Constitutional Law — sovereign immunity — contracts clause

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United States Court of Appeals For the Seventh Circuit

Civil

Constitutional Law — sovereign immunity — contracts clause

The Eleventh Amendment gives states immunity from claims that a pay freeze for state employees violates the Contracts Clause.

“In this case, like the plaintiff in MSA Realty, Council 31 seeks an injunction that would result in payments being made out of the State’s treasury. Council 31 attempts to distinguish its requested injunctive relief from that sought by the plaintiff in MSA Realty by pointing to the fact that Council 31 seeks only to enjoin the Rules that implemented the pay freeze; conversely, the plaintiff in MSA Realty sought relief ‘through an order directing the payment of certain funds out of the state treasury to the Buffalo Grove [tax increment fund] district for the ultimate benefit of [the plaintiff].’ Id. at 292. In other words, Council 31’s request for injunctive relief does not specifically require the court to direct payment of funds out of the State’s treasury, while the plaintiff in MSA Realty did seek direct payment. This distinction is immaterial. Council 31’s argument ignores our holding that ‘the eleventh amendment bars a claim for injunctive relief . . . that would require direct payments by the state from its treasury for the indirect benefit of a specific entity.’ Id. at 295. It does not matter that the injunction in this case would preclude State officials from enforcing the Rules without explicitly directing payment from the State’s treasury; the effect of issuing the injunctive relief Council 31 seeks in this case is the same as the effect of the relief sought by the plaintiff in MSA Realty— the injunction would force the defendants, acting in their official capacities, to extract funds from the State’s treasury for the ultimate benefit of the plaintiffs. There is thus no question that the ‘essence of the relief sought’ is the payment of funds out of the treasury to the employees at the 14 state agencies whose budgets did not contain sufficient appropriations to pay wage increases. Id. at 293; see also Va. Office for Prot. & Advocacy, 131 S. Ct. at 1639 (‘Ex parte Young cannot be used to obtain an injunction requiring the payment of funds from the State’s treasury . . . .’). Accordingly, the injunctive relief sought in this case does not have a ‘merely ancillary’ effect on the State’s treasury, the Ex parte Young doctrine does not apply, and the Eleventh Amendment bars Council 31’s request for an injunction under its Contracts- Clause claim. MSA Realty Corp., 990 F.2d at 293.”

Affirmed.

11-3111 Council 31 v. Quinn

Appeal from the United States District Court for the Central District of Illinois, Myerscough, J., Manion, J.