Court Opinion

ID: 9689147
Source: CourtListenerOpinion
Date Created: 2023-08-24 18:21:44.117717+00
Date Added: 2024-06-11T18:18:45.520905
License: Public Domain

*914SABERS, Justice
(dissenting).
[¶ 33.] It seems senseless for the law to provide three levels of appellate review of school board decisions, especially when the reviewing authorities’ hands are tied by such a deferential standard of review. While it may be appropriate to limit the scope of review with regard to the Board’s non-judicial functions, it is nonsensical to do so when a government entity performs “quasi-judicial” functions; we recently stated exactly that in Fall River County v. South Dakota Department of Revenue, 1996 SD 106, ¶¶ 16-17, 552 N.W.2d 620, 625 (1996), a unanimous opinion written by Chief Justice Miller:
In spite of a statute providing for de novo review, we have held that appeals of school board decisions must be reviewed under the more deferential standards contained in SDCL 1-26-36. However, that case law does not apply here because it involved government entities exercising legislative or administrative rather than quasi-judicial functions. Judicial restraint is required when review of legislative or administrative functions is contemplated. However, we cannot discern any constitutional basis for limiting the scope of judicial review when the executive branch exercises quasi-judicial powers.
We are also unwilling to adopt a different standard of review based on the identity of the parties rather than the nature of the authority exercised by the Department. Under the trial court’s rationale, BNRR could appeal to the circuit court and invoke the traditional de novo standard of review. Meanwhile, an appeal by a county or school district would be considered by the court under a more deferential standard of review. As a result, decisions that are unfavorable to counties and school districts would be more difficult to overturn on appeal than decisions that are unfavorable to utilities. According such benefits to only one potential party in a dispute is inconsistent with a court’s responsibility to be fair and evenhanded.
(Emphasis added) (citations omitted). To continue to employ this standard of “review” stacks the deck in favor of a school board in every case. It is neither fair nor evenhanded and we should stop pretending otherwise.
[¶34.] Moreover, it is a farce to pretend the circuit court reviews the Board’s decision when there really is not one to review. See supra ¶ 11 (showing one paragraph of unapproved minutes listing the “reasons” for its “decision”). The majority opinion repeatedly refers to what the circuit court decided and why it reached the decision which it did. Cf. Kellogg v. Hoven School Dist. No. 53-2, 479 N.W.2d 147, 150 (S.D.1991) (“The circuit court found that Board’s decision was arbitrary and capricious. That is the decision this court is reviewing, not Board’s original decision.”) (emphasis in original). If the Legislature continues to permit the Board to make these decisions, which affect substantial rights of petitioners, without any formal procedures, then it is indeed the circuit court’s decision which is, and should be, reviewed. However, the circuit court’s review of the Board’s decision should be made objectively — not deferentially and not with an eye toward affirming by simply searching for evidence to support the decision.10
Ours is a government of laws and not of men. This is a fundamental concept of our form of government. In essence, it means that personal and property rights must be determined according to stated and defined rules of law rather than by the unbridled whim and fancy of administrative officials and agencies.
Dunker v. Brown Cty. Bd. of Educ., 80 S.D. 193, 206, 121 N.W.2d 10, 18 (1963) (Hanson, P.J., dissenting) (language subsequently revived in Moran v. Rapid City Area Sch. Dist. No. 51-4, 281 N.W.2d 595, 599 (S.D.1979)).
School boards may be “creatures of the legislature,” but when they rule on the petition of a taxpayer to transfer his property to another school district, the circuit *915court has appellate jurisdiction over the board’s decision, SDCL 13-6-85, and the decision may be overturned if it is “arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.” SDCL 1-26-36(6). In other words, the circuit court has the authority to reverse a school board’s arbitrary decision even when the board has acted “legally” in the narrow sense of being 'procedurally correct.
Kellogg, 479 N.W.2d at 149 (emphasis added).
[¶ 35.] As a practical matter, this decision may make little difference in light of the Legislature’s decision to adopt an open enrollment policy in South Dakota. See supra note 5. However, this decision perpetuates an unfair standard of review. Additionally, it leaves Sides’ property tied to a former school district for questionable reasons enunciated by the Board — the same people who have a vital interest in the outcome.11 Certainly the Board was performing a quasi-judicial function in this case. See Fall River County, 1996 SD 106 at ¶15, 552 N.W.2d at 625:
[The definition of a quasi-judicial function is] one involving judgment and discretion and which may be conferred upon an executive or administrative board as an incident to its duties, and from the exercise of which an appeal can be, and in this state often is, given to the courts.
(Citing Hoyt v. Hughes Cty., 32 S.D. 117, 125-26, 142 N.W. 471, 474 (1913) (Whiting, P.J., concurring)).
[¶36.] Additionally, it is difficult to conclude the Board’s decision was anything but arbitrary and capricious when the Board’s President admitted “[W]e spent, like I say, I thought a long time talking about the reasons — well, I’ll be honest with you — to deny the boundary change.” Financial motivation on the part of the fact finder or decision maker is unheard of in any other forum. See, e.g., Gibson v. Berryhill, 411 U.S. 564, 579, 93 S.Ct. 1689, 1698, 36 L.Ed.2d 488, 500 (1973) (“It is sufficiently clear from our cases that those with substantial pecuniary interest in legal proceedings should not adjudicate these disputes.”); Gottschalk v. South Dakota State Real Estate Comm’n, 264 N.W.2d 905, 909 (S.D.1978) (“This court has recognized that professional board members with a substantial pecuniary interest should not adjudicate the kind of [disciplinary] dispute involved in these proceedings.”).
It is one of the mainstays of our system of laws that a state cannot affect a person’s personal or property rights except after a hearing before a fair and impartial tribunal. A fair and impartial tribunal requires at least that the trier of fact be disinterested and that he also be free from any form of bias or predisposition regarding the outcome of the case. Not only must the procedures be fair, “the very appearance of complete fairness” must also be present. These principles apply not only to trials, but equally, if not more so, to administrative proceedings.
It is sufficiently clear that those with substantial pecuniary interest in proceedings of this nature should not adjudicate the disputes. The key word in the last sentence is “substantial.”
Brown v. State Bd. Of Exam’rs in Optometry, 263 N.W.2d 490, 492 (S.D.1978) (citations <& alterations omitted). As the majority opinion states supra at ¶27, “Clearly an $11,000 loss in revenue for a School District the size of Oelrichs is no small matter.” The standard to be applied is “whether the record establishes either actual bias on the part of the Board or the existence of circumstances that lead to the conclusion that an unacceptable risk of actual bias or prejudgment inhered in the Board’s procedure.” Strain v. *916Rapid City Sch. Bd., 447 N.W.2d 332, 336 (S.D.1989) (citations omitted).
[¶ 37.] We should reverse and remand for a trial de novo in the “truest sense of the term.”
[¶ 38.] AMUNDSON, J., joins this dissent.

. While that may be the correct standard of review in contested cases under SDCL chapter 1-26, none of the procedural safeguards inherent in those proceedings are employed by the School Board in these cases.

. Cf. Kellogg, 479 N.W.2d at 151 n5:
To hold otherwise is to hold Kellogg's land hostage for the benefit of the Hoven School District for no reason other than because the district says so. If, on these facts, a circuit court's finding of an abuse of discretion is not affirmed, then SDCL 1-26-36(6) is effectively repealed and there is no longer any appeal from a procedurally correct school board decision on a minor boundary change, regardless of how patently unreasonable or unfair it is.