United States District Court, N.D. Alabama, Northeastern Division
ALABAMA SPACE SCIENCE EXHIBIT COMMISSION d/b/a U.S. SPACE & ROCKET CENTER, Plaintiff,
ODYSSEIA CO. LTD., Defendant.
MADELINE HUGHES HAIKALA, UNITED STATES DISTRICT JUDGE
case has been to the moon and back. After lengthy briefing on
repeated motions to remand (three so far) and multiple
mediations, including one before a magistrate judge, the case
now has reached the dispositive motion stage. In its
summary judgment motion, the Alabama Space Science Exhibit
Commission - ASSEC, for short - renews its challenge to
federal jurisdiction. ASSEC reiterates its argument that it
is an arm of the State of Alabama and hence not a
“citizen of a State” for purposes of diversity
jurisdiction under 28 U.S.C.§ 1332(a)(2). ASSEC rests
its updated remand argument on evidence that is new to the
record in this case but that has been available to ASSEC
since it filed its first motion to remand. ASSEC also adds to
its legal authority in support of its request for remand a
recent decision from the Alabama Supreme Court. Because a
district court must examine its subject matter jurisdiction
at every stage of a case, the Court will evaluate ASSEC's
supplemental evidence and authority and reconsider its
rulings on subject matter jurisdiction.
ASSEC's First Motion to Remand
first motion to remand, filed in 2014, ASSEC argued that
Odysseia removed this action improperly because the amount in
controversy in this action does not meet the $75, 000
jurisdictional threshold in 28 U.S.C. § 1332(a). (Doc.
8). In its initial remand motion, ASSEC did not
“dispute that diversity of citizenship exists in this
matter.” (Doc. 8, p. 2). During a January 12, 2015
hearing regarding the amount in controversy, ASSEC stated:
“we're ready to just move forward with this case .
. . We think it's time to get to the merits.” (Doc.
30, p. 2). The Court rejected ASSEC's challenge to the
amount in controversy and denied ASSEC's motion to
remand. (Docs. 28, 30).
ASSEC's Second Motion to Remand
second motion to remand, filed in 2015, ASSEC argued that the
Court lacks subject matter jurisdiction because ASSEC is an
arm of the state and therefore is not a citizen for purposes
of diversity jurisdiction. (Doc. 35). The Court issued an
order in which the Court evaluated the evidence available to
it concerning ASSEC's relationship to the State of
Alabama and concluded that ASSEC is not an arm of the state.
(Doc. 52). The Court held that ASSEC is a citizen of Alabama
for purposes of diversity jurisdiction and that because
Odysseia is a citizen of a foreign state, the parties to this
action are completely diverse. The Court denied ASSEC's
second motion to remand. (Doc. 52, pp. 14-15).
ASSEC's Third Motion to Remand
third motion to remand, filed in 2017, ASSEC argued that in
an unpublished opinion in Ingalls v. U.S. Space and
Rocket Center, 679 Fed.Appx. 935 (11th Cir. 2017), the
Eleventh Circuit Court of Appeals implied that ASSEC is a
state agency. (Doc. 69, pp. 1-2). The Ingalls
decision did not alter this Court's analysis of
ASSEC's citizenship because in Ingalls, the
Eleventh Circuit did not consider the factors necessary to
evaluate whether ASSEC is an arm of the state. (Doc. 72, p.
3). Based on the evidence then in the record, the Court
maintained its finding that ASSEC is not an arm of the State
of Alabama. The Court denied ASSEC's third motion to
remand. (Doc. 72, p. 4).
ASSEC's Fourth Motion to Remand
motion for summary judgment, on “a more developed
record, ” ASSEC argues again that it is an arm of the
State of Alabama and therefore is not a “‘citizen
of a State' for purposes of diversity jurisdiction under
28 U.S.C. § 1332(a)(2).” (Doc. 89, p. 1). The
Court will discuss all of the jurisdictional evidence, old
and new (again, new to the Court, not to ASSEC), as it
evaluates the factors that govern its assessment of
ASSEC's status for purposes of federal jurisdiction.
Court has explained in previous orders, “if a party is
deemed to be ‘an arm or alter ego of the State,'
then diversity jurisdiction must fail;” however, a
“public entity or political subdivision of a state,
unless simply an ‘arm or alter ego of the
State'” is “a citizen of the state for
diversity purposes.” Univ. of S. Ala. v. Am.
Tobacco Co., 168 F.3d 405, 412 (11th Cir. 1999) (quoting
Moor v. Alameda Cty., 411 U.S. 693, 717-18 (1973)).
To determine whether ASSEC is an “arm of the state,
” the Court must consider: “(1) how the state law
defines the entity; (2) the degree of state control over the
entity; (3) where the entity derives its funds; and (4) who
is responsible for judgments against the entity.”
Nichols v. Ala. State Bar, 815 F.3d 726, 732 (11th
Cir. 2016); see also Lightfoot v. Henry Cty. School
Dist., 771 F.3d 764, 769 (11th Cir. 2014); Manders
v. Lee, 338 F.3d 1304, 1309 (11th Cir. 2003). The Court
discusses each factor in turn.
Alabama Law Regarding ASSEC's Status
Court looks again to the Alabama Code and to decisions from
the Alabama Supreme Court to consider how Alabama law
2016 order denying ASSEC's motion to remand, the Court
stated that it had located no opinion in which an Alabama
state court had determined whether ASSEC is an arm of the
state. (Doc. 52, pp. 3-4). That is still true, but the Court
has located dicta in which the Alabama Supreme Court
indicated that ASSEC's sister entity, the Alabama Space
Science Exhibit Finance Authority, is not an arm of the State
of Alabama. In Hospital Systems, Inc. v. Hill Rom,
Inc., the Alabama Supreme Court held that the Health
Care Authority of Athens and Limestone County is an entity
separate from the State of Alabama even though the Health
Care Authority bears some of the characteristics of an arm of
the state. Hospital Systems, Inc. v. Hill Rom, Inc.,
545 So.2d 1324, 1326 (Ala. 1989). In reaching its decision,
the Alabama Supreme Court analogized the Health Care
Authority to the Alabama Space Science Exhibit Finance
Alabama Supreme Court discussed the Health Care
Authority's status as part of the court's
consideration of the extent to which the Health Care
Authority had to comply with Alabama's Competitive Bid
Law. The provision of the bid law at issue in Hill
All expenditures of funds of whatever nature for labor,
services or work, or for the purchase of materials,
equipment, supplies or other personal property made by ...
the county commissions and the governing bodies of the
municipalities of this State ... shall be made under
contractual agreement entered into by free and open
competitive bidding, on sealed bids, to the lowest
545 So.2d at 1326 (emphasis in Hill Rom). The
Alabama Supreme Court determined that the Alabama Legislature
separately incorporated the Health Care Authority and other
public entities like the Alabama Space Science Exhibit
Finance Authority so that those entities could function
independent of state and local authorities. The Alabama
Supreme Court explained that the Health Care Authority, which
the Supreme Court referred to as the “Hospital, ”
incorporated pursuant to the provisions of Code 1975, §
22-21-310 et seq. It is “a separate entity
from the state and from any local political subdivision,
including a city or county within which it is
organized” (Opinion of the Justices, 254 Ala.
506, 511, 49 So.2d 175, 180 (1950)); therefore, it is not one
of the governmental entities within the contemplation of the
prohibitions of § 22 of our state constitution or §
41-16-50(a). Furthermore, the § 22-21-335 exemption
would apply to the Hospital even if the directors of the
Hospital's board were appointed by either the governing
body of the City of Athens or that of Limestone County.
Alabama State Florists Association v. Lee County Hospital
Bd., 479 So.2d 720 (Ala.1985).
The exemption from the Competitive Bid Law enjoyed by the
Hospital is “part and parcel” of legislation
creating and maintaining public authorities in Alabama. See,
for example, § 4-3-60 (airport authorities); §
11-54A-17 (downtown redevelopment authorities); §
41-10-212 (Alabama Shakespeare Festival Theatre Finance
Authority); and § 41-10-331 (Alabama Space Science
Exhibit Finance Authority). The necessity for the
services provided by the Hospital and other health care
authorities, as well as the services provided by the
myriad of boards and authorities authorized by our state
legislature, is undisputed.
It is, however, equally true that the governmental entities
normally responsible for providing these services too often
lack sufficient funds to justify the expenditure of city or
county tax revenues in these areas. Thus, the
“authority, ” through its separate existence,
provides the required service with funds obtained from
sources other than the tax revenues of a governmental entity.
545 So.2d at 1326 (emphasis added).
Alabama Supreme Court's description of the Health Care
Authority applies equally to ASSEC and to its sister entity,
the Alabama Space Science Exhibit Finance Authority or ASSFA.
The legislation creating ASSFA states:
It is the intent of the Legislature, by the passage of this
article, to authorize the incorporation of a public
corporation for the purposes of acquiring land, constructing
and equipping facilities, leasing such facilities to [ASSEC]
(or others, to the extent provided for herein), and providing
financing therefor, and to vest such corporation with all
powers, authority, rights, privileges and titles that may be
necessary to enable it to accomplish such purposes. This
article shall be liberally construed in conformity with the
purpose herein stated.
Ala. Code § 41-10-301. The legislation creating the
There is hereby created and established a state agency to be
known as the Alabama Space Science Exhibit Commission, which
shall be a public body corporate with all the powers and
privileges of a corporation, for the purpose of providing for
and participating in the management and control of facilities
to house and display such visual exhibits of space
exploration and hardware ...