United States Court of Appeals,

Fifth Circuit.

No. 94-20597.

The PILLSBURY COMPANY, INC., Plaintiff-Appellee,

v.

The PORT OF CORPUS CHRISTI AUTHORITY, Defendant-Appellant.

Oct. 11, 1995.

Appeal from the United States District Court for the Southern District of Texas.

Before JOLLY and BENAVIDES, Circuit Judges, and SHAW*, District Judge.

BENAVIDES, Circuit Judge:

Defendant-Appellee The Port of Corpus Christi Authority

("Corpus Port") appeals the district court's denial of its motion

to dismiss for lack of diversity jurisdiction and/or motion for

summary judgment alleging that it is an "arm of the State of Texas"

entitled to Eleventh Amendment immunity and not a "citizen" for

purposes of diversity jurisdiction. We reverse the district

court's ruling and dismiss for lack of jurisdiction.

FACTS AND PROCEDURAL HISTORY

The facts of the case are undisputed. The Pillsbury Company

("Pillsbury"), a Delaware corporation with its principal place of

business in Minnesota, and the Corpus Port entered into a

contractual arrangement concerning a shipment of bagged sugar

consigned to Pillsbury. The shipment arrived at the Corpus Port in

* Chief Judge of the Western District of Louisiana, sitting by designation.

1 March 1991, and was allegedly damaged while being stored in the

Corpus Port's cargo dock sheds (warehouses).

On March 8, 1993, Pillsbury sued the Corpus Port for breach of

contract/bailment for the damage caused to the sugar stored at the

Corpus Port. The Corpus Port filed a motion to dismiss for lack of

diversity jurisdiction and/or motion for summary judgment, alleging

that it was an "arm of the State of Texas," and therefore not

considered a "citizen" for purposes of diversity jurisdiction. The

Corpus Port also alleged that it was entitled to Eleventh Amendment

immunity from suit in federal court.

After allowing the parties extra time for briefing the

jurisdictional issue, the district court determined that the Corpus

Port is not an arm of the State of Texas and thus, as a citizen

within the meaning of

, is capable of supporting

the exercise of the court's diversity jurisdiction.1 The Corpus

Port filed a motion for reconsideration or, in the alternative, a

motion for certification under

(b). The district

court denied the motion for reconsideration, but certified the

interlocutory order for immediate appeal. This Court subsequently

granted the interlocutory appeal.2

DISCUSSION

1 The court also ruled that it lacked admiralty jurisdiction because 1) the contract at issue did not involve a maritime obligation to provide wharfage and 2) there was no evidence of a claim for damages arising from the breach of a severable maritime obligation of the contract. 2 The Port of Houston Authority has filed a brief of amicus curiae in this appeal.

2 The district court's finding that the Corpus Port is legally

and factually indistinguishable from the Port of Houston Authority

("Houston Port") is unassailed in this appeal. Accordingly, we are

bound by our decision in Kamani v. Port of Houston Authority3, in

which we upheld an earlier decision finding the Houston Port "a

creature of state law and a political subdivision of the State of

Texas" entitled to Eleventh Amendment immunity.

at 613

(quoting McCrea v. Harris County Houston Ship Channel Navigation

Dist.,

, 607 (5th Cir.), cert. denied,

,

,

(1970)). Therefore, we find that the

Corpus Port, like the Houston Port, is entitled to Eleventh

Amendment immunity.

We reject Pillsbury's contention that the U.S. Supreme Court's

decision in Hess v. Port Authority Tans-Hudson Corp.4 overrules our

decision in Kamani. Hess is not broad enough to support

Pillsbury's contention. We view Hess as a limited holding

addressing the standard to be applied to bi-state entities not

created pursuant to state statute. Because the Corpus Port and the

Houston Port were both created and still operate pursuant to

Article XVI, Section 59 of the Texas Constitution, Hess does not

overrule Kamani or control the disposition of this appeal.

Likewise we find Jacintoport Corp. v. Greater Baton Rouge Port

Commission,

(5th Cir. 1985), cert. denied,

,

,

(1986), decided after Kamani by

3

(5th Cir. 1983) 4 --- U.S. ----,

,

(1994).

3 a panel of this Court and pertaining to the Eleventh Amendment

exception status of a port created under Louisiana law and not

Texas law, is of no benefit to Pillsbury.

CONCLUSION

Having found that the Corpus Port is entitled to Eleventh

Amendment immunity, we REVERSE the ruling of the district court and

DISMISS Pillsbury's claim for lack of jurisdiction.

4