9th Circuit affirms schools’ protection from federal suits

9th Circuit affirms schools’ protection from federal suits

(Calif.) Although the 2013 adoption of the Local Control Funding Formula changed almost everything for schools, a recent court ruling found one thing the landmark legislation didn’t change are protections schools enjoy from some lawsuits provided by the 11th Amendment.

Under the U.S. Constitution, states have immunity from federal lawsuits filed by other states without the consent of the state in question. The courts have ruled repeatedly that the same protections apply “agents of the state,” which includes schools districts.

Yet, in a novel case brought by a former employee of the Orange County Office of Education, the question was raised whether the LCFF changed the state-school district relationship enough as to eliminate the right to sovereign immunity.

The short answer, according to a June ruling from the Ninth Circuit Court of Appeal, is no.

“We hold that California school districts and (County Offices of Education), including the  defendant, remain arms of the state and continue to enjoy 11th Amendment immunity,” said Justice Richard Tallman, who wrote the opinion for a three-judge panel.

He said the legislation that created the LCFF, AB 97, “reformed the financing and governance of California public schools in important ways, but it did not so fundamentally alter the relationship between COEs and the state” as to abrogate the protections afforded under the 11th Amendment.

Congress established the barrier as a result of a dispute between a South Carolina businessman and the state of Georgia in the 1790s. Georgia officials refused to participate in the suit, arguing that they had sovereign immunity but the U.S. Supreme Court at the time overruled.

Shortly thereafter, Congress moved to clear up the issue by passed a constitutional amendment prohibiting a federal case against a state unless the state in question gave its consent.

At issue in the Orange County case was the firing of a database architect just a few weeks after starting the job, said attorney Sloan Simmons of the Lozano Smith firm, in a news brief published this month. The employee, Michael Sato, alleged breach of contract, wrongful termination and violations of his right to due process.

But to even get his case to be heard, Sato had to convince the court that the LCFF had changed the legal landscape so that sovereign immunity could no longer be extended to school districts.

In making up their minds, the justices applied an existing test to determine if schools remained an “agent of the state” that considered:

  • whether a money judgment would be satisfied out of state funds;
  • whether the entity  performs central  government functions;
  • whether the entity may sue or be sued;
  • whether the entity has the power to take property in its own name or only the name of the state; and
  • the corporate status of the entity.

The plaintiff argued that the LCFF had changed the relationship saying that when the state replaced revenue limits with the new funding system, it replaced a maximum per-pupil funding formula with a minimum per-pupil formula.

He also suggested that the LCFF had inadvertently given districts the authority to raise local property taxes–which meant that districts were not reliant on state funds to pay for any legal judgements.

The court disagreed:

“We find no intent on the part of the California legislature to replace a maximum per-pupil funding formula with a minimum per-pupil formula,” the court ruled.  “Rather, the legislation’s objectives were twofold: (1) increase education funding, particularly for low-income and (English language learner) students, and (2) simplify what many considered an “overly complex, inefficient, and outdated” education finance system.”

They also rejected the notion that districts had new power to raise property taxes.

In conclusion, the court said that public education has been considered a state obligation:

“California law treats public schooling as a statewide or central governmental function,” they said. “The California Supreme Court has said that “[s]ince its admission to the Union, California has assumed specific responsibility for a statewide public education system open on equal terms to all.”