Opinion ID: 45527
Heading Depth: 3
Heading Rank: 2

Heading: Suits Against Lesser Entities

Text: 34 Thus, Black's argument has merit only if NPSD is considered an arm of the state entitled to Eleventh Amendment immunity. The second important limit to the principle of sovereign immunity is that it bars suits against States but not lesser entities. Alden, 527 U.S. at 756, 119 S.Ct. at 2267. Historically, when states imposed duties on municipalities by charter or statute, they withdrew municipal immunity for actions arising out of the performance or nonperformance of those duties. Will v. Michigan Dept. of State Police, 491 U.S. 58, 67 n. 7, 109 S.Ct. 2304, 2310, 105 L.Ed.2d 45 (internal citations omitted). Accordingly, lesser governmental entities such as counties and municipalities are not considered arms of the state for purposes of Eleventh Amendment immunity. Id.; see also Alden, 527 U.S. at 756-57, 119 S.Ct. at 2267-68 (internal citations omitted). Likewise, Mississippi courts routinely entertain § 1983 actions against municipalities and individual defendants acting under color of state law in accordance with substantive federal law. Burrell, 536 So.2d at 864; Starnes v. City of Vardaman, 580 So.2d 733, 737 (Miss.1991); Mallery v. Taylor, 805 So.2d 613, 620 (Miss. 2002) (citing Howlett, 496 U.S. at 375-76, 110 S.Ct. 2430). To determine whether NPSD is an arm of the state entitled to Eleventh Amendment immunity, this court examines the district according to the six following factors: (1) whether the state statutes and caselaw view the agency as an arm of the state; (2) the source of the entity's funding; (3) the entity's degree of local autonomy; (4) whether the entity is concerned primarily with local, as opposed to statewide, problems; (5) whether the entity has the authority to sue and be sued in its own name; and (6) whether the entity has the right to hold and use property. United States ex. rel. Barron v. Deloitte & Touche, L.L.P., 381 F.3d 438, 440 (5th Cir.2004) (citing Hudson v. City of New Orleans, 174 F.3d 677, 679 (5th Cir. 1999)); Cozzo, 279 F.3d at 281. Generally, school boards and districts are not arms of the state shielded by Eleventh Amendment immunity. See Mt. Healthy, 429 U.S. at 280, 97 S.Ct. 568 (finding under Ohio law, although the school board received guidance and significant funding from the state, it also held extensive powers to issue bonds and levy taxes, and therefore, the district was more similar to a municipality than an arm of the state); Minton v. St. Bernard Parish Sch. Bd., 803 F.2d 129, 131-32 (5th Cir.1986) (finding that under Louisiana law the school board enjoyed a wide degree of local autonomy, that it was predominantly sustained by local funds, and that a judgment against it would not impose upon the state treasury; therefore, the school board was not entitled to Eleventh Amendment immunity notwithstanding Louisiana's characterization of the board as an agency of the state). 35 In light of the fundamental purpose of the Eleventh Amendment—protecting state treasuries—the source of the entity's funding is given the most weight. Barron, 381 F.3d at 440 (internal citation omitted); Cozzo, 279 F.3d at 281 (internal citation omitted). To determine if the state treasury is being protected, this court looks first to whether the state would be liable for a judgment against the defendant and then to whether the state would be liable for the defendant's general debts and obligations. Barron, 381 F.3d at 440 (internal citation and quotation marks omitted). As a Mississippi public school district, NPSD has the power to levy and collect taxes independently from the state. MISS.CODE ANN. § 37-57-1. NPSD's school board may also issue bonds to raise funds for school construction and improvements. MISS.CODE. ANN. § 37-59-3. NPSD receives large grants of money directly from the State of Mississippi for educational programs. MISS.CODE ANN. § 37-151-7. NPSD must apply and receive state money for the repair, maintenance and construction of school facilities. MISS.CODE ANN. §§ 37-45-21; 37-47-1, et. seq. Thus, the burden of funding in Mississippi is more equitably divided between the local school districts and the state. C f. Minton, 803 F.2d at 132 (Louisiana school district's funding came from predominantly local sources). 36 However, in addition to an entity's source of funding, the court considers whether the state treasury would be liable for a potential judgment entered against the school district. See Barron, 381 F.3d at 440 (citing Vogt v. Bd. of Comm'rs, 294 F.3d 684, 693 (5th Cir.2002)); Minton, 803 F.2d at 132. As discussed above, the MTCA provides the only remedy for claims against the state and its political subdivisions. MISS.CODE ANN. § 11-46-7. School districts must self-insure through the Tort Claims Fund and carry excess liability insurance to protect against judgments arising from actions not covered by the MTCA. MISS.CODE ANN. §§ 11-46-16(2); 11-46-17(2). Any judgment entered against a school district would be paid through the Tort Claims Fund and excess liability insurance. Id. A potential judgment would not burden the public fisc. See id. Therefore, the local source of NPSD's operational funding, along with its required excess insurance for potential judgments, weighs in favor of finding that NPSD is not an arm of the state. See Barron, 381 F.3d at 440; Minton, 803 F.2d at 131-32. 37 Turning to the other factors, the Mississippi legislature's definition of political subdivision includes school districts and school boards. MISS.CODE ANN. § 11-46-1(i). Mississippi courts routinely hold that a school district is a political subdivision consistent with the MTCA's definition. See e.g. Lang v. Bay St. Louis Waveland Sch. Dist., 764 So.2d 1234, 1236 (Miss. 1999); Lincoln County, 749 So.2d at 945; L.W. v. McComb Separate Municipal Sch. Dist., 754 So.2d 1136, 1139 (Miss.1999). However, the plain assertion that a school district is a political subdivision or arm of the state does not determine whether the entity is entitled to Eleventh Amendment protection. Minton, 803 F.2d at 131; see also Howlett, 496 U.S. at 379-80, 110 S.Ct. 2430. Thus, to the extent this factor weighs in favor of finding that the school district is an arm of the State based on the MTCA's definition, it is outweighed by federal law. Howlett, 496 U.S. at 379-80, 110 S.Ct. 2430. 38 The third and fourth factors—the degree of the entity's local autonomy and the entity's concern with local problems— weigh heavily towards finding that NPSD is not an arm of the state. Under Mississippi law, NPSD and its board have the power to organize and operate the schools according to the school's best interests, manage and control the district's real and personal property, construct and manage school facilities and improvements, prescribe and enforce rules for government of the district, direct the superintendent to make payments for lawful purposes from the funds available to the district, regardless of the funds' source, employ district personnel, expend local school activity funds and other available school district funds, and acquire real property in its own name, and enter into contracts with other political subdivisions to carry out school board duties. MISS.CODE ANN. § 37-7-301. Accordingly, Mississippi vests broad power and discretion in NPSD to autonomously manage local educational concerns. Id.; see also Minton, 803 F.2d at 132. 39 Finally, the right to hold property and the entity's ability to sue and be sued in state court are the least significant factors. Cozzo, 279 F.3d at 281 (internal citation omitted). First, NPSD's right to hold property is granted by statute. MISS. ANN. CODE § 37-7-301(aa). Second, the MTCA permits NPSD to be sued. MISS.CODE ANN. § 11-46-5(1). To the extent these factors may be considered, they weigh in favor of finding that NPSD is not an arm of the state. 40 Upon consideration of these factors, we conclude that NPSD is not an arm of the state of Mississippi; therefore, it is not entitled to Eleventh Amendment immunity in federal or state court. See Howlett, 496 U.S. at 379-80, 110 S.Ct. at 2445 (internal citations omitted); Minton, 803 F.2d at 131-32. Black cannot escape the effect of res judicata by arguing that her federal claims would have been barred in her state action.