Read the April 2017 issue of Court Report, which includes cases addressing absolute immunity, adoption of local laws and special education. Click the case names to read the complete opinions. This newsletter is an ACSBA member benefit.

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APRIL 2017 COURT REPORT

Alabama Supreme Court

• Salary Schedules – Absolute Immunity

Woodfin v. Bender, -- So.3d --, 2017 WL 1192891 (Ala. Mar. 31, 2017)

This case arose from the board’s adoption of new salary schedules in 2004. The employees claim they were placed on the “step” that was closest to their salary at that time rather than the step that reflected their actual experience as required by board policy. This resulted in new employees, properly placed based on their experience, being paid more than veteran employees. In 2011, 24 classified employees sued the board, as well as the superintendent and board members in their official capacities for reclassification of their salaries, back wages as well as compensation for the resulting reduced pensions paid to the Teachers Retirement System. The defendants moved to dismiss the claims based on absolute immunity. The trial court dismissed the board, but allowed the claims against the superintendent and board members to move forward. Following a bench trial, the court ruled in favor of the employees and awarded them monetary damages. The defendants appealed to the Alabama Supreme Court.

The Court first reviewed the well-established law on immunity as well as the so-called “exceptions”. The Court noted that the declaratory judgment exception, which permits a lawsuit which seeks construction of a statute and its application to a given situation, did not apply because this lawsuit sought construction of a board policy and money damages.

The employees also argued that the defendants were not entitled to immunity because the proper calculation of their salaries was a “ministerial duty”. To the extent board policy is treated like a statute or a contract which creates a legal or ministerial duty for which they have no discretion, absolute immunity would not protect them. Also, if they acted arbitrarily in carrying out the duty, there was no immunity. The Court found that determining proper placement on the salary schedule was not a ministerial duty because the board had discretion. Because there could be a legitimate dispute regarding placement, the defendants’ actions were not arbitrary.

Accordingly, the Court held that the defendants were entitled to absolute immunity. Based on this, the trial court had no jurisdiction over the matter and its verdict against the board members and superintendent was void.

• Adoption of Local Laws – Budget Isolation Resolution (BIR)

Jefferson County v. Taxpayers and Citizens of Jefferson County, -- So.3d --, 2017 WL 1034468 (Ala.Civ.App. Mar. 17, 2017)

In 2004 and 2005, the county issued warrants to fund local school construction and retire debt. The county’s 1% education sales and use tax can only be used to service the debts on the warrants and other related costs. In 2015, as a result of significant financial difficulties in the county, the county and local delegation proposed local legislation which would replace the 1% education sales and use tax with a 1% sales tax and a 1% use tax. This would allow the county to lower the interest rate on new warrants, reduce the debt service and use the excess funds for other purposes, including the county’s general fund.

The Alabama Constitution prohibits the House or Senate from voting on a non-appropriations bill until the body has passed the annual budget unless the body passes a budget isolation resolution (“BIR”) with a three-fifths vote of the quorum present, which House Rules have interpreted to mean three-fifths of those present and voting—not three-fifths of those merely present. During the 2015 Regular Session, the House passed a BIR with three-fifths of the county’s local delegation. As was customary, the other members of the House either abstained or did not vote on the BIR. Both the House and Senate subsequently passed the replacement tax legislation and the Governor signed it into law.

Four county citizens filed a lawsuit against the county claiming the local legislation was unconstitutional. The citizens claimed, in part, that the BIR vote violated the Constitution because three-fifths of those present did not vote in favor of the resolution. It made other claims attacking the legislation as well. The trial court held a bench trial and ultimately ruled against the county, holding that the BIR procedure used did not comply with the Constitution, and therefore the local legislation replacing the taxes was unconstitutional. The trial court did not consider the citizens’ other claims. The county appealed the decision and the citizens filed cross-appeals seeking a ruling on the arguments the trial court did not consider.

During the 2016 Special Session, while the appeals were pending in the Supreme Court, the legislature passed Amendment 14 to amend the way BIR votes are taken. The amendment, which was specifically written to apply retroactively, stated that any local law passed consistent with the House or Senate rules in effect at the time of adoption was valid. Because the House rules in effect at the time of the BIR stated that only three-fifths of those present and voting were needed to adopt the BIR, which here was limited to the local delegation rather than all House members present, the BIR and subsequent legislation would be procedurally valid. Amendment 14 was ultimately approved by the voters during the 2016 General Election.

Following the passage of Amendment 14, the county argued on appeal that the amendment validated the BIR at issue, as well as the subsequent local legislation, because the BIR was passed consistent with House Rules. Also, while the county recognized that retroactive application of laws was generally disfavored, because the text of the amendment made it clear that it applied retroactively, any discrepancy in the BIR passage was cured. Finally, it argued that “remedial statutes”—laws designed to cure defects in an earlier law—are permitted as long as the retroactive intent is clear. This is true even if the trial court struck down the law before the cure was in place. As a result, the rationale for the trial court’s decision no longer applied and the trial court should be reversed.

The citizens argued that Amendment 14 did not cure the BIR issue because the trial court had already struck down the law. They also argue that Amendment 14 did not apply retroactively because the trial court’s decision and their rights had already vested at the time of the amendment’s passage. The Court agreed with the county and held that Amendment 14’s language clearly demonstrated that it applied retroactively.

The Court also considered the citizens’ other arguments for finding the legislation unconstitutional. The citizens argued that the Constitution prohibits local laws that are covered by or conflict with general laws. Specifically, the citizens argued that the local legislation conflicted with Ala. Code §40-12-4, which is the general law that gives counties the authority to levy taxes for education. The citizens argued further that the county’s local legislation was even more egregious because the taxes would be partially used for non-education funding. The citizens also argued that the county had failed to show a local need for the tax, which may have provided an exception to the prohibition against local laws which encroach on general laws. Moreover, even if the county had shown a local need during the trial, the cases permitting the “local need exception” should be overturned by the Court because there is no constitutional basis for those decisions.

In response, the county argued that the local legislation did not encroach on the general state law because that law permitted other forms of taxation for education. The county also argued that the so-called “local need” was adequately demonstrated in the trial court by the passage of the local legislation. The Court agreed with the county and found that the local legislation did not conflict or encroach upon the general law. The Court also declined to overrule the “local need exception” line of cases.

Next, the citizens argued that the local legislation was unconstitutional because it touched on subject matter prohibited by the Constitution, specifically assessment and collection of taxes, warrants and bonds and creation of liens. The count argued that the citizens’ interpretation of the constitutional prohibitions was overly broad. Again, the Court agreed with the county and rejected the citizens’ argument.

Finally, the citizens argued that the county failed to hold a public hearing as required by the local legislation. The County agreed that the legislation required they hold a public hearing before issuing new debt, but argued that it was not yet required. The Court held that the hearing requirement did not impact the constitutionality of the local legislation and declined to invalidate the law on that basis.

Finding the citizens’ arguments without merit, the Court ruled in favor of the county, reversed the trial court’s decision and held that the local legislation was constitutional.

United States Supreme Court

• IDEA – Sufficiency of Free Appropriate Public Education

Endrew F. v. Douglas County School District (CO), 137 S.Ct. 988, (US Mar. 22, 2017)

Editor’s Note: While the release of this opinion garnered extensive headlines across the country, experienced school board attorneys who work primarily in special education believe that the case will not have any meaningful impact on school districts or special education students. The “merely more than de minimis” educational benefit standard established under Rowley has never been the standard school districts use because it would not have been sufficient to educate children. The higher standard set by the Endrew case is consistent with what districts have been following for many years.

The IDEA (Individuals with Disabilities Education Act) requires states to educate children with disabilities and provides federal funding to states to accomplish that duty. In order to receive funding, the states have to comply with the law’s requirements, part of which is that the state provide FAPE (free appropriate publication education) to every eligible child. A child’s FAPE is determined by creating an IEP (individualized education program) designed specifically for the child.

This case involved a student with autism enrolled in the public school district and the adequacy of the education he was provided. Each year since preschool, an IEP was developed to direct the student’s education, but by the time he had reached fourth grade, his parents were concerned that he was no longer progressing. When they learned the IEP for fifth grade would be consistent with those from past years, they withdrew him and sent him to a private school that specialized in educating autistic students. He made significant progress in the private school. The parents filed an IDEA complaint against the school seeking reimbursement for tuition. The State Department of Education, federal trial court and appellate court rejected their claim based on the Rowley standard that held “a child’s IEP is adequate as long as it is calculated to confer an educational benefit [that is] merely … more than de minimis”, but the Rowley Court declined to dictate a precise test to determine if services were adequate for the child. Hendrick Hudson CSD v. Rowley, 458 U.S. 176 (1982).

In this case, the Court sought to establish a more meaningful standard to judge whether the district was adequately providing FAPE. The Endrew Court ultimately held that any IEP must be reasonable and calculated to help the child make progress, even if it is not ideal. However, because the hallmark of special education is that it is “specially created” to benefit the individual child, it is impossible to establish a bright-line rule and courts should resist the urge to substitute their judgment for that of the experts in the school districts. The Court remanded the case back to the lower courts to reconsider the Endrew case based on this restated standard.

 

-Jayne Harrell Williams

Jayne is General Counsel &

Director of Legal Advocacy for the

Alabama Association of School Boards