Legal Opinions - U.S. 4th Circuit Court of Appeals: August 25, 2008

Daily Record, The (Baltimore), Aug 25, 2008

Civil Procedure

Diversity jurisdiction

BOTTOM LINE: A state entity that is an arm or alter ego of the state, rather than an autonomous, independent state agency, does not have citizenship for purposes of satisfying diversity jurisdiction.

CASE: South Carolina Department of Disabilities and Special Needs v. Hoover Universal, Inc., US4th Nos. 07-1190 and 07-1202 (decided July 30, 2008) (Judges NIEMEYER, Duncan & Hilton (sitting by designation)).

COUNSEL: Richard K. Wray, Reed Smith, LLP, Chicago, IL, for Appellant. Andrew Frederick Lindemann, Davidson, Morrison & Lindemann, PA, Columbia, SC, for Appellees.

FACTS: The South Carolina Department of Mental Health, the South Carolina Department of Disabilities and Special Needs, and the South Carolina State Budget and Control Board-Insurance Reserve Fund (collectively, the departments) brought product liability suits in federal court against Hoover Universal, Inc., invoking diversity jurisdiction and alleging damages resulting from Hoover's sale to the departments of defective trusses and sheathing, which were used in 23 public buildings built in the 1970s.

The allegedly defective materials had been used in roofs. When some of those roofs began collapsing, it was determined that replacement would be necessary. That incurred costs and damages exceeding seven million dollars.

The district court entered summary judgment in favor of Hoover. While appeals were pending in the 4th Circuit, the departments moved to vacate the judgments, asserting that, under 28 U.S.C. [section]1332(a)(1), they were not "citizens" for diversity purposes, and therefore the district court did not have subject matter jurisdiction.

After the 4th Circuit granted a limited remand for consideration of the jurisdiction issue, the district court granted the departments' motion.

Hoover appealed to the 4th Circuit, which affirmed.

LAW: The departments had invoked diversity jurisdiction under 28 U.S.C. [section]1332(a)(1), which confers jurisdiction on a federal court over actions between citizens of different States where the amount in controversy exceeds $75,000. To satisfy the diversity requirement, the departments alleged that Hoover was a citizen of Michigan, and that the departments were citizens of South Carolina.

For purposes of diversity jurisdiction, a State is not a "citizen." See Moor v. County of Alameda, 411 U.S. 693, 717 (1973). A public entity created under state law, which is "the arm or alter ego of the State," also is not a citizen for purposes of diversity jurisdiction. Id. An entity created by the State which functions independently of the State with authority to sue and be sued, such as an independent authority or a political subdivision of the State, may however, be a "citizen" for purposes of diversity jurisdiction. Moor, 411 U.S. at 717-18.

Here, each of the departments qualified as an arm, or alter ego, of the State of South Carolina, and not as autonomous, independent state agencies that enjoyed citizenship for purposes of satisfying diversity jurisdiction.

Civil Procedure

Qualified immunity

BOTTOM LINE: In an interlocutory appeal from district court's denial of summary judgment to correctional officers on ground of qualified immunity, 4th Circuit had jurisdiction to review questions of law, but did not have jurisdiction to consider factual determinations.

CASE: Iko v. Shreve, US4th No. 07-7569 (decided August 6, 2008) (Judges Michael, DUNCAN & Floyd (sitting by designation)).

FACTS: Ifeanyi Iko, an inmate at Western Correctional Institution in Cumberland, Maryland, had a history of violent prison incidents, including assaults on correctional officers and inmates.

After Iko was involved in a violent altercation with his cellmate in April 2004, he was moved to an isolation cell. There, he exhibited erratic behavior, prompting a psychologist to recommend transfer to the Special Observation Housing (SOH) unit.

Just prior to the transfer, Iko was instructed to "cuff up" by inserting his wrists through a slot in the cell door. When he failed to respond, officers utilized a cell extraction procedure whereby a team of officers, led by Lt. James Shreve, was deployed to remove him by force.

Immediately prior to the cell extraction, Iko lay passively on the floor of his cell. Shreve told Iko that he could avoid the use of force if he came to the door to be handcuffed. When Iko did not move, Shreve deployed pepper spray through the door slot. When Iko still did not come to the door, Shreve deployed another burst of pepper spray. As he was doing so, Iko came to the door with his hands in front of him, and inserted them through the slot. Officers shouted that he should turn around and place his hands behind his back and through the slot. When he failed to comply with the officers' demands that he place his hands behind his back, however, Shreve administered another burst of pepper spray, and Iko again lay down on the floor.

After one final burst of pepper spray, as Iko remained on the floor, the extraction team entered his cell. They secured him in metal handcuffs, shackles, and placed a spit mask over his head.