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                                                                    [PUBLISH]


            IN THE UNITED STATES COURT OF APPEALS

                   FOR THE ELEVENTH CIRCUIT
                     ________________________

                       No. 13-14182 & 13-14927
                      ________________________

                  D.C. Docket No. 2:13-cv-00524-RDP


DARRYL WALKER, et al.,

                                                         Plaintiffs-Appellants,

                                 versus

JEFFERSON COUNTY BOARD OF EDUCATION, et al.,

                                                        Defendants-Appellees.

                      ________________________

                            No. 13-14624
                      ________________________

                  D.C. Docket No. 5:11-cv-03558-TMP


MICHAEL WEAVER,

                                                            Plaintiff-Appellee,

                                 versus

MADISON CITY BOARD OF EDUCATION, et al.,
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                                                           Defendants-Appellants.
                          ________________________

                  Appeals from the United States District Court
                     for the Northern District of Alabama
                         ________________________

                               (November 4, 2014)

Before ED CARNES, Chief Judge, and JORDAN and ROSENBAUM, Circuit
Judges.

JORDAN, Circuit Judge:

      In these consolidated appeals—Walker and Weaver—the Jefferson County

Board of Education and the Madison City Board of Education ask us to recede

from our opinion in Stewart v. Baldwin Cnty. Bd. of Educ., 

, 1511

(11th Cir. 1990), which held that school boards in Alabama are not arms of the

state and therefore not entitled to Eleventh Amendment immunity.        With the

benefit of oral argument, we conclude that the Eleventh Amendment ruling in

Stewart has not been overruled or abrogated, and therefore remains binding

precedent.

                                        I

      We begin with a summary of the proceedings in Walker and Weaver.

      In Walker, a number of so-called 240-day employees sued the Jefferson

County Board of Education, alleging that the Board’s practice of dividing their

annual salaries by 260 days to obtain their hourly and overtime rates violated the

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Fair Labor Standards Act, 29 U.S.C. § 201, et seq. The Walker plaintiffs sought to

recover wrongfully calculated wages, withheld wages, unpaid wages, overtime

compensation, and liquidated damages.

      The district court in Walker granted the Jefferson County Board’s motion to

dismiss. It held that the Board was an arm of the state and therefore entitled to

assert Eleventh Amendment immunity from suit. In so ruling, the district court

concluded that Stewart did not constitute binding precedent. Relying on Versiglio

v. Bd. of Dental Exam’rs of Ala., 

, 1291 (11th Cir. 2012) (Versiglio

II), the district court looked to decisions of the Alabama Supreme Court declaring

that school boards have sovereign immunity under the Alabama Constitution from

suits based on state tort and contract law. Like the panel in Versiglio II, the district

court declined to interpret Alabama law in a way that it believed was diametrically

opposed to the decisions of the Alabama Supreme Court. See Walker v. Jefferson

Cnty. Bd. of Educ., No. 2:13-CV-00524-RDP, 

, at *1 (N.D. Ala.

Aug. 12, 2013); Walker v. Jefferson Cnty. Bd. of Educ., No. 2:13-CV-00524-RDP,

Order Denying Relief from Judgment [D.E. 26] at 2-5 (N.D. Ala. Oct. 4, 2013).

The plaintiffs appeal from that ruling.

      The plaintiff in Weaver, a member of the United States Army Reserve, sued

his former employer, the Madison City Board of Education, alleging that after his

nearly two-year tour of duty in Afghanistan, the Board refused to reinstate him to

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his prior position. He claimed that, by reducing his responsibilities, status, and

salary upon his return from active duty service, the Board violated the Uniform

Services Employment and Reemployment Rights Act, 38 U.S.C. § 4301, et seq.

      The district court in Weaver denied the Madison City Board’s motion to

dismiss on Eleventh Amendment grounds. It ruled that our decision in Stewart

was binding and, alternatively, that the result would be the same even if Stewart

were not controlling. See Weaver v. Madison City Bd. of Educ., 

, 1314-24 (N.D. Ala. 2013). The Board appeals from that decision.

                                         II

      The Eleventh Amendment, as interpreted by the Supreme Court, generally

provides that Article III’s jurisdictional grant did not and does not limit the

sovereign immunity that states enjoyed when they joined the Union. See generally

Va. Office for Prot. & Advocacy v. Stewart, 

, 1637 (2011). This

immunity from suit is available “only” to states and arms of the states. See N. Ins.

Co. of N.Y. v. Chatham Cnty., Ga., 

, 193 (2006) (holding that county

could not assert Eleventh Amendment immunity because it was not acting as an

arm of the state when it operated a drawbridge that it owned). See also Odebrecht

Const., Inc. v. Sec’y, Fla. Dep’t of Transp., 

, 1289 (11th Cir. 2013)

(“Odebrecht has no monetary recourse against a state agency like FDOT because

of the Eleventh Amendment.”). The Boards contend that they are entitled to

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Eleventh Amendment immunity as arms of the state of Alabama, and insist that our

1990 decision in Stewart is no longer good law.

        Stewart involved a claim against an Alabama county board of education (and

others) under 42 U.S.C. § 1983 by a former employee alleging that he was fired for

exercising his First Amendment rights.          The district court denied the school

board’s motion for summary judgment, and the school board appealed, arguing that

it was entitled to absolute immunity under the Eleventh 

.       We declined to address whether the denial of Eleventh Amendment

immunity was immediately appealable under the collateral order doctrine, and

instead exercised our discretion to entertain the Eleventh Amendment immunity

question under the doctrine of pendent appellate jurisdiction. 

1

        Turning to the merits, we applied a three-factor test to determine whether the

school board enjoyed Eleventh Amendment immunity under federal law. We

framed the test as follows: “(1) how the state law defines the entity; (2) the degree

of state control over the entity; and (3) the entity’s fiscal autonomy—i.e., where

the entity derives its funds and who is responsible for judgments against the

entity.” 

Supreme Court later held that the denial of Eleventh Amendment immunity is
immediately appealable pursuant to the collateral order doctrine. See P.R. Aqueduct & Sewer
Auth. v. Metcalf & Eddy, Inc., 

, 141 (1993).
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      That test, in conjunction with relevant Supreme Court and Eleventh Circuit

precedent, led us to conclude in Stewart that the school board could not assert

Eleventh Amendment immunity. First, the Supreme Court, looking in part to state

law, had held in Mt. Healthy Bd. of Educ. v. Doyle, 

, 280-81 (1977),

that an Ohio school board was not entitled to Eleventh Amendment immunity, as it

was more like a county or city than an arm of the state. 

-

10. Second, we had previously denied Eleventh Amendment immunity to school

boards in Florida, Mississippi, and Louisiana because those entities had a

substantial amount of control over their own affairs and the means to raise funds,

so that any adverse judgments could be paid out of local funds. 

(citing

cases). Third, the fact that “Alabama state courts provide[d] county boards of

education with sovereign immunity in state tort law actions d[id] not require a

similar treatment under the Eleventh Amendment,” as it was improper to “conflate

sovereign immunity with regard to a state-created tort with Eleventh Amendment

immunity for a federal cause of action.” 

n.6. Fourth, school boards in

Alabama possessed a “significant amount of flexibility in raising local funding,”

including the ability to raise revenues by selling interest-bearing tax anticipation

warrants. 

. As a result, “it c[ould not] be said that a judgment against a

county school board w[ould] come from state funds.” 

-11. Fifth, those

school boards had the power to establish general education policy, and the

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authority to assign teachers and place students. 

Finally, at least four

district courts in Alabama had denied Eleventh Amendment immunity to school

boards in that state. 

       Once a panel of this court decides an issue, its holding on that issue is

binding on all subsequent panels, “unless and until it is overruled or undermined to

the point of abrogation by the Supreme Court or by this court sitting en banc.”

United States v. Sneed, 

, 1332 (11th Cir. 2010) (italics omitted).

And that is the rule even if the prior panel failed to consider certain arguments or

contentions. “[W]e have categorically rejected an overlooked reason or argument

exception to the prior precedent rule.” United States v. Johnson, 

,

1320 (11th Cir. 2008) (citing cases), rev’d on other grounds, 

(2010).

                                            A

       A Supreme Court decision abrogates one of our prior cases only if it is

“clearly on point.” United States v. Lawson, 

, 1319 (11th Cir. 2012).

The Supreme Court has not decided any cases that abrogate Stewart, and Mt.

Healthy—its one decision on the Eleventh Amendment immunity of a local school

board—is still good law today, as it continues to be cited favorably by the Court.

       2
        We followed Stewart in Kendrick v. Jefferson Cnty. Bd. of Educ., 

, 914
(11th Cir. 1991), and denied Eleventh Amendment immunity to an Alabama county school board
sued under federal law.


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See N. Ins. Co. of 

; Alden v. Maine, 

, 756 (1999);

Missouri v. Jenkins, 

, 56 n.20 (1990).

      Our circuit, moreover, has not overruled Stewart through an en banc

decision. Indeed, the Eleventh Amendment test articulated in Stewart remains the

law of the circuit, though the third Stewart factor (the entity’s fiscal autonomy—

i.e., where the entity derives its funds and who is responsible for judgments against

the entity) has now been subdivided into a third factor (where the entity derives its

funds) and a fourth factor (who is responsible for judgments against the entity).

See, e.g., Manders v. Lee, 

, 1309 (11th Cir. 2003) (en banc); Ross v.

Jefferson Cnty. Dep’t of Health, 

, 660-61 (11th Cir. 2012).3

                                            B

      We have recognized that “[i]f state law changes or is clarified in a way that

is inconsistent with the state law premise of one of our earlier decisions, the prior

panel precedent rule does not bind us to follow our earlier decision.” 

. The Boards believe that Alabama law has changed significantly with

respect to how school boards are characterized, and that as a result Stewart is no

longer binding.




      3
       We therefore do not address whether (or how) the prior panel precedent rule applies
when one or more factors of a multi-factor test have changed.


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        Quoting one of our recent cases, the Boards begin by pointing out that

whether an entity “qualifies as an arm of the state is a federal question with a

federal standard, but whether that standard is met will be determined by carefully

reviewing how the [entity] is defined by state law.” Versiglio 

.

In that case the panel initially ruled that, “[d]espite the strength of [its] claim” to

Eleventh Amendment immunity under our four-factor test, the Alabama Board of

Dental Examiners did not enjoy such immunity because one factor “weigh[ed]

heavily” against it: the Alabama Court of Civil Appeals had ruled that the Board of

Dental Examiners was not entitled to sovereign immunity under state law. See

Versiglio v. Bd. of Dental Exam’rs of Ala., 

, 1276-77 (11th Cir.

2011) (Versiglio I). The Versiglio I panel thought it would be wrong to rule on

Eleventh Amendment immunity in a way that was “diametrically opposed” to the

ruling of the Alabama Court of Civil Appeals on state sovereign immunity. 

        The Versigilio I panel later granted rehearing, vacated Versiglio I, and ruled

that the Board of Dental Examiners was entitled to Eleventh Amendment immunity

from a claim asserted under the FLSA. It did so because, after issuance of the

initial panel opinion, the Alabama Supreme Court ruled that the Board of Dental

Examiners was a state agency that was immune from a breach of contract suit

based on state law. See Versiglio 

. The Versiglio II panel

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explained that it did not want to have “the incongruous result of having a ‘state

agency’ that is immune from suit under state law but not federal law.” 

by saying that we “give[ ] great deference to how state courts

characterize the entity in question,” and that “[t]his practice is in keeping with the

ordinary deference granted state courts when they interpret matters of state

concern.” 

                                          C

      We have no quarrel with the general proposition, as expressed in Versiglio

II, that how state law defines an entity is significant for purposes of the Eleventh

Amendment. See Mt. 

(“The answer depends, at least in

part, upon the nature of the entity created by state law.”). Accord 

(“Given these [four] factors, the resolution of the Eleventh

Amendment issue . . . depends, in part, on state law.”). But we do not think this

proposition helps the Boards here.

      The Alabama Supreme Court ruled in 2009 and again in 2012 that county

school boards enjoy sovereign immunity, under § 14 of the Alabama Constitution,

from suits based on state tort or contract law. See Ex Parte Hale Cnty. Bd. of

Educ., 

, 848 (Ala. 2009) (“Because county boards of education are

local agencies of the [s]tate, they are clothed in constitutional immunity from

suit[.]”); Ex Parte Montgomery Cnty. Bd. of Educ., 

, 841 (Ala. 2012)

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(“It is well settled in Alabama that ‘[l]ocal school boards are agencies of the state,

and not of the local governmental units they serve, and they are entitled to the

same absolute immunity as other agencies of the state.’”) (citation omitted). As the

Boards see it, the Alabama Supreme Court’s decisions in Hale County and

Montgomery County require us to revisit our ruling in Stewart, and under Versiglio

II we should overrule Stewart so that we do not have the incongruous situation of

having Alabama school boards enjoying sovereign immunity under state law but

being denied Eleventh Amendment immunity under federal law. Versiglio II,

however, is not as sweeping as the Boards think.

      First, the Boards’ suggestion that our 2012 decision Versiglio II can be read

as collapsing the entire Eleventh Amendment multi-factor test into a single

dispositive inquiry—whether the state courts grant state law immunity to the entity

for suits based on state law—conflicts not only with our 1990 decision Stewart, but

also with our 2003 en banc decision in Manders. As the district court in Weaver

explained, “[h]ow the state courts treat an entity is only one part of the first factor

of the Stewart and Manders analysis. Within the first factor the court also weighs

how state statutes treat the particular entity.” 

(emphasis and footnote omitted). We decline to read Versiglio II in a way which

violates our prior panel precedent rule and creates interpretive problems for panels

in the future. See Dippin’ Dots, Inc. v. Frosty Bites Distribution, LLC, 

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1197, 1208 n.13 (11th Cir. 2004) (refusing, given prior panel precedent rule, to

modify multi-factor test previously established by circuit). See also United States

v. Mozie, 

, 1285 (11th Cir. 2014) (“Under the prior panel precedent

rule, when two of our decisions conflict, we are obligated to follow the earlier

one.”); Offshore of the Palm Beaches, Inc. v. Lynch, 

, 1256 (11th

Cir. 2014) (“[W]hen faced with an intracircuit split, we look to the earliest case not

abrogated by the Supreme Court or by this Court sitting en banc.”). 4

       Second, at the time we decided Stewart, Alabama courts had already held

that school boards were state entities entitled to sovereign immunity from tort suits

based on state law. See, e.g., Brown v. Covington Cnty. Bd. of Educ., 

, 625 (Ala. 1988). Although we recognized that principle of state sovereign

immunity law in Stewart, we did not find it determinative, and held that Alabama

school boards could not assert Eleventh Amendment immunity:

             That Alabama state courts provide county boards of education
       with sovereign immunity in state tort law actions does not require a
       similar treatment under the Eleventh Amendment. The Supreme
       Court’s resolution in Mt. Healthy is instructive. At the time that Mt.
       Healthy was decided, the case law in Ohio was clear that a local



       4
         In declining to follow Stewart, the district court in Walker relied in part on Huber, Hunt
& Nichols, Inc. v. Architectural Stone Co., 

, 24 (5th Cir. 1980) (stating that whether
an entity is a “‘second self’ of the state or a ‘separate and distinct’ entity subject to suit ‘must be
determined by the law of the state’”) (citation omitted). To the extent that Huber held that
Eleventh Amendment immunity is governed solely by how state law characterizes an entity, it
has been superseded by the later en banc decision in 

(setting out four-
part Eleventh Amendment immunity test).
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      school board was cloaked in sovereign immunity to the same degree
      as the state itself[.]

n.6 (citing cases). We closed by saying that the school

board’s “attempt to conflate [state] sovereign immunity with regard to a state-

created tort with Eleventh Amendment immunity for a federal cause of action is

unavailaing.” 

like Brown, the Alabama Supreme Court’s 2009 decision in

Hale County and 2012 decision in Montgomery County do not constitute new

pronouncements of Alabama law on the question of the state sovereign immunity

enjoyed by local school boards, and did not permit our Versigilio II decision to

implicitly overrule or prior decision in Stewart. They likewise do not provide a

basis for us to conclude that Stewart has been abrogated.       Cf. Howlett ex rel.

Howlett v. Rose, 

, 377-78 (1990) (“To the extent that the [state] law

of sovereign immunity reflects a substantive disagreement with the extent to which

governmental entities should be held liable for their constitutional violations, that

disagreement cannot override the dictates of federal law.”). We note, as well, that

the Alabama courts do not view state sovereign immunity and Eleventh

Amendment immunity as one and the same. See Ex Parte Ala. Dep’t of Youth

Servs., 

, 404 (Ala. 2003) (“State law sovereign immunity is relevant

[in the Eleventh Amendment context] only as it indicates whether the state

considers the entity to be part of the state. It is at best only a rough, overly
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inclusive gauge of the arm-of-the-state status under the Eleventh Amendment[.]”)

(citation omitted).

                                          D

      Even assuming that Versiglio II now requires us to give more weight to how

state courts treat the entity in question, the Boards’ attempt to sink Stewart with a

Versiglio II broadside fares no better. The problem for the Boards is Ex Parte

Madison Cnty. Bd. of Educ., 

, 989-90 (Ala. 2008), a post-Stewart case

in which the Alabama Supreme Court held that a local school board is “not an arm

of the [s]tate for the purposes of § 1983 liability and is not entitled to Eleventh

Amendment immunity.” In coming to this conclusion, the Alabama Supreme

Court—which like any state court is generally presumed competent to interpret and

apply federal law, see Adventure Outdoors, Inc. v. Bloomberg, 

,

1301 (11th Cir. 2008)—did not just defer to our decision in Stewart. Instead, it

correctly recognized that Eleventh Amendment immunity is a question of federal

law, and independently applied our Manders test over the course of several pages,

ultimately concluding that “application of [that] test to the facts before us does not

support a finding that the [school board] has established a right to Eleventh

Amendment immunity.” Madison 

.

      With respect to the first factor of the test, which asks how state law

characterizes school boards, the Alabama Supreme Court in Madison County

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explained that a school board’s members are elected by voters in the relevant

county; that a school board determines its own educational policy and prescribes

rules and regulations for the schools in its jurisdiction; that a school board may

suspend or dismiss superintendents, principals, teachers, and other employees; and

that a school board may transfer teachers as needed to different schools or grades.

Thus, the Alabama Supreme Court held that the first factor “len[t]

little weight to the [school board] being considered an ‘arm of the [s]tate’ and

thereby entitled to Eleventh Amendment immunity.” 

      As for the second factor of the test, which looks at the degree of control

asserted by the state, the Alabama Supreme Court concluded in Madison County

that “the legislature . . . specifically vested in county boards of education the

authority to transfer, suspend, or dismiss teachers[.]” 

result, this “second

factor d[id] not weigh in favor of the [b]oard’s being considered an ‘arm of the

[s]tate’ and thereby entitled to Eleventh Amendment immunity.” 

and fourth factors (where the board of education derives its funds

and who is responsible for judgments against the board) also did not weigh in favor

of according Eleventh Amendment immunity. The Alabama Supreme Court ruled

that the school board failed to explain from where it derived its funds, and further

failed to provide any evidentiary support for its assertion that any judgment against

it would be paid from the state treasury. 

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      Madison County is the Alabama Supreme Court’s latest word on whether

local school boards are entitled to Eleventh Amendment immunity for federal

causes of action, and its ruling on that issue is consistent with (and identical to) our

ruling in Stewart. So, even if we were to read Versigilio II as broadly as the

Boards urge us to do, and look to the more recent decisions of the Alabama

Supreme Court for definitive guidance on the Eleventh Amendment question

before us, the result would be the same. Simply stated, we do not create an

incongruous result by adhering to our Stewart decision because the Alabama

Supreme Court’s Madison County decision agrees with Stewart that, with respect

to employment decisions, a local school board in Alabama is not an arm of the

state for purposes of Eleventh Amendment immunity. See Madison County, 

at 988-89 (explaining that local school boards have statutory authority to

transfer, suspend, or dismiss teachers and employees). See also Ala. Code § 16-

11-17 (“The city board of education shall fix the salaries of all employees and may

suspend or dismiss any principal or teacher or supervisor or attendance officer or

other regular employee so appointed on the written recommendation of the city

superintendent of schools for immorality, misconduct in office, incompetency,

willful neglect of duty or when, in the opinion of the board, the best interests of the

schools may require[.]”); Ala. Code § 16-8-23 (“The county board [of education]

may suspend or dismiss for immorality, misconduct in office, insubordination,

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incompetency or willful neglect of duty, or whenever, in the opinion of the board,

the best interests of the school require it, superintendents, principals, teachers or

any other employees or appointees of the board[.]”). 5

                                               E

       At oral argument, counsel for the Boards represented that the decision to

compensate employees based upon an allegedly illegal formula in Walker was

made by the state of Alabama, which had assumed control of the Jefferson County

Board of Education pursuant to a state financial intervention law. We do not know

if this factual assertion is correct or not, because the necessary information is not in

the record. We therefore do not address it. On remand the parties are free to

pursue discovery on this issue, and to make whatever arguments they deem

appropriate to the district court in their summary judgment filings.

                                              III

       “Whether [an entity] is an ‘arm of the [s]tate’ must be assessed in light of the

particular function in which the [entity] was engaged when taking the actions out

of which liability is asserted to arise.” 

. Both of the



       5
         The Boards may think that the Alabama Supreme Court’s decisions denying Eleventh
Amendment immunity but granting state sovereign immunity to local school boards are
schizophrenic, but the “Supreme Court has repeatedly recognized that sovereign immunity is a
flexible defense with multiple aspects that states can independently relinquish without affecting
others.” Stroud v. McIntosh, 

, 1301 (11th Cir. 2013). And, as we have explained,
the Alabama courts do not view Eleventh Amendment immunity and state sovereign immunity
as coterminous concepts. See Ala. Dep’t of Youth 

.
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cases before us concern employment-related decisions (i.e., hiring, assignment, and

compensation), and under 

-11, local school boards in

Alabama are not arms of the state with respect to such decisions. Accordingly, the

Jefferson County Board of Education and the Madison City Board of Education are

not immune under the Eleventh Amendment from suits challenging those decisions

under federal law. The district court’s dismissal of the complaint in Walker is

reversed, and the district court’s denial of the motion to dismiss in Weaver is

affirmed.

      REVERSED and REMANDED in Walker, and AFFIRMED in Weaver.




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