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Wednesday, March 30, 2005

Ind. Decisions - 7th Circuit posts one today

Takle, Joyce v. Univ WI Hosp Clinics (WD Wis.) [10 pp.]

Before POSNER, RIPPLE, and ROVNER, Circuit Judges.
POSNER, Circuit Judge. Joyce Takle filed suit in a federal district court in Wisconsin against the University of Wisconsin Hospital and Clinics Authority, which owns and operates the University of Wisconsin Hospital and Clinics in Madison, Wisconsin. (For the sake of brevity, we’ll usually refer to both the Authority and the University of Wisconsin Hospital and Clinics as “the hospital.”) A former nurse at the hospital, Takle sought damages for violation of her rights under Title I of the Americans with Disabilities Act, the alleged violation consisting of the hospital’s having treated her as if she were disabled by diabetes when she was not. * * * The district judge dismissed the suit on the hospital’s motion, ruling that the hospital is an arm of the State of Wisconsin and is therefore immune from suit in federal court unless it has consented to be sued there, which it has not. Title I of the ADA does not abrogate state sovereign immunity. * * *

But what exactly is the “state”? The defendant in this case is, as we are about to see, a hybrid entity; it has characteristics of both a state agency and a private foundation. Where on the public-private spectrum to locate it depends on the purpose of the doctrine of sovereign immunity, and that purpose is obscure because “sovereignty” is an obscure concept when applied to a state of the United States. * * *

What we have, then—making this indeed much like the Illinois Clean Energy Community Foundation case—is a state’s creation of a private entity, with the state using its leverage as the creator of the entity to insist that it serve the state’s interests as well as its own. The strings that tie the hospital to the state are found in many cases in which a state decides to privatize a formerly state function. They do not require that privatization be treated as a farce in which the privatized entity enjoys the benefits both of not being the state and so being freed from the regulations that constrain state agencies, and of being the state and so being immune from suit in federal court.

Our conclusion that the hospital does not have sovereign immunity is in accord with the other decisions that deal with similar hybrid entities. * * *

In a case such as this, in which a privatized “independent” entity for which the state bears no financial responsibility is being sued over its personnel policies, which are entirely within its discretion, the fact that the suit can have no adverse effect on the state’s finances is highly relevant.

The grant of the motion to dismiss is REVERSED and the case REMANDED.

Posted by Marcia Oddi on March 30, 2005 02:08 PM
Posted to Ind. (7th Cir.) Decisions