Daddow v. Carlsbad Mun. School Dist.

• Decision Date: 02 May 1995
• Docket Number: No. 21284,21284
• Citation: 120 N.M. 97,898 P.2d 1235,1995 NMSC 32
• Parties: , 102 Ed. Law Rep. 319 Catherine DADDOW, Plaintiff-Appellant, and Cross-Appellee, v. CARLSBAD MUNICIPAL SCHOOL DISTRICT and the Carlsbad Municipal School Board of Education, Defendants-Appellees, and Cross-Appellants.
• Court: New Mexico Supreme Court

Page 1235

898 P.2d 1235

120 N.M. 97, 102 Ed. Law Rep. 319

Catherine DADDOW, Plaintiff-Appellant, and Cross-Appellee, v. CARLSBAD MUNICIPAL SCHOOL DISTRICT and the Carlsbad Municipal School Board of Education Defendants-Appellees, and Cross-Appellants.

No. 21284.

Supreme Court of New Mexico.

May 2, 1995.

Rehearing Denied June 14, 1995.

[120 N.M. 98] Benny R. Naranjo, Albuquerque, for appellant and cross-appellee.

[120 N.M. 99] Heidel, Samberson & Newell, Lewis C. Cox, III and Michael Newell, Lovington, for appellees and cross-appellants.

OPINION

FRANCHINI, Justice.

Catherine Daddow appeals from a judgment dismissing her complaint in favor of the Carlsbad Municipal School District and the Carlsbad Municipal Board of Education (hereinafter collectively called "the District"). Daddow brought an action under 42 U.S.C. § 1983 (1988), alleging denial of due process and stating a cause of action for breach of employment contract and wrongful termination. After a bench trial, the court concluded that the District could not be sued under § 1983, that the District did not breach Daddow's employment contract by wrongfully terminating her, and that even if a cause of action under § 1983 did exist, Daddow was afforded all process that the Constitution requires both before and after her termination.

The District filed a cross-claim alleging that as a result of Daddow's negligent and wrongful acts, the federal government required the District to reimburse over $60,000 to the United States Department of Agriculture. The District requested an award of damages for this loss. The court found that Daddow's failure to comply with federal regulations resulted in the loss to the District, that Daddow failed to correct deficiencies noted by the federal auditor, and that Daddow's failure to properly do her job was just cause for her termination. The court refused to award damages to the District, however, because the District could not show that Daddow directly benefitted from her malfeasance. The court ruled that the District's only recourse against Daddow was to terminate her employment. The District cross-appeals from this decision.

We conclude that the District, the Board, and its members are not absolutely immune from suit under § 1983. On the merits, the District showed that Daddow received due process and is therefore entitled to recover its costs in defending the suit. We further conclude that the District cannot recover the reimbursements from Daddow. We reverse in part but affirm the judgment of the trial court.

I. Local school boards and their members acting in their official capacities are "persons" for purposes of actions based on § 1983. Section 1983 states, in part:

Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State ... subjects, or causes to be subjected, any citizen of the United States ... to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.

The trial court dismissed Daddow's cause of action under § 1983 because it believed that school boards and their members are absolutely immune from suit due to the holding in Will v. Michigan Department of State Police, 491 U.S. 58, 109 S.Ct. 2304, 105 L.Ed.2d 45 (1989). The District offers the following analysis in support of the trial court's dismissal. Under Will, neither the State nor state officers sued in their official capacities are "persons" under § 1983 except in an action for injunctive relief.¹ 491 U.S. at 71 & n. 10, 109 S.Ct. at 2312 & n. 10. Will based this holding, in part, upon the fact that a state is protected from suit for money damages in federal court under the Eleventh Amendment and the inference that Congress must not have intended different treatment in state court. Id. at 66-67, 109 S.Ct. at 2309-10. The Tenth Circuit has held that New Mexico school boards are "arms of the state" for purposes of the Eleventh Amendment. See Martinez v. Board of Educ., 748 F.2d 1393, 1396 (10th Cir.1984). Therefore, neither school boards nor school board members acting in their official capacities may be sued for money damages under § 1983 in either state or federal court. After carefully analyzing our constitutional provisions and statutes, the relevant cases that have examined both the characterization of school boards and the application of § 1983, and the purpose of § 1983, we conclude that the Tenth Circuit decision is erroneous and that our local school districts and their boards are "persons" under § 1983.

A. The purpose of § 1983 according to Monell. The question before the Court in Monell v. Department of Social Serv., 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978), was "[w]hether local governmental officials and/or local independent school boards are 'persons' within the meaning of 42 U.S.C. § 1983 when equitable relief in the nature of back pay is sought against them in their official capacities." Id. at 662, 98 S.Ct. at 2021. In answering that question affirmatively, the Court examined the precursor to § 1983, the Civil Rights Act of 1871. See Monell, 436 U.S. at 669, 98 S.Ct. at 2024-25. The Court first determined that the word "persons" covered more than natural persons, and was intended to cover legal persons as well. Id. at 683, 98 S.Ct. at 2032. The Court also noted that the meaning of the word "person" was applied "to bodies politic and corporate ... unless the context shows that such words were intended to be used in a more limited sense," and that a municipality is a "body politic and corporate." Id. at 688, 98 S.Ct. at 2034-35 (quoting Act of Feb. 25, 1871, § 2, 16 Stat. 431 (the Dictionary Act)). In looking at the legislative history of the Civil Rights Act, the Court stated that the Act was "intended to give a broad remedy for violations of federally-protected civil rights." Id. at 685, 98 S.Ct. at 2033. Therefore, the Court concluded, "since municipalities through their official acts could, equally with natural persons, create the harms intended to be remedied by [the Civil Rights Act], and, further, since Congress intended [the Act] to be broadly construed, there is no reason to suppose that municipal corporations would have been excluded from the sweep of [the Act]." Id. at 685-86, 98 S.Ct. at 2033.

Congress did intend municipalities and other local government units to be

included among those persons to whom § 1983 applies. Local governing bodies, therefore, can be sued directly under § 1983 for monetary, declaratory, or injunctive relief where ... the action that is alleged to be unconstitutional implements or executes a policy statement, ordinance, regulation, or decision officially adopted and promulgated by that body's officers.

Id. at 690, 98 S.Ct. at 2035-36. The Monell Court also overruled Monroe v. Pape, 365 U.S. 167, 191-92, 81 S.Ct. 473, 486-87, 5 L.Ed.2d 492 (1961), in which the Court had previously held that municipalities were not "persons" under § 1983. Monell, 436 U.S. at 701, 98 S.Ct. at 2041. However, the Monell Court pointed out that even under the more restrictive Monroe approach, school boards had always been "persons" for the purposes of § 1983. Id. at 696-97, 98 S.Ct. at 2038-39. The Court noted that both municipalities and school boards are "instrumentalities of state administration." Monell, 436 U.S. at 696, 98 S.Ct. at 2038. It also emphasized that Congress had "rejected efforts to strip the federal courts of jurisdiction over school boards." Id. We interpret Monell's broad holding that all "local governing bodies" are subject to suit under § 1983 to create a presumption that local school boards are included within the meaning of "person." See Howlett v. Rose, 496 U.S. 356, 376, 110 S.Ct. 2430, 2443, 110 L.Ed.2d 332 (1990) (stating that state courts must adhere to the Supreme Court's interpretation that local governing bodies are "persons" under § 1983); John E. Nowak et al., Constitutional Law 55 (2d ed. 1983) ("[M]unicipal corporations, counties and school boards may be sued in federal court without raising an eleventh amendment issue." (footnotes omitted)). This presumption, based on § 1983's strong protective purposes, can be overcome only by conclusive evidence that a local school board is legally only a state agency subject to the state's control. We must determine whether our local school boards are local governing bodies.

B. The Mt. Healthy test. We find guidance for determining whether an entity is a local governing body from Mt. Healthy City School District Board of Education v. Doyle, 429 U.S. 274, 280, 97 S.Ct. 568, 572-73, 50 L.Ed.2d 471 (1977). Mt. Healthy held that an Ohio school board was not immune from suit under the Eleventh Amendment. 429 U.S. at 280, 97 S.Ct. at 572-73. In its analysis, the Court examined "the nature of the entity created by state law." Id. The Court gave several reasons for deciding that the school board was not an "arm of the state." These reasons included the facts that (1) under state law, the term "state" did not encompass "political subdivisions" such as local school districts, (2) even though the boards received guidance and significant money from the state, local boards had extensive powers to issue bonds and to levy taxes within restrictions, and (3) a board was more like a county or city than it was like an "arm of the state." Id. Accordingly, under Mt. Healthy, the local school board was not entitled to Eleventh Amendment immunity even though it was entitled to state governmental immunity in the same degree as the state in state tort suits. A determination of whether an entity is a local governing body depends upon state law.

C. Will did not limit Monell. We previously noted in dicta that Will "made it clear that the [Bernalillo Board of Education] and its members in their official capacities were not subject to suit for money damages under §...