author: Justice Thomas Justice O’Connor, f — < I — J Justice White,

text:
    FARRAR et al., coadministrators of ESTATE OF FARRAR, DECEASED v. HOBBY
    No. 91-990.
    Argued October 7, 1992
    Decided December 14, 1992

      Thomas, J., delivered the opinion of the Court, in which Rehnquist, C. J., and O’Connor, Scalia, and Kennedy, JJ., joined. O’Connor, J., filed a concurring opinion, post, p. 116. White, J., filed an opinion concurring in part and dissenting in part, in which Blackmun, Stevens, and Souter, JJ., joined, post, p. 122.

      Gerald M. Birnberg argued the cause for petitioners. With him on the brief were Michael A. Maness and Wag-goner Carr.

      Finis E. Cowan argued the cause for respondent. With him on the brief were Dan Morales, Attorney General of Texas, Will Pryor, First Assistant Attorney General, and Thomas Gibbs Gee

      Briefs of amici curiae urging affirmance were filed for the State of Alabama et al. by Warren Price III, Attorney General of Hawaii, and Steven S. Michaels, Deputy Attorney General, Frankie Sue Del Papa, Attorney General of Nevada, and Brooke Nielsen, Assistant Attorney General, Jimmy Evans, Attorney General of Alabama, Charles E. Cole, Attorney General of Alaska, Winston Bryant, Attorney General of Arkansas, Daniel E. Lungren, Attorney General of California, Richard Blumenthal, Attorney General of Connecticut, Charles M. Oberly III, Attorney General of Delaware, Robert A Butterworth, Attorney General of Florida, Michael J. Bowers, Attorney General of Georgia, Larry EchoHawk, Attorney General of Idaho, Roland W. Burris, Attorney General of Illinois, Linley E. Pearson, Attorney General of Indiana, Bonnie J. Campbell, Attorney General of Iowa, Robert T. Stephan, Attorney General of Kansas, Chris Gor-man, Attorney General of Kentucky, Richard P. Ieyoub, Attorney General of Louisiana, Michael E. Carpenter, Attorney General of Maine, J. Joseph Curran, Jr., Attorney General of Maryland, Scott Harshbarger, Attorney General of Massachusetts, Frank J. Kelley, Attorney General of Michigan, Hubert H. Humphrey III, Attorney General of Minnesota, Mike Moore, Attorney General of Mississippi, William L. Webster, Attorney General of Missouri, Don Stenberg, Attorney General of Nebraska, John P. Arnold,
        Attorney General of New Hampshire, Robert J. Del Tufo, Attorney General of New Jersey, Lacy H. Thornburg, Attorney General of North Carolina, Nicholas J. Spaeth, Attorney General of North Dakota, Lee Fisher, Attorney General of Ohio, Ernest D. Preate, Jr., Attorney General of Pennsylvania, James E. O’Neil, Attorney General of Rhode Island, T. Travis Medlock, Attorney General of South Carolina, Mark Barnett, Attorney General of South Dakota, Charles IK Burson, Attorney General of Tennessee, Paul Van Dam, Attorney General of Utah, Jeffrey L. Amestoy, Attorney General of Vermont, Mary Sus Terry, Attorney General of Virginia, Ken Eikenberry, Attorney General of Washington, Joseph B. Meyer, Attorney General of Wyoming, Jorge Perez-Diaz, Attorney General of Puerto Rico, Elizabeth Barrett-Anderson, Attorney General of Guam, and John Payton, Corporation Counsel of the District of Columbia; for the County of Los Angeles by Richard P. Tonne, De Witt W. Clinton, and Patrick T. Meyers; for Americans for Effective Law Enforcement, Inc., et al. by George J. Franscell and Wayne W. Schmidt; for the Equal Employment Advisory Council by Ann Elizabeth Reesman, Robert E. Williams, and Douglas S. McDowell; for the National League of Cities et al. by Richard Ruda, Michael G. Dzialo, and Glen D. Nager; and for the Washington Legal Foundation et al. by Daniel J. Popeo and Richard A Samp.

        Talbot S. D’Alemberte, Eric B. Schnurer, and Carter G. Phillips filed a brief for the American Bar Association as amicus curiae.

   Justice Thomas

delivered the opinion of the Court.

We decide today whether a civil rights plaintiff who receives a nominal damages award is a “prevailing party” eligible to receive attorney’s fees under 42 U. S. C. § 1988. The Court of Appeals for the Fifth Circuit reversed an award of attorney’s fees on the ground that a plaintiff receiving only nominal damages is not a prevailing party. Although we hold that such a plaintiff is a prevailing party, we affirm the denial of fees in this case.

I

Joseph Davis Farrar and Dale Lawson Farrar owned and operated Artesia Hall, a school in Liberty County, Texas, for delinquent, disabled, and disturbed teens. After an Artesia Hall student died in 1973, a Liberty County grand jury returned a murder indictment charging Joseph Farrar with willful failure to administer proper medical treatment and failure to provide timely hospitalization. The State of Texas also obtained a temporary injunction that closed Artesia Hall.

Respondent William P. Hobby, Jr., then Lieutenant Governor of Texas, participated in the events leading to the closing of Artesia Hall. After Joseph Farrar was indicted, Hobby issued a press release criticizing the Texas Department of Public Welfare and its licensing procedures. He urged the department’s director to investigate Artesia Hall and accompanied Governor Dolph Briscoe on an inspection of the school. Finally, he attended the temporary injunction hearing with Briscoe and spoke to reporters after the hearing.

Joseph Farrar sued Hobby, Judge Clarence D. Cain, County Attorney Arthur J. Hartell III, and the director and two employees of the Department of Public Welfare for monetary and injunctive relief under 42 U. S. C. §§ 1983 and 1985. The complaint alleged deprivation of liberty and property without due process by means of conspiracy and malicious prosecution aimed at closing Artesia Hall. Later amendments to the complaint added Dale Farrar as a plaintiff, dropped the claim for injunctive relief, and increased the request for damages to $17 million. After Joseph Farrar died on February 20,1983, petitioners Dale Farrar and Pat Smith, coadministrators of his estate, were substituted as plaintiffs.

The case was tried before a jury in the Southern District of Texas on August 15, 1983. Through special interrogatories, the jury found that all of the defendants except Hobby had conspired against the plaintiffs but that this conspiracy was not a proximate cause of any injury suffered by the plaintiffs. The jury also found that Hobby had “committed an act or acts under color of state law that deprived Plaintiff Joseph Davis Farrar of a civil right,” but it found that Hobby’s conduct was not “a proximate cause of any damages” suffered by Joseph Farrar. App. to Brief in Opposition A-3. The jury made no findings in favor of Dale Farrar. In accordance with the jury’s answers to the special interrogate-ries, the District Court ordered that “Plaintiffs take nothing, that the action be dismissed on the merits, and that the parties bear their own costs.” Id., at A-6.

The Court of Appeals for the Fifth Circuit affirmed in part and reversed in part. Farrar v. Cain, 756 F. 2d 1148 (1985). The court affirmed the failure to award compensatory or nominal damages against the conspirators because the plaintiffs had not proved an actual deprivation of a constitutional right. Id., at 1151-1152. Because the jury found that Hobby had deprived Joseph Farrar of a civil right, however, the Fifth Circuit remanded for entry of judgment against Hobby for nominal damages. Id., at 1152.

The plaintiffs then sought attorney’s fees under 42 U. S. C. § 1988. On January 80, 1987, the District Court entered an order awarding the plaintiffs $280,000 in fees, $27,932 in expenses, and $9,730 in prejudgment interest against Hobby. The court denied Hobby’s motion to reconsider the fee award on August 31,1990.

A divided Fifth Circuit panel reversed the fee award. Estate of Farrar v. Cain, 941 F. 2d 1311 (1991). After reviewing our decisions in Hewitt v. Helms, 482 U. S. 755 (1987), Rhodes v. Stewart, 488 U. S. 1 (1988) (per curiam), and Texas State Teachers Assn. v. Garland Independent School Dist., 489 U. S. 782 (1989), the majority held that the plaintiffs were not prevailing parties and were therefore ineligible for fees under § 1988:

“The Farrars sued for $17 million in money damages; the jury gave them nothing. No money damages. No declaratory relief. No injunctive relief. Nothing. . . . [T]he Farrars did succeed in securing a jury-finding that Hobby violated their civil rights and a nominal award of one dollar. However, this finding did not in any meaningful sense ‘change the legal relationship’ between the Farrars and Hobby. Nor was the result a success for the Farrars on a ‘significant issue that achieve[d] some of the benefit the [Farrars] sought in bringing suit.’ When the sole relief sought is money damages, we fail to see how a party ‘prevails’ by winning one dollar out of the $17 million requested.” 941 F. 2d, at 1315 (citations omitted) (quoting Garland, supra, at 791-792).

The majority reasoned that even if an award of nominal damages represented some sort of victory, “surely [the Farrars’] was ‘a technical victory ... so insignificant and ... so near the situations addressed in Hewitt and Rhodes, as to be insufficient to support prevailing party status.’” 941 F. 2d, at 1315 (quoting Garland, supra, at 792).

The dissent argued that “Hewitt, Rhodes and Garland [do not] go so far” as to hold that “where plaintiff obtains only nominal damages for his constitutional deprivation, he cannot be considered the prevailing party.” 941 F. 2d, at 1317 (Reavley, J., dissenting).

We granted certiorari. 502 U. S. 1090 (1992).

I — I

The Civil Rights Attorney’s Fees Awards Act of 1976, 90 Stat. 2641, as amended, 42 U. S. C. § 1988, provides in relevant part:

“In any action or proceeding to enforce a provision of sections 1981,1982,1983,1986, and 1986 of this title, title IX of Public Law 92-318 ... , or title VI of the Civil Rights Act of 1964 .. ., the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney’s fee as part of the costs.”

“Congress intended to permit the .. . award of counsel fees only when a party has prevailed on the merits.” Hanrahan v. Hampton, 446 U. S. 754, 758 (1980) (per curiam). Therefore, in order to qualify for attorney’s fees under § 1988, a plaintiff must be a “prevailing party.” Under our “generous formulation” of the term, “‘plaintiffs may be considered “prevailing parties” for attorney’s fees purposes if they succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit/” Hensley v. Eckerhart, 461 U. S. 424, 433 (1983) (quoting Nadeau v. Helgemoe, 581 F. 2d 275, 278-279 (CA1 1978)). “[L]iability on the merits and responsibility for fees go hand in hand; where a defendant has not been prevailed against, either because of legal immunity or on the merits, § 1988 does not authorize a fee award against that defendant.” Kentucky v. Graham, 473 U. S. 159, 165 (1985).

We have elaborated on the definition of prevailing party in three recent cases. In Hewitt v. Helms, 482 U. S. 755 (1987), we addressed “the peculiar-sounding question whether a party who litigates to judgment and loses on all of his claims can nonetheless be a ‘prevailing party.’ ” Id., at 757. In his §1983 action against state prison officials for alleged due process violations, respondent Helms obtained no relief. “The most that he obtained was an interlocutory ruling that his complaint should not have been dismissed for failure to state a constitutional claim.” Id., at 760. Observing that “[r]espect for ordinary language requires that a plaintiff receive at least some relief on the merits of his claim before he can be said to prevail,” we held that Helms was not a prevailing party. Ibid. We required the plaintiff to prove “the settling of some dispute which affects the behavior of the defendant towards the plaintiff.” Id., at 761 (emphasis omitted).

In Rhodes v. Stewart, 488 U. S. 1 (1988) (per curiam), we reversed an award of attorney’s fees premised solely on a declaratory judgment that prison officials had violated the plaintiffs’ First and Fourteenth Amendment rights. By the time the District Court entered judgment, “one of the plaintiffs had died and the other was no longer in custody.” Id., at 2. Under these circumstances, we held, neither plaintiff was a prevailing party. We explainéd that “nothing in [Hewitt] suggested that the entry of [a declaratory] judgment in a party’s favor automatically renders that party prevailing under § 1988.” Id., at 3. We reaffirmed that a judgment — declaratory or otherwise — “will constitute relief, for purposes of § 1988, if, and only if, it affects the behavior of the defendant toward the plaintiff.” Id., at 4. Whatever “modification of prison policies” the declaratory judgment might have effected “could not in any way have benefited either plaintiff, one of whom was dead and the other released.” Ibid.

Finally, in Texas State Teachers Assn. v. Garland Independent School Dist., 489 U. S. 782 (1989), we synthesized the teachings of Hewitt and Rhodes. “[T]o be considered a prevailing party within the meaning of § 1988,” we held, “the plaintiff must be able to point to a resolution of the dispute which changes the legal relationship between itself and the defendant.” 489 U. S., at 792. We reemphasized that “[t]he touchstone of the prevailing party inquiry must be the material alteration of the legal relationship of the parties.” Id., at 792-793. Under this test, the plaintiffs in Garland were prevailing parties because they “obtained a judgment vindicating [their] First Amendment rights [as] public employees” and “materially altered the [defendant] school district’s policy limiting the rights of teachers to communicate with each other concerning employee organizations and union activities.” Id., at 793.

Therefore, to qualify as a prevailing party, a civil rights plaintiff must obtain at least some relief on the merits of his claim. The plaintiff must obtain an enforceable judgment against the defendant from whom fees are sought, Hewitt, supra, at 760, or comparable relief through a consent decree or settlement, Maher v. Gagne, 448 U. S. 122, 129 (1980). Whatever relief the plaintiff secures must directly benefit him at the time of the judgment or settlement. See Hewitt, supra, at 764. Otherwise the judgment or settlement cannot be said to “affec[t] the behavior of the defendant toward the plaintiff.” Rhodes, supra, at 4. Only under these circumstances can civil rights litigation effect “the material alteration of the legal relationship of the parties” and thereby transform the plaintiff into a prevailing party. Garland, supra, at 792-793. In short, a plaintiff “prevails” when actual relief on the merits of his claim materially alters the legal relationship between the parties by modifying the defendant’s behavior in a way that directly benefits the plaintiff.

Ill

A

Doubtless “the basic purpose of a § 1983 damages award should be to compensate persons for injuries caused by the deprivation of constitutional rights.” Carey v. Piphus, 435 U. S. 247, 254 (1978). For this reason, no compensatory damages may be awarded in a § 1983 suit absent proof of actual injury. Id., at 264. Accord, Memphis Community School Dist. v. Stachura, 477 U. S. 299, 307, 308, n. 11 (1986). We have also held, however, that “the denial of procedural due process should be actionable for nominal damages without proof of actual injury.” Carey, supra, at 266. The awarding of nominal damages for the “absolute” right to procedural due process “recognizes the importance to organized society that [this] righ[t] be scrupulously observed” while “remaining] true to the principle that substantial damages should be awarded only to compensate actual injury.” 435 U. S., at 266. Thus, Carey obligates a court to award nominal damages when a plaintiff establishes the violation of his right to procedural due process but cannot prove actual injury.

We therefore hold that a plaintiff who wins nominal damages is a prevailing party under §1988. When a court awards nominal damages, it neither enters judgment for defendant on the merits nor declares the defendant’s legal immunity to suit. Cf. Kentucky v. Graham, 473 U. S., at 165; Supreme Court of Va. v. Consumers Union of United States, Inc., 446 U. S. 719, 738 (1980). To be sure, a judicial pronouncement that the defendant has violated the Constitution, unaccompanied by an enforceable judgment on the merits, does not render the plaintiff a prevailing party. Of itself, “the moral satisfaction [that] results from any favorable statement of law” cannot bestow prevailing party status. Hewitt, 482 U. S., at 762. No material alteration of the legal relationship between the parties occurs until the plaintiff becomes entitled to enforce a judgment, consent decree, or settlement against the defendant. A plaintiff may demand payment for nominal damages no less than he may demand payment for millions of dollars in compensatory damages. A judgment for damages in any amount, whether compensatory or nominal, modifies the defendant’s behavior for the plaintiff’s benefit by forcing the defendant to pay an amount of money he otherwise would not pay. As a result, the Court of Appeals for the Fifth Circuit erred in holding that petitioners’ nominal damages award failed to render them prevailing parties.

We have previously stated that “a technical victory may be so insignificant... as to be insufficient to support prevailing party status.” Garland, 489 U. S., at 792. The example chosen in Garland to illustrate this sort of “technical” victory, however, would fail to support prevailing party status under the test we adopt today. In that case, the District Court declared unconstitutionally vague a regulation requiring that “nonschool hour meetings be conducted Only with prior approval from the local school principal.” Ibid. We suggested that this finding alone would not sustain prevailing party status if there were “ ‘no evidence that the plaintiffs were ever refused permission to use school premises during non-school hours.’” Ibid. The deficiency in such a hypothetical “victory” is identical to the shortcoming in Rhodes. Despite winning a declaratory judgment, the plaintiffs could not alter the defendant school board’s behavior toward them for their benefit. Now that we are confronted with the question whether a nominal damages award is the sort of “technical,” “insignificant” victory that cannot confer prevailing party status, we hold that the prevailing party inquiry does not turn on the magnitude of the relief obtained. We recognized as much in Garland when we noted that “the degree of the plaintiff’s success” does not affect “eligibility for a fee award.” 489 U. S., at 790 (emphasis in original). See also id., at 793.

B

Although the “technical” nature of a nominal damages award or any other judgment does not affect the prevailing party inquiry, it does bear on the propriety of fees awarded under § 1988. Once civil rights litigation materially alters the legal relationship between the parties, “the degree of the plaintiff’s overall success goes to the reasonableness” of a fee award under Hensley v. Eckerhart, 461 U. S. 424 (1983). Garland, supra, at 793. Indeed, “the most critical factor” in determining the reasonableness of a fee award “is the degree of success obtained.” Hensley, supra, at 436. Accord, Marek v. Chesny, 473 U. S. 1, 11 (1985). In this case, petitioners received nominal damages instead of the $17 million in compensatory damages that they sought. This litigation accomplished little beyond giving petitioners “the moral satisfaction of knowing that a federal court concluded that [their] rights had been violated” in some unspecified way. Hewitt, supra, at 762. We have already observed that if “a plaintiff has achieved only partial or limited success, the product of hours reasonably expended on the litigation as a whole times a reasonable hourly rate may be an excessive amount.” Hensley, supra, at 436. Yet the District Court calculated petitioners’ fee award in precisely this fashion, without engaging in any measured exercise of discretion. “Where recovery of private damages is the purpose of . . . civil rights litigation, a district court, in fixing fees, is obligated to give primary consideration to the amount of damages awarded as compared to the amount sought.” Riverside v. Rivera, 477 U. S. 561, 585 (1986) (Powell, J., concurring in judgment). Such a comparison promotes the court’s “central” responsibility to “make the assessment of what is a reasonable fee under the circumstances of the case.” Blanchard v. Bergeron, 489 U. S. 87, 96 (1989). Having considered the amount and nature of damages awarded, the court may lawfully award low fees or no fees without reciting the 12 factors bearing on reasonableness, see Hensley, 461 U. S., at 480, n. 3, or multiplying “the number of hours reasonably expended ... by a reasonable hourly rate,” id., at 433.

In some circumstances, even a plaintiff who formally “prevails” under §1988 should receive no attorney’s fees at all. A plaintiff who seeks compensatory damages but receives no more than nominal damages is often such a prevailing party. As we have held, a nominal damages award does render a plaintiff a prevailing party by allowing him to vindicate his “absolute” right to procedural due process through enforcement of a judgment against the defendant. Carey, 435 U. S., at 266. In a civil rights suit for damages, however, the awarding of nominal damages also highlights the plaintiff’s failure to prove actual, compensable injury. Id., at 254-264. Whatever the constitutional basis for substantive liability, damages awarded in a §1983 action “must always be designed ‘to compensate injuries caused by the [constitutional] deprivation.’” Memphis Community School Dist. v. Stachura, 477 U. S., at 309 (quoting Carey, supra, at 265) (emphasis and brackets in original). When a plaintiff recovers only nominal damages because of his failure to prove an essential element of his claim for monetary relief, see Carey, supra, at 256-257, 264, the only reasonable fee is usually no fee at all. In an apparent failure to heed our admonition that fee awards under §1988 were never intended to “‘produce windfalls to attorneys,’” Riverside v. Rivera, supra, at 580 (plurality opinion) (quoting S. Rep. No. 94-1011, p. 6 (1976)), the District Court awarded $280,000 in attorney’s fees without “consider[ing] the relationship between the extent of success and the amount of the fee award.” Hensley, supra, at 438.

Although the Court of Appeals erred in failing to recognize that petitioners were prevailing parties, it correctly-reversed the District Court’s fee award. We accordingly affirm the judgment of the Court of Appeals.

So ordered.

Justice O’Connor,

concurring.

If ever there was a plaintiff who deserved no attorney’s fees at all, that plaintiff is Joseph Farrar. He filed a lawsuit demanding 17 million dollars from six defendants. After 10 years of litigation and two trips to the Court of Appeals, he got one dollar from one defendant. As the Court holds today, that is simply not the type of victory that merits an award of attorney’s fees. Accordingly, I join the Court’s opinion and concur in its judgment. I write separately only to explain more fully why, in my view, it is appropriate to deny fees in this case.

I

Congress has authorized the federal courts to award “a reasonable attorney’s fee” in certain civil rights cases, but only to “the prevailing party.” 42 U. S. C. § 1988; Texas State Teachers Assn. v. Garland Independent School Dist., 489 U. S. 782, 789 (1989). To become a prevailing party, a plaintiff must obtain, at an absolute minimum, “actual relief on the merits of [the] claim,” ante, at 111, which “affects the behavior of the defendant towards the plaintiff,” Hewitt v. Helms, 482 U. S. 755, 761 (1987) (emphasis omitted); accord, ante, at 111-112 (relief obtained must “alte[r] the legalrela-tionship between the parties” and “modif[y] the defendant’s behavior in a way that directly benefits the plaintiff”). Joseph Farrar met that minimum condition for prevailing party status. Through this lawsuit, he obtained an enforceable judgment for one dollar in nominal damages. One dollar is not exactly a bonanza, but it constitutes relief on the merits. And it affects the defendant’s behavior toward the plaintiff, if only by forcing him to pay one dollar — something he would not otherwise have done. Ante, at 113.

Nonetheless, Garland explicitly states that an enforceable judgment alone is not always enough: “Beyond th[e] absolute limitation [of some relief on the merits], a technical victory may be so insignificant... as to be insufficient” to support an award of attorney’s fees. 489 U. S., at 792. While Garland may be read as indicating that this de minimis or technical victory exclusion is a second barrier to prevailing party status, the Court makes clear today that, in fact, it is part of the determination of what constitutes a reasonable fee. Compare ibid, (purely technical or de minimis victories are “insufficient to support prevailing party status”) with ante, at 114 (the “‘technical’” nature of the victory “does not affect the prevailing party inquiry” but instead “bear[s] on the propriety of fees awarded under § 1988”). And even if the exclusion’s location is debatable, its effect is not: When the plaintiff’s success is purely technical or de minimis, no fees can be awarded. Such a plaintiff either has failed to achieve victory at all, or has obtained only a Pyrrhic victory for which the reasonable fee is zero. The Court’s opinion today and its unanimous opinion in Garland are thus in accord. See ante, at 115 (merely “format 1]” victory can yield “no attorney’s fees at all”); Garland, supra, at 792 (“Where the plaintiff’s success on a legal claim can be characterized as purely technical or de minimis, a district court would be justified in concluding that” denial of attorney’s fees is appropriate).

Consequently, the Court properly holds that, when a plaintiff’s victory is purely technical or de minimis, a district court need not go through the usual complexities involved in calculating attorney’s fees. Ante, at 114-115 (court need not calculate presumptive fee by determining the number of hours reasonably expended and multiplying it by the reasonable hourly rate; nor must it apply the 12 factors bearing on reasonableness). As a matter of common sense and sound judicial administration, it would be wasteful indeed to require that courts laboriously and mechanically go through those steps when the de minimis nature of the victory makes the proper fee immediately obvious. Instead, it is enough for a court to explain why the victory is de minimis and announce a sensible decision to “award low fees or no fees” at all. Ante, at 115.

Precedent confirms what common sense suggests. It goes without saying that, if the de minimis exclusion were to prevent the plaintiff from obtaining prevailing party status, fees would have to be denied. Supra, at 116. And if the de mini-mis victory exclusion is in fact part of the reasonableness inquiry, see ante, at 114, summary denial of fees is still appropriate. We have explained that even the prevailing plaintiff may be denied fees if “ ‘special circumstances would render [the] award unjust.’ ” Hensley v. Eckerhart, 461 U. S. 424, 429 (1983) (citations omitted). While that exception to fee awards has often been articulated separately from the reasonableness inquiry, sometimes it is bound up with reasonableness: It serves as a short-hand way of saying that, even before calculating a lodestar or wading through all the reasonableness factors, it is clear that the reasonable fee is no fee at all. After all, where the only reasonable fee is no fee, an award of fees would be unjust; conversely, where a fee award would be unjust, the reasonable fee is no fee at all.

Of course, no matter how much sense this approach makes, it would be wholly inappropriate to adopt it if Congress had declared a contrary intent. When construing a statute, this Court is bound by the choices Congress has made, not the choices we might wish it had made. Felicitously, here they are one and the same. Section 1988 was enacted for a specific purpose: to restore the former equitable practice of awarding attorney’s fees to the prevailing party in certain civil rights cases, a practice this Court had disapproved in Alyeska Pipeline Service Co. v. Wilderness Society, 421 U. S. 240 (1975). Hensley, supra, at 429; see S. Rep. No. 94-1011, p. 6 (1976) (“This bill creates no startling new remedy — it only meets the technical requirements that the Supreme Court has laid down if the Federal courts are to continue the practice of awarding attorneys’ fees which had been going on for years prior to the Court’s [Alyeska] decision”). That practice included the denial of fees to plaintiffs who, although technically prevailing parties, had achieved only de minimis success. See, e.g., Tatum v. Morton, 386 F. Supp. 1308, 1317-1319 (DC 1974) (fees denied where plaintiffs recovered $100 each); see also Mills v. Electric Auto-Lite Co., 396 U. S. 375, 392, 396 (1970) (under judge-made fee-shifting rule for shareholder actions that benefit the corporation, no fees are available if the only benefit achieved is merely “‘technical in its consequence’” (quoting Bosch v. Meeker Cooperative Light & Power Assn., 257 Minn. 362, 366, 367, 101 N. W. 2d 423, 426, 427 (960))); cf. Ruckelshaus v. Sierra Club, 463 U. S. 680, 688, n. 9 (1983) (“[W]e do not mean to suggest that trivial success on the merits, or purely procedural victories, would justify an award of fees under statutes setting out the ‘when appropriate’ standard”). And although Congress did not intend to restore every detail of pre-Alyeska practice, see West Virginia Univ. Hospitals, Inc. v. Casey, 499 U. S. 83, 97-98 (1991), the practice of denying fees to Pyrrhic victors is one it clearly intended to preserve. Section 1988 expressly grants district courts discretion to withhold attorney’s fees from prevailing parties in appropriate circumstances: It states that a court “may” award fees “in its discretion.” 42 U. S. C. § 1988. As under pre-Alyeska practice, the occurrence of a purely technical or de minimis victory is such a circumstance. Chimerical accomplishments are simply not the kind of legal change that Congress sought to promote in the fee statute.

Indeed, § 1988 contemplates the denial of fees to de mini-mis victors through yet another mechanism. The statute only authorizes courts to award fees “as part of the costs.” 42 U. S. C. § 1988. As a result, when a court denies costs, it must deny fees as well; if there are no costs, there is nothing for the fees to be awarded “as part of.” And when Congress enacted §1988, the courts would deny even a prevailing party costs under Federal Rule of Civil Procedure 54(d) where the victory was purely technical. Lewis v. Pennington, 400 F. 2d 806, 819 (CA6) (“‘prevailing party is prima facie entitled to costs’ ” unless “ ‘the judgment recovered was insignificant in comparison to the amount actually sought and actually amounted to a victory for the defendant’ ” (quoting Lichter Foundation, Inc. v. Welch, 269 F. 2d 142, 146 (CA6 1969))), cert. denied, 393 U. S. 983 (1968); Esso Standard (Libya), Inc. v. SS Wisconsin, 54 F. R. D. 26, 27 (SD Tex. 1971) (“Circumstances justifying denial of costs to the prevailing party [exist] where the judgment recovered was insignificant in comparison to the amount actually sought”); see also Brown v. GSA, 425 U. S. 820, 828 (1976) (inquiry is Congress’ understanding of the law, correct or not). Just as a Pyrrhic victor would be denied costs under Rule 54(d), so too should it be denied fees under § 1988.

f — < I — J

In the context of this litigation, the technical or de mini-mis nature of Joseph Farrar’s victory is readily apparent: He asked for a bundle and got a pittance. While we hold today that this pittance is enough to render him a prevailing party, ante, at 113-114, it does not by itself prevent his victory from being purely technical. It is true that Joseph Farrar recovered something. But holding that any award of nominal damages renders the victory material would “render the concept of de minimis relief meaningless. Every nominal damage award has as its basis a finding of liability, but obviously many such victories are Pyrrhic ones.” Lawrence v. Hinton, 20 Fed. Rules Serv. 3d 934, 937 (CA4 1991); accord, Commissioners Court of Medina County, Texas v. United States, 221 U. S. App. D. C. 116, 123-124, 683 F. 2d 436, 442-443 (1982) (where “the net result achieved is so far from the position originally propounded ... it would be stretching the imagination to consider the result a ‘victory’ in the sense of vindicating the rights of the fee claimants”). That is not to say that all nominal damages awards are de minimis. Nominal relief does not necessarily a nominal victory make. See ante, at 115. But, as in pre-Alyeska and Rule 54(d) practice, see supra, at 119, 120, a substantial difference between the judgment recovered and the recovery sought suggests that the victory is in fact purely technical. See ante, at 115 (“A plaintiff who seeks compensatory damages but receives no more than nominal damages” may “formally ‘prevai[l]’ under §1988” but will “often” receive no fees at all). Here that suggestion is quite strong. Joseph Farrar asked for 17 million dollars; he got one. It is hard to envision a more dramatic difference.

The difference between the amount recovered and the damages sought is not the only consideration, however. Carey v. Piphus, 435 U. S. 247, 254 (1978), makes clear that an award of nominal damages can represent a victory in the sense of vindicating rights even though no actual damages are proved. Ante, at 112. Accordingly, the courts also must look to other factors. One is the significance of the legal issue on which the plaintiff claims to have prevailed. Garland, 489 U. S., at 792. Petitioners correctly point out that Joseph Farrar in a sense succeeded on a significant issue — liability. But even on that issue he cannot be said to have achieved a true victory. Respondent was just one of six defendants and the only one not found to have engaged in a conspiracy. If recovering one dollar from the least culpable defendant and nothing from the rest legitimately can be labeled a victory — and I doubt that it can — surely it is a hollow one. Joseph Farrar may have won a point, but the game, set, and match all went to the defendants.

Given that Joseph Farrar got some of what he wanted— one seventeen millionth, to be precise — his success might be considered material if it also accomplished some public goal other than occupying the time and energy of counsel, court, and client. Section 1988 is not “a relief Act for lawyers.” Riverside v. Rivera, 477 U. S. 561, 588 (1986) (Rehnquist, J., dissenting). Instead, it is a tool that ensures the vindication of important rights, even when large sums of money are not at stake, by making attorney’s fees available under a private attorney general theory. Yet one searches these facts in vain for the public purpose this litigation might have served. The District Court speculated that the judgment, if accompanied by a large fee award, might deter future lawless conduct, see App. to Pet. for Cert. A23-A24, but did not identify the kind of lawless conduct that might be prevented. Nor is the conduct to be deterred apparent from the verdict, which even petitioners acknowledge is “regrettably obtuse.” Tr. of Oral Arg. 16. Such a judgment cannot deter misconduct any more than a bolt of lightning can; its results might be devastating, but it teaches no valuable lesson because it carries no discernable meaning. Cf. Chicano Police Officer’s Assn. v. Stover, 624 F. 2d 127, 131 (CA10 1980) (nuisance settlement that does not promote any public purpose cannot support award of attorney’s fees), cited and quoted in Garland, supra, at 792.

Ill

In this case, the relevant indicia of success — the extent of relief, the significance of the legal issue on which the plaintiff prevailed, and the public purpose served — all point to a single conclusion: Joseph Farrar achieved only a de minimis victory. As the Court correctly holds today, the appropriate fee in such a case is no fee at all. Because the Court of Appeals gave Joseph Farrar everything he deserved — nothing — I join the Court’s opinion affirming the judgment below.

Justice White,

with whom Justice Blackmun, Justice Stevens, and Justice Souter join, concurring in part and dissenting in part. .

We granted certiorari in.this case to decide whether 42 U. S. C. § 1988 entitles a civil rights plaintiff who recovers nominal damages to reasonable attorney’s fees. Following our decisions in Texas State Teachers Assn. v. Garland Independent School Dist., 489 U. S. 782 (1989), Hewitt v. Helms, 482 U. S. 755 (1987), Hensley v. Eckerhart, 461 U. S. 424 (1983), and Carey v. Piphus, 435 U. S. 247 (1978), the Court holds that it does. With that aspect of today’s decision, I agree. Because Farrar won an enforceable judgment against respondent, he has achieved a “material alteration” of their legal relationship, Garland, supra, at 792-793, and thus he is a “prevailing party” under the statute.

However, I see no reason for the Court to reach out and decide what amount of attorney’s fees constitutes a reasonable amount in this instance. That issue was neither presented in the petition for certiorari nor briefed by petitioners. The opinion of the Court of Appeals was grounded exclusively in its determination that Farrar had not met the threshold requirement under § 1988. At no point did it purport to decide what a reasonable award should be if Farrar was a prevailing party.

It may be that the District Court abused its discretion and misapplied our precedents by belittling the significance of the amount of damages awarded in ascertaining petitioners’ fees. Cf. Hensley, supra, at 436. But it is one thing to say that the court erred as a matter of law in awarding $280,000; quite another to decree, especially without the benefit of petitioners’ views or consideration by the Court of Appeals, that the only fair fee was no fee whatsoever.

Litigation in this case lasted for more than a decade, has entailed a 6-week trial and given rise to two appeals. Civil rights cases often are complex, and we therefore have committed the task of calculating attorney’s fees to the trial court’s discretion for good reason. See, e. g., Hensley, supra, at 436-437; Garland, supra, at 789-790; Blanchard v. Bergeron, 489 U. S. 87, 96 (1989). Estimating what specific amount would be reasonable in this particular situation is not a matter of general importance on which our guidance is needed. Short of holding that recovery of nominal damages never can support the award of attorney’s fees — which, clearly, the majority does not, see ante, at 115 — the Court should follow its sensible practice and remand the case for reconsideration of the fee amount. Cf. FTC v. Anheuser-Busch, Inc., 363 U. S. 536, 542 (1960). Indeed, respondent’s counsel all but conceded at oral argument that, assuming the Court found Farrar to be a prevailing party, the question of reasonableness should be addressed on remand. See Tr. of Oral Arg. 31-32.

I would vacate the judgment of the Court of Appeals and remand the case for further proceedings. Accordingly, I dissent.

      Although the Fifth Circuit’s original opinion on liability made clear that Joseph Farrar alone was to receive nominal damages for violation of his due process rights, Farrar v. Cain, 766 F. 2d 1148, 1152 (1986), the District Court on remand awarded attorney’s fees not only to petitioners as coadministrators of Joseph Farrar’s estate but also to Dale Farrar in his personal capacity, see App. to Pet. for Cert. A-12. The Fifth Circuit reversed Dale Farrar’s fee award on the apparent assumption that he too had received nominal damages. Dale Farrar has not petitioned from the Fifth Circuit’s judgment in his personal capacity, and the only issue before us is the award of attorney’s fees to Dale Farrar and Pat Smith as coad-ministrators of Joseph Farrar’s estate.

       The majority acknowledged its conflict with the Courts of Appeals for the Second, Eighth, Ninth, Tenth, and Eleventh Circuits. 941 F. 2d, at 1316-1317, and nn. 22 and 26. See Ruggiero v. Krzeminski, 928 F. 2d 558, 564 (CA2 1991); Coleman v. Turner, 838 F. 2d 1004, 1005 (CA8 1988); Scofield v. Hillsborough, 862 F. 2d 759, 766 (CA9 1988); Nephew v. Aurora, 830 F. 2d 1547, 1553, n. 2 (CA10 1987) (en banc) (Barrett, J., dissenting), cert. denied, 485 U. S. 976 (1988); Garner v. Wal-Mart Stores, Inc., 807 F. 2d 1536, 1539 (CA11 1987). After the Fifth Circuit decided this case, the First and Ninth Circuits rejected the Fifth Circuit’s position and held that a nominal damages award does confer prevailing party status on a civil rights plaintiff. Domegan v. Ponte, 972 F. 2d 401, 410 (CA1 1992); Romberg v. Nichols, 970 F. 2d 512, 519-520 (CA9 1992), cert. pending, No. 92-402; 970 F. 2d, at 525-526 (Wallace, C. J., concurring). The Fourth Circuit has adopted a position consistent with the Fifth Circuit’s. Lawrence v. Hinton, 20 Fed. Rules Serv. 3d 934, 936-937 (1991); Spencer v. General Elec. Co., 894 F. 2d 651, 662 (1990) (dicta).

       Similarly, the plaintiff in Hewitt v. Helms, 482 U. S. 755, 763 (1987), “had long since been released from prison” by the time his failed lawsuit putatively prompted beneficial changes in prison policy. We held that the “fortuity” of a subsequent return to prison, which presumably allowed the plaintiff to benefit from the new procedures, could “hardly render him, retroactively, a ‘prevailing party’..., even though he was not such when the final judgment was entered.” Id., at 764.

       We did not consider whether the plaintiffs in Garland could be denied prevailing party status on this basis, because “[t]hey prevailed on a significant issue in the litigation and . . . obtained some of the relief they sought.” 489 U. S., at 793.

      In his brief to the Fifth Circuit, respondent did not argue that petitioners should be denied all fees even if they were found to be prevailing parties. Rather, he asserted that the District Court misapplied the law by awarding “excessive” fees and requested that they be reduced. See Brief for Defendant-Appellant in No. 90-2830, pp. 38-42.


source: Caselaw Access Project

author: Justice Thomas Justice Stevens,

license: Public Domain

text:
    DISTRICT OF COLUMBIA et al. v. GREATER WASHINGTON BOARD OF TRADE
    No. 91-1326.
    Argued November 3, 1992
    Decided December 14, 1992

      Thomas, J., delivered the opinion of the Court, in which Rehnquist, C. J., and White, Blackmun, O’Connor, Scalia, Kennedy, and Souter, JJ., joined. Stevens, J., filed a dissenting opinion, post, p. 133.

      Donna M. Murasky, Assistant Corporation Counsel of the District of Columbia, argued the cause for petitioners. With her on the briefs were John Payton, Corporation Counsel, and Charles Reischel, Deputy Corporation Counsel.

      Lawrence P. Postol argued the cause for respondent. With him on the brief was John N. Erlenborn

      Briefs of amici curiae urging reversal were filed for the State of Connecticut et al. by Richard Blumenthal, Attorney General of Connecticut, and Arnold B. Feigin, Assistant Attorney General, and Scott Harshbarger, Attorney General of Massachusetts; for the State of Oklahoma ex rel. Dave Renfro, Commissioner of Labor, et al. by Susan B. Loving, Attorney General, Rabindranath Ramana, Assistant Attorney General, Michael M. Sykes, and Kayla A Bower; for the American Federation of Labor and Congress of Industrial Organizations by Marsha S. Berzon and Laurence Gold; and for the American Optometric Association by Bennett Boskey, Ellis Lyons, and Edward A Groobert.

      Briefs of amici curiae urging affirmance were filed for the United States by Solicitor General Starr, Deputy Solicitor General Mahoney, Christopher J. Wright, Allen H. Feldman, Nathaniel I. Spiller, and Deborah Greenfield; for the Chamber of Commerce of the United States by Mona C. Zeiberg and Hollis T. Hurd; for the Connecticut Business and Industry Association by Daniel L. FitzMaurice; and for the District of Columbia Insurance Federation by William A Dobrovir and Lawrence H. Mirel.

        Steven S. Zaleznick and Cathy Ventrell-Monsees filed a brief for the American Association of Retired Persons as amicus curiae.

   Justice Thomas

delivered the opinion of the Court.

The District of Columbia requires employers who provide health insurance for their employees to provide equivalent health insurance coverage for injured employees eligible for workers’ compensation benefits. We hold that this requirement is pre-empted by the Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 829, as amended, 29 U. S. C. § 1001 et seq. (1982 ed. and Supp. II).

J-H

ERISA sets out a comprehensive system for the federal regulation of private employee benefit plans, including both pension plans and welfare plans. A “welfare plan” is defined in §3 of ERISA to include, inter alia, any “plan, fund, or program” maintained for the purpose of providing medical or other health benefits for employees or their beneficiaries “through the purchase of insurance or otherwise.” §3(1), 29 U. S. C. § 1002(1). Section 4 defines the broad scope of ERISA coverage. Subject to certain exemptions, ERISA applies generally to all employee benefit plans sponsored by an employer or employee organization. § 4(a), 29 U. S. C. § 1003(a). Among the plans exempt from ERISA coverage under § 4(b) are those “maintained solely for the purpose of complying with applicable workmen’s compensation laws or unemployment compensation or disability insurance laws.” § 4(b)(3), 29 U. S. C. § 1003(b)(3).

ERISA’s pre-emption provision assures that federal regulation of covered plans will be exclusive. Section 514(a) provides that ERISA “shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan” covered by ERISA. § 514(a), 29 U. S. C. § 1144(a). Several categories of state laws, such as generally applicable criminal laws and laws regulating insurance, banking, or securities, are excepted from ERISA preemption by § 514(b), 29 U. S. C. § 1144(b), but none of these exceptions is at issue here.

Effective March 6,1991, the District of Columbia Workers’ Compensation Equity Amendment Act of 1990,37 D. C. Register 6890 (Nov. 1990), amended several portions of the District’s workers’ compensation law, D. C. Code Ann. §§36-301 to 36-345 (1981 and Supp. 1992). Section 2(c)(2) of the Equity Amendment Act added the following requirement:

“Any employer who provides health insurance coverage for an employee shall provide health insurance coverage equivalent to the existing health insurance coverage of the employee while the employee receives or is eligible to receive workers’ compensation benefits under this chapter.” D. C. Code Ann. § 36-307(a-l)(l) (Supp. 1992).

Under § 2(c)(2), the employer must provide such health insurance coverage for up to 52 weeks “at the same benefit level that the employee had at the time the employee received or was eligible to receive workers’ compensation benefits.” § 36-307(a-l)(3).

Respondent Greater Washington Board of Trade, a nonprofit corporation that sponsors health insurance coverage for its employees, filed this action against the District of Columbia and Mayor Sharon Pratt Kelly seeking to enjoin enforcement of § 2(c)(2) on the ground that the “equivalent” benefits requirement is pre-empted by § 514(a) of ERISA. The District Court granted petitioners’ motion to dismiss. App. to Pet. for Cert. 21a. Petitioners conceded that § 2(c)(2) “relate[s] to” an ERISA-covered plan in the sense that the benefits required under the challenged law “are set by reference to covered employee benefit plans.” Id., at 22a. Relying on our opinion in Shaw v. Delta Air Lines, Inc., 463 U. S. 85 (1983), however, the District Court held that § 2(c)(2) is not pre-empted because it also relates to respondent’s workers’ compensation plan, which is exempt from ERISA coverage, and because respondent could comply with § 2(c)(2) “by creating a ‘separate administrative unit’ to administer the required benefits.” App. to Pet. for Cert. 24a (quoting Shaw, supra, at 108).

The Court of Appeals reversed. 292 U. S. App. D. C. 209, 948 F. 2d 1317 (1991). The court held that pre-emption of § 2(c)(2) is compelled by the plain meaning of § 514(a) and by the structure of ERISA. Id., at 215-216, 948 F. 2d, at 1323-1324. In the court’s view, ERISA pre-empts a law that relates to a covered plan and is not excepted from preemption by § 514(b), regardless of whether the law also relates to an exempt plan. Ibid. The Court of Appeals further concluded that this result would advance the policies and purposes served by ERISA pre-emption. Id., at 217-218, 948 F. 2d, at 1325-1326. By tying the benefit levels of the workers’ compensation plan to those provided in an ERISA-covered plan, “the Equity Amendment Act could have a serious impact on the administration and content of the ERISA-covered plan.” Id., at 217, 948 F. 2d, at 1325. Because the opinion below conflicts with the Second Circuit’s decision in R. R. Donnelley & Sons Co. v. Prevost, 915 F. 2d 787 (1990), cert. denied, 499 U. S. 947 (1991), which upheld against a pre-emption challenge a Connecticut law substantially similar to § 2(c)(2), we granted certiorari. 503 U. S. 970 (1992). We now affirm.

b — I HH

We have repeatedly stated that a law “relate[s] to” a covered employee benefit plan for purposes of § 514(a) “if it has a connection with or reference to such a plan.” Shaw, supra, at 97. E. g., Ingersoll-Rand Co. v. McClendon, 498 U. S. 133, 139 (1990); FMC Corp. v. Holliday, 498 U. S. 52, 58 (1990); Mackey v. Lanier Collection Agency & Service, Inc., 486 U. S. 825, 829 (1988); Pilot Life Ins. Co. v. Dedeaux, 481 U. S. 41, 47 (1987); Metropolitan Life Ins. Co. v. Massachusetts, 471 U. S. 724, 739 (1985). This reading is true to the ordinary meaning of “relate to,” see Black’s Law Dictionary 1288 (6th ed. 1990), and thus gives effect to the “deliberately expansive” language chosen by Congress. Pilot Life, supra, at 46. See also Morales v. Trans World Airlines, Inc., 504 U. S. 374, 383 (1992). Under § 514(a), ERISA preempts any state law that refers to or has a connection with covered benefit plans (and that does not fall within a § 514(b) exception) “even if the law is not specifically designed to affect such plans, or the effect is only indirect,” Ingersoll-Rand,, supra, at 139, and even if the law is “consistent with ERISA’s substantive requirements,” Metropolitan Life, supra, at 739.

Section 2(c)(2) of the District’s Equity Amendment Act specifically refers to welfare benefit plans regulated by ERISA and on that basis alone is pre-empted. The health insurance coverage that § 2(c)(2) requires employers to provide for eligible employees is measured by reference to “the existing health insurance coverage” provided by the employer and “shall be at the same benefit level.” D. C. Code Ann. §§36-3Q7(a-l)(l) and (3) (Supp. 1992). The employee’s “existing health insurance coverage,” in turn, is a welfare benefit plan under ERISA § 3(1), because it involves a fund or program maintained by an employer for the purpose of providing health benefits for the employee “through the purchase of insurance or otherwise.” § 3(1), 29 U. S. C. § 1002(1). Such employer-sponsored health insurance programs are subject to ERISA regulation, see § 4(a), 29 U. S. C. § 1003(a), and any state law imposing requirements by reference to such covered programs must yield to ERISA. This conclusion is consistent with Mackey v. Lanier Collection Agency, which struck down a Georgia law that specifically exempted ERISA plans from a generally applicable garnishment procedure. 486 U. S., at 828, n. 2, and 829-830. It also follows from Ingersoll-Rand, where we held that ERISA § 514(a) pre-empted a Texas common-law cause of action for wrongful discharge based on an employer’s desire to avoid paying into an employee’s pension fimd. Even though the employee sought no pension benefits, only “lost future wages, mental anguish and punitive damages,” 498 U. S., at 136 (internal quotation marks omitted), we held the claim pre-empted because it was “premised on” the existence of an ERISA-covered pension plan. Id., at 140.

It makes no difference that §2(c)(2)’s requirements are part of the District’s regulation of, and therefore also “relate to,” ERISA-exempt workers’ compensation plans. The exemptions from ERISA coverage set out in §4(b), 29 U. S. C. § 1003(b), do not limit the pre-emptive sweep of § 514 once it is determined that the law in question relates to a covered plan. See Alessi v. Raybestos-Manhattan, Inc., 451 U. S. 504, 525 (1981) (“It is of no moment that New Jersey intrudes indirectly, through a workers’ compensation law, rather than directly, through a statute called ‘pension regulation’”). Shaw v. Delta Air Lines, Inc., 463 U. S. 85 (1983), does not support petitioners’ position. Shaw dealt, in relevant part, with a New York disability law that required employers to pay weekly benefits to disabled employees equal to “‘one-half of the employee’s average weekly wage.’” Id., at 90, n. 4 (quoting N. Y. Work. Comp. Law §204.2 (McKinney Supp. 1982-1983)). We held that this law was not preempted by § 514(a) because it related exclusively to exempt employee benefit plans “maintained solely for the purpose of complying with applicable . . . disability insurance laws” within the meaning of § 4(b)(3), 29 U. S. C. § 1003(b)(3). See 463 U. S., at 106-108. The fact that employers could comply with the New York law by administering the required disability benefits through a multibenefit ERISA plan did not mean that the law related to such ERISA plans for preemption purposes. See id., at 108. We simply held that as long as the employer’s disability plan, “as an administrative unit, providefd] only those benefits required by” the New York law, it could qualify as an exempt plan under ERISA § 4(b)(3). Id., at 107. Thus, unlike § 2(c)(2) of the District’s Equity Amendment Act, the New York statute at issue in Shaw did not “relate to” an ERISA-covered plan.

Petitioners nevertheless point to Metropolitan Life Ins. Co. v. Massachusetts, 471 U. S. 724 (1985), in which we described Shaw as holding that “the New York Human Rights Law and that State’s Disability Benefits Law ‘relate[d] to’ welfare plans governed by ERISA.” Id., at 739. Relying on this dictum and their reading of Shaw, petitioners argue that § 514(a) should be construed to require a two-step analysis: If the state law “relate[s] to” an ERISA-covered plan, it may still survive pre-emption if employers could comply with the law through separately administered plans exempt under § 4(b). See Tr. of Oral Arg. 16-17. But Metropolitan Life construed only the scope of § 514(b)(2)(A)’s safe harbor for state laws regulating insurance, see 471 U. S., at 739-747; it did not purport to add, by its passing reference to Shaw, any further gloss on § 514(a). And although we did conclude in Shaw that both New York laws at issue there related to “employee benefit plan[s]” in general, 463 U. S., at 100, only the Human Rights Law, which barred discrimination by ERISA plans, fell within the pre-emption provision. See id., at 100-106. As we have explained, the Disability Benefits Law upheld in Shaw — though mandating the creation of a “welfare plan” as defined in ERISA — did not relate to a welfare plan subject to ERISA regulation. Section 2(c)(2) does, and that is the end of the matter. We cannot engraft a two-step analysis onto a one-step statute.

The judgment of the Court of Appeals is accordingly

Affirmed.

Justice Stevens,

dissenting.

The basic question that this case presents is whether Congress intended to prevent a State from computing workers’ compensation benefits on the basis of the entire remuneration of injured employees when a portion of that remuneration is provided by an employee benefit plan. By converting unnecessarily broad dicta interpreting the words “relate to” as used in § 514(a) of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U. S. C. § 1144(a), into a rule of law, and by underestimating the significance of the exemption of workers’ compensation plans from the coverage of the Act, the Court has reached an incorrect conclusion in an unusually important case.

In today’s world the typical employee’s compensation is not just her take-home pay; it often includes fringe benefits such as vacation pay and health insurance. If an employee loses her job, by reason of either a wrongful discharge or a negligently inflicted physical injury, normal contract or tort principles would allow her to recover damages measured by her entire loss of earnings — including the value of fringe benefits such as health insurance. If I understand the Court’s reasoning today, a state statute that merely announced that basic rule of damages law would be pre-empted by ERISA if it “specifically refers” to each component of the damages calculation. Ante, at 130.

Workers’ compensation laws provide a substitute for tort actions by employees against their employers. They typically base the amount of the compensation award on the level of the employee’s earnings at the time of the injury. In the District of Columbia’s workers’ compensation law, for example, an employee’s “average weekly wages” provide the basic standard for computing the award regardless of the nature of the injury. D. C. Code Ann. § 36-308 (1988 and Supp. 1992). Because an employee who receives health insurance benefits typically has a correspondingly reduced average weekly wage, the District decided to supplement the standard level of workers’ compensation with a component reflecting any health insurance benefits the worker receives. The Court seems to be holding today that such a supplement may never be measured by the level of the employee’s health insurance coverage — at least if the state statutes or regulations specifically refer to that component of the calculation.

It is true, as the Court points out, that in Shaw v. Delta Air Lines, Inc., 463 U. S. 85, 96-97 (1983), we stated that a law “related to” an employee benefit plan, “in the normal sense of the phrase, if it has a connection with or reference to such a plan.” It is also true that we have repeatedly quoted that language in later opinions. Indeed, it has been reiterated so often that petitioners did not challenge the proposition that the statute at issue in this case “related to” respondent’s ERISA plan. It nevertheless is equally true that until today that broad reading of the phrase has not been necessary to support any of this Court’s actual holdings.

Given the open-ended implications of today’s holding and the burgeoning volume of litigation involving ERISA preemption claims,1 think it is time to take a fresh look at the intended scope of the pre-emption provision that Congress enacted. Let me begin by repeating the qualifying language in the Shaw opinion itself and by emphasizing one word in the statutory text that is often overlooked.

After explaining why the two New York statutes at issue related to benefit plans, we noted:

“Some state actions may affect employee benefit plans in too tenuous, remote, or peripheral a manner to warrant a finding that the law ‘relates to’ the plan. Cf. American Telephone and Telegraph Co. v. Merry, 592 F. 2d 118, 121 (CA2 1979) (state garnishment of a spouse’s pension income to enforce alimony and support orders is not pre-empted). The present litigation plainly does not present a borderline question, and we express no views about where it would be appropriate to draw the line.” Id., at 100, n. 21.

In deciding where that line should be drawn, I would begin by emphasizing the fact that the so-called “pre-emption” provision in ERISA does not use the word “pre-empt.” It provides that the provisions of the federal statute shall “supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in section 1003(a) of this title and not exempt under section 1003(b) of this title.” 29 U. S. C. § 1144(a) (emphasis added). Thus the federal statute displaces state regulation in the field that is regulated by ERISA; it expressly disavows an intent to supersede state regulation of exempt plans; and its text is silent about possible pre-emption of state regulation of subjects not regulated by the federal statute. Thus, if we were to decide this case on the basis of nothing more than the text of the statute itself, we would find no pre-emption (more precisely, no “supersession”) of the District’s regulation of health benefits for employees receiving workers’ compensation because that subject is entirely unregulated by ERISA.

I would not decide this case on that narrow ground, however, because both the legislative history of ERISA and prior holdings by this Court have given the supersession provision a broader reading. Thus, for example, in Shaw itself we held that the New York Human Rights Law, which prohibited employers from structuring their employee benefit plans in a manner that discriminated on the basis of pregnancy, was pre-empted even though ERISA did not contain any superseding regulatory provisions. 463 U. S., at 98. State laws that directly regulate ERISA plans, or that make it necessary for plan administrators to operate such plans differently, “relate to” such plans in the sense intended by Congress. In my opinion, a state law’s mere reference to an ERISA plan is an insufficient reason for concluding that it is pre-empted — particularly when the state law itself is related almost solely to plans that Congress expressly excluded from the coverage of ERISA. It is anomalous to conclude that ERISA has superseded state regulation in an area that is expressly excluded from the coverage of ERISA.

The statute at issue in this case does not regulate any ERISA plan or require any ERISA plan administrator to make any changes in the administration of such a plan. Although the statute may grant injured employees who receive health insurance a better compensation package than those who are not so insured, it does so only to prevent a converse windfall going to injured employees who receive high weekly wages and little or no health insurance coverage. Even if the District’s statute did encourage an employer to pay higher wages instead of providing better fringe benefits, that would surely be no reason to infer a congressional intent to supersede state regulation of a category of compensation programs that it exempted from federal coverage. Moreover, by requiring an injured worker’s compensation to reflect his entire pay package, the statute attempts to replace fully the lost earning power of every injured employee. Nothing in ERISA suggests an intent to supersede the State’s efforts to enact fair and complete remedies for work-related injuries; it is difficult to imagine how a State could measure an injured worker’s health benefits without referring to the specific health benefits that worker receives. Any State that wishes to effect the equitable goal of the District’s statute will be forced by the Court’s opinion to require a predetermined rate of health insurance coverage that bears no relation to the compensation package of each injured worker. The Court thereby requires workers’ compensation laws to shed their most characteristic element: postinjury compensation based on each individual worker’s preinjury level of compensation.

Instead of mechanically repeating earlier dictionary definitions of the word “relate” as its only guide to decision in an important and difficult area of statutory construction, the Court should pause to consider, first, the wisdom of the basic rule disfavoring federal pre-emption of state laws, and second, the specific concerns identified in the legislative history as the basis for federal pre-emption. The most expansive statement of that purpose was quoted in our opinion in Shaw. As explained by Congressman Dent, the “crowning achievement” of the legislation was the “ ‘reservation to Federal authority [of] the sole power to regulate the field of employee benefit plans. With the preemption of the field, we round out the protection afforded participants by eliminating the threat of conflicting and inconsistent State and local regulation.’” Id., at 99 (quoting 120 Cong. Rec. 29197 (1974)).

The statute at issue in this case does not regulate even one inch of the pre-empted field, and poses no threat whatsoever of conflicting and inconsistent state regulation. By its holding today the Court enters uncharted territory. Where that holding will ultimately lead, I do not venture to predict. I am persuaded, however, that the Court has already taken a step that Congress neither intended nor foresaw.

Accordingly, I respectfully dissent.

       Pre-emption does not occur, however, if the state law has only a “tenuous, remote, or peripheral” connection with covered plans, Shaw v. Delta Air Lines, Inc., 463 U. S. 85, 100, n. 21 (1983), as is the case with many laws of general applicability, see Mackey, 486 U. S., at 830-838, and n. 12; cf. Ingersoll-Rand, 498 U. S., at 139.

       In Fort Halifax Packing Co. v. Coyne, 482 U. S. 1 (1987), we construed the word “plan” to connote some minimal, ongoing “administrative” scheme or practice, and held that “a one-time, lump-sum payment triggered by a single event” does not qualify as an employer-sponsored benefit plan. Id., at 12. Petitioners do not contend that employers in the District of Columbia provide health insurance for their employees without thereby administering welfare plans within the meaning of ERISA, and petitioners concede that the existing health insurance sponsored by respondent constitutes an ERISA plan. Tr. of Oral Arg. 14.

       ERISA does not pre-empt § 2(e)(2) to the extent its requirements are measured only by reference to “existing health insurance coverage” provided under plans that are exempt from ERISA regulation, such as “governmental” or “church” plans, see ERISA §§ 4(b)(1) and (2), 29 U. S. C. §§ 1003(b)(1) and (2).

       “Welfare plans” include plans providing “benefits in the event of sickness, accident, [or] disability.” § 3(1), 29 U. S. C. § 1002(1).

       Similar arguments have been considered and rejected in several cases. See Martori Bros. Distributors v. James-Massengale, 781 F. 2d 1349, 1358-1359 (CA9), modified, 791 F. 2d 799, cert. denied, 479 U. S. 949 (1986); Teper v. Park West Galleries, Inc., 431 Mich. 202, 216, 427 N. W. 2d 535, 541 (1988); Schultz v. National Coalition of Hispanic Mental Health and Human Services Organizations, 678 F. Supp. 936, 938 (DC 1988); Jaskilka v. Carpenter Technology Corp., 757 F. Supp. 175, 178 (Conn. 1991).

       See Ingersoll-Rand Co. v. McClendon, 498 U. S. 133, 138-139 (1990); FMC Corp. v. Holliday, 498 U. S. 52, 58-59 (1990); Mackey v. Lanier Collection Agency & Service, Inc., 486 U. S. 825, 829 (1988); Fort Halifax Packing Co. v. Coyne, 482 U. S. 1, 11 (1987); Pilot Life Ins. Co. v. Dedeaux,
        481 U. S. 41, 47-48 (1987); Metropolitan Life Ins. Co. v. Massachusetts, 471 U. S. 724, 739 (1985).

       Several years ago a District Judge who had read “nearly 100 cases about the reach of the ERISA preemption clause” concluded that “common sense should not be left at the courthouse door.” See Schultz v. National Coalition of Hispanic Mental Health and Human Services Organizations, 678 F. Supp., at 938. A recent LEXIS search indicates that there are now over 2,800 judicial opinions addressing ERISA pre-emption. This growth may be a consequence of the growing emphasis on the meaning of the words “relate to,” thus pre-empting reliance on what the District Judge referred to as “common sense.”

       See, e. g., Cipollone v. Liggett Group, Inc., 505 U. S. 504, 516 (1992): “Consideration of issues arising under the Supremacy Clause ‘start[s] with the assumption that the historic police powers of the States [are] not to be superseded by . . . Federal Act unless that [is] the clear and manifest purpose of Congress.’ Rice v. Santa Fe Elevator Corp., 331 U. S. 218, 230 (1947). Accordingly, ‘“[t]he purpose of Congress is the ultimate touchstone’” of pre-emption analysis. Malone v. White Motor Corp., 436 U. S. 497, 504 (1978) (quoting Retail Clerks v. Schermerhorn, 376 U. S. 96, 103 (1963)).
      . . . “In the absence of an express congressional command, state law is pre-empted if that law actually conflicts with federal law, see Pacific Gas & Elec. Co. v. Energy Resources Conservation and Development Comm’n, 461 U. S. 190, 204 (1983), or if federal law so thoroughly occupies a legislative field ‘ “as to make reasonable the inference that Congress left no room for the States to supplement it.”’ Fidelity Fed. Sav. & Loan Assn. v. De la Cuesta, 468 U. S. 141, 153 (1982) (quoting Rice v. Sante Fe Elevator Corp., 331 U. S., at 230).”

       One of the statute’s stated goals was “to promote a fairer system of compensation.” Preamble to District of Columbia’s Workers’ Compensation Equity Amendment Act of 1990, 37 D. C. Register 6890 (Nov. 1990).


author: Justice White Justice Blackmun, Justice Stevens,

text:
    PUERTO RICO AQUEDUCT AND SEWER AUTHORITY v. METCALF & EDDY, INC.
    No. 91-1010.
    Argued November 9, 1992
    Decided January 12, 1993

      White, J., delivered the opinion of the Court, in which Rehnquist, C. J., and Blackmun, O’Connor, Scalia, Kennedy, Souter, and Thomas, JJ., joined. Blackmun, J., filed a concurring opinion, post, p. 147. Stevens, J., filed a dissenting opinion, post, p. 148.

      Richard Taranto argued the cause for petitioner. With him on the briefs were Perry M. Rosen, Paige E. Reffe, and Michael T. Brady.

      Peter W. Sipkins argued the cause for respondent. With him on the brief were Michael J. Wahoske, Paul R. Dieseth, Carol A. Peterson, and Jay A. Garcia-Gregory

      Briefs of amici curiae urging reversal were filed for the State of Ohio et al. by Lee Fisher, Attorney General of Ohio, and Patrick A Devine and Andrew I. Sutter, Assistant Attorneys General, and by the Attorneys General for their respective jurisdictions as follows: James H. Evans of Alabama, Grant Woods of Arizona, Winston Bryant of Arkansas, Daniel E. Lungren of California, Richard Blumenthal of Connecticut, Robert A Butterworth of Florida, Michael J. Bowers of Georgia, Elizabeth Barrett-Anderson of Guam, Warren Price III of Hawaii, Larry EchoHawk of Idaho, Roland W. Burris of Illinois, Linley E. Pearson of Indiana, Bonnie J. Campbell of Iowa, Robert I Stephan of Kansas, Chris Gorman of Kentucky, Michael E. Carpenter of Maine, Scott Harshbarger of Massachusetts, Frank J. Kelley of Michigan, Mike Moore of Mississippi, William L. Webster of Missouri, Marc Racicot of Montana, Frankie Sue Del Papa of Nevada, Robert J. Del Tufo of New Jersey, Tom Udall of New Mexico, Robert Abrams of New York, Lacy H. Thornburg of North Carolina, Nicholas J. Spaeth of North Dakota, Robert C. Naraja of Northern Mariana Islands, Susan Loving of Oklahoma, Charles Crookham of Oregon, Ernest D. Preate, Jr., of Pennsylvania, Jorge E. Perez Diaz of Puerto Rico, James E. O’Neil of Rhode Island, T. Travis Medlock of South Carolina, Mark W. Barnett of South Dakota, Charles W. Burson of Tennessee, Dan Morales of Texas, Paul Van Dam of Utah, Jeffrey L. Amestoy of Vermont, Mary

        Sue Terry of Virginia, Kenneth Eikenberry of Washington, Mario J. Palumbo of West Virginia, James E. Doyle of Wisconsin, and Joseph B. Meyer of Wyoming; and for the Council of State Governments et al. by Richard Ruda, Michael G. Dzialo, and Clifton S. Elgarten.

   Justice White

delivered the opinion of the Court.

The question before the Court is whether a district court order denying a claim by a State or a state entity to Eleventh Amendment immunity from suit in federal court may be appealed under the collateral order doctrine of Cohen v. Beneficial Industrial Loan Corp., 337 U. S. 541 (1949). We conclude that it may.

I

Petitioner, the Puerto Rico Aqueduct and Sewer Authority (PRASA), is “an autonomous government instrumentality” which functions to “provide to the inhabitants of Puerto Rico an adequate drinking water, sanitary sewage service and any other service or facility proper or incidental thereto.” P. R. Laws Ann., Tit. 22, §§ 142,144 (1987). In 1985, PRASA entered into a consent decree with the federal Environmental Protection Agency under which it agreed to upgrade many of its wastewater treatment plants to ensure compliance with the federal Clean Water Act. PRASA subsequently contracted with respondent, a private engineering firm incorporated in Delaware, to assist it with this task. In 1990, PRASA withheld payments on the contract in light of alleged overcharging by respondent. Respondent brought a diversity action in the United States District Court for the District of Puerto Rico, alleging breach of contract and damage to its business reputation.

PRASA moved to dismiss on the grounds that it was an “arm of the State,” and that the Eleventh Amendment therefore prohibited the suit. The District Court found that petitioner did not qualify for immunity “because of its ability to raise funds for payment of its contractual obligations which do not affect the Commonwealth’s funds” and denied the motion. App. to Pet. for Cert. A-9. PRASA filed a timely notice of appeal to the Court of Appeals for the First Circuit and sought to stay proceedings while the appeal was pending. The court denied the stay and subsequently dismissed the appeal for want of jurisdiction, 945 F. 2d 10, 14 (1991), concluding that First Circuit precedent barred both States and their agencies from taking an immediate appeal on a claim of Eleventh Amendment immunity. Id., at 12 (discussing Libby v. Marshall, 833 F. 2d 402 (CA1 1987)).

In light of the conflict between the decision below and those of the other Courts of Appeals that have considered the issue, we granted certiorari. 503 U. S. 918 (1992).

H — I

Title 28 U. S. C. § 1291 provides for appeal from “final decisions of the district courts.” Appeal is thereby precluded “from any decision which is tentative, informal or incomplete,” as well as from any “fully consummated decisions, where they are but steps towards final judgment in which they will merge.” Cohen v. Beneficial Industrial Loan Corp., 337 U. S., at 546. Nevertheless, a judgment that is not the complete and final judgment in a case will be immediately appealable if it

“fall[s] in that small class which finally determine claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated.” Ibid.

Thus, in Cohen itself, the Court held that appeal could be taken from a district court order denying the defendant’s motion to compel the plaintiffs in a shareholder derivative suit to post a bond. The Court found the order appealable because it “did not make any step toward final disposition of the merits of the case and [would] not be merged in final judgment” and because, after final judgment, it would “be too late effectively to review the present order, and the rights conferred by the [bond] statute, if it is applicable, will have been lost.” Ibid.

The Court has held that orders denying individual officials’ claims of absolute and qualified immunity are among those that fall within the ambit of Cohen. See Nixon v. Fitzgerald, 457 U. S. 731 (1982); Mitchell v. Forsyth, 472 U. S. 511 (1985). Mitchell bears particularly on the present case. There, the Attorney General of the United States appealed from a District Court order denying his motion to dismiss on grounds of qualified immunity. The Court of Appeals held that the order was not appealable and remanded the case for trial. We reversed, holding that the order denying qualified immunity was a collateral order immediately appealable under Cohen. We found that, absent immediate appeal, the central benefits of qualified immunity — avoiding the costs and general consequences of subjecting public officials to the risks of discovery and trial — would be forfeited, much as the benefit of the bond requirement would have been forfeited in Cohen. “The entitlement is an immunity from suit rather than a mere defense to liability; and like an absolute immunity, it is effectively lost if a case is erroneously permitted to go to trial.” Mitchell, supra, at 526 (emphasis in original).

Petitioner maintains, and we agree, that the same rationale ought to apply to claims of Eleventh Amendment immunity made by States and state entities possessing a claim to share in that immunity. Under the terms of the Amendment, “[t]he Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State . . . .” This withdrawal of jurisdiction effectively confers an immunity from suit. Thus, “this Court has consistently held that an unconsenting State is immune from suits brought in federal courts by her own citizens as well as by citizens of another State.” Edelman v. Jordan, 415 U. S. 651, 662-663 (1974). Absent waiver, neither a State nor agencies acting under its control may “be subject to suit in federal court.” Welch v. Texas Dept. of Highways and Public Transportation, 483 U. S. 468, 480 (1987) (plurality opinion); see also Will v. Michigan Dept. of State Police, 491 U. S. 58, 66 (1989); Cory v. White, 457 U. S. 85, 90-91 (1982); Alabama v. Pugh, 438 U. S. 781 (1978) (per curiam); Mt. Healthy City Bd. of Ed. v. Doyle, 429 U. S. 274, 280 (1977).

Once it is established that a State and its “arms” are, in effect, immune from suit in federal court, it follows that the elements of the Cohen collateral order doctrine are satisfied. “To come within the ‘small class’ of . . . Cohen, the order must [1] conclusively determine the disputed question, [2] resolve an important issue completely separate from the merits of the action, and [3] be effectively unreviewable on appeal from a final judgment.” Coopers & Lybrand v. Livesay, 437 U. S. 463, 468 (1978) (footnote omitted). Denials of States’ and state entities’ claims to Eleventh Amendment immunity purport to be conclusive determinations that they have no right not to be sued in federal court. Moreover, a motion by a State or its agents to dismiss on Eleventh Amendment grounds involves a claim to a fundamental constitutional protection, cf. Lauro Lines s.r.l. v. Chasser, 490 U. S. 495, 502-503 (1989) (Scalia, J., concurring), whose resolution generally will have no bearing on the merits of the underlying action. Finally, the value to the States of their Eleventh Amendment immunity, like the benefit conferred by qualified immunity to individual officials, is for the most part lost as litigation proceeds past motion practice.

Respondent, following the rationale of the First Circuit in this case and in Libby v. Marshall, 833 F. 2d 402 (1987), maintains that the Eleventh Amendment does not confer immunity from suit, but merely a defense to liability. Were this true, petitioner arguably would not be entitled to avail itself of the collateral order doctrine. See, e. g., Van Cauwenberghe v. Biard, 486 U. S. 517, 526-527 (1988). Support for this narrow view of the Eleventh Amendment is drawn mainly from Ex parte Young, 209 U. S. 123 (1908), under which suits seeking prospective, but not compensatory or other retrospective relief, may be brought against state officials in federal court challenging the constitutionality of official conduct enforcing state law.

The doctrine of Ex parte Young, which ensures that state officials do not employ the Eleventh Amendment as a means of avoiding compliance with federal law, is regarded as carving out a necessary exception to Eleventh Amendment immunity. See, e. g., Green v. Mansour, 474 U. S. 64, 68 (1985). Moreover, the exception is narrow: It applies only to prospective relief, does not permit judgments against state officers declaring that they violated federal law in the past, id., at 73, and has no application in suits against the States and their agencies, which are barred regardless of the relief sought, Cory v. White, supra. Rather than defining the nature of Eleventh Amendment immunity, Young and its progeny render the Amendment wholly inapplicable to a certain class of suits. Such suits are deemed to be against officials and not the States or their agencies, which retain their immunity against all suits in federal court.

More generally, respondent’s claim that the Eleventh Amendment confers only protection from liability misunderstands the role of the Amendment in our system of federalism: “The very object and purpose of the 11th Amendment were to prevent the indignity of subjecting a State to the coercive process of judicial tribunals at the instance of private parties.” In re Ayers, 123 U. S. 443, 505 (1887). The Amendment is rooted in a recognition that the States, although a union, maintain certain attributes of sovereignty, including sovereign immunity. See Hans v. Louisiana, 134 U. S. 1, 13 (1890). It thus accords the States the respect owed them as members of the federation. While application of the collateral order doctrine in this type of case is justified in part by a concern that States not be unduly burdened by litigation, its ultimate justification is the importance of ensuring that the States’ dignitary interests can be fully vindicated.

Respondent argues in the alternative that a distinction should be drawn between cases in which the determination of a State or state agency’s claim to Eleventh Amendment immunity is bound up with factual complexities whose resolution requires trial and cases in which it is not. See Tr. of Oral Arg. 30-32; cf. Dube v. State University of New York, 900 F. 2d 587, 594 (CA2 1990) (immediate appeal will lie where immunity can be found as a matter of law), cert. denied, 501 U. S. 1211 (1991). On this view, for example, an order denying a motion to dismiss a suit against a named State would be immediately appealable, whereas the same order, when issued in a suit which presents difficult factual questions as to whether an agency is an “arm of the State,” would not. We see little basis for drawing such a line. See Mitchell v. Forsyth, 472 U. S., at 527-529, and n. 10. In any event, it does not appear to us that the determination of PRASA’s status under the Eleventh Amendment implicates any extraordinary factual difficulty and the issue of its entitlement to immunity can be fully explored in the Court of Appeals on remand.

m

We hold that States and state entities that claim to be “arms of the State” may take advantage of the collateral order doctrine to appeal a district court order denying a claim of Eleventh Amendment immunity. The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.

It is so ordered.

Justice Blackmun,

concurring.

I join the Court’s opinion but write separately to make plain once again my position on one feature. I continue to believe that the Court’s interpretation of the Eleventh Amendment as embodying a broad principle of state immunity from suit in federal court “simply cannot be reconciled with the federal system envisioned by our Basic Document and its Amendments.” Atascadero State Hospital v. Scanlon, 473 U. S. 234, 303 (1985) (Blackmun, J., dissenting). Nevertheless, because I believe that the Eleventh Amendment does preserve a State’s immunity from suit in the limited context of an action by a citizen of another State or of a foreign country on a state-law cause of action brought in federal court, id., at 301 (Brennan, J., dissenting), a claim of immunity under the Eleventh Amendment ought to be appealable immediately. Whether the assertion of an Eleventh Amendment claim is well founded — a matter not before us in this case, see ante, at 141-142, n. 1-is a question separate from the question whether the Eleventh Amendment interests are “too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated.” Cohen v. Beneficial Industrial Loan Corp., 337 U. S. 541, 546 (1949). Because I believe that the Eleventh Amendment does guarantee immunity from suit in a narrow class of cases, I concur in the Court’s opinion and judgment that, regardless of the merits, a district court’s denial of a claim of immunity under the Eleventh Amendment should be appealable immediately. See Sullivan v. Finkelstein, 496 U. S. 617, 632 (1990) (opinion concurring in judgment).

Justice Stevens,

dissenting.

This case arises out of a commercial dispute between respondent, a private engineering firm, and the Puerto Rico Aqueduct and Sewer Authority (PRASA or Authority). The parties entered into a multimillion dollar contract providing for the construction of extensive improvements to Puerto Rico’s wastewater treatment facilities. Respondent brought suit in the Federal District Court for the District of Puerto Rico alleging breach of contract. The Authority filed a motion to dismiss, claiming that the action was barred by the Eleventh Amendment. The District Court concluded that the claim had no merit and denied the motion to dismiss. The Court of Appeals dismissed PRASA’s appeal from that order because it was not final within the meaning of 28 U. S. C. § 1291.

If the Authority were a private litigant engaged in a commercial dispute, it would be perfectly clear that the dismissal of its appeal was required by our precedents. For the denial of a motion to dismiss on jurisdictional grounds — a motion that asserts that the defendant cannot be sued in a particular forum — is not a final order within the meaning of §1291. Van Cauwenberghe v. Biard, 486 U. S. 517, 526-527 (1988); Catlin v. United States, 324 U. S. 229, 236 (1945). In this case, PRASA makes the same assertion — namely, that it may not be sued in a federal forum, but rather must be sued in another court. Brief for Petitioner 4-5.

Nonetheless, despite our decisions in Biard and Catlin, the Court holds that when a State or state entity claiming to be an “arm of the State” asserts that it cannot be sued in a federal forum because of the Eleventh Amendment, the “final decision” rule must give way and the claim must be subject to immediate appellate review. The Court reasons that such a claim is analogous to a government official’s claim of absolute or qualified immunity, which we have held is subject to interlocutory appeal. Nixon v. Fitzgerald, 457 U. S. 731 (1982); Mitchell v. Forsyth, 472 U. S. 511 (1985). I cannot agree.

The defense of absolute or qualified immunity is designed to shield government officials from liability for their official conduct. In the absence of such a defense, we have held, “officials would hesitate to exercise their discretion in a way injuriously affecting the claims of particular individuals even when the public interest required bold and unhesitating action.” Nixon v. Fitzgerald, 457 U. S., at 744-745 (internal quotation marks and citation omitted). Because the specter of a long and contentious legal proceeding in and of itself would inhibit government officials from exercising their authority with the freedom and independence necessary to serve the public interest, we have held that claims of absolute or qualified immunity are subject to immediate appeal. Id., at 742-743; Mitchell v. Forsyth, 472 U. S., at 526-527.

While the Eleventh Amendment defense available to States and state entities is often labeled an “immunity,” that label is virtually all that it has in common with the defense of absolute or qualified immunity. In contrast to the latter, a defense based on the Eleventh Amendment, even when the Amendment is read at its broadest, does not contend that the State or state entity is shielded from liability for its conduct, but only that the federal courts are without jurisdiction over claims against the State or state entity. See ante, at 144. Nothing in the Eleventh Amendment bars respondent from seeking recovery in a different forum. Indeed, as noted above, petitioner acknowledges that it is not seeking immunity for its conduct, but merely that the suit be brought in the courts of the Commonwealth of Puerto Rico. Brief for Petitioner 4-5.

Plainly, then, the interests underlying our decisions allowing immediate appeal of claims of absolute or qualified immunity do not apply when the so-called “immunity” is one based on the Eleventh Amendment. Whether petitioner must bear the burden, expense, and distraction of litigation stemming from its contractual dispute with respondent has nothing whatsoever to do with the Eleventh Amendment; the Eleventh Amendment only determines where, or more precisely, where not, that suit may be brought. Because the Amendment goes to the jurisdiction of the federal court, as opposed to the underlying liability of the State or state entity, Biard and Catlin, not Nixon and Mitchell, are the relevant precedent for determining whether PRASA’s claim is subject to interlocutory appeal.

If indeed the interests underlying our decisions permitting immediate appeal of claims of absolute or qualified immunity do not apply to a State or state entity’s objection to federal jurisdiction on Eleventh Amendment grounds, what then is driving the Court to hold that PRASA’s claim under the Eleventh Amendment is subject to immediate appeal? The Court tells us, ante, at 146: “[The] ultimate justification is the importance of ensuring that the States’ dignitary interests can be fully vindicated.” Whereas a private litigant must suffer through litigation in a federal tribunal despite his claim that the court lacks jurisdiction, e. g., Biard and Catlin, a State or state entity must be protected from the “indignity” of having to present its case — as to both the court’s jurisdiction and the underlying merits — in the neutral forum of a federal district court.

I find that rationale to be embarrassingly insufficient. The mandate of § 1291 that appellate jurisdiction be limited to “final decisions of the district courts” is not predicated upon “mer[e] technical conceptions of ‘finality,’” Catlin, 324 U. S., at 233, but serves important interests concerning the fair and efficient administration of justice. The “final decision” rule preserves the independence of the trial judge and conserves the judicial resources that are necessarily expended by piecemeal appeals. Moreover, and of particular relevance to this case, it serves an important “fairness” purpose by preventing “the obstruction to just claims that would come from permitting the harassment and cost of a succession of separate appeals from the various rulings to which a litigation may give rise . . . .” Firestone Tire & Rubber Co. v. Risjord, 449 U. S. 368, 374 (1981) (internal quotation marks and citation omitted). Sacrificing those interests in the name of preserving the freedom and independence that government officials need to carry out their official duties is one thing; doing so out of concern for the “dignitary” interest of a State or, in this case, a state aqueduct and sewer authority, is quite another.

For me, the balance of interests is easy. The cost to the courts and the parties of permitting piecemeal litigation of this sort clearly outweighs whatever benefit to their “dignity” States or state entities might derive by having their Eleventh Amendment claims subject to immediate appellate review. I would therefore hold, as did the court below, that the denial of a motion to dismiss on Eleventh Amendment grounds is not subj ect to immediate appellate review. Accordingly, I respectfully dissent.

       As the case comes to us, the law of the First Circuit — that the Commonwealth of Puerto Rico is treated as a State for purposes of the Eleventh Amendment, see Ramirez v. Puerto Rico Fire Serv., 715 F. 2d 694, 697 (1983)-is not challenged here, and we express no view on this matter. Because the Court of Appeals dismissed the appeal on jurisdictional grounds, it did “not consider the merits of PRASA's Eleventh Amendment defense and [took] no view as to whether PRASA is actually entitled to the claimed immunity.” 945 F. 2d 10, 14, n. 6 (CA1 1991). We likewise express no view on the merits of the immunity claim.

       See Dube v. State University of New York, 900 F. 2d 587, 594 (CA2 1990), cert. denied, 501 U. S. 1211 (1991); Coakley v. Welch, 877 F 2d 304, 306 (CA4), cert. denied, 493 U. S. 976 (1989); Chrissy F. v. Mississippi Dept. of Pub. Welfare, 925 F 2d 844, 848-849 (CA5 1991); Kroll v. Board of Trustees of University of Illinois, 934 F. 2d 904, 906 (CA7), cert. denied, 502 U. S. 941 (1991); Barnes v. Missouri, 960 F. 2d 63, 64 (CA8 1992) (per curiam); Durning v. Citibank, N. A., 950 F. 2d 1419, 1422 (CA9 1991); Schopler v. Bliss, 903 F 2d 1373, 1377 (CA11 1990) (per curiam).

       The District Court also denied absolute immunity. This order was held appealable by the Court of Appeals and was affirmed, as it was by us. Mitchell v. Forsyth, 472 U. S., at 520.

       The result reached today was largely anticipated by Ex parte New York, 256 U. S. 490 (1921). There, private citizens brought an in rem libel action in Federal District Court against ships chartered and operated by New York State. New York moved to dismiss on the ground that the action was in the nature of an in personam proceeding and was thus barred by the Eleventh Amendment. When the District Court denied the motion, the State applied to the Court for a writ of prohibition. Although noting that the State’s interest could be pressed on appeal, id., at 497, the Court issued the extraordinary writ in order to vindicate fully the "fundamental” constitutional rule that a State may not be sued in federal court without its consent, id., at 497, 503.

       For this reason, the First Circuit’s attempt to distinguish Mitchell v. Forsyth, 472 U. S. 511 (1985), on the grounds that the States, as compared to individual officials, are better able to bear the burden of litigation, fails. See Libby v. Marshall, 833 F. 2d 402, 406 (1987). The Eleventh Amendment is concerned not only with the States’ ability to withstand suit, but with their privilege not to be sued.

      Not surprisingly, we have expressly characterized the Eleventh Amendment defense, albeit in a different context, as “partak[ing] . . . of a jurisdictional bar.” Edelman v. Jordan, 415 U. S. 651, 678 (1974).