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

Supreme Court of the United States · 1993 · Civil Procedure

Civil ProcedureFederal CourtsCollateral order doctrineEleventh Amendment immunityInterlocutory appealEleventh Amendmentcollateral order doctrineCohen

Facts

PRASA is an autonomous government instrumentality in Puerto Rico that provides water and sewage services. After entering a consent decree with the EPA, PRASA contracted with Metcalf & Eddy, a private Delaware engineering firm, to help upgrade wastewater treatment plants. PRASA later withheld payments, alleging overcharging, and Metcalf & Eddy brought a diversity action in federal district court for breach of contract and damage to business reputation. PRASA moved to dismiss, asserting that it was an arm of the State entitled to Eleventh Amendment immunity, but the district court denied the motion.

Issue

May a State or a state entity claiming to be an arm of the State immediately appeal a district court order denying its claim of Eleventh Amendment immunity under the collateral order doctrine? More specifically, is such an order a collateral order within the meaning of Cohen and § 1291?

Rule

An order denying a State's or a state entity's claim to Eleventh Amendment immunity is immediately appealable under the collateral order doctrine because it conclusively determines a claim of immunity from suit, resolves an important issue separate from the merits, and would be effectively unreviewable after final judgment. Eleventh Amendment immunity is treated as an immunity from suit in federal court, not merely a defense to liability.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Nora Velez sued the Indiana Coastal Research Board in federal court in Chicago for damages arising from an alleged breach of a consulting agreement. The Board moved to dismiss, arguing that it is an arm of Indiana and therefore immune from suit in federal court under the Eleventh Amendment, but the district court denied the motion.

May the Board immediately appeal the denial under 28 U.S.C. § 1291?

Explanation. Yes. The majority held that an order denying a State's or state entity's claim to Eleventh Amendment immunity falls within the collateral order doctrine. Such an order conclusively rejects a claimed immunity from suit in federal court, resolves an important issue separate from the merits, and would be effectively unreviewable after final judgment because the benefit of not being sued is largely lost once litigation proceeds.