No. 14-3812

Dec. 27, 2016 (DATE FILED)

Judge Krause

FOR APPELLANT: Jennifer J. McGruther, Office of Attorney General of New Jersey.

DEFENDANT’S ATTORNEY: Michael R. DiChiara, Krakower DiChiara.

Defendant appealed from the order of the district court denying its motion to dismiss plaintiff’s FMLA claim pursuant to Eleventh Amendment immunity. Plaintiff alleged that she took leave from her position with defendant to receive treatment for breast cancer, but when she returned from her medical leave she was denied her original position and instead offered an allegedly inferior position, in violation of the FMLA. The district court denied defendant’s motion to dismiss the FMLA claim, holding that defendant was not the state of New Jersey’s “alter ego” and therefore not entitled to Eleventh Amendment immunity from private suit in federal court. On appeal, the court noted that the test for determining whether an entity was an arm of the state for Eleventh Amendment purposes was the three-factor analysis set forth in Fitchik v. New Jersey Transit Rail Operations, Inc., 873 F.2d 655. The Fitchik test considered: (1) whether the state treasury would be legally responsible for an adverse judgment, (2) whether the entity was treated as an arm of the state under case and statutory law, and (3) the autonomy of the entity from state control. The court determined that, although it was a close analysis, defendant met two of the three Fitchik factors and was entitled to Eleventh Amendment immunity. The court first ruled that defendant did not meet the first Fitchik factor, as only a small portion of defendant’s budget came from state appropriations, which did not retain their state-owned character, whereas a plurality or majority of defendant’s income came from sources under its control like tuition, room and board. However, the court determined that defendant did closely meet the remaining two Fitchik factors. The court found that, although defendant’s treatment under statutory or caselaw was somewhat inconclusive, the fact that defendant was not able to sue and be sued in its own name, had immunity from state taxes, and could exercise eminent domain tipped the analysis in favor of finding that defendant was treated as an arm of the state. Finally, the court held that the state, through the governor, exercised sufficient control and oversight over defendant to meet the third Fitchik factor, given that the governor appointed the trustees, who were then required to submit to various administrative, contract and civil service laws and regulations that governed the trustees’ decision-making authority. Accordingly, the court reversed the order of the district court.