The opinion of the court was delivered by: Charles L. Brieant, United States District Judge
Before this Court for decision is the second motion by the Idaho
Potato Commission, represented by the Attorney General of the State
of Idaho, for relief under Rule 60(b) of the Federal Rules of Civil
Procedure, representing the third attempt by the Idaho Potato
Commission (hereinafter the "IPC") to assert Eleventh Amendment immunity.
Familiarity on the part of the reader with this Court's prior
decisions, Idaho Potato Commission v. M&M Produce Farms & Sales,
35 F. Supp.2d 313 (SDNY January 22, 1999) (First Opinion) denying
IPC's motion to dismiss, and this Court's subsequent unreported
decision dated August 18, 1999 (Second Opinion) denying the first
Rule 60(b) motion is assumed.
The sole issue is whether the IPC enjoys sovereign immunity as an
agency created by the Idaho Legislature charged with promoting the
sale of Idaho potatoes. The legislative purpose of the IPC is to
exercise the power of the State of Idaho in resisting the unlawful
branding of other potatoes as Idaho potatoes and protect the quality
of Idaho potatoes. In an effort to further this result and to protect
the identity and integrity of Idaho potatoes, pursuant to Idaho Code
§§ 22-1207(9), the IPC is required to "devise and require the
application of either a seal, label brand package or other suitable
device that will protect the identity of the original Idaho pack of
potatoes as near to the final consumer as possible." In furtherance
of this statutory mission, the IPC or the State of Idaho itself, duly
registered in the principal register of the United States Patent and
Trademark Office the five certification marks described in this
Court's First Opinion.
The IPC requires all shippers who buy potatoes in bulk and then
repackage them in consumer bags to obtain a license from the
Commission and agree to submit to IPC's audit and inspection process.
Naturally, this service implicates payment of a fee. The licensing
agreements also require the packers to acknowledge that certain of
the Idaho marks are valid registered marks, and that they will not
during the term of the agreement or at any time thereafter attack the
title or any rights of the IPC in and to the relevant Idaho marks.
The parties opposing the IPC in this litigation are packers or
re-packers of produce (the "Packers"). They seek declaratory and
injunctive relief cancelling the Idaho marks under federal and state
law, and compensatory and treble damages for three claims of
anti-trust violations by IPC.
In its original motion to dismiss, the LPC argued that as an agency
of the state it was immune from suit by the Packers under the
Eleventh Amendment and that it was entitled to sovereign immunity
from the Packers' counterclaims.
The Packers claimed, and the Court found in its First Opinion that
IPC was not entitled to Eleventh Amendment immunity, and that
assuming it was, any immunity from Hapco's and G&T's claims for
cancellation of the IPC's marks had been abrogated by the Lanham Act
as amended by the Trademark Remedy Clarification Act of 1992,
15 U.S.C. § 1122.
Our First Opinion turned essentially on this Court's Mancuso
analysis of Eleventh Amendment immunity, based upon Mancuso v. New
York State Thruway Authority, 86 F.3d 289, 292 (2d Cir. 1996) cert.
denied 519 U.S. 992 (1996). Mancuso jurisprudence allows a state
created entity such as IPC to enjoy Eleventh Amendment immunity if it
can demonstrate that it is "more like `an arm of the state' such as
an agency, than like `a municipal corporation or other political
subdivision."' Mancuso, 86 F.3d at 292 (quoting Mt. Healthy School
District Bd. of Educ. v. Doyle, 429 U.S. 274 (1977)).
In our initial Mancuso analysis this Court considered the six
factors listed in that case and found that the issue of "whether
allowing the entity to be sued in federal court would put the State
Treasury at risk and/or whether it would threaten the integrity of
the State" to be the most salient factor under Mancuso where, as in
this case, the remaining five factors are evenly balanced or point in
different directions. The Court concluded that the State Treasury of
Idaho was not at risk, and denied the motion to dismiss on the ground
of Eleventh Amendment immunity.
Idaho took an immediate appeal, but while the appeal was pending
returned to this Court for the first Rule 60(b) motion, based on
subsequently adopted legislation in the State of Idaho which
purported to alter the Court's analysis of the sixth Mancuso factor.
Prior to the first legislative change of § 22-12 10, the statute read
in relevant part as follows:
All expenses incurred by the [IPC] in performing
its duties and exercising its powers shall be
without liability on the part of the state.
The first legislative change in Idaho Code § 22-12 10 read as follows:
All contractual expenses incurred by the [IPC] in
performing its duties and exercising its powers
shall be without liability on the part of the
state. (Emphasis in original)
The IPC then argued that the purpose of the amendment was to make
clear that the state was not responsible for the IPC's contractual
obligations, but was [by negative implication] liable for its torts.
(IPC's memorandum of law in ...