Nautilus Insurance Company v. Selective Service, LLC

Opinion

UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT

NAUTILPUlaSi nINtiSffURANCE CO. v. , Civil No. 3:19cv1973 (JBA)

SELECTIVE SERVICE, LLC, JOEL MROSEK, JAY PELLETIER, CORNERSTONE ASSETS, LLC, and STATE DOeFf eCnOdNaNntEsCTICUT SECOND INJURY FUND, March 9, 2021 . RULING GRANTING DEFENDANT SECOND INJURY FUND’S MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION Plaintiff, Nautilus Insurance Company (“Nautilus”), a corporation domiciled and maintaining a principal place of business in Arizona, filed this declaratory judgment action to determine whether it has a duty under its commercial liability policy and/or its excess Jay Pelletier, et. al v. Joel insurance policy to indemnify its insured, Selective Service, in an employee’s tort action Mrosek, et. al now pending in the Superior Court for the State of Connecticut, , Docket No. HHD-cv-18-6101052-S (“Pelletier Action”). The State of Connecticut intervened in the Pelletier action since Connecticut’s Second Injury Fund, a state-operated workers’ compensation insurance fund, had or may become obligated to pay workers compensation benefits to the plaintiff employee because his employer did not carry workers’ compensation insurance. The Second Injury Fund now moves to dismiss this declaratory judgment action against it for lack of subject matter jurisdiction under the doctrine of sovereign immunity. (Def.’s Mem. in Supp. of Mot. to Dismiss [Doc. # 24-1] at 2, 4.) Plaintiff opposes, arguing that the Second Injury Fund “does not enjoy Eleventh 1 Amendment or common law sovereign immunity” with respect to these claims. (Pl.’s Mem 1 At oral argument, Plaintiff also argued that because the Second Injury Fund is merely a in Opp. of Mot. to Dismiss [Doc. # 25] at 1.) The Court held oral argument via teleconIf.e renceL oenga Nl oSvteamndbaerrd 1 9, 2020. ([Doc. # 38].)

“A case is properly dismissed for lack of subject matter jurisdiction under Rule Makarova v. United States 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it.” , 201 F.3d 110, 113 (2d Cir. 2000). “A plaintiff asserting Id. Malik v. Meissner subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists.” (citing , 82 F.3d 560, 562 (2d Cir. 1996)). In evaluating a motion to dismiss for lack of subject matter jurisdiction, the Court is instructed to accept all Natural Resources Defense Council v. Johnson facts alleged in the complaint as true and make all reasonable inferences in favor of the plaintifIfI. . Discussion , 461 F.3d 164, 171 (2d Cir. 2006). The Eleventh Amendment provides that “[t]he Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State.” U.S. CONST. AMEND. XI. “While the Amendment by its terms does not bar suits against a State by its own citizens, this Edelman v. Jordan Court has consistently held that an unconsenting State is immune from suits brought in

federal court by her own citizens as well as by citizens of another State.” , 415 U.S. 651, 662-663 (1974).This immunity “protects a state’s dignity and fiscal integrity Beaulieu v. Vermont from federal court judgments . . . and acts as a limitation on the federal judiciary’s Article III powers.” , 807 F.3d 478, 483 (2d Cir. 2015). A state may waive its Pennhurst State Sch. & Hosp. v. Halderman Eleventh Amendment sovereign immunity by consenting to suit against it in a federal court. , 465 U.S. 89, 99 (1984). Congress can also Kimel v. Florida Bd. of Regents abrogate a state’s sovereign immunity with respect to the rights afforded by the Fourteenth Ex parte Young Amendment. , 528 U.S. 62, 73 (2000). In , 209 U.S. 123 (1908), the Supreme Court recognized an exception to the Eleventh Amendment’s grant of sovereign immunity where a plaintiff sues a state official acting in their official capacity for prospective relief from continuing violations of Ex parte Young federal law. Although permits limited prospective relief against state officials, the Eleventh Amendment “forecloses . . . an award of money required to be paid New York City Health & Hosps. Corp. v. Perales from state funds that compensates a claimant for the state’s past violation of federal law.” Edelman , 50 F.3d 129, 135 (2d Cir. 1995) (citing , 415 U.S. at 668). The Supreme Court reasoned that when a state officer acts Pennhurst unconstitutionally, the state could not have authorized the action, thereby stripping the state official of any immunity. , 465 U.S. at 102. This exception is narrow, and “a Id. suit against state officials that is in fact a suit against a State is barred regardless of whether it seeks damages or injunctive relief.” at 101-102. Here, Plaintiff brings a claim against the Second Injury Fund, a state agency, for declaratory relief. Plaintiff does not allege that the State of Connecticut waived its Eleventh Amendment immunity, nor does it allege that Congress abrogated the State’s sovereign immunity in cases such as this. Importantly, Plaintiff does not name any state official as a defendant in its lawsuit. Plaintiff maintains that “the Eleventh Amendment does not prevent claims for prospective relief, such as injunctions and declaratory relief, against the [Second Injury] Fund.” (Mem. in Opp. at 4.) In support of its contention, the opinions that Plaintiff cites reflect that the plaintiffs brought claims against state officials, not solely against states or 2 state agencies. Moreover, the Supreme Court expressly rejected Plaintiff’s proposition, concluding that it is not the c ase “that the Eleventh Amendment never applies unless a Morenz v. Wilson-Coker 2 Galvin v. L loyd , 415 F.3d 230 (2d Cir. 2005) (bringing suit against Patricia Wilson-Cooker, Commissioner of the Connecticut Department of Social Services); Dwyer v. Reg,a 6n63 F. Supp. 1572 (D. Conn. 1987) (bringing suit against members of the Connecticut Commission on Medicolegal Investigations in their indiHviadmuaillt oann dv .o Lfafijcoiiael capacities); , 777 F.2d 825 (2d Cir. 1985) (bringing suit against trustee and administrative head oFflo trhied aN Dewep Yt.o orfk S Statatete v E. Tmrpealosyueree sS Ralevtoirres,m Inecn.t System); , 660 F. Supp. 2d 261 (D. Conn. 2G0r0e9g)g ( bv.r Linagwinsogn suit against the prison warden and correctional officers); , 458 U.S. 670 (1T9o8w2n) o(bf Brilnogoimngsb suurigt avg. ainst sPteantne soyflfviacinailas); , 732 F. Supp. 849 (E.D. Tenn. 1989) (bringing suit against the Commissioner of the Tennessee DepaSrotmline nv.t Sotfa Stea fUetnyiv);e rsity of New York , 496 F. Supp. 686 (M.D. Pa. 1980) (bringing suit against state agencies and various state officers). In one other case, , 416 F. Supp. 536 (S.D.N.Y. 1976), the court found that further factual development was required to judgment for money payable from the state treasury is sought” and that “limiting the Cory v. White strictures of the Eleventh Amendment to a suit for a money judgment . . . would ignore the explicit language and contradict the very words of the Amendment itself.” , 457 U.S. 85, 91 (1982). In other words, that a plaintiff seeks only prospective relief and not retrospective damages does not necessarily exempt the claim or categorically exclude it from the Eleventh Amendment. Since Plaintiff fails to name a state official in its suit for declaratory relief, Eleventh Amendment immunity bars the action against the Second Injury FIIuIn. d. Conclusion The Court finds that the Eleventh Amendment bars Plaintiff’s action for declaratory relief against the Second Injury Fund and accordingly GRANTS the Second Injury Fund’s motion to dismiss for lack of subject matter jurisdiction. IT IS SO ORDERED. /s/ _ Janet Bond Arterton, U.S.D.J. Dated at New Haven, Connecticut this 9th day of March 2021.