District Court May Decide Whether Montclair State University

Waived Its Immunity to Suit For LAD Discrimination Claims

March 3, 2017

Francine Foner, Esq.

Ty Hyderally, Esq.

The Eleventh Amendment to the United States Constitution has been interpreted as generally granting states with immunity from suit in federal court. In addition, that immunity has been extended to a state university when certain factors exist which justify a finding that the university is an “arm of the State.”  These factors are known as the Fitchik factors since the Third Circuit consolidated these elements into a three-part test in Fitchik v. New Jersey Transit Rail Operations, Inc., 873 F.2d 655, 659 (3d Cir. 1989) (en banc).  The Fitchik factors are: (1) the funding factor: whether the state treasury is legally responsible for an adverse judgment entered against the alleged arm of the State; (2) the status under state law factor: whether the entity is treated as an arm of the State under state case law and statutes; and (3) the autonomy factor: whether, based largely on the structure of its internal governance, the entity retains significant autonomy from state control. Maliandi v. Montclair State University, 845 F.3d 77, 83-84 (3d Cir. N.J. 2016). However, even when the Fitchik factors weigh in favor of finding that a state university is “an arm of the State” and therefore entitled to immunity from suit in federal court, “States may waive their immunity to suit in federal court at their discretion if done unequivocally.” Id. at 93. Whether New Jersey has waived its immunity to suit for violation of the New Jersey Law Against Discrimination (“NJLAD”) in federal court is at issue in Maliandi.

In Maliandi, the District Court for the District of New Jersey decided that the Fitchik factors weighed in favor of finding that Montclair State University (“MSU”) was not an arm of the State, and therefore not entitled to Eleventh Amendment immunity from suit in federal court, i.e., MSU could be sued in federal court. However, on appeal by MSU, the United States District Court of Appeals for the Third Circuit disagreed. Instead, the Third Circuit held that the Fitchik factors weighed in favor of finding that MSU was an arm of the State, and therefore entitled to Eleventh Amendment immunity from suit in federal court.  However, because neither party had raised the issue, the Appeals Court punted to the District Court the issue of whether New Jersey (and by extension MSU) had waived immunity for suit “with regard to Maliandi’s NJLAD claim or the consequences for the District Court’s exercise of supplemental jurisdiction on remand.” Id. at 82, fn. 2.  Thus, the Third Circuit held that “the constitutional right of the State of New Jersey to be free from private suit in federal court must be respected, and, unless the District Court determines on remand that New Jersey has waived its immunity for Maliandi’s NJLAD claim, the suit against MSU must be dismissed.”  Id. at *38 (emphasis added).

Although the Third Circuit declined to decide the issue of whether New Jersey has waived its immunity for the plaintiff’s NJLAD claim, the Court pointed to relevant case law on the issue in which the New Jersey District Court has recognized that there is a different waiver standard applicable to a state Defendant being sued as an employer. Thus, when the State (or by extension a university found to be an arm of the State) is sued in the capacity of an employer, such suits “are clearly within the scope of the explicit waiver of sovereign immunity contained in N.J.S.A. § 10:5-5(e); §§ 10:5-12(a),(c)).” Heine v. Comm’r of the Dep’t of Cmty. Affairs of N.J., 2014 U.S. Dist. LEXIS 116904, 2014 WL 4199203 (D.N.J. Aug. 22, 2014), citing Rudolph v. Adamar of N.J., Inc., 153 F. Supp. 2d 528, 540-44 (D.N.J. 2001).  The Rudolph Court distinguished cases which were filed in federal court alleging NJLAD violations against state employers, which were not dismissed on Eleventh Amendment immunity grounds. Id. at 541-42,  citing   Motley v. New Jersey State Police, 196 F.3d 160 (3d Cir. 1999), cert. denied, 529 U.S. and Lanni v. State of New Jersey, 177 F.R.D. 295 (D.N.J. 1998).

As Maliandi’s NJLAD claim was brought against MSU as Maliandi’s employer, it clearly falls within the scope of the explicit waiver of sovereign immunity contained in N.J.S.A. § 10: 5-5(e); §§ 10:5-12(a), (c). Thus, on remand, the District Court should find that New Jersey has waived its immunity for Maliandi’s NJLAD claim against MSU as an employer, and therefore exercise supplemental jurisdiction over Maliandi’s NJLAD claim.

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