The opinion of the court was delivered by: Wm. R. Wilson, Jr. United States District Judge
This is a tort claim based on state law originally filed in the Circuit Court of Phillips County, Arkansas on June 9, 2006. Defendants removed the case to federal court on July 3, 2006. Although West Helena Housing Authority ("WHHA"), like the Plaintiffs, is based in Phillips County, Defendants argue that complete diversity*fn1 exists because WHHA was fraudulently named in the Complaint. Alternatively, Defendants argue that because WHHA is a non-profit corporation, charitable immunity applies and it cannot be sued. Pending are Plaintiffs' Motions to Remand (Doc. No. 10 and 11).
Federal courts are required to strictly construe the federal removal statute, and any ambiguities about federal jurisdiction are to be resolved in favor of remand.*fn2 In removal cases, defendant has the burden of proving federal court jurisdiction.*fn3 "As the party seeking removal and opposing remand, [defendant] has the burden of establishing federal subject matter jurisdiction."*fn4 In the present case, however, Plaintiffs originally filed in state court, the case was removed to federal court by Defendants, and Plaintiffs are now moving for a remand back to state court.
Defendants argue that WHHA is entitled to sovereign immunity as set out in Ark. Code Ann. § 21-9-301, which provides for "immunity to all counties, municipal corporations, school districts, special improvement districts, and all other political subdivisions of the state and any of their boards, commissions, agencies, authorities, or other governing bodies . . . ." Defendants contend that WHHA is a "political subdivision" and, therefore, immune from suit.*fn5 Whether a party is entitled to immunity is a question of law, not fact.*fn6
The Arkansas Housing Authorities Act creates housing authorities, which are defined as "a public body corporate and politic . . . with the capacity to sue and be sued."*fn7 Comparing school districts with housing authorities, the Arkansas Supreme Court recently stated:
It would appear that a school district is in the same legal category as a housing authority. Both are created by the General Assembly, both are termed, and are body corporates, and both may sue and be sued.*fn8
The court concluded that school districts, "as political subdivisions, are not entitled to the State's constitutional sovereign-immunity protection."*fn9 Likewise, housing authorities are not entitled to sovereign immunity, and Defendants sovereign immunity argument fails.
Defendants next argue that since WHHA is a non-profit corporation, the charitable immunity exception applies. "The essence of the [charitable immunity] doctrine is that agencies, trusts, etc., created and maintained exclusively for charity may not have their assets diminished by execution in favor of one injured by acts of persons charged with duties under the agency or trust."*fn10 The Low Court held that charitable immunity is a complete bar to suit.
Is a housing authority a charity? The Arkansas Constitution, in pertinent part, exempts "public property used exclusively for public purposes."*fn11 The Arkansas Supreme Court, in interpreting Ark. Const. art. 16, § 5, has consistently held that "in order for property to be exempt from taxation two elements must be present: 1) the property must in fact be "public property," that is it must be owned by a public entity; and 2) it must be used exclusively for public purposes."*fn12
Existing Arkansas case law supports the tax-exempt status of property of a municipal housing authority.*fn13 Accordingly, although WHHA does not qualify for sovereign immunity, it cannot be sued due to charitable immunity.
Because WHHA qualifies for charitable immunity and cannot be sued, it's residency cannot be considered to determine federal diversity. Without WHHA, complete diversity exists. Plaintiffs' Motion to Remand is DENIED.
IT IS SO ORDERED this 14th day of ...