The opinion of the court was delivered by: DEBEVOISE
This is an action brought by a group of professors formerly employed at Rutgers, the State University of New Jersey. Plaintiffs Gabor Kovats, Steven C. Procuniar, Joy L. Davis, Roberta M. Delson, Hace Tishler, and Anna Beck filed a Complaint on June 21, 1982 against defendants Rutgers, the Board of Governors of Rutgers, Dr. Edward Bloustein, as President of Rutgers and individually and John Martin, as Vice-President for University Personnel and individually. Plaintiffs allege they acquired academic tenure by virtue of University Regulation 60.1 and that their respective discharges without notice and hearing violated their due process rights under the Fourteenth Amendment. Plaintiffs seek relief pursuant to 42 U.S.C. § 1983. Defendants now move for summary judgment and leave to amend the Answer. Plaintiffs cross-move for leave to amend the Complaint.
I entered an Order on October 7, 1982 administratively terminating this action pursuant to the abstention doctrine of Railroad Commission v. Pullman Company, 312 U.S. 496, 61 S. Ct. 643, 85 L. Ed. 971 (1941). After final disposition of related state court litigation, I granted the motion of plaintiffs Procuniar, Davis, and Delson to reopen the action on September 26, 1983. The remaining plaintiffs, Kovats, Tishler, and Beck, voluntarily dismissed their claims in the state court proceedings in July 1983. I granted summary judgment in favor of defendants on grounds of res judicata in January 1984. The United States Court of Appeals for the Third Circuit reversed and remanded the case for determination of the property issue. Kovats v. Rutgers, 749 F.2d 1041 (3d Cir. 1984).
Defendants now move for summary judgment arguing the Eleventh Amendment poses a bar to maintenance of this action against Rutgers, the Board of Governors, and Bloustein and Martin in their official capacities. In the alternative, they contend Rutgers and the Board of Governors are not persons within the meaning of 42 U.S.C. § 1983 and cannot be sued under that statute. They also argue that the declaratory and injunctive relief plaintiffs seek cannot be obtained from Bloustein and Martin in either their official or individual capacities. Finally, they seek leave to amend the Answer to include the affirmative defense of qualified immunity. Defendants maintain that plaintiffs have alleged insufficient personal involvement on the part of Bloustein and Martin to satisfy 42 U.S.C. § 1983, and that monetary relief against them in their individual capacities should be dismissed on the ground of qualified immunity.
The Third Circuit, after reviewing the res judicata question on appeal, concluded its opinion with the following instruction: "On remand the district court should address the property issue." Kovats, 749 F.2d at 1049. The present motions pertain to the Eleventh Amendment and qualified immunity but do not reach the property issue. By entertaining these motions, I am not unmindful of the Third Circuit's directive. However, on remand a case is before the district court "in the same posture it originally came. . . ." Union Pacific Railroad Company v. Johnson, 249 F.2d 674, 676 (9th Cir. 1957). Disposition of a question is implied if that question was necessarily implied in the claim before the appellate court or if failure to raise it constitutes an implied waiver. Sprague v. Ticonic Bank, 307 U.S. 161, 168, 83 L. Ed. 1184, 59 S. Ct. 777 (1938). The issue of immunity falls within neither category. Thus, I am guided by the Supreme Court's finding in Sprague that "(w)hile a mandate is controlling as to matters within its compass, on the remand a lower court is free as to other issues." Id.; see also Illinois Bell v. Slattery, 102 F.2d 58 (7th Cir. 1939). I construe the Third Circuit's instruction to mean the property question should be reached if necessary. Accordingly, these motions are properly before me.
I. Eleventh Amendment Immunity
In Miller v. Rutgers, 619 F. Supp. 1386 (D.N.J. 1985), I held that Rutgers is entitled to Eleventh Amendment immunity from suit in a federal court. I applied the factors set forth by the Third Circuit in Urbano v. Board of Managers of New Jersey State Prison, 415 F.2d 247 (3d Cir. 1969), cert. denied, 397 U.S. 948, 90 S. Ct. 967, 25 L. Ed. 2d 128 (1970) to determine whether a state entity is considered the alter ego of a state and concluded that most of the Urbano factors demonstrate Rutgers' entitlement to Eleventh Amendment immunity. Plaintiffs assert several new arguments not considered in Miller and, in effect, urge reconsideration of that opinion. Because of the substantial concerns raised, it is appropriate to review the question of Rutgers' status.
Two considerations lead me to conclude that my decision in Miller was erroneous: (i) Review of additional financial data not submitted in Miller leads to the conclusion that Rutgers has non-state assets and recurring non-state income sufficient to ensure that any judgment against it need not be paid from the state treasury. (ii) Although the opinion in the recent Third Circuit case of Mauriello v. The University of Medicine and Dentistry of New Jersey, 781 F.2d 46 (3d Cir. 1986) does not address the Eleventh Amendment question, the question was raised in the trial court and the Third Circuit had no difficulty in proceeding to the merits of the case, which sought damages and injunctive relief against the University under 42 U.S.C. § 1983. As will be discussed below, the University of Medicine and Dentistry is in a very similar posture to Rutgers.
Plaintiffs' counsel has thoroughly and elegantly set forth the history of Rutgers, beginning with its origins in 1766 as a private college. Today, Rutgers' holdings and income reflect that private origin and the steadily increasing role of the state in the functioning of the University. As is the case with many state-related universities, Rutgers has for years walked on both sides of the line demarcating its state and private ties. This is most evident when considering the source of funds for a judgment.
Rutgers contends, through the affidavit of its Senior Vice President for Program Development, Budgeting and Student Services, Marvin Greenberg, that any judgment against it would be paid in part from state appropriations. Greenberg Aff., paras. 10-11. The University is self-insured on all claims under $250,000, so any judgment would allegedly come out of the commingled funds derived from the University's self generating income and state appropriations.
In Miller plaintiff failed to demonstrate that any factual questions existed with regard to this most important Urbano factor. Miller, 619 F. Supp. at 1390. Plaintiffs in this action argue that Rutgers has sources of funds other than state monies to satisfy a judgment against it and that commingling of funds does not warrant Eleventh Amendment immunity.
I outlined Rutgers' four sources of income in Miller relying on the affidavit of Charles Coyle, Rutgers' Assistant Vice-President for Budget and Resources. These sources are auxiliary income, restricted income, general Unversity or self-generating income, and appropriations from the state. Id. at 1389. New evidence demonstrates that the significant auxiliary funds available to Rutgers may be and are pledged to various projects of Rutgers' choosing. For example, for fiscal years 1982-83 through 1984-85 Rutgers pledged 67.3% to 68.1% of its auxiliary income to holders of bonds issued under a trust indenture and a capital lease obligation with the New Jersey Educational Facilities Authority. The total amount of revenue attributable to auxiliary enterprises for ...