#24989-rev & rem-JKM 

2009 SD 63 

IN THE SUPREME COURT 

OF THE 

STATE OF SOUTH DAKOTA 

* * * * 

BRAD OLSON, DUANE ALM, 

MICHAEL MILLER, LINDA 

BURDETTE, RUSSELL GALL, 

MERRITT STEGMEIER, TOMMY 

SVATOS, TERRY SVATOS, 

DEBBRA J. HOUSEMAN, JOHN 

BROOKS, MADELINE FAST 

HORSE, KAREN SLUNECKA, 

DAWN REDDEN, TERRY AESOPH, 

HEATHER BODE, and GRADY 

HEITMANN, Plaintiffs and Appellants, 

 v. 

MARTY GUINDON, Auditor General, 

Department of Legislative Audit of 

the State of South Dakota, M. MICHAEL 

ROUNDS, Governor, State of South 

Dakota, LAWRENCE LONG, Attorney 

General, State of South Dakota, 

and the STATE OF SOUTH DAKOTA, Defendants and Appellees, 

 v. 

SOUTH DAKOTA COALITION OF 

SCHOOLS, Intervenor and Appellant. 

* * * * 

APPEAL FROM THE CIRCUIT COURT OF 

THE SIXTH JUDICIAL CIRCUIT 

HUGHES COUNTY, SOUTH DAKOTA 

* * * * 

HONORABLE LORI S. WILBUR 

Judge 

* * * * 

ARGUED ON JANUARY 14, 2009 

 OPINION FILED 07/22/09 
RORY KING of 

Bantz, Gosch & Cremer, LLC Attorneys for plaintiffs 

Aberdeen, South Dakota and appellants. 

RONALD A. PARSONS, JR. of 

Johnson, Heidepriem, Abdallah 

& Johnson, LLP Attorneys for intervenor 

Sioux Falls, South Dakota and appellant. 

LAWRENCE E. LONG 

Attorney General 

JEFFREY P. HALLEM 

Assistant Attorney General Attorneys for defendants 

Pierre, South Dakota and appellees. 
-1-

 

#24989 

MEIERHENRY, Justice 

 [¶1.] The issue in this appeal is whether school districts have standing to 

seek a declaratory judgment against Auditor General Marty Guindon, Governor M. 

Michael Rounds, and Attorney General Lawrence Long (state officials) on the 

question of the constitutionality of K-12 public school funding in South Dakota. The 

circuit court determined that school districts did not have standing and granted 

summary judgment in favor of Guindon, Rounds, and Long. We reverse and 

remand. 

Procedural History 

[¶2.] School district board members from Aberdeen, Andes Central, and 

Faulkton Area school districts1 (school districts) filed the initial complaint for 

declaratory relief. The South Dakota Coalition of Schools (Coalition) joined the 

action as an intervenor. Formed in 1988 as the South Dakota Coalition of Small 

Schools, the Coalition is currently governed by a nine member board of school 

superintendents who work to advance the interests of member school districts. The 

Coalition is funded by dues paid by member school districts. In 2003, the Coalition 

was incorporated as a non-profit corporation. The Coalition employs attorneys to 

lobby the legislature and also employs expert-consultants and attorneys to represent 

the member school districts. The Coalition is a member of an organization that 

1. The school district board members of the three districts involved in the 

instant suit include: Brad Olson, Duane Alm, Michael Miller, Linda Burdette, 

Russell Gall, Merritt Stegmeier, Tommy Svatos, Terry Svatos, Debbra 

Houseman, John Brooks, Madeline Fast Horse, Karen Slunecka, Dawn 

Redden, Terry Aesoph, Heather Bode, and Grady Heitmann. 
#24989 

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commissioned an adequacy study to determine the level of funding necessary to 

support South Dakota’s required education and learning standards.2 The results of 

the study showed that education was seriously underfunded in South Dakota. On 

June 11, 2007, the school districts filed the original complaint for declaratory relief 

against the state officials in Hughes County. The complaint challenged the 

constitutionality of the funding of the K-12 education system in South Dakota. The 

Coalition joined the suit as an intervenor on June 25, 2007. The Coalition received 

funding from 96 of the 168 school districts in South Dakota, either in the form of 

dues or in direct support of the constitutional challenge. 

[¶3.] In May 2007, Governor Rounds ordered Auditor General Guindon to 

determine the legality of the payments made by the school districts in support of the 

pending litigation. Attorney General Long concluded that the payment of funds by 

the school districts to the Coalition was illegal and requested the Auditor General to 

conduct an audit. The school districts and the Coalition challenged the Attorney 

General’s conclusion that the payment was illegal and brought an action for 

declaratory relief. The parties agreed to suspend the audit. Based upon an agreed 

stipulation of facts, the parties filed cross-motions for partial summary judgment 

 

2. The organization, the Alliance for Education commissioned the adequacy 

study to “tie resources to outcomes.” Other members of the Alliance include: 

the Associated School Boards of South Dakota (ASBSD), the School 

Administrators of South Dakota, the ESD Plus Six (a lobbying organization 

for school districts), and the Middle Schools Organization. The South Dakota 

adequacy study is available on the Alliance’s website. See Estimating the 

Cost of an Adequate Education in South Dakota, 

http://www.sdallianceforeducation.org/object/u/AdequacyStudy.pdf (last 

visited July 13, 2009). 
#24989 

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pursuant to SDCL 15-6-56(b). The state officials claimed that the school districts 

did not have standing to sue the state officials. The school districts claimed that 

they did have standing to seek a declaratory judgment action; or alternatively, if 

they did not have standing, they had authority to expend school district monies to 

finance the litigation through the Coalition. 

[¶4.] The circuit court ruled in favor of the state officials and entered a 

judgment declaring that the school districts lacked standing and did not have 

authority to finance the litigation. The school districts and the Coalition appeal the 

issue of whether the school districts have standing to seek a judgment declaring the 

system of funding K-12 public education unconstitutional; or alternatively, whether 

the school districts can finance the lawsuit in the absence of standing. We hold that 

the school districts have standing. Standing is recognized here in the limited 

context of a declaratory judgment action and stems from provisions in the South 

Dakota Constitution. 

[¶5.] The trial court denied standing based, in part, on prior cases decided 

by this Court. Edgemont Sch. Dist. 23-1 v. South Dakota Dep’t of Revenue, 1999 SD 

48, 593 NW2d 36; Agar Sch. Dist. No. 58-1 v. McGee, 527 NW2d 282 (SD 1995). In 

those cases, we held that the school districts did not have standing to challenge tax 

levies and distributions. In both cases, we determined that the districts were not 

the real parties in interest. In Agar School District, the district challenged the 

legality of an increased tax levy and its distribution to other school districts. 527 

NW2d at 284. The case did not involve a constitutional challenge of any sort only a 

dispute over statutes. We determined that the district did not have standing 
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because it could show no actual or threatened injury. Id. at 285. The district had 

received its requested funds for the school year, and the operation of the district had 

not been affected. Id. In Edgemont School District, the district challenged the 

constitutionality of a state law that set forth the methods of assessment and 

distribution of a statewide railroad tax. 1999 SD 48, ¶12, 593 NW2d at 39. We 

determined that the school districts lacked standing to challenge the 

constitutionality of state legislation. Id. ¶15. The rationale centered on the concept 

that school districts, like counties and municipalities, “are the creatures of the 

legislature.” Id. Generally, “‘[t]he creature is not greater than its creator, and may 

not question that power which brought it into existence and set the bounds of its 

capacities.’” Id. (quoting Bd. of Supervisors of Linn County, 263 NW2d 227, 232 

(Iowa 1978)). We determined that “[n]one of the exceptions to this general rule 

regarding standing apply because the taxpayers within the district and county are 

the real parties in interest and can satisfy the traditional standing requirements.” 

Id. ¶16 (citing Agar Sch. Dist., 527 NW2d at 284). 

[¶6.] The school districts and the Coalition assert that South Dakota’s K-12 

public school funding system unconstitutionally underfunds education. The state 

officials claim that as creatures of the legislature, the school districts do not have 

standing to challenge the constitutionality of the funding system and that the real 

parties in interest are the parents and students. To establish standing, the school 

districts rely on provisions in the South Dakota Constitution that directly and 

expressly accord school districts rights to certain funds. 
#24989 

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Standing under the South Dakota Constitution 

[¶7.] Pursuant to the constitutional mandate “to establish and maintain a 

general and uniform system of public schools,” the South Dakota Legislature 

delegates to local school districts the authority to organize for the purpose of 

operating schools. See SD Const art VIII, §1 (enabling legislation set forth in SDCL 

13-5-1). In addition, the legislature gives local school boards “general charge, 

direction and management of the schools of the district and control and care of all 

property belonging to it.” SDCL 13-8-39.

[¶8.] The South Dakota Constitution creates and defines the system of 

public schools. SD Const art VIII, §1 mandates the establishment of a “general and 

uniform system of public schools” as follows: 

The stability of a republican form of government depending on 

the morality and intelligence of the people, it shall be the duty of 

the Legislature to establish and maintain a general and uniform 

system of public schools wherein tuition shall be without charge, 

and equally open to all; and to adopt all suitable means to secure 

to the people the advantages and opportunities of education. 

SD Const art VIII, §1. The South Dakota Constitution specifies four sources of 

funding that go to the local school districts for public education. The first source is 

the interest from a permanent trust fund, whose principal derives from the sale of 

public school lands acquired from the United States government, property escheated 

to the State, gifts and donations, and other property “acquired for public schools.” 

SD Const art VIII, §2. The constitutional provision provides for the permanent 

trust fund as follows: 

All proceeds of the sale of public lands that have heretofore been 

or may hereafter be given by the United States for the use of 

public schools in the state; all such per centum as may be 
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granted by the United States on the sales of public lands; the 

proceeds of all property that shall fall to the state by escheat; the 

proceeds of all gifts or donations to the state for public schools or 

not otherwise appropriated by the terms of the gift; and all 

property otherwise acquired for public schools, shall be and 

remain a perpetual fund for the maintenance of public schools in 

the state. It shall be deemed a trust fund held by the state. The 

principal shall never be diverted by legislative enactment for any 

other purpose, and may be increased; but, if any loss occurs 

through any unconstitutional act, the state shall make the loss 

good through a special appropriation. 

Id.

[¶9.] SD Const art VIII, §3 directs that the interest and income from 

the fund “be faithfully used and applied each year for the benefit of the public 

schools of the state” as follows:

The interest and income of this fund together with all other 

sums which may be added thereto by law, shall be faithfully 

used and applied each year for the benefit of the public schools of 

the state, and shall be for this purpose apportioned among and 

between all the several public school corporations of the state in 

proportion to the number of children in each[.] 

Id. 

[¶10.] Shortly after Article VIII had been approved by the voters, this Court 

in 1895 determined that the provision made the local school districts “the real 

owners of the [permanent trust] fund,” and the State a “constitutionally appointed 

trustee.” In re State Bonds, 7 SD 42, 63 NW 223, 226 (1895). We concluded that: 

“These funds do not belong to the state, but to the several school corporations. The 

state is simply a constitutionally appointed trustee, with the imposed duty of 
#24989 

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distributing to the real owners of the fund whatever of such moneys have been 

received by it . . . .” Id.3

[¶11.] In 1896 in State v. Ruth, this Court for the first time addressed the 

issue of sovereign immunity for state constitutional officials. 9 SD 84, 68 NW 189 

(1896). While ascertaining that sovereign immunity did exist for discretionary 

tasks, the Court painstakingly distinguished the State’s legal status pertaining to 

the school trust funds found in Article VIII. Id. at 190. In regard to the school trust 

funds, the State’s legal status was that of a trustee not that of a sovereign: 

The state appears in this action in its capacity of trustee, and 

must be treated as a natural person, acting in the same capacity; 

regard being had to the character of the trust, and the spirit of 

the constitutional provisions relating thereto. The rules which 

regulate ordinary trustees will need to be so applied as to secure 

and promote the ends contemplated by the constitution. It is the 

duty of each branch of the state government to regard the sacred 

character of this important trust, and to insist upon the utmost 

fidelity in its management. 

Id. These earlier constitutional decisions have been subsequently viewed as 

particularly persuasive because those cases were decided by Justices who had been 

members of the Constitutional Convention of 1885 that drafted Article VIII. See

 

3. This doctrine first surfaced in the Constitutional Debates of 1885. The 

following was proposed by two delegates concerning what would become 

Article VIII. 

 Mr. Edgerton: “I would have the school fund beyond all possible control 

of the elections of the future state; if there is any fund that should [b]e 

sacredly set apart beyond a possibility of its being used for such purposes, it 

is the school fund.” At p. 500. 

 Mr. Kanouse: “The parties who hold this [school] fund, hold it nominally 

as a sacred trust and against the possibility of its being used for political 

purposes.” At pp. 515-516. 
#24989 

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Schomer v. Scott, 65 SD 353, 274 NW 556, 566 (1937). See also McDonald v. Sch. Bd 

of Yankton, 90 SD 599, 246 NW2d 93, 97 (1976); Green v. Siegel, Barnett & Schutz, 

1996 SD 146, ¶19 n10, 557 NW2d 396, 402 n10. 

[¶12.] In 1937 in Schomer v. Scott, this Court made it clear that the school 

corporations were the beneficiaries of the permanent school trust fund. 65 SD 353, 

274 NW 556 (1937). We said that “[u]nder the provisions of the Constitution, both 

the state and the county become trustees of the funds for the benefit of the school 

corporations of the state.” Id. at 561.4

[¶13.] The trustee/beneficiary relationship was examined for a fourth time in 

Schelle v. Foss, 76 SD 620, 83 NW2d 847 (1957). There, we held that because of the 

“sacred character of this important trust,” it was no ordinary trust but rather, as the 

duties were set forth in In re Bonds, Ruth and Schomer, the trust was for the benefit 

of “the school corporations of the state.” Id. at 851. The nature of the trust was 

defined as follows: 

The framers of our Constitution intended to, and did, establish a 

special trust for the administration and preservation of our 

permanent school and educational funds. Article VIII of the 

Constitution serves as a trust instrument containing the 

declarations of trust. Its provisions are written in strong, clear, 

self-expressive language. Its beneficiaries are all of the public 

schools in the state together with its endowed charitable and 

educational institutions. The trust must be administered for 

their sole benefit and best interest. An involvement of the trust 

funds for any other purpose, consideration, or motivation would 

be in violation of the basic intendment of the trust. 

 

4. At that time, Article VIII, section 11 authorized borrowing from the school 

funds for mortgages upon farm land. The counties assumed certain legal 

obligations to see that these funds were repaid. Such loan authority was 

removed by amendment of section 11 in 1952.
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Id. at 853 (emphasis added). 

[¶14.] The Constitution establishes a second education funding source from 

“[t]he proceeds of all fines collected from violations of state laws[.]” SD Const art 

VIII, §3. The county treasurers collect the fines and distribute them “among and 

between all of the several public schools incorporated in such county in proportion to 

the number of children in each, of school age, as may be fixed by law.” Id. The 

Constitution also provides two other funding sources for public education – general 

taxation and local taxation. Article VIII, section 15 requires the legislature to 

“make such provision by general taxation and by authorizing the school corporations 

to levy such additional taxes as with the income from the permanent school fund 

shall secure a thorough and efficient system of common schools throughout the 

state.” SD Const art VIII, §15.

[¶15.] The funding sources established by the Constitution go to the local 

school districts for the sole purpose of educating the children of South Dakota. 

Local school districts are the core of the entire K-12 educational system. The 

districts are beneficiaries of the permanent trust fund and designated recipients of 

the fines and taxes earmarked for education. Their position as beneficiaries and 

designated recipients is established by the South Dakota Constitution. Without 

adequate funding, the school districts claim they are unable to fulfill their mandate 

of educating the children of South Dakota. It is undisputed that public education is 

of utmost importance to the state and its citizens. South Dakota’s Constitution 

requires the legislature “to establish and maintain a general and uniform system of 

public schools . . . and to adopt all suitable means to secure to the people the 
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advantages and opportunities of education.” SD Const art VIII, §1. The 

Constitution pronounces that a “general and uniform system of public schools” 

without tuition and “equally open to all” is important because “[t]he stability of a 

republican form of government depend[s] on the morality and intelligence of the 

people.” Id. Here, all the parties stipulated that “[e]ducation is a matter of great 

public importance in the State of South Dakota.” As the United States Supreme 

Court said in Brown v. Board of Education of Topeka, “education is perhaps the 

most important function of state and local governments.” 347 US 483, 493, 74 SCt 

686, 691, 98 LEd 873 (1954) (emphasis added).

[¶16.] Unlike the prior cases of Agar and Edgemont, the districts and 

Coalition challenge the constitutionality of the overall system of funding of K-12 

public education. The school districts’ interest in discharging their constitutional 

duty is not simply based on their status as representatives of constituent students 

and taxpayers. In this constitutional challenge, the school districts are not mere 

creatures of statute. Instead, they are creations of the Constitution via Article VIII. 

Because of the constitutional provisions and the vital position school districts hold 

as beneficiaries and recipients of public K-12 education funding, we recognize that 

school districts have standing to challenge the constitutionality of K-12 public school 

funding in the limited context of a declaratory judgment action. However, as 

counsel for the Coalition conceded during oral argument, 

It would be up to the legislature and the executive branch to 

come up with a solution through the political process. The 

school funding litigation is not asking for a dollar. It asks for no 

relief other than declaratory relief and attempts to enforce 

declaratory relief if certain statutes have to be enjoined as 

unconstitutional.
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Conclusion

[¶17.] Thus, we hold that in the narrow context of seeking a declaratory 

ruling on the constitutionality of K-12 public school funding that the districts have 

standing. Because we determine that the school districts have standing to sue the 

state officials at this stage of the proceeding, it follows that the school districts also 

have authority to expend funds to support the litigation. 

[¶18.] We reverse and remand. 

[¶19.] GILBERTSON, Chief Justice, concurs with a writing and SABERS, 

Retired Justice, concurs. 

[¶20.] KONENKAMP and ZINTER, Justices, concur in result. 

GILBERTSON, Chief Justice (concurring). 

[¶21.] I join in the Court’s opinion but wish to add a few points. Before us is 

the question of the standing of certain school districts within South Dakota to 

commence a declaratory judgment action against the State. A substantial portion of 

oral argument before this Court focused directly upon the relief the school districts 

were seeking in that underlying proceeding. 

[¶22.] During oral arguments, the school districts stated, “[w]e are seeking 

declaratory relief. We are not seeking any kind of a specific amount of 

appropriation from the State.” Further, “[t]he school funding litigation does not ask 

for a dollar, and it asks for no relief other than declaratory relief, and attempts to 

enforce declaratory relief if certain statutes have to be enjoined as unconstitutional.” 
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[¶23.] When the Court asked if the school districts, “. . . would concede . . . 

that there is no Constitutional authority for this Court to declare itself to be some 

kind of ‘super school board,’ that is now somehow, de facto, running the education 

system of South Dakota,” they replied, “[we] would readily concede that. We have 

made no assertion of that whatsoever.” The Court then asked, “What happens . . . if 

we get to the point where the Legislature says ‘so what’ [in response to a declaratory 

judgment]? Do school districts have standing at that point . . . to ask for an order to 

the Legislature to appropriate the funds?” The plaintiffs responded, “This Court 

can’t appropriate funds. That would violate separation of powers. . . . [The school 

districts do not have standing] to ask for the Court to appropriate funds. . . .” 

[¶24.] Finally, the school districts explained the underlying litigation as, 

[A]n action brought purely under the Declaratory Judgment Act. 

The [DJA] specifically authorizes public corporations of any 

character whatsoever to bring declaratory judgment actions, 

including against the State. This Court placed one limitation on 

that, in the Dan Nelson case. . . ‘The holding of Pennington 

County is limited to county suits seeking monetary relief from 

the State Treasury.’ So a governmental entity, a subdivision of 

government, could not sue the State for money to try to . . . force 

it to appropriate funds. Although the underlying action involves 

funding issues, it does not ask for a dollar. It does not seek to 

disgorge any money from the public treasury. 

[¶25.] From the foregoing, it is clear that the school districts seek only a 

declaration as to the meaning of article VIII of the South Dakota Constitution. Also, 

they have made it clear that this Court is not being asked to address the issue of the 

parameters of its authority to mandate any certain dollar amount of school funding. 

See generally McIntyre v. Wick, 558 NW2d 347 (SD 1996). 
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[¶26.] To arrive at its result of limited standing by the school districts, the 

Court properly applies the public trust theory to resolve this issue. In its 

interpretation of article VIII of the South Dakota Constitution, the Court’s historical 

analysis begins with the Constitutional Convention of 1885, which “framed the 

issues for debate in the 1889 Constitutional Convention and the constitution 

produced in 1885 was the genesis of the constitution adopted in 1889.” Chief Justice 

David Gilbertson & David S. Barari, Indexing the South Dakota Constitutional 

Conventions: A 21st Century Solution to a 125 Year Old Problem, 53 SD Law Rev 

260, 261 (2008) (citing In re Opinion of the Judges, 61 SD 107, 246 NW 295, 295 

(1933); Schomer v. Scott, 65 SD 353, 274 NW 556, 562-63 (1937); Green v. Siegel, 

Barnett & Schutz, 1996 SD 146, ¶17 n8, 557 NW2d 396, 401 n8). Our case law since 

1889, as cited by the Court, strongly supports standing in this limited case. It is 

clear from the Court’s analysis that this trust theory is limited to article VIII and no 

case law since 1889 suggests it applies to any subdivisions of government other than 

the schools. 

[¶27.] I cannot join in the concept of standing through what is declared to be 

“a public interest exception.” Until today, such a doctrine has been unknown to our 

South Dakota Constitution or its interpretative scholarship. Moreover, it is a 

nebulous term without specific definition. We are not provided with a workable 

definition of what this term means; instead, we are told in general terms what it is 

not. Thus, should this exception be adopted, in future cases, what constitutes an 

issue of “great public importance” will be what three members of this Court conclude 

it to be. “The Court’s inability to formulate a ‘judicially discernible standard’ 
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strongly counsels against the recognition of a novel constitutional right.” Caperton 

v. A.T. Massey Coal Co., Inc., __US__, __SCt__, __ LEd2d__, available at 2009 WL 

1576573, at *20 (June 8, 2009) (Roberts, C.J. dissenting) (citing Vieth v. Jubelirer, 

541 US 267, 306, 124 SCt 1769, 158 LEd2d 546 (2004) (plurality opinion)). In future 

litigation, such a nebulous term invites the once narrow exception to swallow the 

general rule of no standing. 

ZINTER, Justice (concurring in result). 

[¶28.] The principal allegation in the underlying school funding litigation is 

that the Legislature is failing to perform its duty of appropriating sufficient general 

funds, derived from taxation, to maintain a thorough and efficient system of schools 

as required by article VIII, section 15 of the South Dakota Constitution. The 

plaintiffs in the underlying litigation do not allege any improper use of the two 

educational trust funds that were created by article VIII, sections 2 and 3 and are 

relied upon by the majority. See supra ¶¶6, 8-15. Therefore, I cannot join the 

majority’s adoption of a theory of standing that is based upon a trust beneficiary’s 

right to appear in actions concerning the use of the beneficiary’s trust funds. 

Instead, I would apply a similar but more limited standing exception than that 

recognized by the other courts that have considered school funding litigation. 

[¶29.] There is no dispute that, generally, governmental subdivisions do not 

have standing to sue their creator, the state. See Edgemont Sch. Dist. 23-1 v. SD 

Dep’t of Revenue, 1999 SD 48, ¶¶13-16, 593 NW2d 36, 39-40. The school districts, 

however, argue that they have standing under the public interest exception to the 
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general rule. The question of standing under the public interest exception is a 

question of first impression in this jurisdiction. Until today, we have applied the 

general rule disallowing standing to school districts as governmental subdivisions, 

but we have also acknowledged the exceptions. Id.

[¶30.] A limited exception is justified in this case for three reasons. First, 

local school districts have a unique constitutional role in both providing and 

financing K-12 education under article VIII of the South Dakota Constitution. 

Second, on appeal, the school districts have narrowed the relief they seek in the 

underlying litigation to that of pure declaratory relief to determine the meaning of 

the parties’ constitutional obligations.5 Finally, all parties agree that this is an 

important public interest question. Under these circumstances, we should now 

adopt a limited standing exception for schools when they seek pure declaratory 

relief to determine the meaning of the constitutional provision under which they 

must provide a public education.6

 

 (continued . . .) 

5. At oral argument, counsel for the school districts stated that in the 

underlying litigation, the plaintiffs are “seeking an interpretation of article 

VIII, what does it mean that . . . the State is to adopt all suitable means to 

provide an education? Are the school districts entitled to have sufficient 

funds to provide an adequate education? What does an adequate education 

mean?” 

6. Although the State relies on authorities finding no standing for governmental 

subdivisions, those authorities are distinguishable as they either apply to 

other governmental subdivisions having no specific constitutional duty with 

respect to the issue in litigation, or the recognized standing exceptions are 

inapplicable or not discussed. See e.g. Denver Ass’n for Retarded Children, 

Inc. v. Sch. Dist. No. 1 in City and County of Denver, 188 Colo 310, 535 P2d 

200 (1975); Lobato v. State, __P3d __, 2008 WL 194019 (ColoApp 2008); Bd. of 

Supervisors of Linn County v. Dep’t of Revenue, 263 NW2d 227 (Iowa 1978); 

East Jackson Pub. Sch. v. State, 133 MichApp 132, 348 NW2d 303 (1984); 
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[¶31.] I would not, however, recognize the broad public interest standing 

exception adopted in many of the school districts’ cases. Rather, Washakie County 

Sch. Dist. No. One v. Herschler, 606 P2d 310, 317-18 (Wyo 1980), and a restrictive 

reading of Seattle Sch. Dist. No. 1 of King County v. State, 90 Wash2d 476, 493-94, 

585 P2d 71, 82 (1978), provide the most appropriate analysis. In Washakie County,

the Wyoming Supreme Court recognized standing because schools themselves are 

tangibly injured if prevented from performing their constitutionally required duty to 

provide the important governmental function of education: 

Educating the youth of our state is an important function 

performed by our state government. Our constitution. . . plainly 

expresses the commitment of a free people to the value of a 

thorough education. The school districts and the members of 

school boards are charged with the responsibility of providing 

education to the children of Wyoming and are tangibly injured if 

the statutes which guide their hands disenable them from so 

providing. 

606 P2d at 317. 

[¶32.] Like Wyoming, the South Dakota Constitution makes local school 

districts an integral part of financing and providing a thorough and efficient system 

of common schools. Article VIII, section 15 imposes a joint Legislature-local school 

district duty to finance schools: the legislative obligation through general taxation 

and the local school districts’ obligation through property taxation. And, annual 

legislative funding together with property taxation provides the bulk of the revenue 

necessary for schools to fulfill their constitutional obligation of providing an 

_______________________ 

(. . . continued) 

New York State Ass’n of Small City Sch. Dist., Inc. v. State, 42 AD3d 648, 840 

NYS2d 179 (3d Dept. 2007). 
#24989 

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adequate education. Therefore, as the Washington Supreme Court concluded, the 

interest of the schools is sufficiently within the zone of interest recognized by 

Washington’s analogous education clause to afford standing. 

[I]t is clear the District has standing to challenge the 

constitutionality of the school financing system. The interests of 

the District are not theoretical; they involve actual financial 

constraints imposed upon the District by the challenged system 

itself. In short, the interests sought to be protected by the 

District are within the zone of interest either regulated by the 

challenged regulations and legislation or by [the Washington 

Constitution’s analogous education clauses.] Under these 

circumstances it would be unreasonable to deny standing to the 

District which, far from being a nominal party, stands at the 

very vortex of the entire financing system. 

Seattle Sch. Dist. No. 1, 90 Wash2d at 493-94, 585 P2d at 82.7

 

7. Although I agree with the Washington court’s view of school standing in light 

of the school districts’ constitutional obligation to provide education, I would 

not adopt the Washington court’s view of standing for other governmental 

entities. The State’s authorities from other jurisdictions overwhelmingly 

demonstrate that, absent the constitutional zone of interest that state 

constitutions provide to schools, other governmental entities, as creatures of 

the legislature, have no standing. South Dakota has adopted this view. For 

example, we have stated that: 

Counties and other municipal corporations are, of course, the 

creatures of the Legislature; they exist by reason of statutes 

enacted within the power of the Legislature, and we see no 

sound basis upon which a ministerial (or, for that matter, any 

other) office may question the laws of its being. The creature is 

not greater than its creator, and may not question that power 

which brought it into existence and set the bounds of its 

capacities. 

Edgemont Sch. Dist., 1999 SD 48, ¶15, 593 NW2d at 40 (quoting Bd. of 

Supervisors of Linn County, 263 NW2d at 232 (quoting C. Hewitt & Sons Co. 

v. Keller, 223 Iowa 1372, 275 NW 94, 97 (1937))). 
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[¶33.] In the case before us today, the issue of standing arose in a declaratory 

judgment action in which the interests at stake involved the joint school districtlegislative obligation to provide an adequate public education. The school districts 

specifically alleged that they are under threat of sanctions for failure to meet stateimposed standards of educational achievement.8 They further allege injury to their 

ability to meet state and constitutional requirements. Under those circumstances, 

even the jurisdictions that strictly apply the general rule barring governmental 

subdivision challenges to legislative decisions recognize an exception. The exception 

applies when schools seek an interpretation of the law they were required to 

implement, but also alleged that by their very compliance, they will be forced to 

violate a constitutional provision. See City of New York v. State, 86 NY2d 286, 292, 

655 NE2d 649, 652 (1995) (citing Matter of Jeter v. Ellenville Cent. Sch. Dist., 41 

NY2d 283, 287, 360 NE2d 1086, 1088 (1977)) (additional citation omitted) 

(concluding that the school board had standing to seek a declaration interpreting 

the meaning of laws governing the right to a free public education, but they did not 

have the substantive right to challenge those laws). 

[¶34.] As previously indicated, at oral argument in this case the school 

districts limited their request for relief, stressing that standing was appropriate as 

they should be entitled to seek a determination of the “meaning” of article VIII, 

section 15. See supra note 5. Considering this limited question, considering the 

unique constitutional status and duties of schools regarding K-12 education, and 

considering the agreement that the underlying issue is a matter of great public 

 

8. See, e.g., SDCL §§ 13-3-62, 13-3-69, 13-6-2, 13-13-11.
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importance, I agree with the previously cited authorities holding that schools have 

standing to seek declaratory relief under the public interest exception. It must, 

however, be emphasized that such standing should only be recognized at this stage 

of the proceeding, and then only for the limited question of interpreting and 

determining the meaning of the education clauses and statutes.9 To this extent, I 

concur in result. 

 

9. In the underlying litigation, the circuit court dismissed all claims except 

those seeking declaratory relief. That litigation has not been finalized and it 

is not known if the dismissed claims may be the subject of an appeal. In any 

event, in light of the Schools’ appellate limitation on their request for relief, 

see supra note 5, it should be understood that today’s decision is no authority 

for the proposition that public schools have standing to take the often utilized 

step of also seeking enforcement of a declaratory ruling, which might, for 

example, include a request for monetary or other affirmative relief against 

the State. See Dan Nelson Auto., Inc. v. Viken, 2005 SD 109, ¶¶30-31, 706 

NW2d 239, 251-52 (restating that declaratory relief is unavailable to 

governmental subdivisions seeking monetary relief from the state treasury).

For the same reason, today’s decision should not be understood to mean that 

school districts have standing to seek the other relief they initially sought in 

the underlying litigation; namely, 

That the [circuit] court issue appropriate writs of mandamus, 

writs of prohibition, and/or interim and permanent injunctive 

relief to bring defendants into compliance with article VIII of the 

South Dakota Constitution, to prohibit the defendants from 

administering, enforcing and/or funding those provisions of the 

public school financing system that are unconstitutional, and to 

remedy the continuing violation of plaintiffs’ constitutional 

education rights; and 

That the court retain jurisdiction and maintain judicial 

oversight to assure that the Legislative and Executive 

departments act appropriately to correct the constitutional 

inadequacies of the public school finance system that presently 

exists in South Dakota. 

 Third Amended Complaint, 83. 
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[¶35.] The majority’s standing exception is based on a theory of trust law; i.e.,

that a trust beneficiary has standing when asserting a claim of “right” to trust 

funds. See supra ¶6 (stating: “To establish standing, the school districts rely on 

provisions in the South Dakota Constitution that directly and expressly accord 

school districts rights to certain funds”) (emphasis added). The majority relies on 

case law and constitutional provisions recognizing the school districts’ direct and 

express rights in two trust funds. The first is the perpetual trust fund established 

by article VIII, section 2, which is funded from the sale of public lands, escheated 

property, and gifts. The second is the trust for collected fines established by article 

VIII, section 3. See supra ¶¶8-13 (discussing the perpetual trust fund) and supra

¶14 (discussing the proceeds of fines). 

[¶36.] School districts do not, however, seek relief in the underlying litigation 

for any act or omission with respect to these two existing trust funds. Instead, 

according to the Third Amended Complaint, the school districts seek a larger future

legislative appropriation of general funds through general taxation under the article 

VIII, section 15. Critically, that constitutional provision leaves some discretion to 

the Legislature, and it certainly has not created a trust fund. Article VIII, section 

15 merely provides that the Legislature shall “make such provision by general 

taxation [which shall with other funds10] secure a thorough and efficient system of 

common schools throughout the state.” 

 

10. Although article VIII, section 15 also provides that the Legislature shall 

make provision for the school corporations to levy such additional local taxes, 

there is no allegation in the underlying complaint that the Legislature has 

failed to authorize the school districts to levy local taxes for their schools. 
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[¶37.] Consequently, article VIII, section 15 -- the focus of the underlying 

litigation -- does not provide school districts with any direct or express right to any 

trust fund, and it certainly does not provide school districts with trust rights in the 

funds they seek: future increased appropriations. After all, the Legislature could, as 

it did in 1996 after the last school funding litigation, completely repeal and adopt a 

new method of funding K-12 education. See 1996 Session Laws ch 69, “An Act to 

revise and repeal certain provisions relating to state aid to education.” Therefore, 

although Schelle v. Foss, 76 SD 620, 83 NW2d 847 (1957) and State v. Ruth, 9 SD 

84, 68 NW 189 (1896) support the theory that school districts would be injured 

parties with standing if the trust funds in article VIII, sections 2 and 3 were not 

being used in accordance with constitutional requirements, that is not the allegation 

in the underlying litigation. For that reason, school district standing based on a 

trust beneficiary’s “rights” to trust funds has no application in this case.11

[¶38.] KONENKAMP, Justice, joins this special writing. 

 

11. There is one limited exception. To the extent the underlying plaintiffs allege 

inappropriate use of the article XII, section 6 Education Enhancement Trust 

Fund, the majority’s trustee beneficiary theory could apply. That does not, 

however, appear to be the focus of the underlying litigation.