Opinion ID: 3022284
Heading Depth: 3
Heading Rank: 1

Heading: The Status of the Board Under State Law

Text: Four sub-factors are relevant to assessing the Board’s legal status under state law: how state law treats the Board generally, whether the Board can sue or be sued in its own right, whether the Board is separately incorporated, and whether it is immune from state taxation. See, e.g., Carter, 181 F.3d at 347 n.22; Fitchik, 873 F.2d at 662-63. As the District Court noted in its oral opinion, the Board can sue or be sued under state law, is separately incorporated, and is not immune from state taxation. See N.J. Stat. Ann. §§ 18A:10-1, 11-2. Moreover, New Jersey state law generally treats school boards as separate political subdivisions. See id. § 18A:10-1; see, e.g., Otchy v. Elizabeth Bd. of Educ., 737 A.2d 1151 (N.J. Super. Ct. App. Div. 1999) (noting that under state law a school board is a distinct legal entity, which, for example, may hold property in its name). In 2002, the New Jersey legislature enacted the Municipal Rehabilitation and Economic Recovery Act (“MRERA”), N.J. Stat. Ann. §§ 52:27BBB-1 to -65, which provides that a municipality fulfilling specified criteria3 will be designated a 3 The MRERA applies to any New Jersey municipality:
financial review board pursuant to the ‘Special Municipal Aid Act,’ P.L.1987, c. 75 (C.52:27D-118. 24 et seq.) for at least one year; (2) that has been subject to the supervision of the Local Finance 5 “qualified municipality” and subjected to a series of measures to try to alleviate its ongoing fiscal distress. See N.J. Stat. Ann. §§ 52:27BBB-1 to -3, -7 to -30. Camden has been so designated. See Camden City Bd. of Educ. v. McGreevey, 850 A.2d 505 (N.J. Super. Ct. App. Div. 2004) (upholding the MRERA). The MRERA also provides for “limited school district oversight” in these qualified municipalities. N.J. Stat. Ann. § 52:27BBB- 2.1(c)-(d); see id. §§ 52:27BBB-63 to -64 (regarding appointment of school board members and gubernatorial veto power). The District Court suggested that the Governor’s power, under the MRERA, to veto actions taken at school board meetings abrogated the Board’s status as a separate political entity. Cf. id. § 52:27BBB-64. This, however, conflates the second and third criteria of the Fitchik test; the gubernatorial veto is better addressed with regard to the Board’s autonomy. See discussion infra; Fitchik, 873 F.2d at 660, 663-64 (addressing gubernatorial veto power under the autonomy prong of the arm-of-the-state analysis). In sum, the various factors relating to the Board’s “status under state law” support appellants’ contention that the Board is not an arm of the state and therefore not entitled to immunity.