83 F.3d 1013 (8th Cir. 1996), 95-1481, Little Rock School Dist. v. Pulaski County Special School Dist., No. 1

Docket Nº:95-1481EA, 95-1482EA.
Citation:83 F.3d 1013
Party Name:LITTLE ROCK SCHOOL DISTRICT; Plaintiff-Appellee, Anne Mitchell; Bob Moore; Pat Gee; Pat Rayburn; Mary J. Gage; Intervenors-Appellees, North Little Rock Classroom Teachers Association; Pulaski Association of Classroom Teachers; Little Rock Classroom Teachers Association; Intervenors, Alexa Armstrong; Karlos Armstrong; Ed Bullington; Khayyam Davis; J
Case Date:May 15, 1996
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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Page 1013

83 F.3d 1013 (8th Cir. 1996)

LITTLE ROCK SCHOOL DISTRICT; Plaintiff-Appellee,

Anne Mitchell; Bob Moore; Pat Gee; Pat Rayburn; Mary J.

Gage; Intervenors-Appellees,

North Little Rock Classroom Teachers Association; Pulaski

Association of Classroom Teachers; Little Rock

Classroom Teachers Association; Intervenors,

Alexa Armstrong; Karlos Armstrong; Ed Bullington; Khayyam

Davis; Janice Dent; John Harrison; Alvin Hudson; Tatia

Hudson; Milton Jackson; Lorene Joshua; Leslie Joshua;

Stacy Joshua; Wayne Joshua; Katherine Knight; Sara

Matthews; Becky McKinney; Derrick Miles; Janice Miles;

John M. Miles; NAACP; Joyce Person; Brian Taylor; Hilton

Taylor; Parsha Taylor; Robert Willingham; Tonya

Willingham; Intervenors-Appellees,

v.

PULASKI COUNTY SPECIAL SCHOOL DISTRICT, # 1; North Little

Rock School District; Leon Barnes; Sheryl Dunn; Mac

Faulkner; Richard A. Giddings; Marianne Gosser; Don

Hindman; Shirley Lowery; Bob Lyon; George A. McCrary;

Bob Moore; Steve Morley; Buddy Raines; David Sain; Bob

Stender; Dale Ward; John Ward; Judy Wear; Grainger

Williams; Defendants-Appellees,

The Arkansas State Board of Education; State of Arkansas;

Defendants-Appellants,

Office of Desegregation Monitor, Claimant.

LITTLE ROCK SCHOOL DISTRICT; Plaintiff-Appellant,

Anne Mitchell; Bob Moore; Pat Gee; Pat Rayburn; Mary J.

Gage; Intervenors-Appellants,

North Little Rock Classroom Teachers Association; Pulaski

Association of Classroom Teachers; Little Rock

Classroom Teachers Association; Intervenors,

Alexa Armstrong; Karlos Armstrong; Ed Bullington; Khayyam

Davis; Janice Dent; John Harrison; Alvin Hudson; Tatia

Hudson; Milton Jackson; Lorene Joshua; Leslie Joshua;

Stacy Joshua; Wayne Joshua; Intervenors-Appellants,

Katherine Knight; Sara Matthews; Becky McKinney; Derrick

Miles; Janice Miles; John M. Miles; NAACP; Joyce Person;

Brian Taylor; Hilton Taylor; Parsha Taylor; Robert

Willingham; Tonya Willingham; Intervenors,

v.

PULASKI COUNTY SPECIAL SCHOOL DISTRICT, # 1; Defendant-Appellee,

North Little Rock School District; Leon Barnes; Sheryl

Dunn; Mac Faulkner; Richard A. Giddings; Marianne Gosser;

Don Hindman; Shirley Lowery; Bob Lyon; George A.

McCrary; Bob Moore; Steve Morley; Buddy Raines; David

Sain; Bob Stender; Dale Ward; John Ward; Judy Wear;

Grainger Williams; Defendants,

The Arkansas State Board of Education; State of Arkansas;

Defendants-Appellees,

Office of Desegregation Monitor, Claimant.

Nos. 95-1481EA, 95-1482EA.

United States Court of Appeals, Eighth Circuit

May 15, 1996

Submitted Nov. 16, 1995.

Rehearing Denied June 27, 1996.

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Page 1015

Timothy Gauger, Little Rock, AR, argued (Winston Bryant, Atty. Gen., on the brief), for appellants/cross-appellees.

Christopher John Heller, argued, Little Rock, AR (John W. Walker, on the brief), for appellee/cross-appellant Little Rock School Dist.

Samuel Jones, argued, Little Rock, AR (John W. Walker, on the brief), for appellee/cross-appellant Pulaski County Special School Dist.

John W. Walker, argued, Little Rock, AR, for intervenor Joshua.

Before RICHARD S. ARNOLD, Chief Judge, HEANEY and WOLLMAN, Circuit Judges.

RICHARD S. ARNOLD, Chief Judge.

In this case, we must decide whether certain actions by the State of Arkansas and the Arkansas Department of Education (collectively referred to as the State) run afoul of the Little Rock Schools Desegregation Settlement Agreement. The plaintiffs, the Little Rock School District (LRSD) and the Pulaski County Special School District (PCSSD), claim that they do, and the District Court agreed. We affirm in part and reverse in part.

Page 1016

I.

This case is made up of three distinct issues with three separate sets of facts. The facts themselves are not in serious dispute. The legal consequences attaching to those facts in light of the Settlement Agreement are.

Before 1994, the State of Arkansas bore the entire burden of funding the workers' compensation programs for all school districts in the State. This approach, quite naturally, did nothing to induce individual school districts to take measures that might reduce workers' compensation exposure. Therefore, the Arkansas General Assembly changed the law to require individual school districts to provide their own coverage beginning July 1, 1994. See Ark.Code Ann. §§ 6-17-1411 to 1413 (Repl.1993).

In order to soften the blow brought about by this change, the State distributed "seed money" to all school districts for the 1994-95 school year. The amount distributed to each school district was based on the number of students in the school district, rather than the number of employees needing coverage. This approach resulted in school districts statewide receiving about one-half of the cost of their coverage, but the plaintiff districts received only about one-third of their coverage costs. Whether the State may cease funding workers' compensation insurance for the plaintiff districts, and, if so, whether the State must distribute to them one-half or one-third of the initial cost in seed money is the first issue that we must address.

The second issue involves "loss funding," and the manner in which the State computes the amount of loss funding due the Pulaski County Districts. Loss funding was created by the...

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