, Howard Wasserman | Permalink

Comments

Penn State, Pitt and Temple are "state affiliated institutions," making them private entities for many purposes -- most especially, in PSU's case, for open records purposes. I suspect that's why you won't see that argument in PSU's case and didn't see it in Pitt's. None stands exactly in the shoes of "the state" the way, for example, Shippensburg State University would.

Posted by: JEC | Jul 14, 2017 5:52:11 PM

What's the significance of being "state related" for civil rights purposes? Specifically, with all the free speech stuff going on, state universities are bound by the Constitution, while private universities are bound only by whatever promises they've made. Where do state affiliated universities fall?

Posted by: Derek Tokaz | Jul 14, 2017 8:48:33 PM

I am wondering what the status is of any contract that requires one to abide by NCAA rules and regulations.

http://www.businesslawbasics.com/chapter-18-contract-law

"Covenant of good faith and fair dealing. One type of guaranty similar to an implied warranty is the covenant of good faith and fair dealing. This covenant is an obligation between all parties of a contract that they act with good faith (i.e., deal honestly and fairly)[26] towards each other, and not seek to take unfair advantage of their contract partners. Under common contract law, the covenant of good faith and fair dealing attaches to all contracts, and cannot be waived or disclaimed under any circumstances.[27] In most U.S. jurisdictions, breach of the covenant of good faith and fair dealing may form an independent cause of action even if the express terms of the contract have not, strictly speaking, been violated."

http://www.washingtontimes.com/news/2017/feb/7/ncaa-threatening-pull-more-championships-north-car/

"Illegality and unconscionability. A contract is void if it requires the performance of an act that violates a relevant law, such as a statute or regulation."

"In Pennsylvania, it is against the law to commit indecent exposure. Indecent exposure occurs if a person exposes his or her genitals in any public place or in any place where other people are present in circumstances that he or she knows or should know that the exposure will likely offend or alarm others."

Posted by: N.D. | Jul 15, 2017 11:11:19 AM

The state-related universities in Pennsylvania are state actors for 14th Amendment and § 1983 purposes--so Temple, Pitt, and Penn State all can be sued for violating due process or free speech.

These universities are like municipal corporations or other local governmental entities--they are public for constitutional purposes, but not arms of the state for purposes of, for example, the 11th Amendment or § 1332.

Posted by: Howard Wasserman | Jul 15, 2017 11:28:15 AM

N.D.: I think you have the wrong Penn State defensive coordinator.

Posted by: Howard Wasserman | Jul 15, 2017 11:28:46 AM

Professor Wasserman, those acts that particular Penn State defensive coordinator was accused of were indecent, predatory, and heinous.


https://www.merriam-webster.com/dictionary/decent

https://www.merriam-webster.com/dictionary/predatory

Posted by: N.D. | Jul 15, 2017 12:14:44 PM

Jerry Sandusky was the defensive coordinator who committed those predatory and heinous acts, for which he now is in prison. The defensive coordinator who PSU is suing in *this case* is Bob Shoop, who only committed the heinous act of taking a non-head-coaching position at another college.

Posted by: Howard Wasserman | Jul 15, 2017 12:24:23 PM

With all due respect, I was simply referring to the fact that because the NCAA has recently change their rules and regulations in regards to deceny, they have in essence, voided all their contracts, regardless of state or the state actor's location.

Posted by: N.D. | Jul 15, 2017 12:35:26 PM

With all due respect, I was simply referring to the fact that because the NCAA has recently change their rules and regulations in regards to deceny, they have in essence, voided all their contracts, regardless of state or the state actor's location.

Posted by: N.D. | Jul 15, 2017 12:35:26 PM

Post a comment