PRIMARY SOURCE — captured 2026-06-03 via user paste (CaseMine).

Caption: ALABAMA STATE UNIVERSITY; ALABAMA A&M UNIVERSITY (on behalf of themselves...) v.
BAKER & TAYLOR, INC.; THE CARLYLE GROUP; W.R. GRACE & CO.-CONN.
Court: U.S. District Court, M.D. Alabama, Northern Division. Judge: De Ment.
Civil Action No. 97-D-614-N. Decided: March 11, 1998. (Memorandum Opinion & Order.)

=== WHAT THE CASE IS ===
Two Alabama PUBLIC UNIVERSITIES — Alabama State University and Alabama A&M (both HBCUs) — sued
Baker & Taylor over **"various tort and contractual claims ... arising out of alleged wrongdoing
in the sale of books by Defendant Baker Taylor."** That is the SAME discount/overcharge conduct at
the heart of the federal Costa qui tam and the "price key"/"Y Key" scheme — but brought DIRECTLY by
defrauded institutional customers, in STATE court (Circuit Court of Montgomery County, AL).

Co-defendants are the familiar ownership cluster: **Baker & Taylor, The Carlyle Group (the PE owner
from March 1992), and W.R. Grace & Co.-Conn. (the pre-1992 owner)** — the same trio named in Whalen
(the age-discrimination suit).

=== THE RULING (procedural — remand only, NO merits) ===
- Defendants removed the case to federal court April 21, 1997 on **diversity jurisdiction** (28
  U.S.C. § 1332), asserting the universities are Alabama citizens and the defendants are non-Alabama.
- Plaintiffs moved to REMAND, arguing ASU and Alabama A&M are **alter-egos / instrumentalities /
  arms of the State**, hence NOT "citizens" for diversity purposes.
- Court GRANTED remand: well-settled that ASU and Alabama A&M are state instrumentalities (Eleventh
  Amendment line of cases); a state/arm-of-state is not a "citizen" for § 1332 (Moor v. Alameda
  County). No complete diversity → **no subject-matter jurisdiction → REMANDED to Montgomery County
  Circuit Court.** Defendants' motions to dismiss (personal jurisdiction, 12(b)(6), Rule 9(b)
  particularity) and W.R. Grace's motion to stay were NOT reached. Each party bears own costs.
- So this opinion decides ONLY where the case is heard (state court), not the merits of the
  overcharge claim. The underlying tort/contract case proceeded in Alabama state court; outcome not
  in this document.

=== WHY IT MATTERS TO THE CORPUS ===
Shows the B&T book-overcharge fraud spawned **direct institutional litigation in parallel to the
federal qui tam** — here two **HBCUs** (Alabama State + Alabama A&M) suing on their own behalf in
state court, ~1997, during the Carlyle era. Reinforces that the "profit enhancement"/price-key
scheme (see [[bt-profit-enhancement-qui-tam-2000]]) was litigated on multiple fronts and that its
victims included historically Black public universities. Same defendant trio (B&T + Carlyle + Grace)
as the Whalen age-discrimination case — the 1990s Carlyle-era B&T was simultaneously defending
library/university overcharge suits AND an older-worker-purge suit.

Grade: [P] that the suit existed (ASU + Alabama A&M v. B&T/Carlyle/Grace, M.D. Ala. 97-D-614-N),
the book-sale-wrongdoing claims, the defendant trio, and the remand holding. [X/allegation] on
whether B&T actually defrauded these universities — not adjudicated here; case remanded to state
court, merits/outcome unknown from this text.

=== FULL OPINION TEXT (as pasted) ===
ALABAMA ST. UNIV. v. BAKER & TAYLOR, INC. (M.D. Ala. 1998). Civil Action No. 97-D-614-N.
Mar 11, 1998. MEMORANDUM OPINION & ORDER. DE MENT, District Judge.

[Before the court: Plaintiffs' Motion to Remand (filed May 12, 1997) + supporting memo (May 22) +
Motion to Expedite (May 21); Defendants Baker & Taylor and "Carlye [sic] Group" Motions to Dismiss
and W.R. Grace & Co.-Conn.'s Rule 12(b) Motions + Motion for Stay (all May 5, 1997); Alabama A&M's
opposition (May 21). Court: Motion to Remand GRANTED; Motion to Expedite DENIED as moot; declines to
rule on Motions to Dismiss/Stay for lack of subject-matter jurisdiction.]

BACKGROUND: Plaintiffs originally filed in the Circuit Court of Montgomery County, alleging various
tort and contractual claims against Defendants, arising out of alleged wrongdoing in the sale of
books by Defendant Baker & Taylor. Defendants removed April 21, 1997 invoking diversity (28 U.S.C.
§ 1332), asserting ASU and Alabama A&M are Alabama citizens (real parties in interest = their Boards
of Trustees) and each Defendant is a non-Alabama citizen. Plaintiffs seek remand, arguing that as
state universities they are alter-egos/instrumentalities/arms of the state, precluding diversity.

DISCUSSION: Removal statutes strictly construed; all doubts resolved for remand (Shamrock Oil;
Burns v. Windsor). Diversity requires complete diversity (Carden) and amount > $75,000. A state is
not a "citizen" for § 1332 (Moor v. Alameda County, 411 U.S. 693). A public entity that is merely an
"arm or alter ego" of the State is treated as the State, not a citizen. Well-settled (Eleventh
Amendment immunity context) that ASU and Alabama A&M are alter egos/instrumentalities of Alabama
(United States v. Alabama, 791 F.2d 1450 (11th Cir. 1986); Harden v. Adams, 760 F.2d 1158; Davis v.
ASU, 613 F. Supp. 134). Diversity is distinct from immunity, and whether they are alter egos for
diversity is "an open question in this Circuit" — but the Eleventh Circuit has imported its Eleventh
Amendment reasoning into standing/diversity contexts (Coastal Petroleum, 695 F.2d 1314 — same
analysis for "citizen" under diversity as for Eleventh Amendment immunity). Defendants urged a
multi-factor autonomy analysis (Univ. of Rhode Island v. A.W. Chesterton, 2 F.3d 1200; Univ. of
Tennessee v. USF&G, 670 F. Supp. 1379) to show the universities are autonomous "citizens." The court
DECLINES that independent review and, resolving doubts for remand, finds ASU and Alabama A&M are
alter egos/instrumentalities of the state for diversity too → not "citizens" → no complete diversity
→ lacks subject-matter jurisdiction → improvidently removed.

ORDER: (1) Motion to Remand GRANTED; (2) REMANDED to the Circuit Court of Montgomery County under
28 U.S.C. § 1447(c); (3) Motion to Expedite DENIED as moot; (4) each party bears own costs.