Fifth Circuit Issues En Banc Opinion in Pace

After a long wait, the Fifth Circuit finally issued this en banc opinion in Pace v. Bogalusa City School Board. The crucial issue on which the Court granted rehearing en banc involved the validity of the waiver of sovereign immunity that two federal statutes demand of state programs that receive federal funds: Section 504 of the Rehabilitation Act, which prohibits disability-based discrimination by any program or activity that receives any kind of federal funds; and the Individuals with Disabilities Education Act, which requires states that receive federal special-education funds to guarantee all children with disabilities a free appropriate public education and any related services that are necessary to give them access to school. The Supreme Court has held that Congress may demand that states waive sovereign immunity in exchange for receiving federal funds, but only if the condition is (among other things) voluntarily accepted by the state. The panel in Pace held that a state that accepted federal funds prior to the Supreme Court's Garrett decision in 2001 did not knowingly and voluntarily waive its sovereign immunity under Section 504 and the IDEA. Under the panel's cockamamie theory, before Garrett a state would not have known it had any sovereign immunity to waive, because the state would have thought its sovereign immunity had already been abrogated by the ADA. In other words, because the state thought it was getting something for nothing (federal funds without giving up sovereign immunity), it was unfair to hold the state to the plain terms of Section 504 and the IDEA, which clearly require states that accept federal funds to waive sovereign immunity. In so holding, the panel relied on, but extended, the Second Circuit's decision in Garcia v. SUNY Health Sciences Center, 280 F.3d 98 (2d Cir. 2001), which held that a state that accepted federal funds prior to the 1996 decision in Seminole Tribe did not knowingly and voluntarily waive its sovereign immunity under Section 504.

Prior to the panel opinion in Pace, no other court of appeals had followed Garcia on the Section 504 issue, while a number of courts of appeals had explicitly rejected Garcia's reasoning. In today's en banc decision, the Fifth Circuit brought itself back into the mainstream. The majority opinion (jointly written by Judges Davis and Weiner) holds that the only kind of knowledge necessary to make a sovereign-immunity waiver effective "is a state's knowledge that a Spending Clause condition requires a waiver of immunity, not a state's knowledge that it has immunity that it could assert. At bottom, we conclude that if Congress satisfies the clear-statement rule" -- that is, if Congress makes clear that acceptance of federal funds will be deemed a waiver of sovereign immunity -- "the knowledge prong of the Spending Clause waiver analysis is fulfilled." And the majority concluded that "during the relevant time period," Section 504 and the IDEA "put each state on notice that, by accepting federal money, it was waiving its Eleventh Amendment immunity."

Reaching the merits, the majority ruled that the plaintiff was not entitled to relief under the IDEA, and that his claims under the ADA and Section 504 were barred by issue preclusion.

Judge Jones, joined by five of her colleagues, dissented on the sovereign immunity question. Notably, the dissent seems to take the position that Tennessee v. Lane, which upheld the abrogation of sovereign immunity under Title II of the ADA where the statute is applied to guarantee access to courts, should not be extended beyond the access-to-courts context.