In a recent opinion, the Fifth Circuit Court of Appeals ruled that the “Sabine River Authority, State of Louisiana” (“SRA-L”) is not entitled to Eleventh Amendment sovereign immunity.
SRA-L was a named defendant in a suit by plaintiffs who own land in Louisiana and Texas. Plaintiffs levied allegations that years-long mismanagement of the Toledo Bend reservoir by SRA-L culminated in damage to plaintiffs’ properties via flooding, violating their constitutional rights under the Fifth Amendment. Plaintiffs alleged that despite advance knowledge of the likelihood for significant downstream flooding, SRA-L decided to open spillway gates freeing water from the reservoir into the Sabine River to alleviate elevated reservoir volumes from a cataclysmic rain storm in March of 2016.
The Fifth Circuit affirmed the federal district court’s order denying SRA-L’s Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction by applying the Circuit’s well-established six-factor test of Clark v. Tarrant County, 798 F.2d 736, 744-45 (5th Cir. 1986). An entity classified as an “arm of the state” would be entitled to sovereign immunity provided by the Eleventh Amendment; in contrast, a “political subdivision” is not afforded the same protection. The burden of proof falls on the entity seeking immunity and SRA-L failed to meet its burden.
The six Clark factors are as follows:
“(1) whether state statutes and case law characterize the agency as an arm of the state;
(2) the source of funds for the entity;
(3) the degree of local autonomy the entity enjoys;
(4) whether the entity is concerned primarily with local, as opposed to statewide, problems;
(5) whether the entity has authority to sue and be sued in its own name; and
(6) whether the entity has the right to hold and use property.”
In its opinion, the Fifth Circuit considered each factor in turn, focusing primarily on factor number two—the most significant of the six. Since one of the Eleventh Amendment’s primary objectives is preservation of the state treasury, the main question when determining whether an entity is considered as an organ of the State is its source of funding (i.e. who will be liable for payment of a judgment levied against it). By analyzing various Louisiana Statutes pertaining to the SRA-L, the Fifth Circuit concluded that SRA-L “appears to have near-total financial independence.” The Fifth Circuit found SRA-L failed to meet its burden of showing that the state would be liable for a judgment against it either directly or indirectly (via responsibility for general debt or because the state provides the majority of the levee district’s budget).
As for the five other factors, only one weighed in favor of finding the SRA-L as an arm of the state as opposed to a political subdivision, and only slightly. The Fifth Circuit agreed with the lower court that state statutes and case law characterize SRA-L as an arm of the state; but caveated that the factor was restricted and “given the inconsistent descriptions in the same statutes and the lack of a more-definite characterization in either statute or case law.” The Fifth Circuit noted that even though the SRA-L was made part of the umbrella of the executive branch via its placement in the Department of Transportation and Development after its creation, it maintained substantial control over its operations. That retention of autonomy tilted against finding SRA-L an arm of the state.
To support its position regarding the third factor—the degree of local autonomy the entity enjoys—SRA-L harped on the fact that its thirteen board members are gubernatorial appointees confirmed by the state senate with no involvement by local governing bodies or local legislators. The lower court found that although SRA-L board members were susceptible to state influence on account of their serving at the governor’s behest, the parish residency requirement for board members imposed sufficient limits on the governor’s control. The Fifth Circuit disagreed, finding that this factor weighed minimally against finding SRA-L as an arm of the state, but for a different reason. The Fifth Circuit focused on the autonomy the SRA-L enjoys in its functional decision-making such as acquiring property, incurring debts, borrowing money, entering contracts, and even establishing an enforcement division. To the extent that independent management authority mattered more than commissioner/board member autonomy, the Fifth Circuit found this factor ultimately weighed toward SRA-L being a political subdivision rather than an arm of the state.
Regarding whether the entity principally focuses on local (as opposed to statewide) issues, the Fifth Circuit found the case cited by SRA-L in support of this factor inapposite—wherein a state university was afforded Eleventh Amendment sovereign immunity. The Fifth Circuit determined that the SRA-L primarily dealt with local or regional concerns, unlike a state university fulfilling statewide higher education demands.
The last two factors hold the least weight. SRA-L did not contest the lower court’s finding that the fifth factor did not aid in a finding of SRA-L being an arm of the state. La. R.S. 38:232(B)(2) clearly delineates SRA-L’s authority to sue and be sued in its own name. As for the sixth and final factor, though SRA-L pointed to La. R.S. 38:2325(B) which states that it holds property “as an instrumentality of the State of Louisiana[;]” the Fifth Circuit pointed out that the statute also states “[t]itle to all property acquired by the Authority shall be taken in its corporate name.” The argument that the property ultimately belongs to the State and thus weighs in favor of sovereign immunity has been previously rejected by the Circuit—and was rejected again here. The pertinent issue is whether the entity has the power to hold property in its name and under state statutes, which the SRA-L clearly does.
The Fifth Circuit’s ruling in Bonin will impact future flood-damage litigation by making it easier for plaintiff landowners to bring claims against various State River Authorities for decisions made in the maintenance, conservation, and supervision of dams, reservoirs, rivers, and streams in their respective watersheds.
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 Perry Bonin, et al., v. Sabine River Auth., State of Louisiana, No. 20-40138 c/w No. 22-40433 (5th Cir. 2023).
 After its creation by the Louisiana legislature in 1950 as a conservation and reclamation district, the SRA-L entered a joint venture with the Sabine River Authority, Texas (“SRA-T”) to build “a dam and reservoir to provide electrical power, promote industrial development in both States, conserve water for agricultural purposes, and create fishing, recreation, and commercial development.” Stallworth v. McFarland, 350 F. Supp. 920, 926 (W.D. La. 1972).
 “Denials of motions to dismiss on sovereign immunity grounds fall within the collateral order doctrine, and are thus immediately appealable.” Texas v. Caremark, Inc., 584 F.3d 655, 658 (5th Cir. 2009) (citing McCarthy ex rel. Travis v. Hawkins, 381 F.3d 407, 411-12 (5th Cir. 2004)).
 Voyt v. Board of Com’rs of Orleans Levee Dist., 294 F.3d 684, 690 n. 4 (5th Cir. 2002).
 E.g. La. R.S. §§ 38:2324 (B)(1) and 2325(A)(5).
 Bonin at 9.
 Bonin at 7.
 See Voyt v. Board of Com’rs of Orleans Levee Dist., 294 F.3d 684, 696 (5th Cir. 2002).