The Florida Prepaid College Board offers savings plans that guarantee to cover the cost of tuition at Florida public universities. In 2007, the Florida Legislature authorized a tuition differential fee to improve undergraduate instruction but exempted plan holders from paying it if they attended Florida state schools. The Board amended its contracts to clarify that this fee was not covered. When the plaintiffs' daughters attended out-of-state colleges, the Board refused to transfer an amount equivalent to the tuition differential fee, which they would have received if they had attended a Florida state school. The plaintiffs sued Board members, alleging the Board's refusal violated the Contracts and Takings Clauses. They sought an order enjoining the Board from applying the fee exemption and contract changes. The district court dismissed the suit with prejudice, ruling that the relief amounted to a refund precluded by the Eleventh Amendment.
The Eleventh Circuit affirmed that sovereign immunity bars the suit but corrected the procedural posture. The court explained that while the Ex parte Young exception allows suits against state officials for prospective relief to vindicate federal rights, it does not permit actions for the specific performance of a contract to which the State was a party. The court cited Supreme Court precedent establishing that an official is stripped of their representative character only when their actions conflict with federal law, but this does not extend to enforcing state contracts. The plaintiffs sought the benefit of their bargain by requiring state officials to interpret and enforce future contractual benefits lawfully. The court determined this request was effectively a demand for specific performance, noting that a party cannot wiggle into the Ex parte Young exception through creative pleading. The court distinguished the plaintiffs' reliance on Maron v. Chief Financial Officer of Florida, noting that Maron involved a property interest not based on a contract, whereas the plaintiffs' rights arose solely from the plan contracts. The court also rejected reliance on Lipscomb v. Columbus Municipal Separate School District, finding it conflicted with binding Eleventh Circuit precedent and Supreme Court authority. However, the court held that the district court erred by dismissing the complaint with prejudice. Because a dismissal for lack of subject matter jurisdiction is not a judgment on the merits, it must be entered without prejudice.
The judgment is vacated and remanded to the district court to dismiss the complaint without prejudice. This allows the plaintiffs to potentially pursue alternative remedies that do not require specific performance of the contract, such as claims for money damages if a waiver of immunity exists, or other relief not barred by sovereign immunity. The decision clarifies that contract enforcement against state agencies is generally barred by the Eleventh Amendment unless the state consents.
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