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California Districts Granted Immunity From Federal Suits

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A recent ruling by a federal appeals court may shield school districts in a growing number of states against some types of lawsuits brought against them in federal courts.

The U.S. Court of Appeals for the Ninth Circuit ruled late last month that due to extensive state control over school finances, California school districts are state agencies and deserve the same 11th Amendment immunity against federal lawsuits enjoyed by other branches of state government.

In general, the 11th Amendment protects states from being sued in federal court without their consent. There are many exceptions to that rule, however, such as suits against officers of a state, suits brought by the federal government, and suits filed under laws in which the Congress has clearly set aside the states' immunity.

In a line of cases dating back to the late 1800's, the U.S. Supreme Court has held that 11th Amendment immunity does not extend to a state's political subdivisions. In a 1977 case, Mt. Healthy School District v. Doyle, the Court ruled that school districts enjoy sufficient autonomy to fit into this category.

In its decision in Belanger v. Medera Unified School District, the Ninth Circuit Court ruled, however, that California's role in local school finance has become so pervasive so as to reduce districts to the status of arms of the state. The case was brought by a former elementary-school principal who claimed that her reassignment to a teaching position was discriminatory.

"A judgment against the school district would be satisfied out of state funds,'' the three-judge panel unanimously ruled. "In the critical area of school funding, around which this litigation revolves, California has selected a different path from that of most states. California has vested control of school funding in the state rather than local governments.''

Far-Reaching Effects?

The Ninth Circuit Court's ruling could have implications far beyond California due to the wave of lawsuits aimed at forcing states to assume a greater share of the school-finance burden.

The appeals court found that California's own court-ordered school-finance remedy in the early 1970's, combined with its property-tax limitations, stripped districts of a distinct political identity.

"The state has assumed the burden of funding public schools, and property-tax revenue allocated to the public-school revenue-limit program is state money collected for a state purpose,'' the judges wrote. "In short, the state determines the amount of money that school districts may spend per pupil and then provides the necessary state funds.''

Observers noted that California exerts an unusually high degree of control over its districts. But, they added, other states are moving quickly in the same direction.

California's "combination of a high state share of funding, and caps and restrictions on local funds, [is] fairly unusual,'' said Mary Fulton, a research associate for the Education Commission of the States. "They are in a small group of states that have that kind of control. In most states, there is still quite a bit of leeway on local funding.''

"California is a little different than other states, but nevertheless, I would say that the 11th Amendment defense is now worth putting in,'' said Gwendolyn Gregory, the deputy general counsel for the National School Boards Association. "Certainly, if I were a school-board lawyer these days, I would run it up the flagpole.''

Property-Tax Control

The federal appeals court concluded that California's efforts to manage districts' local property-tax revenues contributed greatly to the dilution of local control.

"Under the revenue-limit system, state and local revenue is commingled in a single fund under state control,'' the judges wrote. "In essence, any use of the commingled funds is a use of state funds.''

The court said that the state's influence over such matters such as textbook selection and student-expulsion policy also influenced its decision. But, it said, the most important factors were the distribution of funds and language in the state constitution that charges lawmakers with primary responsiblity for supervising public schools.

The court ruled that although "public schooling is usually considered to be a local governmental function,'' under California law "school districts are agents of the state that perform central governmental functions.''

Legal Test

In its ruling, the appeals court used a test set in a 1989 case involving the Los Angeles community-college system to determine whether the Medera school district was a branch of the state.

Under the test, the court must ask whether state funds would be used to settle a financial judgment, whether the defendant in the case performs a central governmental function, whether it can participate on its own in a lawsuit, whether it can hold property, and what is the defendant's corporate status.

"It is the state legislature that has acknowledged the local needs of the individual school districts throughout the state,'' the court held. "That the state itself has decided to give its local agents more autonomy does not change the fact that the school districts remain agents under state control.''

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