McHUGH, Circuit Judge.
Ms. Arbogast was employed in the Workers Compensation Division of KDOL, a governmental subdivision of the State of Kansas. Ms. Arbogast suffers from asthma and, in April 2008, complained that perfumes and other strong fragrances in the workplace were impairing her ability to work. In September 2010, Ms. Arbogast was moved to a workspace in the basement of her office building in an attempt to alleviate the problem. But Ms. Arbogast continued to suffer asthma attacks when coworkers wearing fragrances would come speak with her, prompting Ms. Arbogast to make additional complaints to her supervisor. On August 1, 2011, Karin Brownlee, then-Secretary of Labor, terminated Ms. Arbogast's employment at KDOL.
On January 22, 2013, Ms. Arbogast filed suit, asserting claims of discrimination and retaliation in violation of the Rehabilitation Act of 1973, 29 U.S.C. § 701 et seq.
KDOL moved to dismiss Ms. Arbogast's Rehabilitation Act claims pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(6), and 12(c). Relevant to this appeal, KDOL argued the district court did not have jurisdiction to adjudicate the claim because (1) KDOL lacks the capacity to sue or to be sued under Kansas law and (2) Kansas has not waived its Eleventh Amendment immunity from suit. Ms. Arbogast filed a motion seeking limited discovery on the jurisdictional issue, which the district court granted.
After the parties completed limited discovery, the district court denied KDOL's motion to dismiss. Specifically, the district court found KDOL had waived its Eleventh Amendment immunity by accepting federal funds for its Unemployment Insurance Division. Although Ms. Arbogast worked in the Workers Compensation Division, the district court concluded that KDOL's acceptance of federal funds for the Unemployment Insurance Division was sufficient to waive Eleventh Amendment immunity for the entirety of KDOL, including the Workers Compensation Division. The district court also rejected KDOL's argument that it did not have the capacity to be sued, finding it was merely a reiteration of KDOL's immunity argument. KDOL now brings this interlocutory appeal.
KDOL argues (1) the district court erred in not dismissing Ms. Arbogast's Rehabilitation Act claims because KDOL
KDOL first argues the district court erred in refusing to dismiss Ms. Arbogast's suit because KDOL lacks the capacity to sue or to be sued under Kansas law and is therefore not a proper defendant. See Fed.R.Civ.P. 17(b) (indicating that a party's capacity to sue or be sued in federal court is determined by state law). Specifically, KDOL argues that, as merely a state agency, Kansas law does not endow it with the capacity to sue or to be sued. It further argued in its briefing before this court that we have jurisdiction to hear an immediate appeal of this issue under the collateral order doctrine. But counsel for KDOL conceded at oral argument that the collateral order doctrine may not permit interlocutory review of KDOL's lack of capacity argument. For the reasons discussed below, this concession was appropriate.
Normally, federal appellate courts only have jurisdiction to hear appeals from "final decisions of the district courts." 28 U.S.C. § 1291. But the U.S. Supreme Court has also recognized a "small class" of nonfinal orders, which, though not usually immediately appealable, are nonetheless amenable to interlocutory appeal under the collateral order doctrine.
First, KDOL contends both its Eleventh Amendment immunity and lack of capacity claims fall within the collateral order doctrine. It is well established that orders denying state entities Eleventh Amendment immunity are immediately reviewable under the collateral order doctrine. Puerto Rico Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 147, 113 S.Ct. 684, 121 L.Ed.2d 605 (1993) ("We hold that States and state entities that claim to be `arms of the State' may take advantage of the collateral order doctrine to appeal a district court order denying a claim of Eleventh Amendment immunity."); accord Timpanogos Tribe v. Conway, 286 F.3d 1195, 1199-1200 (10th Cir.2002). But we must determine whether KDOL's lack of capacity claim is similarly amenable to immediate review. To invoke our jurisdiction under the collateral order doctrine, an appellant "must establish that the district court's order (1) conclusively determined the disputed
When considering whether a district court has conclusively determined the disputed question, this court has emphasized the importance of precisely identifying that question. See United States v. Deters, 143 F.3d 577, 580 (10th Cir.1998). "In order to determine what the disputed question is, we must examine the grounds for the appeal." Id. (brackets and internal quotation marks omitted). "Only by identifying the precise issue being appealed can a court decide whether that issue has been conclusively determined ...." Id. at 580. The relevant issue being appealed in this case is whether KDOL has the capacity to be sued under Kansas law.
The district court's analysis of KDOL's lack of capacity argument consisted of three sentences:
Although the district court disposed of KDOL's lack of capacity argument, it held only that the argument was "ineffectual" because it reflected a mere repackaging of KDOL's sovereign immunity arguments. But the court's analysis sheds little light on the precise issue KDOL raised below and on appeal: whether KDOL has the statutory capacity to be sued under Kansas law. Thus, KDOL has failed to establish that its capacity claim is an independently appealable collateral order.
Because we do have collateral order doctrine jurisdiction to review KDOL's immunity claim, we next consider whether we may exercise our pendent appellate jurisdiction to also consider its capacity claim. In Swint, the Supreme Court expressly limited pendent appellate jurisdiction in the collateral order context. See Swint, 514 U.S. at 42, 115 S.Ct. 1203. And this court has "interpreted Swint to mean that the exercise of our pendent appellate jurisdiction is only appropriate when the otherwise nonappealable decision is inextricably intertwined with the appealable decision, or where review of the nonappealable decision is necessary to ensure meaningful review of the appealable one." Crowe & Dunlevy, 640 F.3d at 1148 (internal quotation marks omitted). We have further emphasized,
Moore v. City of Wynnewood, 57 F.3d 924, 930 (10th Cir.1995).
KDOL's remaining claim is that it is immune from suit under the Eleventh Amendment to the U.S. Constitution. Specifically, KDOL argues it has not waived its Eleventh Amendment immunity
The Eleventh Amendment provides, "The 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, or by Citizens or Subjects of any Foreign State." U.S. Const. amend. XI. The Supreme Court has interpreted the Eleventh Amendment to bar suits in federal court against a nonconsenting state brought by the state's own citizen. Edelman v. Jordan, 415 U.S. 651, 662-63, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974). But such immunity is not absolute. Congress can abrogate states' immunity when exercising its power under section 5 of the Fourteenth Amendment to the U.S. Constitution. See U.S. Const. Amend. XIV, sec. 5 ("The Congress shall have power to enforce, by appropriate legislation, the provisions of this article."); College Sav. Bank v. Fla. Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666, 670, 119 S.Ct. 2219, 144 L.Ed.2d 605 (1999); Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 59, 116 S.Ct. 1114, 134 L.Ed.2d 252 (1996). Relevant to this appeal, a state may also waive its Eleventh
To determine whether KDOL unequivocally expressed its intent to waive Eleventh Amendment immunity through acceptance of federal funds as described in the Rehabilitation Act, we first look to the act's plain language. Congress enacted the Rehabilitation Act of 1973 to combat discrimination targeted toward individuals with physical and mental disabilities. See 29 U.S.C. § 794. The act provides:
Id.
In Atascadero State Hospital v. Scanlon, 473 U.S. 234, 247, 105 S.Ct. 3142, 87 L.Ed.2d 171 (1985), the Supreme Court held that the act fell "far short of manifesting a clear intent to condition participation in the programs funded under the Act on a State's consent to waive its constitutional immunity." In response to the Atascadero decision, Congress enacted the Rehabilitation Act Amendments of 1986, in which it sought to provide a sufficiently clear statement that acceptance of federal funds by the states constituted a waiver of immunity. See Robinson, 295 F.3d at 1189. As codified, the amendment provides:
42 U.S.C. § 2000d-7(a)(1).
The Supreme Court has declared § 2000d-7 to be precisely "the sort of unequivocal waiver that our precedents demand." Lane v. Pena, 518 U.S. 187, 198, 116 S.Ct. 2092, 135 L.Ed.2d 486 (1996). Accordingly, every circuit court to consider the issue, including the Tenth Circuit, has concluded "that by accepting federal financial assistance as specified in 42 U.S.C. § 2000d-7, states and state entities waive sovereign immunity from suit." Robinson, 295 F.3d at 1190 (collecting cases); Brockman v. Wyo. Dep't of Family Servs., 342 F.3d 1159, 1167 (10th Cir.2003) ("[A]ny State reading 42 U.S.C. § 2000d-7(a)(1) would clearly understand that, by accepting funding, it was consenting to resolve disputes regarding alleged violations of the Act's anti-discrimination provisions in federal court." (brackets and ellipses omitted)). Therefore, our precedent squarely holds that a state's "affirmative choice to apply for, and accept, [federal] funds thus serves as an express waiver of immunity." Brockman, 342 F.3d at 1168.
It is undisputed that KDOL accepted federal funds for its Unemployment Insurance Division. As such, the only remaining
Counsel for KDOL conceded at oral argument that the plain language of § 794(b)(1)(A) indicates KDOL's acceptance of federal funds for any part of its operations effectuates a waiver of Eleventh Amendment immunity for the entire department. Nevertheless, KDOL advances several overlapping theories why it has not waived Eleventh Amendment immunity for the Workers Compensation Division.
KDOL argues its mere receipt of federal funds is insufficient to demonstrate it has knowingly and voluntarily waived its Eleventh Amendment immunity. This argument is squarely foreclosed by our precedent holding that receipt of funds under the Rehabilitation Act is a valid waiver of immunity. See Robinson, 295 F.3d at 1190. Accordingly, we do not address it further.
KDOL next argues its acceptance of federal funds for its Unemployment Insurance Division cannot support a finding of waiver because the contract documents governing the federal grant received by
KDOL argues that, like in Nanomantube, the contracts governing the grants it received from the federal government are insufficient to constitute an explicit waiver of immunity. The first problem with KDOL's argument is that tribal sovereignty, unlike state sovereignty, is not governed by the Eleventh Amendment. See id. at 1151-52 (explaining the source of tribal immunity). The second problem with KDOL's argument is that the waiver of its immunity here is not dependent on any contractual agreements. Rather, KDOL's immunity has been waived through Congress's unequivocal statement in § 2000d-7 that receipt of federal funds constitutes consent to waive Eleventh Amendment immunity, followed by KDOL's affirmative choice to accept the conditioned funds. See Robinson, 295 F.3d at 1190 (noting that no waiver through contract is necessary if waiver has been accomplished by statute). Accordingly, there was no need for KDOL to waive its immunity by contract because waiver had already been accomplished through the acceptance of federal funds.
KDOL also argues the Workers Compensation Division should be considered its own "program or activity" under the Rehabilitation Act. And as a result, it argues any waiver of immunity based on the Unemployment Insurance Division's acceptance of federal funds cannot be extended to waive immunity from Rehabilitation Act claims arising out of Ms. Arbogast's employment in the Workers Compensation Division. Generally, courts considering the scope of a state entity's waiver under the Rehabilitation Act acknowledge that the definition of "program or activity" was "not intended to sweep in the whole state or local government" whenever one subdivision discriminates. Schroeder v. City of Chicago, 927 F.2d 957, 962 (7th Cir.1991). Rather, courts interpret the phrase "program or activity" to "only cover[] all the activities of the department or the agency receiving federal funds." Lovell v. Chandler, 303 F.3d 1039, 1051 (9th Cir.2002). When courts consider whether a particular subunit of state government is an independent department under the Rehabilitation Act, they look to the state's characterization of the subunit under state law. Sharer v. Oregon, 581 F.3d 1176, 1178 (9th Cir.2009); Haybarger v. Lawrence Cnty. Adult Probation & Parole, 551 F.3d 193, 201 (3d Cir.2008) ("Although the Rehabilitation Act is a federal statute, we look to state law to ascertain the character of a state entity for purposes of assessing Eleventh Amendment immunity."). Courts further consider the degree of financial and administrative independence of the subunit. Sharer, 581 F.3d at 1180; Haybarger, 551 F.3d at 202.
But a division that accepts no federal funds can nonetheless fall within the scope of an Eleventh Amendment waiver so long as that division is part of the same department under state law. The Third Circuit has described the waiver under § 2000d-7 as "structural," meaning "[o]nce the department or agency is identified, ... the statute encompasses all of its operations, regardless of whether a particular operation is federally funded." Haybarger, 551 F.3d at 200. In Haybarger, a former employee of Pennsylvania's Lawrence County Adult Probation and Parole Department (LCAPPD) brought suit under the Rehabilitation Act, claiming she was discharged due to health problems. Id. at 196. LCAPPD was a subunit of the Fifty-Third Judicial District. Id. at 196 n. 1. Although LCAPPD received no federal funds, the Domestic Relations Section of the Fifty-Third Judicial District received federal social security funds. Id. at 197. After the district court dismissed the claims on the basis of Eleventh Amendment immunity, the employee appealed. The Third Circuit concluded the Domestic Relations Section was a subunit of the Fifty-Third Judicial District and that a subunit's acceptance of federal funds worked a waiver on the entire Fifty-Third Judicial District. Id. at 200. The Third Circuit reasoned that "[b]ecause the [Domestic Relations Section] is not independent, the funds it receives are imputed to the Fifty-Third Judicial District as a whole," and immunity was therefore waived. Id. at 202. See also Thomlison v. City of Omaha, 63 F.3d 786, 789 (8th Cir.1995) (holding that where the city's Fire Division received no federal funds, but was part of the Public Safety Department and other Public Safety Department divisions received federal funds, the entire Public Safety Department — including the Fire Division — had waived immunity for violations of the Rehabilitation Act). But see Sharer, 581 F.3d at 1179-80 (holding that where agency was part of judicial branch as defined by Oregon Constitution, but not part of the Judicial Department under Oregon statute, receipt of federal funds by Judicial Department did not waive Eleventh Amendment immunity for Rehabilitation Act claims against agency).
These cases stand for the proposition that acceptance of federal funds for one division within a larger department may effectuate a waiver of Eleventh Amendment immunity for the entirety of the larger department, including divisions that accept no federal funds. The critical question is the degree to which the division accepting federal funds can be considered independent from the larger department. In this case, the Unemployment Insurance Division and Workers Compensation Division both have strong administrative ties to KDOL, which is "administered under the direction and supervision of the secretary of labor." Kan. Stat. Ann. § 75-5701(a). The Workers Compensation Division is "established within and as a part of the department of labor." Id. § 75-5708(a). The Workers Compensation division director is appointed by and serves at the pleasure of the secretary of labor. Id.
Under Kansas law, KDOL actively administers both the Unemployment Insurance Division and the Workers Compensation Division. Thus, the Workers Compensation Division's separate funding does not make it so independent of the Department of Labor that it should be considered its own "program or activity" under the Rehabilitation Act.
Moreover, the contract governing the grant of funds to the Unemployment Insurance Division was entered into by the Kansas Secretary of Labor on behalf of KDOL. Kansas law specifically authorizes the secretary to enter into such contracts. Kan. Stat. Ann. § 75-5733. There is no similar authorization for division directors. Thus, KDOL accepted federal funds and passed those funds through to its Unemployment Insurance Division. Under the plain language of the Rehabilitation Act, KDOL's acceptance of federal funds waived Eleventh Amendment immunity for "all of [its] operations," including those of its Workers Compensation Division. See 29 U.S.C. § 794(b)(1)(A).
Finally, KDOL argues that interpreting the Rehabilitation Act and § 2000d-7 to effectuate a waiver of Eleventh Amendment immunity for KDOL's Workers Compensation Division — which received no federal funds — would exceed Congress's authority under the Spending Clause of the U.S. Constitution. Specifically, KDOL contends the connection between its receipt of federal unemployment insurance funds is too attenuated from the Workers Compensation Division, thereby violating the Supreme Court's test for conditions on grants of federal funds announced in South Dakota v. Dole, 483 U.S. 203, 107 S.Ct. 2793, 97 L.Ed.2d 171 (1987).
In Dole, the Supreme Court discussed the limitations on Congress's power under the Spending Clause. First, any exercise of the spending power must be for the "general welfare." Id. at 207, 107 S.Ct. 2793 (internal quotation marks omitted). "In considering whether a particular expenditure is intended to serve general public purposes, courts should defer substantially to the judgment of Congress." Id. Second, Congress may condition the states' receipt of federal funds, but it must do so "unambiguously, enabling the States to exercise their choice knowingly, cognizant of the consequences of their participation." Id. (brackets, ellipses, and internal quotation marks omitted). Third, the conditions must be related "to the federal interest in particular national projects or programs." Id. And fourth, other constitutional principles may independently bar the condition of federal funds. Id. at 208, 107 S.Ct. 2793.
KDOL first argues the creation of an individual right of action under the Rehabilitation Act lacks a sufficient nexus with the general welfare to satisfy the first Dole requirement. But KDOL's argument misapprehends the Dole test. The first Dole factor requires Congress to exercise its spending power "in pursuit of the general welfare." Id. at 207, 107 S.Ct. 2793
KDOL also argues under the second Dole factor that it did not have sufficient notice of the possibility that it would be waiving immunity for the entire Department of Labor by accepting funds for the Unemployment Insurance Division. But the plain language of the Rehabilitation Act and § 2000d-7 indicates that a state waives immunity for "all of the operations" of a department "any part of which" receives federal funds. 29 U.S.C. § 794(b)(1)(A). Therefore, KDOL had sufficient notice of the scope of its waiver.
KDOL further argues that the condition placed upon the receipt of federal funds — waiver of immunity — is unrelated to the federal interest justifying expenditure of those funds, at least to the extent waiver is extended to a division that accepted no federal funds. Although the Dole Court declined to "define the outer bounds of the `germaneness' or `relatedness' limitation on the imposition of conditions under the spending power," Dole, 483 U.S. at 208 n. 3, 107 S.Ct. 2793, the Third Circuit rejected an argument largely identical to KDOL's. It held there need only be a "discernible relationship imposed by a Rehabilitation Act condition on a department or agency and a federal interest in the program it funds." Koslow, 302 F.3d at 175 (internal quotation marks omitted). The Koslow court reasoned, "Through the Rehabilitation Act, Congress has expressed a clear interest in eliminating disability-based discrimination in state departments or agencies. That interest, which is undeniably significant and clearly reflected in the legislative history, flows with every dollar spent by a department or agency receiving federal funds." Id. at 175-76 (citing Alexander v. Choate, 469 U.S. 287, 295-97, 105 S.Ct. 712, 83 L.Ed.2d 661 (1985)). We agree with the Third Circuit that Congress's intent to eliminate disability-based discrimination is linked to its distribution of federal funds, and that it expressly conditioned the receipt of federal funds by any subunit of a state department or agency on compliance with the Rehabilitation Act. The third Dole factor is satisfied.
KDOL has not argued that any other constitutional provisions are implicated in this case. Accordingly, we do not apply the fourth Dole factor.
We lack appellate jurisdiction to consider KDOL's argument that it does not have the capacity to be sued and DISMISS the appeal as to that claim. The district court was correct to reject KDOL's claim of Eleventh Amendment immunity as to Ms. Arbogast's Rehabilitation Act claims and we AFFIRM as to that claim.