
USCA1 Opinion

	




          August 26, 1993   UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________          No. 92-1034                             UNIVERSITY OF RHODE ISLAND,                                Plaintiff, Appellant,                                          v.                              A. W. CHESTERTON COMPANY,                                 Defendant, Appellee.                                 ____________________                                     ERRATA SHEET                                     ERRATA SHEET               The  opinion of  this Court  issued on  August 16,  1993, is          amended as follows:               Page  8,  line 5,  should read:    as the  nominal plaintiff          . . .                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________        No. 92-1034                             UNIVERSITY OF RHODE ISLAND,                                Plaintiff, Appellant,                                          v.                              A. W. CHESTERTON COMPANY,                                 Defendant, Appellee.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                           FOR THE DISTRICT OF RHODE ISLAND                    [Hon. Ronald R. Lagueux, U.S. District Judge]                                             ___________________                                 ____________________                                        Before                            Cyr and Boudin, Circuit Judges,                                            ______________                             and Hornby,* District Judge.                                          ______________                                 ____________________             Louis  J.  Saccoccio with  whom Merlyn  P.  O'Keefe and  Packer &             ____________________            ___________________      ________        O'Keefe were on brief for appellant.        _______             Steven E. Snow with whom Partridge, Snow & Hahn was  on brief for             ______________           ______________________        appellee.                                 ____________________                                   August 16, 1993                                 ____________________                                  __________________        *Of the District of Maine, sitting by designation                    CYR,  Circuit Judge.   The  University of  Rhode Island                    CYR,  Circuit Judge.                          _____________          ("URI")  appeals a  judgment disallowing  its breach  of warranty          claims against A.W. Chesterton Company ("Chesterton"), contending          that the  district court lacked subject  matter jurisdiction, and          challenging  various  rulings at  trial.   Finding  no  error, we          affirm.                                          I                                          I                                      BACKGROUND                                      BACKGROUND                                      __________                    We  recite  only those  record  facts  essential to  an          understanding of the issues raised on appeal, drawing all reason-          able inferences  in favor  of plaintiff-appellant URI.   Richmond                                                                   ________          Steel,  Inc. v. Puerto  Rican American Ins. Co.,  954 F.2d 19, 20          ____________    _______________________________          (1st Cir. 1992).   The R/V Endeavor is a  vessel chartered by the          National Science Foundation to  URI's Graduate School of Oceanog-          raphy  (GSO) for research purposes.   In the summer of 1985, John          Metz, the GSO's port  engineer, discovered serious rust corrosion          on  the inside of the  Endeavor's steel ballast  tanks, which are          submerged in  salt water during  normal operation of  the vessel.          Responding  to  a  Chesterton advertisement,  Metz  received test          samples of  "Rust Transformer,"  a Chesterton product  which pur-          portedly converts surface corrosion  into a rust-inhibitor, which          in turn serves  as a base for further coats  of paint.  Satisfied          with  the  test-sample  results,  Metz  invited Chesterton  sales          representatives  aboard  the  Endeavor.    After  inspecting  the                                          2          Endeavor's ballast tank  corrosion, Chesterton's  representatives          recommended that  Metz use Chesterton's 1-2-3  System (using Rust          Transformer,  a primer, and a final  enamel coat) to rehabilitate          the  tanks.   Metz  ordered the  1-2-3  System on  September  11,          1985.1   Six months after URI completed the 1-2-3 System applica-          tion, the  new coating on  the ballast tanks began  to loosen and          flake  off.    URI allegedly  expended  $100,000  to correct  the          problem.                    URI  brought suit  against Chesterton  in Rhode  Island          state  court  on   May 4,  1989,   alleging  negligence,   strict          liability,  and  breaches  of  an express  warranty  and  implied          warranties  of  merchantability  and  fitness  for  a  particular          purpose.    Chesterton promptly  removed  the  action to  federal          district court.   URI moved for remand on the ground that URI, as          an "alter  ego, arm, or agent"  of the State of  Rhode Island, is          not  a "citizen"  of Rhode  Island for  diversity purposes.   The          district court denied URI's  remand motion without an evidentiary          hearing,  relying  on an  earlier  district  court decision,  see                                                                        ___          Vanlaarhoven v. Newman,  564 F. Supp.  145 (D.R.I. 1983)  (Selya,          ____________    ______          J.), which  determined that URI was not an "arm" of the State for          sovereign immunity purposes.                                        ____________________               1The original URI complaint  alleged that Metz was reassured          by Chesterton  that  the 1-2-3  System would  work on  Endeavor's          ballast tanks.  On the other hand, the product's written instruc-          tions advised  that the system  was not recommended  for surfaces          regularly  immersed in sea water.   In an  amended complaint, URI          alleged that  Chesterton  representatives observed  the URI  crew          applying  the 1-2-3 System to the ballast tanks, but said nothing          to URI representatives  about the unsuitability of the  system or          its improper application.                                          3                    This  court declined  to entertain  URI's interlocutory          appeal  from the  jurisdictional  ruling  but noted  disagreement          among  the circuits as to the proper criteria for determining the          citizenship  of state  universities for  diversity purposes.   We          recommended that the district court conduct "limited factfinding"          on remand relating to several factors pertinent to URI's citizen-          ship,  including  (1)  "the degree  of  URI's  dependence on  and          functional integration  with the  state treasury," (2)  "the per-          centage of URI's annual budget that derives from state appropria-          tions,"  and (3)  "whether the legislature  bases levels  of such          appropriations  in part  on the  amount of  nonappropriated funds          available to URI."2   On remand, the district court  denied URI's          motion  for  a pretrial  evidentiary  hearing  relating to  these          jurisdictional  matters.   The  jury trial  began on  December 3,          1991.  After the  district court excluded the testimony  of URI's          only expert witness on the issue of contract damages, URI abrupt-          ly  rested its case.  Judgment  was entered for Chesterton on all          counts, as  a matter of law,  pursuant to Fed. R.  Civ. P. 50(a),          and URI appealed.                                          II                                          II                                      DISCUSSION                                      DISCUSSION                                      __________                                        ____________________               2As  an alternate  and independent  reason for  declining to          entertain  the interlocutory  appeal, this  court noted  that the          litigation  was unlikely to be so protracted as to warrant appel-          late   interruption, given the nature and scope of URI's contract          claims.                                          4          A.   Subject Matter Jurisdiction          A.   Subject Matter Jurisdiction               ___________________________                    URI urges us to  set aside the judgment and  remand the          case  to state court on  the ground that  Chesterton, a Massachu-          setts corporation,  has not established diversity.   URI contends          that it  is not a  Rhode Island  "citizen," but a  mere "arm"  or          "alter ego" of the  State.  See  Gibbs v. Buck,  307 U.S. 66,  69                                      ___  _____    ____          (1939) (holding that party  invoking diversity jurisdiction  must          establish sufficient  facts to  warrant its exercise);  Bank One,                                                                  _________          Texas, N.A. v.  Montle, 964 F.2d  48, 50 (1st Cir.  1992) (same);          ___________     ______          see also  Shamrock Oil Corp. &  Gas Co. v. Sheets,  313 U.S. 100,          ___ ____  _____________________________    ______          108-09  (1941)  (removal  statute  should  be strictly  construed          against removal); McNutt v.  General Motors Acceptance Corp., 298                            ______     _______________________________          U.S. 178, 187 (1936);  Wilson v. Republic Iron  & Steel Co.,  257                                 ______    __________________________          U.S. 92, 97 (1921).                    We  begin with first principles.   A State  cannot be a          "citizen"  of itself  for  purposes  of diversity  jurisdiction.3          Moor v. County of Alameda, 411 U.S. 693, 717  (1973); Postal Tel.          ____    _________________                             ___________          Cable Co.  v. Alabama, 155  U.S. 482, 487  (1894).  On  the other          _________     _______          hand, a  political subdivision possessing the formal  status of a          "body politic and  corporate," such as a  county or municipality,          is  presumed a  "citizen"  for diversity  purposes "unless  it is          simply 'the arm or  alter ego of the State.'"   Moor, 411 U.S. at                              _________                   ____          717, 721 (finding that Alameda  County had a "sufficiently  inde-                                        ____________________               3Section 1332(a) provides that "[t]he district  courts shall          have original jurisdiction of  all civil actions . . . [involving          over $50,000]  . . . between  . . . citizens of  different States          . . . ."  28 U.S.C.   1332(a)(1).                                          5          pendent corporate character" to be a "citizen" of California  for          diversity  purposes) (citation  omitted) (emphasis  in original);          Illinois v. City of Milwaukee, 406 U.S. 91,  97 (1972); Cowles v.          ________    _________________                           ______          Mercer County, 74 U.S.  (7 Wall.) 118, 121-22 (1869).4   Thus, in          _____________                                        ____________________               4A  political  subdivision's  "detachment"  from  the  State          generally will deprive it of the right to partake  of the State's          sovereign immunity under the  Eleventh Amendment. See U.S. Const.                                                            ___          amend. XI  ("The 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 . . . .").   Although we  have noted the  essential          similarity between  the immunity and diversity  tests, see George                                                                 ___ ______          R. Whitten, Jr. Inc.  v. State Univ. Constr. Fund,  493 F.2d 177,          ____________________     ________________________          179  n.2 (1st  Cir.  1974) (tests  "closely  allied and  yet  not          identical"); cf. Krieger v. Trane Co.,  765 F. Supp. 756, 758 (D.                       ___ _______    _________          D.C. 1991) (rejecting any distinction  between the two tests), we          have  not  had occasion  to identify  the  precise nature  of any          differences.   In this case, however, we address, and reject, two          proposed  distinctions.    First,  Eleventh   Amendment  analysis          normally would focus  primary attention on any financial drain on                                                                   _____          the State treasury caused by a judgment adverse to URI, see Quern                                                                  ___ _____          v. Jordan, 440 U.S. 332, 337 (1979); Edelman  v. Jordan, 415 U.S.             ______                            _______     ______          651, 663 (1974),  a concern which  obviously does not arise  in a          diversity case where the State-related plaintiff seeks to recover                                                                    _______          a  monetary judgment.   Significantly,  however, courts  have not          accepted the notion  that sovereign immunity  exists only if  the                                                               ____          State treasury is  threatened.  See Cory  v. White, 457 U.S.  85,                                          ___ ____     _____          90-91  (1982); Kroll v. Board  of Trustees of  Univ. of Illinois,                         _____    ________________________________________          934 F.2d  904,  908 (7th  Cir.),  cert. denied,  112  S. Ct.  377                                            _____ ______          (1991);  Harden v. Adams, 760  F.2d 1158, 1163  (11th Cir.) (Troy                   ______    _____          State University), cert. denied, 474  U.S. 1007 (1985).   Whether                             _____ ______          in  the  diversity or  the  immunity context,  the  analysis must          center on  the State-related party's enduring legal identity as a          juridical entity separate from the State.               The second  possible distinction  we must consider  is that,          unlike sovereign  immunity, nondiversity cannot be  waived by the          State.  See State Highway Comm'n  of Wyoming v. Utah Constr. Co.,                  ___ ________________________________    ________________          278 U.S. 194, 199 (1929); George R.  Whitten, Jr., Inc., 493 F.2d                                    _____________________________          at 179.   Generally,  however, the  "waiver of  immunity" inquiry          would  follow the  initial determination  that the  State-related                 ______          entity was not sufficiently autonomous to escape characterization          as an "alter ego"  of the State.   For example, in  Vanlaarhoven,                                                              ____________          the court based   its holding on the alternate  ground that, even          if URI were  merely an "alter  ego" of the  State, the State  had          expressly waived  URI's immunity under  state law by  granting it          the authority to "sue or be sued" in its own name.  Vanlaarhoven,                                __________                    ____________          564 F. Supp. at 149; see also  infra note 7.  While such a bypass                               ___ ____  _____                                          6          principle at least, public  and private corporations are accorded          similar treatment as  "citizens" for diversity purposes.   See 28                                                                     ___          U.S.C.    1332(c)(1)  ("For  purposes  of this  section  . . .  a          corporation shall be deemed to be a citizen of any State by which          it has  been incorporated  . . . ."); see also  Media Duplication                                                ___ ____  _________________          Servs., Ltd. v. HDG Software, Inc., 928 F.2d 1228, 1236 (1st Cir.          ____________    __________________          1991).                    The Rhode Island Board of Higher Education ("Board") is          nominally constituted by the  State of Rhode Island as  the legal          entity which acts in behalf of URI and other public postsecondary          educational institutions  in Rhode Island.5   The Board  has been          constituted a  "public corporation,"  R.I. Gen. Laws    16-59-1,6          see  infra note  10, just  as the  County of  Alameda is  a "body          ___  _____                                        ____________________          argument is  impermissible where the sole issue is URI's citizen-          ship for diversity purposes, sovereign immunity case law, and its          identification of the relevant attributes of autonomy, is no less          probative  in diversity cases; hence,  we cite to  these cases as          apposite.               5The  complaint mistakenly designates  URI as the plaintiff.          Since URI is not  a distinct legal entity under Rhode Island law,          we  treat the  Board as the  real party  in interest,  as did the          district court.               6Section 16-59-1(a) provides,  in pertinent part: "There  is          hereby  created a board of governors  for higher education, some-          times hereinafter referred  to as  the 'board' or  the 'board  of          governors,' which  shall be  and hereby  is constituted a  public          corporation, empowered  to sue and  be sued in  its own  name, to          have a corporate  seal, and to exercise all  the powers, in addi-          tion   to  those  hereinafter  specifically  enumerated,  usually          appertaining  to  public corporations  entrusted with  control of          postsecondary educational institutions and functions."  R.I. Gen.          Laws    16-59-1(a) (1992).    In all  significant respects,  this          section,  enacted  in 1988,  merely  extended  the extant  powers          possessed  by  the  Board's  immediate  predecessor,  the  entity          involved in Vanlaarhoven.                      ____________                                          7          corporate and politic" under  California law.  Moor, 411  U.S. at                                                         ____          719 (citing Cal. Gov't Code   23003).                    Several  ancillary  principles derive  from Moor.   The                                                                ____          criteria are  substantially  similar for  evaluating  whether  an          entity is  a citizen of  the State  for diversity purposes,  or a          State for  Eleventh Amendment  sovereign  immunity purposes,  see                                                                        ___          Northeast Fed. Credit Union v. Neves, 837 F.2d 531, 534 (1st Cir.          ___________________________    _____          1988)  (tests  "pretty much  the same");  see  supra note  4, and                                                    ___  _____          present the  same ultimate  question for  decision:   whether the          State  of Rhode Island remains  the real party  in interest, not-                                              ____ _____  __ ________          withstanding URI's designation as the nominal plaintiff.  See id.                                                                    ___ ___          at 533 ("For the purpose of diversity jurisdiction,  the determi-          native factor is whether  the state is the  real party in  inter-          est.") (quoting Krisel  v. Duran,  386 F.2d 179,  181 (2d  Cir.),                          ______     _____          cert.  denied, 390 U.S. 1042 (1967)); see also Kovats v. Rutgers,          _____  ______                         ___ ____ ______    _______          822  F.2d 1303, 1307 (3d Cir. 1987) (immunity), cert. denied, 489                                                          _____ ______          U.S. 1014 (1987);  Ronwin v.  Shapiro, 657 F.2d  1071, 1073  (9th                             ______     _______          Cir. 1981) (Board  of Regents of Arizona)  (immunity and diversi-          ty);  Jagnandan v.  Giles, 538  F.2d 1166,  1173 (5th  Cir. 1976)                _________     _____          (Mississippi State University) (immunity), cert. denied, 432 U.S.                                                     _____ ______          910  (1977); Krieger  v.  Trane Co.,  765  F. Supp.  756,  757-58                       _______      _________          (D.D.C.  1991)  (diversity).   Thus,  most  unincorporated  state          agencies and departments are  readily recognizable as mere "arms"          or "alter egos" of the State.                    On the other hand, though the State's formal incorpora-          tion  of a State-related entity is not necessarily dispositive on                                          8          the  issue  of its  autonomy,  either for  immunity  or diversity          purposes, see, e.g., Jagnandan, 538  F.2d at 1174, 1176; Krieger,                    ___  ____  _________                           _______          765  F. Supp. at 760,  762, the legislative  act of incorporation          should  prompt a thorough examination  into the precise nature of          the entity  established under state law.   See Moor, 411  U.S. at                                                     ___ ____          719 (undertaking  "a detailed examination of  the relevant provi-          sions  of California law" in  order to rule  out Alameda County's          "mere  agency"); id. at 721 n.54 (generally repudiating resort to                           ___          "conclusory" determinations as to  entity's legal character); see                                                                        ___          also  Lake  Country  Estates,  Inc. v.  Tahoe  Regional  Planning          ____  _____________________________     _________________________          Agency, 440 U.S. 391, 401 (1979); Mt. Healthy City Sch. Dist. Bd.          ______                            _______________________________          of Educ. v. Doyle, 429 U.S.  274, 280 (1977); Kovats, 822 F.2d at          ________    _____                             ______          1307; Goss v. San  Jacinto Junior College, 588  F.2d 96, 98  (5th                ____    ___________________________          Cir.  1979).   Accordingly,  comparing  the  incorporated  public          entity  to the  polar extremes  (the State on  the one  hand, and          political subdivisions  on the other), we  must determine whether          the nominal public corporation possesses "a sufficiently indepen-          dent  corporate  character to  dictate that  it  be treated  as a          citizen of [the State of incorporation]."  Moor, 411 U.S. at 721.                                                     ____          See Mt. Healthy, 429 U.S. at 280 (finding city board "more like a          ___ ___________                                       ____ ____          county or  city than it is  like an arm of  the State") (emphasis          added); see also Kashani v. Purdue Univ.,  813 F.2d 843, 845 (7th                  ___ ____ _______    ____________          Cir. 1987), cert. denied, 484 U.S. 846 (1988); Goss, 588 F.2d  at                      _____ ______                       ____          98.                    Often  these comparative appraisals unavoidably lead to          imprecise  distinctions  in  degree,  rarely  amenable  to  ready                                          9          resolution.  Cf.  Metcalf & Eddy, Inc. v.  Puerto Rico Aqueduct &                       ___  ____________________     ______________________          Sewer Auth., ___ F.2d ___, ___ (1st Cir. 1993) [No. 91-1602, 1993          ___________          U.S. App. LEXIS 10064, at 10 (1st Cir. May 3, 1993)] (noting that          agency's entitlement to immunity "poses an essentially functional                                                                 __________          inquiry, not easily amenable to bright-line answers or mechanical          solutions") (emphasis added).   Like their  private counterparts,          public  corporations are  hardly monolithic,  having  been vested          with whatever  powers, rights, and privileges  state legislatures          may  bestow to suit the  public purpose for  which the particular          corporation was commissioned. Although the vast majority of state          universities,  incorporated and  unincorporated alike,  have been          found  to be  "arms"  of the  State  for immunity  and  diversity          purposes, each state university must be evaluated in light of its          unique characteristics.  See Kovats,  822 F.2d at 1303;  Kashani,                                   ___ ______                      _______          813 F.2d at  845; Hall v. Medical College of  Ohio, 742 F.2d 299,                            ____    ________________________          302 (6th Cir. 1984),  cert. denied, 469 U.S. 1113  (1985); United                                _____ ______                         ______          Carolina Bank  v. Board of  Regents, 665 F.2d 553,  557 (5th Cir.          _____________     _________________          1982) (Austin  State University);  Soni v.  Board of  Trustees of                                             ____     _____________________          Univ.  of Tennessee,  513 F.2d  347, 352  (6th Cir.  1975), cert.          ___________________                                         _____          denied,  426 U.S. 919 (1976); University Sys. of New Hampshire v.          ______                        ________________________________          United States Gypsum, 756 F. Supp. 640, 645 (D.N.H. 1991).7          ____________________                                        ____________________               7Even if  it were presumed  that the immunity  and diversity          standards  converge,  see  supra  note 4,  Vanlaarhoven  was  not                                ___  _____           ____________          conclusive  as  to  URI's  citizenship  for  diversity  purposes.          Chesterton argues  that URI is  barred, by Vanlaarhoven  and col-                                                     ____________          lateral  estoppel,  from  litigating  the  diversity jurisdiction          issue.   We do not agree.   Chesterton did not raise the estoppel          issue  in the district court, nor did the court invoke collateral          estoppel by way  of reference to Vanlaarhoven.   Thus, Chesterton                                           ____________          waived the issue.   McCoy v.  Massachusetts Inst. of  Technology,                              _____     __________________________________                                          10                    We have propounded an  illustrative list of criteria             by no means exhaustive    often germane to the Eleventh Amendment          "arm" or "alter ego"  determination, including whether the entity          (1)  performs an "essential"  or "traditional" governmental func-          tion, as opposed to a nonessential or merely proprietary one; (2)          exercises  substantial autonomy over its internal operations; (3)                                        ____________________          950 F.2d  13, 22 (1st Cir.  1991), cert. denied, 112  S. Ct. 1939                                             _____ ______          (1992) (issues not "squarely" raised before trial court cannot be          raised  on appeal).  Moreover, the  "alter ego"  determination in          Vanlaarhoven was not "essential" to the judgment, in at least two          ____________          respects.  See Restatement  (Second) of Judgments   27  ("When an                     ___ __________________________________          issue of fact  or law is actually litigated by  a valid and final          judgment, and the determination is essential to the judgment, the                    ___ ___ _____________ __ _________ __ ___ ________          determination is  conclusive . . . .") (emphasis added).   First,          the Vanlaarhoven court, as an alternate holding, assumed arguendo              ____________                                         ________          that URI might be  an "alter ego"  of the State,  but went on  to          hold that Rhode Island  law had recognized similar grants  of the          power to sue  and be sued as express  waivers by the State  of an          alter ego's  sovereign immunity from unconsented  suit.  Vanlaar-                                                                   ________          hoven, 564 F. Supp. at 149;  see supra note 4.  Second,  URI, the          _____                        ___ _____          defendant in  Vanlaarhoven, prevailed on  the merits.   Except in                        ____________          limited circumstances  not present here, the  party that prevails          on the merits  is not obligated to appeal from  an adverse ruling                         __ ___ _________ __          on a collateral  issue.  Cf. Deposit  Guar. Nat'l Bank v.  Roper,                                   ___ _________________________     _____          445 U.S. 326,  334-35 (1980) (noting that adverse  ruling presum-          ably would have no effect in later litigation).               Although  not  binding,  Vanlaarhoven   nonetheless  remains                                        ____________          persuasive  precedent in its own right.   See Metcalf & Eddy, ___                                                    ___ ______________          F.2d  at ___ [No. 91-1602, 1993 U.S.  App. LEXIS 10064, at 13 n.4          (1st Cir. May 3, 1993)] (noting that immunity  of agency need not          always be considered de novo;  "[w]here the agency's activity and                               __ ____          its  relation  to the  state remain  essentially the  same, prior                                               ___________ ___  ____          circuit  precedent will  be controlling")  (emphasis  added); see                                                                        ___          also  infra  note 16.   URI  argues  that much  of Vanlaarhoven's          ____  _____                                        ____________          precedential weight was eroded  by the later repeal of  R.I. Gen.          Laws    16-31-1 to 15 in  1988, and its replacement  with the new          statutory scheme.  See R.I.  Gen. Laws   16-59-1.  We  agree with                             ___          the  district court  that the  legislative modifications  in 1988          were largely inconsequential,  see infra  Section II.A.2.a.,  and                                         ___ _____          that Vanlaarhoven's  "lengthy description of the fiscal relation-               ____________          ship between the University and  the State of Rhode Island is  as          accurate today as when it was written in 1983 . . . ."  Universi-                                                                  _________          ty of  Rhode Island v. A.W. Chesterton Co., 721 F. Supp. 400, 402          ___________________    ___________________          (D.R.I. 1989).                                          11          enjoys meaningful  access to, and control over,  funds not appro-          priated  from the State treasury;  (4) possesses the  status of a          separate "public corporation"; (5) may sue and be sued in its own          name; (6) can enter into contracts in its own name;  (7) has been          granted a  state tax exemption on  its property; or (8)  has been          expressly debarred  from incurring debts  in the State's  name or          behalf.   See Metcalf & Eddy, ___  F.2d at ___ [No. 91-1602, 1993                    ___ _______________          U.S. App.  LEXIS 10064, at 11-12  (1st Cir. May 3,  1993)]; In re                                                                      _____          San  Juan DuPont Plaza Hotel  Fire Litigation, 888  F.2d 940, 942          _____________________________________________          (1st Cir. 1989); Ainsworth Aristocrat Int'l Pty, Ltd. v.  Tourism                           ____________________________________     _______          Co. of Puerto Rico, 818  F.2d 1034, 1038 (1st Cir. 1987).   These          __________________          diverse  considerations are  designed to  disclose the  extent to          which state law endows the incorporated State-related entity with          the operational authority, discretion, and  proprietary resources          with which to function independently of the State.  See George R.                                 _____________                ___ _________          Whitten, Jr., Inc. v. State Univ. Constr. Fund, 493 F.2d 177, 180          __________________    ________________________          (1st  Cir. 1974); cf.  Metcalf & Eddy,  ___ F.2d at  ___ [No. 91-                            ___  _______________          1602, 1993 U.S.  App. LEXIS 10064, at 12 (1st  Cir. May 3, 1993)]          ("[T]he  more tightly the agency and the state are entangled, the          more  probable it  becomes  that the  agency  shares the  state's          Eleventh Amendment immunity.").8                                         ____________________               8URI argues that Rhode Island case law provides a definitive          statement on the functional interdependence of the  Board and the          State. See,  e.g., State  of  Maryland Cent.  Collection Unit  v.                 ___   ____  __________________________________________          Board  of Regents, 529 A.2d 144, 145  (R.I. 1987); Opinion to the          _________________                                  ______________          Governor, 181  A.2d 618  (R.I. 1962).  State court  decisions are          ________          entitled  to  great  deference  in our  diversity  and  sovereign          immunity determination.   See Ainsworth,  818 F.2d  at 1037;  see                                    ___ _________                       ___          also  Harden, 760  F.2d at  1163; Jackson  v. Hayakawa,  682 F.2d          ____  ______                      _______     ________          1344, 1350  (9th Cir.  1982) (California State  University); Jag-                                                                       ____                                          12               1.   The Board's Operational Autonomy               1.   The Board's Operational Autonomy                    ________________________________                    After  reviewing  many  decisions  relating  to  public          postsecondary educational institutions, we are  impressed, as was          the  district  court in  this case  and  in Vanlaarhoven,  by the                                                      ____________          extraordinary  measure of  autonomy enjoyed  by the  Rhode Island          Board of  Higher Education.   As with most  "state" universities,          the Board is charged with an essential and traditional governmen-                                        ____________________          nandan, 538 F.2d at 1175-76; Brennan v. University of Kansas, 451          ______                       _______    ____________________          F.2d 1287,  1290 (10th Cir. 1971).   But see Kovats,  822 F.2d at                                               ___ ___ ______          1310  (state case law treating entity as "arm" does not undermine          autonomy for diversity purposes).   Nevertheless, the "real party          in interest" analysis is ultimately a matter of federal law.  See                                                          _______       ___          Moor,  411 U.S. at 720  (looking to California  state court deci-          ____          sions merely to confirm  Court's independent diversity determina-                          _______          tion, based on California statutes); Hughes-Bechtol, Inc. v. West                                               ____________________    ____          Va. Bd. of  Regents, 737  F.2d 540, 543  (6th Cir.)  (diversity),          ___________________          cert.  denied, 469 U.S. 1018 (1984); Long v. Richardson, 525 F.2d          _____  ______                        ____    __________          74, 79  (6th Cir.  1975) (Memphis  State University);  cf. Jacin-                                                                 ___ ______          toport  Corp. v. Greater Baton  Rouge Port Comm'n,  762 F.2d 435,          _____________    ________________________________          439 (5th Cir. 1985).               In the instant case,  we find the State of  Maryland and its                                                 __________________          predecessor  decisions inconclusive.    First, State  of Maryland                                                         __________________          involved  the  distinct question  of  the  United States  Supreme          Court's original jurisdiction, not  the issue of diversity juris-          diction. State of Maryland, 529 A.2d at 147.  Second, the court's                   _________________          finding that URI  and the State were the  same "party" is dictum,          the State of Maryland having  conceded the point.  Id.   Finally,                                                             ___          although State of  Maryland cites  to prior state  case law,  see                   __________________                                   ___          Opinion to the Governor,  181 A.2d 618, 621 (R.I.  1962), neither          _______________________          case  engages in  an extended  analysis of the  Board's corporate          powers  or characteristics.    See Moor,  411  U.S. at  721  n.54                                         ___ ____          (expressing  disfavor for "conclusory" determinations of entity's          legal character); Jacintoport Corp., 762 F.2d at 438 (refusing to                            _________________          follow state case law on immunity question where cited cases "did          not  deal  with the  precise question  before  us, nor  was their          inquiry based on even analogous jurisprudential concerns"). Thus,          unlike the situation in  Moor, where the  Court was able to  find                                   ____          "the clearest indication possible from California's Supreme Court               ________ __________ ________          of  the status of California's  counties," Moor, 411  U.S. at 720                                                     ____          (emphasis  added), neither the focus nor the nature of the analy-          sis in State of Maryland enables us to  derive a clear indication                 _________________          as  to the  Rhode Island  Supreme Court's  views on  the critical          factors controlling the "real party in interest" determination in          the context of federal diversity jurisdiction.                                          13          tal function    namely, the provision of postsecondary education-          al  facilities to the citizens of Rhode  Island.  See R.I. Const.                                                            ___          art. XII,   1; Chang v. University of Rhode Island, 375 A.2d 925,                         _____    __________________________          933-34  (R.I. 1977); see also Kovats, 822 F.2d at 1310 (providing                               ___ ____ ______          educational facilities is an essential or traditional  governmen-          tal  function,  not a  proprietary one);  Hall,  742 F.2d  at 305                                                    ____          (same); Rutledge v. Arizona  Bd. of Regents, 660 F.2d  1345, 1349                  ________    _______________________          (9th Cir. 1981) (same); cf. also  Kashani, 813 F.2d at 847-48 (if                                  ___ ____  _______          entity serves entire state, instead of one region, more likely an          "arm" of  State).  As a  general rule, therefore, it  may well be          that an entity  established to conduct a  core governmental func-          tion is less  likely to  be vested with  meaningful freedom  from          governance by the State's  elected officials.  Nevertheless, this          isolated  factor is seldom  dispositive.9  An  exception must lie                                        ____________________               9For example,  in Moor the county's  responsibility for many                                 ____          traditional and essential  governmental functions, including  the          provision of water services, flood control, rubbish disposal, and          harbor and airport  facilities, appears to have been  accepted by          the  Court as affirmative evidence of citizenship.  See Moor, 411                                                              ___ ____          U.S. at 720.   These governmental responsibilities  were noted by          the  Court in acknowledging the  county's power to  levy taxes to          finance  its functions.  Similarly,  URI is empowered  to fix and          collect tuitions and fees  and enjoys plenary control over  these          nonappropriated funds, as well as its educational functions.  Cf.                                                                        ___          University of Tennessee v.  United States Fidelity &  Guar., Co.,          _______________________     ____________________________________          670 F. Supp. 1379, 1384 (E.D. Tenn. 1987)  (legislature's control          of tuition rates suggests "arm").  We discern from Moor a general                                                             ____          rule of thumb:   the State's delegation of essential governmental          functions, together  with the power  to generate and  control the          nonappropriated revenues with which to perform those governmental          functions,  normally will  be viewed  as supporting,  rather than          undermining,  the  entity's  independent status  for  citizenship          purposes.  Cf. Metcalf & Eddy, ___ F.2d at ___ [No. 91-1602, 1993                     ___ _______________          U.S.  App. LEXIS  10064, at 17,  17 n.6  (1st Cir.  May 3, 1993)]          (noting that,  if all traditional government  functions triggered          immunity protection,  local school boards would  have been deemed          "arms"  of state, and that  agencies which derive revenue through                                          14          where the statutory scheme, as a whole, confutes any  legislative                                      __ _ _____          intent to establish the entity as a mere "arm" of the State.  See                                                                        ___          Kovats, 822 F.2d at 1312 (performance of governmental, nonpropri-          ______          etary function  not necessarily indicative of  lack of autonomy).          Accordingly, we must examine the particular powers with which the          Board is endowed under its statute of "incorporation."                    From an operational standpoint, the Board is denominat-          ed  a  "public corporation,"  Moor,  411  U.S.  at 719  (county's                                        ____          corporate  status  and  powers  "most  notabl[e]"  attributes  of          citizenship);  cf. Hall,  742 F.2d at  305 (noting  that school's                         ___ ____          lack  of  separate  corporate  status  suggests  mere  agency),10          which may "sue and be sued in its own name." R.I. Gen. Laws   16-          59-1(a).11   The Rhode Island  statutes elsewhere define the term                                        ____________________          "user  fees"  for  performance  of  "governmental" functions  are          unlikely  to be characterized as  "arms" merely by  virtue of the          traditional  nature of  their  mission) (citing  Royal  Caribbean                                                           ________________          Corp. v. Puerto Rico Ports Auth., 973 F.2d 8 (1st Cir. 1992)).          _____    _______________________               10Some courts have  held that corporate status ought  not be          regarded as probative unless the legislature expresses its intent          to confer perpetual corporate status upon the entity.  See, e.g.,                    _________                                    ___  ____          Hall, 742 F.2d at 299.   The rationale of these cases  appears to          ____          be that the legislature reserves the right to revoke all delegat-          ed powers to such  a nonperpetual entity, at any time.   Id.  See                               ____________                        ___  ___          also Kashani,  813 F.2d at 847; Jackson,  682 F.2d at 1350; Bren-          ____ _______                    _______                     _____          nan, 451 F.2d at  1290.  As we  are unable to accept the  premise          ___          that legislative  enactments can  be immunized from  amendment by          succeeding legislatures, let alone be perpetuated, we respectful-          ly decline to  follow these decisions.   We note also that  these          decisions conflict with  Moor, insofar as they  suggest that most                                   ____          political  subdivisions cannot  be "citizens"  because succeeding          legislatures retain  the power to alter or  rescind prior delega-          tions of the State's police power.               11It is not always  clear in the Eleventh  Amendment context          whether  the court has already  determined that the  entity is an          "arm"  of the State, and is referring to this provision (power to          sue and  be sued) only as  evidence of an explicit  waiver of the                                          15          "public corporation" as "a corporate entity which is considered a          governmental agency but which has a distinct legal existence from                              ___ _____ ___ _ ________ _____ _________ ____          the state  or  any  municipality,  [and] does  not  constitute  a          ___ _____  __  ___  ____________          department of state or  municipal government . . . ."  Id.    16-                                                                 ___          62-4 (emphasis added).  See Harden  v. Adams, 760 F.2d 1158, 1163                                  ___ ______     _____          (11th Cir. 1985) (Troy  State University) (holding that statutory          definitions of  "state" and "political subdivision"  may be rele-          vant  factors); compare Kovats,  822 F.2d at  1310 (evidence that                          _______ ______          entity  is "instrumentality,"  but otherwise  excluded from  some          statutory definitions of  "state," is  probative of  citizenship)          with  United Carolina Bank, 665  F.2d at 557  (noting that entity          ____  ____________________          falls  clearly within statutory definition of  "state").  But cf.                                                                    ___ ___                                        ____________________          dependent  entity's  sovereign immunity.    See,  e.g., Rozek  v.                                                      ____  ____  _____          Topolnicki,  865 F.2d 1154, 1158 (10th Cir. 1989); Long, 525 F.2d          __________                                         ____          at 77; Soni, 513 F.2d at 352; see also supra notes 4 & 7 (discus-                 ____                   ___ ____ _____          sing  Vanlaarhoven's alternative  "waiver"  holding).   The  bare                ____________          power to sue is unlikely to  hold complete sway in the  threshold          "alter ego" determination either  in diversity or immunity cases.          See  Kashani, 813  F.2d at  847  (power to  sue and  be sued  not          ___  _______          conclusive  of  autonomy); Jagnandan,  538  F.2d  at 1174,  1176;                                     _________          Krieger,  765 F.  Supp. at 760,  762; cf.  Hall, 742  F.2d at 305          _______                               ___  ____          (deliberate withholding of power to  sue highly probative of lack          of  autonomy).  But  the power to  sue in the  entity's own name,          when coupled  with other powers  of self-determination  typically          held by  distinct juridical entities (power to contract, power to          buy, hold, and sell property), undeniably affords the entity some          additional independence from the State, since the entity need not          seek the State's consent  to bring, defend, or settle  a lawsuit.          In this  case, we note  in particular  that (1) URI  brought suit          exclusively in its own name, and (2) its counsel of record is not          a legal  officer of the  State of Rhode Island.   See Jacintoport                                                            ___ ___________          Corp., 762  F.2d  at 442  (noting commission's  right to  "employ          _____          private  attorneys to  represent  it"  as  evidence that  it  has          separate legal identity from  State); Tradigrain, Inc. v. Missis-                                                ________________    _______          sippi  State  Port Auth.,  701 F.2d  1131,  1136 (5th  Cir. 1983)          ________________________          (Thornberry,  J., dissenting) (noting  as evidence of citizenship          that  Authority "employs its own counsel,  and is not represented          by  the State of Mississippi in this action"); cf. Hall, 742 F.2d                                                         ___ ____          at 305 (university's counsel is state attorney general).                                          16          Lewis  v. Midwestern State Univ.,  837 F.2d 197,  198 (5th Cir.),          _____     ______________________          cert. denied, 488  U.S. 849 (1988) (mere  statutory definition as          _____ ______          "agency" suggests "alter ego"); Kashani, 813 F.2d at 847 (holding                                          _______          that  entity's  designation as  "separate"  from  State for  some          purposes is inconclusive of autonomy);  Krieger, 765 F. Supp.  at                                                  _______          759(findingterm"independent                                    agency"inconclusiveevidenceofautonomy).                    Ten of the thirteen Board members  are appointed by the          Governor,12 with the advice  and consent of the senate,  see R.I.                                                                   ___          Gen. Laws   16-59-2(a), a legislative design most courts routine-          ly  view as  evidence of  an entity's  lack of  independence from          State control.  See,  e.g., Lewis, 837 F.2d at 198;  Kashani, 813                          ___   ____  _____                    _______          F.2d at  847 (7  of 10 members  appointed); Harden,  760 F.2d  at                                                      ______          1163; Hall, 742 F.2d  at 306; Gay Students Servs. v.  Texas A & M                ____                    ___________________     ___________          Univ.,  737 F.2d 1317, 1333  n.28 (5th Cir.  1984), cert. denied,          _____                                               _____ ______          471  U.S. 1001  (1985); United  Carolina Bank,  665 F.2d  at 558;                                  _____________________          Rutledge,  660 F.2d at 1347  (all 8 appointed);  Prebble v. Brod-          ________                                         _______    _____          rick, 535 F.2d 605, 610 (10th Cir. 1976) (University of Wyoming).          ____          But  see Kovats,  822  F.2d at  1311  (concluding that,  even  if          ___  ___ ______          majority is appointed by governor, that fact is not conclusive of          "alter ego"  status).  The  power of appointment  (and reappoint-          ment)  is significant, and may entail risks of subtle or indirect          manipulation of the entity's  decisionmaking processes by elected          officials.                                        ____________________               12The Governor appoints the chairperson  as well, and two ex                                                                         __          officio positions on  the Board  are occupied by  members of  the          _______          legislative branch. Cf. Harden, 760 F.2d at 1163 (noting the fact                              __  ______          that  executive branch officials  serve as ex  officio members of                                                     __  _______          Board as evidence of "alter ego" status).                                          17                    On the other hand, the Rhode Island statutory scheme is          somewhat unusual in the  respect that it attempts to  protect the          Board  from "partisan or personal"  pressures.  R.I.  Gen. Laws            16-59-3 ("removal  solely for partisan or  personal reasons unre-          lated  to capacity or fitness for the office shall be unlawful").          Although individual  Board members  might be vulnerable  to pres-          sure,  the Board  as a  whole is  insulated  to some  degree from          sudden "reversal[s]  of policy"  by fixed (three-year)  and stag-                                              _____          gered terms. Id.    16-59-1.   Cf. Jacintoport  Corp. v.  Greater                       ___               ___ __________________     _______          Baton  Rouge Port  Comm'n,  762 F.2d  435,  442 (5th  Cir.  1985)          _________________________          (focusing on autonomy  of Commission  as an entity,  not only  on                                                __ __ ______          independence  of the  individual  commissioners).   Board members          receive minimal compensation  ($50 per day of actual service, not          to  exceed $3000  annually).   Since it  is highly  unlikely that          members  would depend  on their  Board compensation as  a primary          source of income, the  economic coercion attending the  threat of          removal  would be minimal.   R.I. Gen. Laws    16-59-1(e).  Aside          from the power of  appointment, the governor has no  direct voice          in  Board decisionmaking.    Cf.,  e.g.,  Fitchik v.  New  Jersey                                       ___   ____   _______     ___________          Transit  Rail  Operations, Inc.,  873  F.2d  655, 663  (3d  Cir.)          _______________________________          (finding  entity not  "alter  ego,"  despite  gubernatorial  veto          power), cert. denied,  493 U.S.  850 (1989).   Finally, and  most                  _____ ______          significantly, individual Board members  are provided with signi-          ficant insulation  from partisan or personal pressure, in that no          Board  member may  be  removed except  for  cause, after  a  full                                                 ___  _____          hearing and appellate review.  R.I. Gen. Laws   16-59-2, 3.                                          18                     As a corporate entity,  the Board's supervisory powers          are  pervasive.  It unilaterally appoints, and may dismiss at its          pleasure, the commissioner of higher education and the presidents          of the  individual educational institutions it  oversees, see id.                                                                    ___ ___            16-59-4(5),  (6).  It  possesses plenary  power over  the post-          secondary school organizational structure, accounting procedures,          the creation  and abolition  of all postsecondary  school depart-          ments  and programs of study, as well as their affirmative action          hiring practices.  Id.   16-59-4(10), (11).  See Kovats, 822 F.2d                             ___                       ___ ______          at 1311-12 (finding that  minimal state supervision over entity's          operations suggests autonomy); cf. Hall,  742 F.2d at 306 (noting                                         ___ ____          that state  control through  mandated programs of  study suggests          lack of  independence); University of Tennessee  v. United States                                  _______________________     _____________          Fidelity & Guar, Co., 670  F. Supp. 1379, 1384 (E.D. Tenn.  1987)          ____________________          (observing that entity must comply with controller's regulations,          and  legislature controls  physical  plant  operations). But  see                                                                   ___  ___          Kashani, 813  F.2d at  847 (finding entity's  power to  prescribe          _______          curricula not probative of its autonomy).  The Board is expressly          exempted  from compliance  with  the Rhode  Island Administrative          Procedures Act, R.I. Gen.  Laws   16-59-12, see Kovats,  822 F.2d                                                      ___ ______          at 1312 (APA exemption suggests autonomy); cf. Fitchik,  873 F.2d                                                     ___ _______          at 663  (APA applicability suggests "arm");  Jackson v. Hayakawa,                                                       _______    ________          682 F.2d 1344, 1350 (9th Cir. 1982) (California State University)          (same); Krieger,  765 F.  Supp. at  760 (same),  as well as  from                  _______          certain  personnel employment  and equipment  requisition regula-          tions, R.I. Gen. Laws    16-59-21 (providing Board with exemption                                          19          from R.I. Gen.  Laws   35-3-1(5), (6) in  "the interest of educa-          tional efficiency").   See  Kovats, 822  F.2d at  1313 (exemption                                 ___  ______          from civil service rules  suggests autonomy); cf. United Carolina                                                        ___ _______________          Bank, 665  F.2d at  558 (applicability of  employment regulations          ____          suggests  dependence); Krieger, 765  F. Supp. at  759-60 (lack of                                 _______          exemption  from  general budget  controls  and procurement  rules          suggests "arm"); University  of Tennessee, 670  F. Supp. at  1384                           ________________________          (legislature's control of employee compensation suggests "arm").                    The  Board holds full legal  title to all  URI real and          personal property, with the attendant power to acquire, hold, and          dispose  of  URI property  and  "other  like property  as  deemed          necessary for  the execution of  its corporate  purposes."   R.I.          Gen. Laws    16-59-1.   See Moor,  411 U.S.  at 719 (noting  that                                  ___ ____          county may "sell, hold, or otherwise deal in property"); see also                                                                   ___ ____          Fitchik,  873 F.2d  at 663  (power to purchase  property suggests          _______          citizenship); cf. Hall, 742 F.2d at 306 (unlike community college                        ___ ____          which holds title to  property, no independence where educational          entity may sell property  only with State's approval); University                                                                 __________          of Tennessee, 670  F. Supp. at  1384 (legislature's control  over          ____________          all  physical  plants  and  leases  indicates  lack  of  indepen-          dence).13   Although URI's real  and personal property  is exempt                                        ____________________               13Since  the Board's legal title to URI property is held "in          trust"  for the State,  R.I. Gen.  Laws   16-59-1(a),  URI argues          that the Board's fiduciary duty to the State, the equitable owner          of  the  property,  inhibits  its discretion  to  administer  the          property  as record owner.  The language of the statute neverthe-          less suggests  that the  Board's business decisions  to purchase,          administer, and dispose of URI property are largely unrestricted,          and  absent misfeasance would  be impervious to  challenge by the          State.  See  Kovats, 822 F.2d at  1309 (legal title  to property,                  ___  ______                                          20          from  taxation, see R.I. Gen. Laws   44-3-3(1); Powers v. Harvey,                          ___                             ______    ______          103  A.2d 551,  552 (R.I.  1954), in  many cases  this  factor is          considered minimally  probative.  Often,  tax policy  is used  by          States to  encourage certain  types of  activity even though  the          target  entities  are  otherwise  entirely  independent  of state          government.  Rhode Island is no exception in this  respect.  See,                                                                       ___          e.g.,  R.I. Gen.  Laws    44-3-3(11)  (cemeteries), (12)  (incor-          ____          porated or free libraries),  (13) (veterans' organizations), (15)          (volunteer fire departments),  (21) (water treatment facilities).          Moreover,  nonpublic educational  institutions  in  Rhode  Island                     _________          partake  of a similar tax exemption, albeit narrower than that of          the Board.  R.I.  Gen. Laws   44-3-3(8) (private  school property          is tax exempt to  the extent it is  used "exclusively for  educa-          tional  purposes").  Arguably,  of course,  tax exemption  may be          attributable to  the State's equitable title to the URI property.                                       _________          We  think it  at least  as plausible,  however, that  the general          assembly exempts  Board  property from  taxation  as a  means  of          fostering performance  of the  Board's corporate functions.   See                                                                        ___          Kovats,  822 F.2d at 1311 (autonomy not fatally undermined by tax          ______          exemption); Kashani, 813 F.2d at  846 (less probative where State                      _______          grants tax  exemption to political subdivisions);  Hall, 742 F.2d                                                             ____          at 307 (tax exemption  relevant only if it is not  accorded other          entities  which are  not "alter  egos").   But see  University of                                                     ___ ___  _____________                                        ____________________          though held in  trust, coupled with  discretionary power to  dis-          pose, and to control both proceeds and income therefrom, suggests          independence);  cf. Hall,  742 F.2d  at 306  (entity is  "arm" if                          ___ ____          property held in State's name).                                          21          Tennessee, 670 F. Supp.  at 1384 (university is an  "arm" because          _________          it is fully  tax exempt,  while private schools  enjoy a  partial          exemption only).                    As  a natural  corollary to  its power  to  control URI          property,  the  Board  possesses,14  and  freely  exercises,  its          corporate power  to enter into  contracts in its  own name.   See                                                                        ___          State  of Maryland Cent. Collection Unit v. Board of Regents, 529          ________________________________________    ________________          A.2d  144, 145 (R.I. 1987);  cf. Hughes-Bechtol, 737  F.2d at 544                                       ___ ______________          (lack  of power to contract without invoking State as named party          indicates entity is "arm"); Tradigrain, Inc. v. Mississippi State                                      ________________    _________________          Port  Auth., 701  F.2d 1131,  1133 (5th  Cir. 1983)  (noting that          ___________          authority's power  to enter into  contract was limited;  any con-          tract in excess of $2500 must be advertised and awarded to lowest          bidder); University of Tennessee, 670 F. Supp. at 1384 (entity is                   _______________________          "arm" where legislature exerts control over its personal services          contracts). But cf. Kashani, 813 F.2d at 847 (power to enter into                      ___ ___ _______          contracts not  conclusive of independent status);  Hall, 742 F.2d                         __________                          ____                                        ____________________               14The  Board's   power  to  contract   is  not  specifically          enumerated in the statute, but  is implicit in the grant of  "all          the [other]  powers . . .  usually pertaining to  public corpora-          tions  . . . ."   R.I. Gen.  Laws   16-59-1.   Contrary  to URI's          contention, we see  no reason to infer that this general grant of          corporate power  is  contradicted by  other statutory  provisions          which specifically  authorize the  Board to  guarantee particular          loans in the state's name, see, e.g., R.I. Gen.  Laws    16-32-11                                     ___  ____          (Board empowered to guarantee student loans), 16-32-12, 14 (Board          empowered  to guarantee,  "in the  name of  the state,"  loans to          "societies of students"  up to  a total of  $1.2 million; at  de-          fault, loans  "shall become state  obligations in like  manner as          any state bond"); Jacintoport Corp., 762 F.2d at 439, 441 (State-                            _________________          's  mere guarantee of agency's bonds is too "ancillary" an effect          to subvert agency's independence from State); see also infra note                                                        ___ ____ _____          17.                                          22          at 305 (same);  Krieger, 765 F.  Supp. at 760,  762 (same).   The                          _______          Board's  capacity to contract for the maintenance and repair of a          federally  funded  GSO research  vessel likewise  suggests opera-          tional autonomy.  See Moor, 411 U.S. at 719 (county "may contract                            ___ ____          for  the  construction  and  repairs  of  structures")  (emphasis                                       _______________________          added);  cf. State Highway Comm'n of Wyoming v. Utah Constr. Co.,                   ___ _______________________________    ________________          278  U.S. 194,  199 (1929)  (finding that  entity is  "arm" where          "contract  for  the construction  of  the  work  was between  the          [defendant] and the State").                    Thus, the Board's  operational autonomy,  approximating          that of the  political subdivision  in Moor, sets  it apart  from                                                 ____          most  entities with  similar  educational missions  and tips  the          balance in favor of  the district court's finding that  the Board          is a "citizen" of Rhode Island for diversity purposes.               2.   The Board's Fiscal Autonomy15                2.   The Board's Fiscal Autonomy15                     ___________________________                    a.   Statutory Scheme                    a.   Statutory Scheme                         ________________                    Like most other  public universities, URI's  operations          are financed  in part by State  appropriations, approved annually          by the  general assembly ("appropriated" funds), R.I. Gen. Laws            16-59-9  (such  appropriations  as  the general  assembly  "deems          necessary"),  and in part  by non-State sources,  such as tuition                                        ____________________               15Although  the multi-factor  test  is  nonweighted,  courts          generally agree on the  primacy of the financial autonomy  factor          in the overall balance.  See  Ainsworth, 818 F.2d at 1038 (finan-                                   ___  _________          cial accountability      who pays  or gets  paid     is the  most                                                                       ____          important factor in  test); see  also Fitchik, 873  F.2d at  664;                                      ___  ____ _______          Kashani, 813 F.2d at 846 (same); Hall, 742 F.2d at 304; Rutledge,          _______                          ____                   ________          660 F.2d at 1349.                                          23          charges, fees, and donations  ("nonappropriated" funds).  As with          all state universities, the  legislature has the final say  as to          the  size of the  annual appropriation.  The  Board, on the other          hand, prepares the  five-year funding plan and budget for submis-          sion  to the general  assembly, and  the Board  alone "determines          priorities  of expenditures."    Id.    16-59-4(4).   Cf.  United                                           ___                  ___  ______          Carolina  Bank, 665  F.2d at  558  (legislature's "comprehensive"          ______________          control of appropriated funds  suggests entity's financial depen-          dence); Prebble, 535 F.2d at 610 ("No expenditure may be  made in                  _______          excess  of an appropriation and no money appropriated may be used          for  any purpose  other  than for  which  it is  appropriated.").          Furthermore,  the  Board  has  plenary  authority  to  reallocate          appropriated  funds among  its various programs,  facilities, and          agencies.  R.I. Gen. Laws   16-59-9(c). Cf. Krieger, 765 F. Supp.                                                  ___ _______          at 760 (lack of  power to reallocate appropriated funds  suggests          entity  is  "arm").   And, as  noted,  the Board  has substantial          income from  sources other than State  appropriations, see Kroll,                                                                 ___ _____          934 F.2d  at 908  n.3 (availability  of substantial  revenue from          other sources may be very relevant to autonomy inquiry),  includ-          ing tuition  charges, housing,  dining  and administrative  fees,          donations, bequests and devises, the income and proceeds from URI          property, and federal grants.                    URI's tuition and  fees are  set by the  Board.   URI's          housing,  dining,  and  auxiliary  facilities are  totally  self-          supporting, with no State appropriations slated for these purpos-          es after 1987.   R.I. Gen. Laws   16-59-9(d).   Thus, much of its                                          24          nonappropriated funding  is roughly analogous to  revenues raised          by  means of a political subdivision's power to impose taxes upon          its  constituents to defray the  costs of the  public services it          provides,  a power delegated by the State to enable the political          subdivision to  finance its "corporate"  public service  mission.          See Moor, 411 U.S.  at 719-20 (county "authorized to  levy taxes"          ___ ____          and  to  "issue  general  obligation bonds  payable  from  county          taxes"); Metcalf & Eddy, ___ F.2d  at ___ [No. 91-1602, 1993 U.S.                   _______________          App.  LEXIS 10064,  at 19 (1st  Cir. May  3, 1993)]  (in immunity          context,  "[t]he  power and  opportunity  to  generate a  revenue          stream  [through  user  fees]  and thereby  finance  an  agency's          operations  is an  important attribute  of the  agency's separate          identity");  Fitchik, 873 F.2d at  663 (power to  set and collect                       _______          fares  and fees tilts  balance toward  autonomy); see  also supra                                                            ___  ____ _____          note 9;  cf. Kashani, 813  F.2d at 846  (lack of power  to impose                   ___ _______          taxes  is  equivalent to  ultimate  financial  dependence on  the          State); Hall, 742 F.2d  at 304 (same); United Carolina  Bank, 665                  ____                           _____________________          F.2d at 558 (same); University of Tennessee, 670 F. Supp. at 1384                              _______________________          (legislature's control of tuition fees suggests "arm").                    There is  no provision  in Rhode Island  law permitting          State  intervention  in URI's  income  stream  from inception  to          expenditure.    The  Board's nonappropriated  funds  are  neither          "covered into," nor merged  with, the general fund, but  are kept          in segregated accounts pending discretionary  disbursement by the          Board "without the necessity of appropriation  or reappropriation          by  the general assembly."   R.I. Gen. Laws    16-59-18.  Compare                                                                    _______                                          25          Kovats,  822 F.2d  at  1308-09 (financial  accounts not  "within"          ______          control  of State  treasury indicate  autonomy), with  Lewis, 837                                                           ____  _____          F.2d  at 197 (finding  evidence of lack  of autonomy  in the fact          that funds must  go back into  State treasury, their  expenditure          extremely  restricted); Hall, 742 F.2d at 304 (entity is an "arm"                                  ____          of the State if it has power to issue bonds, but disbursements of          bond  proceeds  are restricted,  and  if  State merely  "permits"          formal  segregation as  matter of  convenience); United  Carolina                                                           ________________          Bank, 665 F.2d at 558 (nonappropriated funds deposited into State          ____          treasury, then reappropriated  for disbursement); Jagnandan,  538                                                            _________          F.2d at  1176 (nonappropriated funds go  directly into commingled          treasury account);  Krieger, 765 F.  Supp. at  760 (where  entity                              _______          does not  "control" expenditure of funds,  segregation not proba-          tive of autonomy); University of Tennessee, 670 F. Supp. at 1383-                             _______________________          84 (all  university funds commingled  in one account,  subject to          state comptroller's regulations and "regular" audits).  Unexpend-          ed  balances  in  the  Board's segregated  nonappropriated  funds          account are carried  forward from year to  year, awaiting discre-          tionary  disbursement by  the Board  for "nonrecurring"  items, a          practice which effectively allows the  Board to exceed its annual          appropriation and its annual budget if necessary.  R.I. Gen. Laws            16-59-9(b).  Cf. Jagnandan, 538 F.2d at 1175 (lack of authority                         ___ _________          to  "exceed"  budgeted  expenditures,  even  from nonappropriated          funds, without approval  of executive  or legislature,  indicates          dependency); Prebble, 535 F.2d at 610 (same).                       _______                                          26                    Finally,  the  State of  Rhode  Island  engages in  but          limited  monitoring  of  Board  revenues  and  expenditures,  see                                                                        ___          Harden, 760  F.2d at 1163-64  (the more financial  oversight, the          ______          more  likely the university's debts  are state's debts), though a          few  statutory  provisions  serve  to keep  the  State  generally          apprised of the Board's financial decisions, enabling the type of                                                                    ____          financial monitoring  usually considered indicative of  a lack of          meaningful  fiscal autonomy.  See,  e.g., Lewis, 837  F.2d at 199                                        ___   ____  _____          (regular auditing of both  appropriated and nonappropriated funds          suggests  "arm"); Kashani, 813 F.2d at 845-46 (entity is "arm" as                            _______          it  submits budget,  and "Indiana  examines [its]  finances care-          fully"); Harden, 760 F.2d at 1163 (submission of annual financial                   ______          reports suggests "arm");  United Carolina Bank,  665 F.2d at  558                                    ____________________          ("extensive"  reporting requirements  suggest lack  of autonomy);          Rutledge, 660  F.2d at  1349-50 ("detailed" report  to governor);          ________          Krieger, 765 F. Supp.  at 756 (annual report to  "general public"          _______          suggests "alter ego");  University of Tennessee, 670 F.  Supp. at                                  _______________________          1379  (submission of  annual report  to governor  or legislature,          with "detailed statement" of receipts and expenditures, indicates          "arm").  On the other hand, the level of State  fiscal monitoring                                          _____          of  the Board is comparatively unintrusive.   For example, though          URI's  treasurer  must  submit  financial reports  to  the  state          controller for  "preaudit," the purely "ministerial"  audit moni-          tors Board  expenditures only for possible  illegality and avail-          ability of funds, not with a view to the prudence  of the Board's          financial decisions.  R.I. Gen. Laws   16-59-20.  See Kovats, 822                                                            ___ ______                                          27          F.2d at 1311 (mere "reporting" of spending decisions not  indica-          tive  of lack of  autonomy).  URI  makes a rather  wan attempt to          undermine Vanlaarhoven by citing a  subsequently enacted "limita-                    ____________          tion" on the Board's purchasing power.  See R.I. Gen. Laws    37-                                                  ___          2-1  and 37-2-7(11) (Board's  purchases can be  made only through          State Purchasing agent's office).   As the district court  found,          however, nothing in this  statutory requirement portends  quality          review or rejection  of purchase orders by the  purchasing agent.          R.I. Gen. Laws   16-59-20  ("controller [shall not] interpose his          or  her judgment").   See supra  note 7.   Far  from a meaningful                                ___ _____          limitation  on the  Board's  power to  disburse  its funds,  this          measure  appears to have been designed solely to enable the Board          to  avail itself of the  financial savings associated with pooled          purchasing power.                    With Moor as our benchmark, therefore, we conclude that                         ____          the Rhode  Island statutory  scheme demonstrates that  the Board,          unlike more "typical"  state educational entities, possesses  the          essential attributes of operational and financial autonomy needed          to qualify as a Rhode Island "citizen" for diversity purposes.                    b.  "Functional Integration"                    b.  "Functional Integration"                         ______________________                    In a  resourceful  effort to  avoid  Vanlaarhoven,  URI                                                         ____________          urges its  "functional integration" theory,  whose genesis appar-          ently lay  in our earlier "recommendation" to  the district court          following dismissal of URI's interlocutory  appeal.  See supra p.                                                               ___ _____          4.  URI argues, for example, that the Board's ostensible indepen-          dence  in financial matters would prove illusory if, in fact, (1)                                          28          the  Board's  annual  budget were  funded  by  State-appropriated          monies to such  an extent that its  nonappropriated revenues were          rendered  functionally  insignificant, or  (2)  the  Rhode Island          general assembly  were to  employ its statutory  pre-audit proce-          dures to attune the  Board's annual State appropriation so  as to          force the  Board to expend its anticipated and accumulated nonap-          propriated revenues in lieu  of a more ample annual  State appro-          priation.  See,  e.g., Krieger, 765 F. Supp. at  761 (evidence of                     ___   ____  _______          actual control by State would trump evidence of formal autonomy).                    We emphasize that URI does not assert the existence  of                                               ___            _________          budgetary data which would demonstrate that the Board enjoys less          financial autonomy  than the  enabling statute indicates.   More-          over, notwithstanding its efforts  to persuade the district court          to conduct a separate  evidentiary hearing on diversity jurisdic-          tion, URI has taken no initiative to substantiate its "functional          integration"  theory, either  by  way of  an evidentiary  proffer          below,  or even by way of  the barest allusion to supportive data          in its  brief or oral argument  before this court.   Instead, URI          insists  that Chesterton,  as the  party requesting  removal, see                                                                        ___          supra Section II.A,  was required  to bear the  entire burden  of          _____                                           ______          proof and production on every conceivable fact     even including          "negative" facts     which  might prove  relevant to the  Board's                                      _____ _____          citizenship  status.  Thus, even  after trial on  the merits, URI          speculates that  there may  be evidence  which  would preclude  a          reliable determination as to federal diversity jurisdiction.  For          the  reasons  hereinafter  explained,  we  think  URI inadvisably                                          29          banked on a cramped view of the proper allocation of the  burdens          of  proof and  production relating  to the  jurisdictional issue,          misapprehended the proper role of  "functional integration" data,          and exaggerated the import of our earlier "recommendation" to the          district court for further factfinding on remand.                    For some  reason, our  earlier invitation to  engage in          additional factfinding  on remand  went unheeded.   URI intimates          that it did  all it  could by requesting  a separate  evidentiary                                                      ________          hearing,  and  that  the  district court  simply  discounted  our          recommendation  as  to  the  possible  relevance  of  "functional          integration"  evidence.   In  our view,  however, URI  mischarac-          terizes the remand order.  While we suggested the desirability of          supplementary factfinding, the  precise factfinding procedure  to                        ___________                           _________          be employed always rests within the sound discretion of the trial          court.  See Foman v. Davis,  371 U.S. 178, 182 (1962); O'Toole v.                  ___ _____    _____                             _______          Arlington Trust Co., 681 F.2d 94,  98 (1st Cir. 1982) (finding no          ___________________          abuse of discretion,  as "the  court was under  no obligation  to          require  an evidentiary  hearing  . . . [but]  has  the right  to          determine the procedures it will employ to decide a jurisdiction-          al issue")  (citation omitted).    At no  time did  we require  a          separate  evidentiary   hearing  on  the   jurisdictional  issue.          ________          Indeed, given our alternative  ground for dismissing URI's inter-          locutory appeal    namely, that it appeared unlikely that a trial          on the merits would be prolonged    the district court's decision          to defer its jurisdictional determination until trial was entire-          ly consistent with the remand order.                                          30                    Nor did the district court prevent URI from introducing                                               _______          any such statistical evidence at  trial.  Following an unrecorded          pretrial  conference with  counsel, the  district court  did deny          URI's motion for a separate evidentiary hearing.  In that connec-          tion,  URI has provided  no indication  of the  legal contentions          advanced by either party  at the pretrial conference, nor  of the          grounds for the  district court's decision  to bypass a  pretrial          evidentiary hearing.  Chesterton, on the other hand, asserts that          the conference  involved an extended discussion  about the appro-          priateness  of a  separate pretrial hearing,  but that  the court          opted to permit the presentation of evidence on the jurisdiction-          al issue at trial.                   __ _____                    Viewed  in  proper procedural  context,  therefore, the          present claim hinges entirely  on URI's unremitting allocation of          the burdens of persuasion  and production to Chesterton, and  not          on  any lack of opportunity  to raise or  substantiate its "func-          tional integration" claim.   Significantly, our remand order took          no position  as to which party  would be obliged  to come forward                             _____          with evidence of functional integration, nor did it suggest  that          proof of  lack of  functional integration  was required  in every          case.                      Of  course,  Chesterton, the  party  invoking diversity          jurisdiction, bears  the ultimate burden of  proving diversity of                                   ________          citizenship.   See Topp v. Compair, Inc.,  814 F.2d 830, 839 (1st                         ___ ____    _____________          Cir.  1987).  Nevertheless, there  is more to  be said concerning          the burden of production:                                          31                    [T]he  party  who  invoked  diversity  juris-                    diction has  the burden of  proving all facts                    upon which jurisdiction  could be  sustained.                    If  [the invoking  party]  does  construct  a                    prima facie showing  of diversity, [the chal-                    lenging  party] must  overcome or  rebut this                    showing  in order  to  dismiss  the  [removal                    petition].    Support for  [the challenger's]                    position  may  be  derived  from  affidavits,                    depositions,  and  sworn statements  filed by                    the  parties from which the Court can examine                    and  evaluate all  relevant factors  and sur-                    rounding circumstances but  the exact  method                    of determining the jurisdictional  issue lies                    within  the sound discretion  of the district                    court.          United States Fidelity & Guar. Co. v. Di Massa, 561 F. Supp. 348,          __________________________________    ________          350  (E.D.  Pa.  1983)  (citation  omitted).    Although  neither          Chesterton nor  URI submitted  affidavits, depositions,  or sworn          statements, the  district court  properly conducted  inquiry into          the  controlling  jurisdictional  facts,  pursuant  to  Moor,  by                                                                  ____          examining the Rhode Island enabling statute.  Under Moor, such an                                                              ____          inquiry  is designed primarily to provide the court with a compe-          tent  basis for determining the legal  framework within which the          relationship  between  a State  and  a  State-created entity  are          required  to function.   In  the present  case, the  Rhode Island          enabling statute constituted a sufficient proffer on the issue of          the Board's financial autonomy.  See,  e.g., Tradigrain, 701 F.2d                                           ___   ____  __________          at  1132 ("the state's  constitutional, statutory, and decisional          law" comprise source material  for the court's citizenship analy-          sis);  see also Indiana Port Comm'n v. Bethlehem Steel Corp., 702                 ___ ____ ___________________    _____________________          F.2d 107, 109 (7th Cir. 1983); cf. supra note 8.                                         ___ _____                    As  noted, see  supra  Section  II.A.2.a, the  enabling                               ___  _____          statute's  broad  grant   of  control  to  the  Board  over  non-                                          32          appropriated revenues  weighs heavily  in Chesterton's  favor and          satisfied  its  prima facie  burden  on  the issue  of  financial          autonomy.   Furthermore, financial autonomy is  but one component          of the  fact-intensive citizenship inquiry mandated  by Moor, and                                                                  ____          Chesterton prevailed on most other relevant jurisdictional  facts          as well.   See supra  Section II.A.1.   It was incumbent  on URI,                     ___ _____          therefore, to mount  an effective  challenge to  the prima  facie          showing of financial autonomy.  See  Ohio Nat'l. Life Ins. Co. v.                                          ___  _________________________          United States,  922 F.2d 320, 327 n.7  (6th Cir. 1990) ("That the          _____________          burden of  proof is always on the  [party asserting jurisdiction]          does not mean that a [challenger], without any proof on his part,          can put the [party asserting jurisdiction] to proof  by affidavit          of  jurisdictional facts  sufficiently alleged in  the complaint.          The  [challenger] must at least submit some proof that the juris-                                                 ____ _____          dictional  facts so  alleged do  not exist.")  (citation omitted)          (emphasis added).  Absent evidence or  a compelling argument that          the fiscal autonomy  permitted the Board under Rhode  Island law,          as determined  by the district  court, does not  actually obtain,          URI failed to overcome Chesterton's prima facie showing.16                                        ____________________               16Moreover,  in  view  of  the   presumptive  deference  due          Vanlaarhoven  in the  present  context, see  supra note  7, URI's          ____________                            ___  _____          "functional  integration" theory was not being written on a blank          slate.    See, e.g.,  Rollins v.  Board  of Governors  for Higher                    ___  ____   _______     _______________________________          Educ., 761 F.  Supp. 930, 931 (D.R.I.  1990) (citing Vanlaarhoven          _____                                                ____________          as precedent);  cf.  Cowan v.  University of  Louisville Sch.  of                          ___  _____     __________________________________          Medicine, 900  F.2d 936, 940 (6th  Cir. 1990) (proper  to rely on          ________          federal court  precedent finding school not  autonomous); Dube v.                                                                    ____          State Univ.  of New York, 900 F.2d 587, 594 (2d Cir. 1990) (SUNY)          ________________________          (same), cert. denied, 111 S. Ct. 2814 (1991); Thompson v. City of                  _____ ______                          ________    _______          Los Angeles, 885 F.2d  1439, 1443 (9th Cir. 1989)  (University of          ___________          California) (same); Schuler v.  University of Minnesota, 788 F.2d                              _______     _______________________          510,  516 (8th  Cir. 1986)  (same), cert.  denied, 479  U.S. 1056                                              _____  ______                                          33                    Furthermore, challenges to subject  matter jurisdiction          typically arise early in the litigation, and even though Eleventh          Amendment immunity and  diversity jurisdiction may require  fact-          intensive  inquiries, see Kroll, 934  F.2d at 908  n.2, we see no                                ___ _____          justification  for  requiring the  removing  party  to resort  to          formal discovery before the opposing party    with readier access                           ______          to the evidence    raises  a specific dispute relating to  a duly          alleged  jurisdictional fact.   Such  a requirement  would invite          needless waste of  judicial resources on a  threshold issue which          must be resolved as expeditiously as practicable.  See  Tanzymore                                                             ___  _________          v. Bethlehem Steel Corp., 457 F.2d 1320,  1323 (3d Cir. 1972) (no             _____________________          need  for evidentiary  hearing on  jurisdictional question  if no          facts are in genuine dispute).                    Without  statistical  evidence,   URI's  rebuttal   was          exceedingly  thin.   Nevertheless, because  it is clear  that the          Board is "dependent" on the State for some unknown portion of its          revenues, we  will assume,  arguendo, that certain  provisions of                                      ________          the enabling  statute cited  by URI  did give rise  to a  genuine          dispute  over an  important  jurisdictional fact     whether  the          Board actually  enjoys financial autonomy  from the State.   See,                                                                       ___          e.g., R.I. Gen. Laws   16-59-5 (Board must hold annual meeting to          ____          discuss  budget and "invite" members  of general assembly); id.                                                                        ___          16-59-9(c)  (all proposals  for  tuition increases  must be  made          before State appropriates funds for fiscal year).          ______                                        ____________________          (1987); Goss, 588 F.2d at 98-99 (same).                  ____                                          34                    As  far as we  can discern from  the case law,  in only          three  situations has  the  financial autonomy  authorized by  an          enabling statute been  considered illusory.   First,  "functional          integration"  may  obtain  if  the State  nonetheless  bears  the          ultimate  legal responsibility to  answer for debts  on which the          ________          state university defaults.  Thus, the very financial independence          accorded  the  Board  under  the Rhode  Island  enabling  statute          ultimately might expose  the State treasury to liability  for the          Board's  financial obligations.  In Kovats, 822 F.2d at 1309, the                                              ______          Third Circuit flatly rejected such a functional integration claim          where the  legislature's decision to answer  for the university's          debts  appeared to be purely discretionary  and not legally bind-          ing.   Cf. also Fitchik, 873 F.2d  at 661 (the State's disclaimer                 ___ ____ _______          of  any obligation to  "cover" is the  primary consideration, not          the relative size (50-70%)  of the state appropriation); but  cf.                                                                   ___  ___          Hall, 742 F.2d  at 304-05 (no  statute prohibits university  from          ____          incurring debt in state's name, and fact that state  will have to                         __ _______ ____          "cover" debt by law  is indicative of "alter ego"  status); Krie-                                                                      _____          ger, 765 F.  Supp at  761 (where District  of Columbia  expressly          ___          committed  itself to funding, agency not wholly "self-supporting"          is "mere arm").                    Even if a state's  ultimate legal obligation to "cover"          a university's financial obligations  were the controlling consi-          deration  in the  diversity context,  however, but see  Moor, 411                                                         ___ ___  ____          U.S. at 719 (noting that  the county, "and from all that  appears                                                     ____ ___ ____  _______          the  county  alone, is  liable  for  the  judgments against  it")                                          35          (emphasis added),  the Rhode  Island statutory scheme  evinces no          conclusive answer as to  whether the State is  so obligated.   We          have neither been cited to, cf.  supra note 8, nor have we found,                                      ___  _____          statutory language  governing whether  the State of  Rhode Island          ultimately is   responsible  for the Board's  corporate financial          obligations.   Cf. Metcalf & Eddy,  ___ F.2d at ___ [No. 91-1602,                         ___ ______________          1993 U.S.  App. LEXIS  10064, at  13-14 (1st Cir.  May 3,  1993)]          (statute  explicitly  divested  Puerto Rico  Aqueduct  and  Sewer          Authority of  power "to pledge the credit  or taxing power of the          Commonwealth," thereby "erect[ing]  a wall  between the  agency's          appetite and the public fisc.").17                    Second,  the  amount  of  the  Board's  nonappropriated          funding,  either in absolute or  relative terms, might be consid-          ered so insubstantial as to leave the Board financially dependent          on  the State.    But even  assuming,  arguendo, that  an  entity                                                 ________          receiving  any State  funding  or subsidy  is thereby  inevitably          rendered  susceptible  to State  pressure, two  principles remain          constant.   First, an  incorporated entity dependent  entirely on                                                                ________          State appropriations rarely (if ever) would escape  characteriza-          tion as the  State's "alter ego,"  since the hand that  holds all                                                                        ___          the purse strings presumably controls the dependent entity.  See,                                                                       ___                                        ____________________               17The only provision remotely  on point empowers the general          assembly  to appropriate such funds  to the Board  as the general          assembly "deems  necessary," R.I.  Gen. Laws    16-59-9 (emphasis                    _____  _________          added),  as distinguished  from  such amount  as "is  necessary."          Furthermore, as  we have noted, the  general assembly purposively          delineated narrow categories of Board "debts" (e.g., student loan                                                         ____          guarantees) which  would become "state obligations,"  a seemingly          superfluous undertaking  if the State  implicitly underwrites all          Board financial obligations.  See supra note 14.                                        ___ _____                                          36          e.g., State Highway Comm'n, 278 U.S. at 199 (finding no diversity          ____  ____________________          where Highway Commission, despite  its power to sue and  be sued,          "had no funds or ability to respond in damages"); Neves, 837 F.2d                                                            _____          at  534 (where monies "will  inure exclusively to  the benefit of          the public fisc," the  diversity inquiry is at an  end); Culebras                                                                   ________          Enters. Corp. v. Rios, 813 F.2d 506, 517 (1st  Cir. 1987) (Puerto          _____________    ____          Rico conservation  authority is  "alter ego" notwithstanding  its          power  to sue and be  sued, where agency  directors attested, and          plaintiffs did not dispute,  that "the agency would not  have the          funds  to satisfy  a judgment  and  that such  would  have to  be          satisfied from  the general budget  of [Puerto Rico]");  see also                                                                   ___ ____          Kashani, 813 F.2d at 846 (lack of other funding "ensures ultimate          _______          fiscal reliance on state"); Gay Students Servs., 737 F.2d at 1333                                      ___________________          n.28 (same); Hughes-Bechtol, 737 F.2d at 543 ("board has no funds                       ______________          or  ability to  respond in  damages"); Ronwin,  657 F.2d  at 1073                                                 ______          (given State's comprehensive provisions  for risk management, "no          evidence  that the Board, acting in its corporate capacity, could          satisfy a libel judgment in any  way other than by turning to the          state of  Arizona").  URI  must concede  that the Board  does not          fall within this bright-line category.                    On the other hand, mere receipt of state appropriations          is not conclusive  evidence of the recipient entity's "alter ego"             ___          status.   Many  (if  not most)  political subdivisions  routinely          receive significant  state appropriations, but  are characterized                  ___________          as autonomous entities for immunity and diversity purposes.  See,                                                                       ___          e.g., Mount Healthy, 429 U.S. at 280-81 (city board of education,          ____  _____________                                          37          which received  "significant amount" of state  funding, not enti-          tled to immunity where State granted board the power to raise its          own revenue); Gary A. v. New Trier High Sch. Dist., 796 F.2d 940,                        _______    _________________________          945  (7th Cir. 1986) (noting  that the "fact  that a local school          district receives 'a significant amount of money  from the state'                               ___________ ______ __ _____          does not mean  that it is an arm of  the state") (emphasis added)          (citation omitted).  In  the Eleventh Amendment immunity context,          we recently rejected just such a contention:                    We think  [that the Puerto Rico  Aqueduct and                    Sewer  Authority's]  situation is  not unlike                    that of a typical political subdivision. Such                    an entity often receives  part of its  budget                    from  the state and  raises the rest indepen-                    dently. Despite this dual funding, such enti-                    ties do  not automatically (or  even usually)                    come within the zone of protection demarcated                    by the Eleventh  Amendment . . . despite  the                    "significant amount of money" [they] received                    from the state.          Metcalf  & Eddy,  ___ F.2d  at ___ [No.  91-1602, 1993  U.S. App.          _______________          LEXIS 10064, at 15 (1st Cir. May 3, 1993)] (citations omitted).                    Nevertheless, under Moor,  the courts  are expected  to                                        ____          consider  available statistical  evidence in  arriving at  a more                    _________          precise assessment  of the relative "significance"  of the appro-          priated and nonappropriated funding which goes into the universi-          ty budget.   See  Kovats, 822 F.2d  at 1308 (entity  is "citizen"                       ___  ______          even though  state appropriation is "large,"  or approximately 50          to 70% of budget). But  see Kashani, 813 F.2d at 845  (33% appro-                             ___  ___ _______          priation suggests  "arm"); Hall,  742 F.2d  at  304 (average  64%                                     ____          state appropriation suggests "arm");  Jagnandan, 538 F.2d at 1175                                                _________          (maximum 72% state  appropriation suggests "alter ego").   In the                                          38          present case,  however, neither the amount nor  the percentage of          the Board's nonappropriated revenues  can be ascertained from the          record.   Thus, argues URI,  the district court  was compelled to          find that Chesterton did  not sustain its burden of  proof on the          Board's financial autonomy.                    In characterizing  such statistical data  as indispens-          able jurisdictional "facts," however,  URI misconstrues our  case          law,18 as well  as Supreme Court precedent.  We  have never inti-          mated that such statistical information is itself a jurisdiction-          al fact,  the absence of which would  invariably defeat diversity          jurisdiction.    The  core  jurisdictional fact,  after  all,  is          financial autonomy.   Under  the seminal Supreme  Court decisions                                        ____________________               18On occasion, we have adverted to this  kind of statistical          evidence in the  appellate record, as  confirmation that a  party                   __ ___  _________ ______          could not establish diversity.   See Perez v. Rodriguez  Bou, 575                                           ___ _____    ______________          F.2d 21, 25  (1st Cir. 1978) (in  dicta, noting that  the "extent          and nature" of the  Commonwealth's support for the  University of          Puerto Rico  suggested lack  of autonomy, but  without describing          precise statistics, or stating whether University had other forms          of substantial  nonappropriated income).  On  other occasions, we          have remanded for further factfinding  where it appeared that the          autonomy  equation was so  evenly balanced that  the proponent on          the jurisdictional issue  could not meet  its ultimate burden  of          proof without resort to  such statistical information, see, e.g.,                _______ ______ __  ____ ___________ ___________  ___  ____          Ainsworth, 818 F.2d at 1038-39 (noting various factors supporting          _________          and  undermining autonomy,  and remanding  to district  court for          hearing on whether entity receives "significant funding" from the          Commonwealth),  and that the parties had not been afforded a full          and  fair opportunity to present evidence in the trial court. Id.                                                                        ___          at  1038 n.23 (as an  alternative reason for  remand, noting fact          that proponent had  not raised  the "alter ego"  issue until  its          appellate reply brief, denying opponent "the opportunity to argue          . . .  or to rebut" the  proponent's contentions).   Thus, in our          earlier denial of the interlocutory appeal in this case, we acted          on  the side of caution and judicial economy in recommending that          the district  court allow the  parties an opportunity  to present                                                    ___________          this kind of evidence, on  the chance that it might be  needed to          tip the "alter ego" balance in the final analysis.                                          39          dealing with  both immunity and diversity, there  is a noticeable          lack  of reliance on such statistical data, a fact which confutes          ____          its indispensability.  See, e.g., Mount Healthy, 429 U.S. at 280-                                 ___  ____  _____________          81  (noting  only "significant  amount  of  money" received  from                             ___________          State)  (emphasis added);  Moor, 411  U.S. at  719-20 (discussing                                     ____          county's  ability to  raise  its own  funds,  not whether  county          received any funds from State); see also Metcalf & Eddy, ___ F.2d                                          ___ ____          at ___  [No. 91-1602, 1993 U.S. App. LEXIS 10064, at 15 (1st Cir.          May  3, 1993)].    Unsurprisingly, as  the divergent  conclusions          reached  on essentially  similar "statistical"  evidence suggest,          see supra pp. 37-38,  a closely calibrated" statistical" approach          ___ _____          in these cases entails its own impediments to  reliable decision-          making; namely, at  what levels should  the absolute or  relative          size  of an entity's  appropriated funding be  considered so sub-          stantial, or  its nonappropriated funding so  insubstantial, that          "functional integration" is to  be presumed, or a  previous judi-          cial determination  of the  entity's citizenship set  aside?   We          believe a wide margin  of variance would need to  be demonstrated          before it could  be found to  have effected a  sea change in  the          entity's jurisdictional status.   After all, while not immutable,          the  citizenship  of a  public  corporation,  like its  domicile,          should be  accorded a  reasonable measure  of permanence; at  the          very  least, ordinary  fluctuations  in  the university's  budget          ought not occasion continual  judicial reevaluation.  Thus, trial          court rulings  on subject matter jurisdiction  normally ought not          await  budgetary  data  and  oscillations  absent  an evidentiary                                          40          proffer of sufficient import to alter a determination based on an          analysis of state  statutory and  decisional law.   In our  view,          this  approach best  comports with  the analysis  contemplated in          Moor.           ____                    In considering whether Chesterton carried its burden of          persuasion on the  issue of  financial autonomy, we  think it  is          inescapable that the Board's nonappropriated revenues represent a          substantial budget component; tuition, housing, dining and admin-          istrative  fees, donations,  bequests,  federal  grants, and  the          proceeds from discretionary sales and leases of URI property  are          not  insubstantial  revenue sources.    Thus,  on its  face,  the          enabling statute demonstrates Board  access to, and control over,          substantial amounts  of nonappropriated  revenues.   Following  a          trial on the merits, and  absent any indication that URI did  not          have  a  fair opportunity  to  identify  and produce  statistical          evidence which  might rebut  Chesterton's demonstration  that the          enabling  statute  confers the  requisite  financial  autonomy to          qualify the  Board for citizenship  under Moor, we  conclude that                                                    ____          URI's appellate challenge comes too late.                    Finally, in a similar vein,  URI suggests that it might                                                                      _____          be  that the State routinely attunes  its annual appropriation to          the  Board in  response to  the total  amount  of nonappropriated          funds available to the Board, including the nonappropriated funds          accumulated from  prior fiscal years and those anticipated in the          current  fiscal  year.   Under this  "linkage" theory,  the State          could  compel the Board to expend all accumulated and anticipated                                     ______                                          41          nonappropriated funds  merely by  limiting its  annual appropria-          tions to the  difference between the Board's  fiscal year revenue          requirements and the total available nonappropriated funds.                    URI's contention  that the State might  link its appro-          priations to  the availability of nonappropriated  Board funds is          pure  conjecture.    Arrayed  against URI's  conjecture  are  the          explicit provisions of the enabling statute,  as amended in 1988,          which expressly  state that all nonappropriated  funds, including          accumulated  nonappropriated  funds, are  to  be  deposited in  a          segregated account under the exclusive control of the Board.  See                                                                        ___          Kovats,  822 F.2d at 1308-09 (mere possibility of offset by state          ______          appropriations not  especially probative of  "alter ego" status).          Appropriated  funds, on the other hand, are  to be set apart in a          separate account, and all unexpended balances in the appropriated                                                               ____________          funds account are to  be redeposited to the general  fund.  Unex-                                                      _______  ____          pended nonappropriated funds, however, are carried over from year                 _______________          to year  in  the Board's  nonappropriated  funds account.    This          separate  treatment of  appropriated  and nonappropriated  funds,          deliberately mandated  by the  general assembly, would  have been          both superfluous and  contraindicated had routine  "linkage" been          intended.  Cf. Allende v. Shultz,  845 F.2d 1111, 1117 (1st  Cir.                     ___ _______    ______          1988)  (in general,  courts  should  avoid interpretations  which          would render a statutory provision meaningless).   In the absence          of any countervailing showing, the Board's financial autonomy, as          ordained by the  general assembly  in the  enabling statute,  was                                          42          sufficient to sustain Chesterton's burden of proof on the central          jurisdictional fact at issue under 28 U.S.C.   1332.                    Accordingly, having weighed  the myriad factors contem-          plated by  Moor, we  conclude that  the district court  correctly                     ____          determined  that Chesterton  met  its ultimate  burden of  estab-          lishing that the Board  enjoys "a sufficiently independent corpo-          rate character  to dictate  that it  be treated as  a citizen  of          [Rhode Island]."  Moor, 411 U.S. at 721.                            ____          B.   Evidence of Damages          B.   Evidence of Damages               ___________________                    In  a ruling  that  proved fatal  to  URI's claims  for          damages for breach of warranties, the district court excluded the          testimony of URI's longtime  controller, Ronald Osborne, a certi-          fied public accountant in charge of all URI financial information          and  accounting practices.    URI  called  Osborne as  an  expert          witness to establish  the amount of money it spent to correct the          corrosion problem allegedly left unremedied by Chesterton's 1-2-3          System.  URI  proffered no  other evidence on  damages.   Osborne          testified on direct examination  that he previously had performed          cost assessments  on various  URI projects,  and  that his  usual          procedure  was  to  consult  URI financial  records  and  conduct          interviews with URI personnel involved in the particular project.          He consulted GSO  records to ascertain the  overtime hours worked          in 1985, and conducted several interviews with URI employees  and          various "private vendors" to  ascertain which overtime hours were          attributable to  the correction of Endeavor's  corrosion problem.          To these figures he added the  cost of fringe benefits (22%)  for                                          43          overtime  employees,  and  "indirect costs,"  at  an  unspecified          percentage rate,  which included  expenses for  "accounting, pur-          chasing,  maintenance,  [and] utilities."   Before  Osborne could          state an opinion concerning  the total monetary damages sustained          by URI, Chesterton objected  on the grounds that (1)  Osborne was          not a  qualified expert on  damages calculation, (2)  the factual          bases for his calculation  included inadmissible hearsay, and (3)          the damages  calculation included inappropriate factors,  such as          "indirect costs."                    URI  relied on Federal Rules of Evidence 703 and 705 as          grounds  for the admission of Osborne's expert opinion.  Rule 703          provides that "[t]he  facts or  data . . . upon  which an  expert          bases an opinion or inference . . . [,] [i]f of a type reasonably          relied upon by experts  in the particular field in  forming opin-          ions or inferences upon the subject, . . . need not be admissible          in evidence."  Fed. R. Evid. 703.  Rule 705  provides that "[t]he          expert  may testify  in terms  of opinion  or inference  and give          reasons therefor without prior disclosure of the underlying facts          or data, unless the court requires  otherwise.  The expert may in                   ______ ___ _____ ________  _________          any event be required to disclose the underlying facts or data on          cross-examination."   Fed. R. Evid.  705 (emphasis  added).   The          court sustained Chesterton's objection on the ground that URI had          not demonstrated that the  facts relied on  by Osborne were of  a          type reasonably relied on by experts in damages assessment.19                                        ____________________               19The court  also expressed a firm  preference for requiring          preliminary  disclosure of  the factual  "background" for  an ex-          pert's opinion on  direct examination.  The court considered this                                          44                    URI's central  arguments on  appeal are: (1)  Rules 703          and 705 afford the right to present unsubstantiated expert testi-                             _____          mony on  direct examination without first  disclosing its factual          underpinnings, and  (2) the district court  abused its discretion          by adhering to its self-imposed rule  of exclusion, a per se rule                                                                ___ __          which, according  to URI, runs  counter to the  "burden shifting"          implicit in Rule 705  and disregards the obligation  to predicate          its exclusionary ruling on the particular circumstances.                    We have no doubt  that Rules 703 and 705  permitted the                                                              _________          district  court  to   admit  Osborne's  opinion  testimony,   see                                                                        ___          International Adhesive  Coating Co. v. Bolton  Emerson Int'l, 851          ___________________________________    _____________________          F.2d 540, 545 (1st Cir. 1988) (business and financial records are          "obvious"  sources  relied  on  by  accountants  in  ascertaining          damages),  subject of course  to Chesterton's right  to probe the          premises  of the opinion on  cross-examination.  But  that is not          the question presented.   Rather, the issue on appeal  is whether          the district court abused  its considerable discretion by exclud-          ing the evidence.  We think not.                    Rules  703 and  705 normally  relieve the  proponent of          expert testimony from engaging in the awkward art of hypothetical          questioning, which  involves the  somewhat meticulous, and  often          tedious, process  of laying  a full  factual foundation prior  to                                                                  _____                                        ____________________          procedure preferable to the alternatives, which were (1) to allow          the evidence in on direct, then exclude it later if it were found          wholly unreliable, or  (2) to permit  Chesterton to shoulder  the          burden of testing the reliability of Osborne's methods  on cross-          examination, leaving the  ultimate weight of the evidence  to the          jury.                                          45          asking  the expert  to state  an  opinion.   In the  interests of          efficiency, the Federal Rules  of Evidence deliberately shift the          burden  to the  cross-examiner to  ferret out  whatever empirical          deficiencies may lurk in the expert opinion.  Nevertheless, Rules          703 and 705 do not afford automatic entitlements to proponents of          expert  testimony.   Rule 703  requires the  trial court  to give          "careful consideration" to any  inadmissible facts upon which the          expert will  rely,  in order  to  determine whether  reliance  is          "reasonable." Id. at  545.  Similarly, under  the broad exception                        ___          to Rule 705  ("unless the court  otherwise requires"), the  trial          court  is given  considerable latitude  over the  order in  which          evidence will  be presented to the  jury.  See Fed.  R. Evid. 705                                                     ___          advisory  committee's note  ("[S]afeguards [to  minimize 'unfair'          burden  on cross-examiner]  are reinforced  by  the discretionary          power  of the  judge  to require  preliminary  disclosure in  any                                                                    __  ___          event.") (emphasis added).  While the trial court's discretion is          _____          not unfettered, at a minimum the rules suggest that the proponent          must  be prepared,  if the court  so requires, to  make a limited          offer of proof to aid the court in its assessment.  Cf. Ambrosini                                                              ___ _________          v. Labarraque, 966  F.2d 1464,  1469 (D.C. Cir.  1992) ("A  court             __________          must know the  basis for an expert's opinion before it can deter-          mine  that the  basis is not  of a  type reasonably  relied on by          experts  in the field."); Head  v. Lithonia Corp.,  881 F.2d 941,                                    ____     ______________          944 (10th Cir. 1989)  (despite the  liberality of Rule 703, court          must  not abdicate  its responsibility  to assure  "minimum stan-          dards" for admissibility as required by Rule 104(a)).                                          46                    Even though URI's threshold burden was minimal, and may          have been readily met, it made no attempt whatever to assuage the          district court's  legitimate concerns, but chose  instead to rely          on its perceived "right" to have Osborne's opinion admitted under          Rule  703.   Apparently,  URI came  to  trial with  no supporting          documentation  whatever to  substantiate Osborne's  assessment of          damages.  Based on what can be gleaned from Osborne's preliminary          testimony,  URI's apparent  unpreparedness and  recalcitrance may          have  given the  district  court real  concerns  as to  Osborne's          methodology.   Unlike the  expert witness in  International Adhe-                                                        ___________________          sive, Osborne's "damages" assessment was  not based solely on the          ____          conventional examination and compilation of documents from  which          an expert  objectively might  ascertain the overtime  labor costs          incurred in  repairing Endeavor's ballast tanks, as distinguished          from  various other projects at URI and the GSO.  Rather, Osborne          relied on  "interviews" with undisclosed URI  employees and "out-          side vendors," conducted either by himself or other URI officials          who reported to him.   The trial court quite  reasonably expected          URI  to explain,  out  of the  presence of  the  jury, the  basic          assumptions  undergirding  its  witness's   seemingly  unorthodox          method of reconstruction.                    Rather than provide an explanation, however, URI simply          accepted a directed verdict  on the issue of damages.   Moreover,          when pressed  by the district court, URI indicated no inclination          to  pursue a claim  for nominal damages.   Although  we are given          some  pause by  the district  court's  blanket statement  that it                                          47          "always requires" the proponent to disclose on direct examination          the factual basis for an expert opinion, cf., e.g., Lis v. Robert                                                   ___  ____  ___    ______          Packer Hosp.,  579 F.2d 819,  822, 822-23  (3d Cir.)  (expressing          ____________          disapproval of  trial court's statement that  it invariably exer-          cises its discretion to invoke the Rule  611(b) exception), cert.                                                                      _____          denied, 439  U.S. 955 (1978),  there was no abuse  of the court's          ______          broad  discretion  in this  case, as  a  sound basis  existed for          requiring disclosure.                                         III                                         III                                      CONCLUSION                                      CONCLUSION                                      __________                    We  need  proceed  no  further  with  this  endeavor.20                                        ____________________               20URI raises  two  other arguments  on  appeal.   First,  it          contends that the district court abused its discretion by denying          its motion to file a second amended complaint in November 1991             eighteen months after  the filing of its  original complaint, and          following jury  impanelment     since URI asserted  valid reasons          for its lack of  diligence.  See Quaker State Oil  Refining Corp.                                       ___ ________________________________          v. Garrity  Oil Co., 884  F.2d 1510,  1517 (1st  Cir. 1989)  (due             ________________          diligence  required for amendments).   As far as  we can discern,          the  amendment's only significant  factual supplementation to the          original complaint would allege that Chesterton's representatives          "came aboard the Research vessel Endeavor while the Chesterton 1-          2-3 System was actually being applied and said  nothing as to its          not being  equal to the task of painting the ballast tanks."  The          amended complaint  generally shifted  the focus of  URI's allega-          tions  from Chesterton's  defective manufacture  of a  product to          Chesterton's negligence in recommending an ill-suited product, or          its failure to  give adequate or  continuing instructions on  its          use.  Chesterton suffered no prejudice, however, as most of these          new factual matters  were in  fact "tried by  express or  implied                                    __  ____          consent of the parties," Fed. R. Civ. P. 15(b).  In any event, as          the substance  of the proposed amendments was wholly unrelated to          the  issue of  damages, amendment  would have  been futile.   See                                                                        ___          Arzuaga-Collazo  v. Oriental Fed. Sav.  Bank, 913 F.2d  5, 7 (1st          _______________     ________________________          Cir.  1990) (amendment futile if there  is no "meaningful indica-          tion"  that  amendment  would  make  a  "dispositive difference")          (citing  The Dartmouth Review v.  Dartmouth College, 889 F.2d 13,                   ____________________     _________________                                          48          Absent competent evidence of damages, the district court properly          granted judgment as  a matter  of law in  favor of Chesterton  on          URI's breach of warranty claims.                    The judgment of the district court is affirmed.                    The judgment of the district court is affirmed.                    ______________________________________________                            - Concurring Opinion Follows -                                        ____________________          22-23 (1st Cir. 1989)).                Similarly, URI  contends that the  district court improperly          directed  a verdict for Chesterton on Count III of the complaint,          which  alleged Chesterton's breach of a warranty of fitness for a          particular purpose.  URI  merely argues that it presented  suffi-          cient evidence  to establish that  Chesterton had reason  to know          that URI intended to use the product on salt water ballast tanks,          and that  URI specifically  relied on Chesterton's  assurances of          suitability.  Once again, however, absent proof of damages, URI's          argument is to no avail.                                          49                    HORNBY, District Judge, concurring.  It takes the court                    HORNBY, District Judge, concurring.                              __________________________          38 typed pages (8-1/2 x  11") of closely reasoned text to  decide          whether the University of Rhode Island is a citizen -- a determi-          nation that  has nothing  to do  with the  substance of  the real          world dispute between these parties, but simply resolves where to          try  their lawsuit.  Is this approach really essential for deter-          mining  whether a federal  court has jurisdiction?   Granted that          our system limits the jurisdiction  of federal courts, a rational          observer might nevertheless  expect simple gatekeeping rules  for          what gets in and what is kept out.   A litigant should be able to          ascertain, with relatively modest effort and legal fees, where to          bring its  lawsuit.   But if  the court's  analysis of a  "myriad          factors" --  which are "by  no means exhaustive" -- is  to be the          governing standard,  future litigants in cases  involving similar          state agencies had better be prepared to pay a lot  of legal fees          for  their lawyers to  (1) read and digest  the prose; (2) gather          the relevant  information and apply  the legal analysis  to their          client or  opponent; (3) litigate  the issues at  pretrial, trial          and on  appeal.  Those litigants had  also better be prepared for          delays in decisionmaking as lawyers and judges ponder  the issue:          the  "myriad factors" will seldom yield a certain outcome until a          court actually decides the issue.                    To  be sure, this court  is not alone  in adopting this          approach.   Other courts have also applied a multitude of factors          (with no  particular weight assigned), in  determining the status                                          50          of a particular state agency.  See, e.g., Hughes-Bechtol, Inc. v.                                         ___  ____  _______________________          West  Virginia Bd. of Regents,  737 F.2d 540,  543-44 (6th Cir.),          _____________________________          cert.  denied, 469 U.S. 1018 (1984) (looking at several factors);          _____________          Krieger  v. Trane Co., 765 F. Supp. 756, 758 (D.D.C. 1991) (exam-          _____________________          ining seven factors); University Sys. of New  Hampshire v. United                                ___________________________________________          States  Gypsum Co., 756 F.  Supp. 640, 645  (D.N.H. 1991) (citing          __________________          eight factors); University of Tennessee v. United States Fidelity                          _________________________________________________          & Guar. Co.,  670 F. Supp. 1379, 1386-87 (E.D.  Tenn. 1987) (con-          ___________          sidering, arguendo, a nine-factor approach).  The result is great                    ________          unpredictability.  As the  commentaries recognize, "[t]here is no          unanimity among  the decisions  as to  whether state  agencies or          departments  are  citizens  within  the meaning  of  28  U.S.C.S.            1332, with some  decisions holding that  they are while  others          hold that they are  not."  1 Federal  Proc. L. Ed.   1:200.   The          ensuing  extensive litigation  over jurisdiction  has undoubtedly          caused  substantial delay  and consumed  thousands of  dollars in          attorney fees where  the real  goal should have  been speedy  and          inexpensive resolution of the merits of the underlying dispute.                    The  question is  whether  United States  Supreme Court          precedents  really require such a complex analysis.  I think not.          I will  concede  that  this  court's approach  is  one  plausible          reading of the precedents, but there is another plausible reading          that  keeps  the  subject  matter jurisdiction  issue  in  proper          perspective as only a preliminary issue in the underlying econom-          ic dispute between the parties.                                          51                    As the  court recognizes, a couple  of propositions are          beyond  debate,  given  United States  Supreme  Court  decisions.          First, a  State  cannot be  a  citizen of  itself: "There  is  no          question  that a  State is  not a `citizen'  for purposes  of the          diversity  jurisdiction."  Moor  v. County  of Alameda,  411 U.S.                                     ___________________________          693, 717  (1973). Second, incorporated branches  of state govern-          ment (for example, cities and counties) are citizens of the state                                                  ___          of their incorporation.  See Cowles  v. Mercer County, 74 U.S. (7                                   ___ ________________________          Wall.) 118, 122 (1869).   This resulting principle of independent          citizenship for a public corporation had become so "well settled"          by 1972 that the Supreme Court no  longer stopped to question it.          See Moor, 411 U.S. at 718, quoting Illinois v. City of Milwaukee,          ___ ____                   _______ _____________________________          406 U.S. 91, 97 (1972).                    Here, the  Rhode Island  Board of Higher  Education1 is          separately incorporated with the  power to sue and be  sued.  The          diversity statute  provides: "[A]  corporation shall be  deemed a          citizen of any state  by which it has been  incorporated . . . ."          28 U.S.C.   1332(c).  What more need be said to conclude that the          Rhode  Island Board  is a  citizen for  diversity purposes?   The          court apparently  believes that its lengthy  and complex analysis          is required  by Moor.  But  in Moor the Supreme  Court spent only                          ____           ____          one paragraph  summarizing California  statutes to  conclude that          the county was a corporation with important powers independent of          the state and a second paragraph summarizing a California Supreme                                        ____________________               1I  agree with the court that there is no legal entity under          Rhode Island law known as the University of Rhode Island.                                          52          Court decision  finding California  counties to  be corporations.          Based on those two summary paragraphs, the Supreme Court conclud-          ed  that "the  county  has a  sufficiently independent  corporate          character  to dictate that it be treated as a citizen of Califor-          nia under our  decision in Cowles v. Mercer County,  supra."  411                                     _______________________   _____          U.S. at 721.               A parallel short treatment  of Rhode Island law  can dispose          of the jurisdictional issue in this case.  The Board that governs          the University of  Rhode Island is a  "public corporation, empow-          ered to sue  and be sued  in its  own name, to  have a  corporate          seal,  and to  exercise  all the  powers,  in addition  to  those          hereinafter  specifically  enumerated,  usually  appertaining  to          public  corporations entrusted  with  control  of  post-secondary          educational institutions and functions."  R.I. General Laws   16-                                                    _________________          59-1-(a) (1992).   Under Rhode Island law, a "public corporation"          is "a corporate entity which is  considered a governmental agency          but which  has a distinct  legal existence from the  state or any          municipality, [and] does not constitute  a department of state or          municipal government . . . ."  Id. 22-10-2(f).  The Board has the                                         __          corporate power to acquire, hold, and dispose of real and person-          al property (albeit in  trust for the state).   Id.   16-59-1(b).                                                          __          The Board is entitled to levy tuition and other fees  in order to          obtain funds to carry  out its activities.   Id.   16-59-9.   Its                                                       __          receipts from sources other  than state appropriations do not  go          into the  state's  general fund  and are  subject to  use at  the          Board's  order.  Id.   16-59-18.   It appoints  the presidents of                           __                                          53          postsecondary institutions  and has a great deal  of authority in          determining  what postsecondary  education will  be available  to          Rhode Island citizens.  Id.   16-59-4, 8.   This summary paints a                                  __          picture of  a "sufficiently independent corporate  character"  to          match that  of the California county  at issue in Moor.   No more                                                            ____          should  be necessary.2  I therefore concur in the court's evalua-          tion that jurisdiction exists, but not in the prolonged reasoning          by which it reaches that conclusion.                    I add one postscript:   The careful reader will observe          that neither I nor the court have articulated any  jurisdictional          policy  arguments in  determining the  citizenship of  the Board.          The policy  interests behind  the court's myriad  factor approach          are borrowed -- I believe  ill-advisedly -- from Eleventh  Amend-          ment cases where the primary  goal is to protect the state  trea-          sury.   Perhaps  the  court's complex  analysis and  case-by-case          approach  are  justified there.   The  policy goals  in diversity          jurisdiction  analysis are  somewhat different,  involving avail-          ability of  an unbiased  forum.   The Supreme Court  has not  ad-                                        ____________________               2Since the  Board is a public corporation, it seems unneces-          sary to pursue  the "arm or  alter ego" alternative set  forth in                                       _____ ___          State Highway Comm'n  of Wyoming  v. Utah Constr.  Co., 278  U.S.          ______________________________________________________          194,  199 (1929).    There, a  lawsuit  was brought  against  the          Wyoming State Highway Commission (an unincorporated state agency)          and its individual members, premised on diversity of citizenship.          The Supreme  Court found  no diversity jurisdiction.   Primarily,          the Court determined  that the  suit was not  really against  the          Highway  Commission  but against  the  State  of Wyoming  itself,          because it  was the State that  was actually a party  to the con-          tract  in dispute  and  neither the  Commission  nor any  of  its          members had assumed any responsibility.   The sentence most often          quoted (and referred to in Moor) states:  "The Commission was but                                     ____          the arm  or alter ego  of the State with  no funds or  ability to                      _____ ___          respond in damages."  278 U.S. at 199.                                          54          dressed them in its analysis of what is a citizen  and neither do          I.   In any event,  such interests  can best be  served by  clear          rules  for the generality of cases; every single piece of litiga-          tion  need not require a  return to first  principles.  Probably,          the major policy interest at stake  lies in how the conclusion is                                                      ___          reached.   Simplicity from the courts of appeals (and the Supreme          Court)  on these  gatekeeping and  procedural issues  will permit          lawyers and  judges -- and  most importantly,  the  parties -- to          deal  with the  merits of disputes  in a  simple and  less costly          manner.   Needlessly complex jurisdictional rules  like those the          court  advances here can only  perplex the litigants  as they pay          mounting  attorney fees  and  suffer through  procedural  delays.          Congress has ordered district courts to pay heed to such concerns          in  the Civil Justice Reform  Act of 1990,  28 U.S.C.    471-482.          Appellate courts  can make that task easier by resisting unneces-          sary subtleties and  focusing instead on  rules that ensure  pre-          dictability and certainty, as well as fairness.                    In all other respects, I join the court's opinion.                                          55
