Arcadia Unified School Dist. v. State Dept. of Education

• Decision Date: 16 March 1992
• Docket Number: No. S021288,S021288
• Citation: 2 Cal.4th 251,825 P.2d 438,5 Cal.Rptr.2d 545
• Parties: , 825 P.2d 438, 72 Ed. Law Rep. 1137 ARCADIA UNIFIED SCHOOL DISTRICT et al., Plaintiffs and Appellants, v. STATE DEPARTMENT OF EDUCATION, Defendant and Respondent; Francisco Salazar, Intervenor and Respondent.
• Court: California Supreme Court

Page 545

5 Cal.Rptr.2d 545

2 Cal.4th 251, 825 P.2d 438, 72 Ed. Law Rep. 1137

ARCADIA UNIFIED SCHOOL DISTRICT et al., Plaintiffs and Appellants, v. STATE DEPARTMENT OF EDUCATION, Defendant and Respondent Francisco Salazar, Intervenor and Respondent.

No. S021288.

Supreme Court of California In Bank.

March 16, 1992.

Breon, O'Donnell, Miller, Brown & Dannis, Priscilla Brown, Nancy B. Bourne and Martha Buell Scott, San Francisco, for plaintiffs and appellants.

Joseph R. Symkowick, Roger D. Wolfertz and Joanne Lowe, Sacramento, for defendant and respondent.

Robert K. Miller, M. Carmen Ramirez, Grant R. Specht, Oxnard, Barbara Macri-Ortiz, Keene, Peter D. Roos and Deborah Escobedo, San Francisco, for intervenor and respondent.

Cynthia L. Rice, Santa Rosa, Ellen Braff-Guajardo, Gilroy, Tina L. Rasnow, Westlake Village, Carol K. Smith, Elizabeth E. Guillen, Vibiana Andrade and Stephen P. Wiman, Los Angeles, as amici curiae on behalf of intervener and respondent.

PANELLI, Justice.

We granted review to decide whether Education Code section 39807.5, ¹ which authorizes school districts to charge fees for pupil transportation, violates either the free school guarantee (art. IX, § 5) or the equal protection clause (art. I, § 7, subd. (a)) of the California Constitution. We conclude that the statute, on its face, violates neither constitutional guarantee. ²

FACTS

This case has its roots in an earlier case. In 1985, Francisco Salazar (the intervenor in the present case) filed a taxpayers' suit in Ventura County Superior Court against the State Department of Education, the State Board of Education, the Superintendent of Public Instruction, and the Fillmore Unified School District, ³ alleging that defendants' implementation of section 39807.5 violated the free school guarantee and the equal protection clause of the California Constitution. ⁴ The superior court ruled that the school districts that assessed the fees were indispensable parties but did not reach the merits. The Court of Appeal, Second District, Division Six, reversed, holding that the districts were not indispensable parties, and that section 39807.5 violated both the free school guarantee and the equal protection clause of the state Constitution. (Salazar v. Honig (May 10, 1988) Cal.App. B026629 [review den. Sept. 1, 1988, and opn. ordered nonpub.].) We denied review but ordered the Court of Appeal opinion depublished. On remand, the superior court entered judgment against the defendants.

Pursuant to the superior court's order, the State Department of Education (Department) issued a legal advisory, informing all school districts that section 39807.5 was unconstitutional and directing them to cease charging for transportation. However, numerous school districts, which were not parties to the Ventura County action, did not follow the advisory, taking the position that the statute was not unconstitutional.

The present action was instituted to determine the validity of section 39807.5. Twenty-five school districts as plaintiffs and the Department as defendant agreed to submit to the Sacramento County Superior Court on a stipulated statement of facts for judgment "to determine the rights of the parties." (Code Civ.Proc., § 1138.) Eighteen of the school districts had continued to charge for transportation, while seven had ceased after the decision in Salazar v. Honig and the Department's legal advisory. The purpose of the action was to determine the facial validity of the statute, rather than to litigate the propriety of any particular application.

Salazar successfully moved to intervene. He also moved to dismiss, alleging that the Department was bound by the judgment in the Ventura County action as a party and that the school districts were bound as agents of the Department. The trial court denied the motion to dismiss and granted judgment for the Department, ruling that section 39807.5 facially violated the free school guarantee. (Cal. Const., art. IX, § 5.)

The Court of Appeal, Third District, in a unanimous decision, reversed. The court held that the districts were not collaterally estopped to maintain the action, because the public interest exception to the rule of collateral estoppel applied; the court therefore did not consider whether the districts were agents of the Department or in privity with it. The court also held that section 39807.5 on its face violates neither the free school guarantee nor the equal protection clause of the California Constitution.

COLLATERAL ESTOPPEL

As a threshold matter, we must determine whether the Court of Appeal was correct in holding that this action is not barred by the earlier judgment in Salazar v. Honig (supra, Cal.App.).

Salazar contends that the Department is bound by the judgment in Salazar v. Honig (supra, Cal.App.), and that the school districts are also bound, since they are agents of the Department and in privity with it. "Generally, collateral estoppel bars the party to a prior action, or one in privity with him, from relitigating issues finally decided against him in the earlier action." (City of Sacramento v. State of California (1990) 50 Cal.3d 51, 64, 266 Cal.Rptr. 139, 785 P.2d 522, citing Clemmer v. Hartford Insurance Company (1978) 22 Cal.3d 865, 874, 151 Cal.Rptr. 285, 587 P.2d 1098 (City of Sacramento).) Salazar also claims that it was inappropriate for the Sacramento County Superior Court to take jurisdiction over the action when the state defendants were bound by the injunctions issued as a result of the Ventura County action. The Department and the school districts, on the other hand, maintain that the requirements of collateral estoppel are not met as to the school boards, because the boards are neither agents of, nor in privity with, the Department. Moreover, they maintain, even if the formal requirements are met, the Court of Appeal was correct in its holding that the action was not barred, because the requirements of the public interest exception to the doctrine of collateral estoppel are met, and we agree.

As we will discuss, it appears that the Court of Appeal properly applied the public interest exception. Therefore, like the Court of Appeal, we need not consider whether the districts were agents of the Department or in privity with it. We would be reluctant to do so in the absence of a factual record when our decision might have unforeseeable consequences in other cases and there is an alternative basis for our conclusion.

We recently affirmed the rule that, " 'when the issue is a question of law rather than of fact, the prior determination is not conclusive either if injustice would result or if the public interest requires that relitigation not be foreclosed. [Citations.]' " (City of Sacramento, supra, 50 Cal.3d at p. 64, 266 Cal.Rptr. 139, 785 P.2d 522, quoting Consumers Lobby Against Monopolies v. Public Utilities Com. (1979) 25 Cal.3d 891, 902, 160 Cal.Rptr. 124, 603 P.2d 41.) The issue in City of Sacramento was whether local governments were entitled to subvention of the costs of extended mandatory unemployment insurance coverage. We determined that the state should not be bound by a prior judgment on the issue because "the consequences of any error transcend those which would apply to mere private parties"; any error would also affect the taxpayers and employers of the state. (City of Sacramento, supra, 50 Cal.3d at pp. 64-65, 266 Cal.Rptr. 139, 785 P.2d 522.)

It would be equally detrimental to the public interest to apply collateral estoppel here. Because Salazar v. Honig (supra, Cal.App.) was ordered not to be officially published and may not be cited as legal authority, there has been a continuing and demonstrable uncertainty about the validity of section 39807.5. School districts do not know if they can constitutionally charge for school transportation, and have responded to this uncertainty in different ways. It is clearly in the public interest that school districts have a uniform understanding of this important issue. If we were to hold that this action could not go forward, and if Salazar v. Honig was wrongly decided, school districts would be unable to charge fees for transportation, and so they would be unable to collect those revenues, to which they are entitled by statute. Students might also be adversely affected, because those districts that could not afford to fund bus transportation out of their limited revenues might be forced to eliminate the service. The public interest, especially the interests of school districts, taxpayers, and students, will best be served by a final resolution by this court of whether the fees are permissible.

In addition, the unusual history of Salazar v. Honig, supra, suggests that it would be in the public interest to permit this action to go forward. Although Salazar presented evidence at that trial on the unconstitutionality of section 39807.5, the state defendants did not present any evidence on the issue, nor did they argue that the statute was constitutional. Their defense was based solely on the contention that the school districts were indispensable parties. Thus, no one during the Salazar v. Honig proceedings contended that the statute could be applied in a manner consistent with the Constitution. The public interest would best be served by a determination of this important issue based on the presentation of both sides of the controversy.

The practical result of Salazar's position would be that the constitutionality of section 39807.5 would never again be litigated. If, as Salazar contends, all of the school districts in the state of California are bound by the decision in Salazar v. Honig (supra, Cal.App.) then no school district is free either to charge a fee for home-to-school transportation or to assert the constitutionality of the statute. In that case, there would be no opportunity for anyone ever to challenge the legal grounds of the unpublished ruling. Thus, in one fell swoop, by binding all...