Carter v. State

• Decision Date: 08 November 2022
• Docket Number: 2:21-CV-256-PPS-JPK
• Parties: LARONA CARTER; NYCLETHA BYRD; LAVETTA SPARKS-WADE, Plaintiffs, v. STATE OF INDIANA; and PAIGE MCNULTY, in her individual capacity, Defendants.
• Court: U.S. District Court — Northern District of Indiana

LARONA CARTER; NYCLETHA BYRD; LAVETTA SPARKS-WADE, Plaintiffs,
v.
STATE OF INDIANA; and PAIGE MCNULTY, in her individual capacity, Defendants.

No. 2:21-CV-256-PPS-JPK

United States District Court, N.D. Indiana, Hammond Division

November 8, 2022

OPINION AND ORDER

JOSHUA P. KOLAR UNITED STATES DISTRICT COURT MAGISTRATE JUDGE

Presently before the Court is Plaintiffs' Motion For Leave To Amend Complaint. [DE 53]. For the reasons discussed below, the motion is denied without prejudice.

BACKGROUND

B. Procedural History

1. The Initial Complaint

Plaintiffs Larona Carter and Nycletha Byrd initiated this action by filing a complaint on August 20, 2021 alleging that they are African American citizens of Indiana and registered voters in Lake County, Indiana, and that their constitutional rights were violated when the Lake County Board of Election and Registration (LCBER) and the Distressed Unit Appeal Board (DUAB) authorized a public question to be placed on the November 3, 2020 ballot in Gary, Indiana, where Plaintiffs reside, own property, and/or are registered to vote. The public question was whether to raise taxes to provide funding for the Gary Community School Corporation (GCSC). [DE 1 ¶¶ 12, 6, 27-28]. The initial complaint alleged that the majority of voters approved the referendum to increase property taxes, but that the public question was illegally placed on the ballot by Dr. Paige

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McNulty, the Emergency Manager of the GCSC, appointed to that position by the DUAB after the Indiana General Assembly designated the GCSC as a financially distressed political subdivision. See IC 6-1.1-20.3-6.8.

The initial complaint (and all subsequent filed and proposed complaints) alleges that Plaintiffs' federal constitutional rights to due process, equal protection, and free speech have been violated because, among other things: (1) the GCSC does not have a governing body that could legally authorize the placement of a public question on the ballot; (2) the DUAB and McNulty did not allow public comments regarding the tax referendum; (3) the GCSC is being treated differently from the Muncie Community School District (MCSC), another distressed school corporation, because of the racial make-up of the GCSC versus that of the MCSC; (4) the public referendum resulted in Plaintiffs being subjected to taxation without representation because the GCSC is under the control of the Emergency Manager and the DUAB, rather than a locally elected governing body; and (5) the requirement in IC 6-1.1-20.3-9.9 that a person wishing to appeal a decision by the Emergency Manager must include the signatures of at least 250 individuals residing in the GCSC community constitutes a prior restraint on Plaintiffs' right to free speech. [DE 1 ¶¶ 3-23, 87-90].

The initial complaint named the LCBER and the DUAB as defendants. It sought various declarations regarding the alleged constitutional violations, as well as an injunction against the enforcement of IC 6-1.1-20.3-9.9, an injunction removing the DUAB's decision-making authority over the GCSC, and an injunction mandating an election to convene a governing body for the GCSC with full authority over the school community.

The LCBER responded to the initial complaint by filing a motion to dismiss in which it argued the following: (1) the Court lacks subject matter jurisdiction over Plaintiffs' claims under

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the Tax Injunction Act, 42 U.S.C. § 1341; (2) the complaint should be dismissed because the State of Indiana is an indispensable party but, under principles of sovereign immunity, that entity cannot be sued; and (3) the complaint fails to plausibly allege facts showing that any actions of the LCBER violated the First Amendment, or the Due Process or Equal Protection Clauses of the Fourteenth Amendment. [DE 20]. The DUAB filed a separate motion to dismiss in which it argued that it is a state entity and therefore entitled to sovereign immunity. The DUAB acknowledged that an exception to sovereign immunity exists where a suit seeks to enjoin state officials from ongoing violations of federal law. See Ex parte Young, 209 U.S. 123 (1908). But the DUAB argued that exception did not apply to the initial complaint because the DUAB is not a “state official.” [DE 22 at 6-7].

2. The Amended Complaint

Plaintiffs responded to the motions to dismiss filed by the LCBER and the DUAB by seeking leave to file an amended complaint. [DE 25]. The proposed amended complaint added some factual allegations, and also dropped the DUAB as a defendant. In the DUAB's place, Plaintiffs named the State of Indiana and McNulty as defendants. McNulty was named in her individual capacity only. The proposed amended complaint also added a third plaintiff, LaVetta Sparks-Wade, a parent of a student who attends the GCSC. [DE 31 ¶ 10].

LCBER-the only defendant named in the proposed amended complaint who had entered an appearance in the case at the time of Plaintiffs' proposed filing-opposed Plaintiffs' motion to amend. [DE 26]. While the motion to amend was still pending, however, Plaintiffs and the LCBER reached an agreement pursuant to which they filed a joint motion to allow the amended complaint to be filed, with the additional joint request that, once the amended complaint was filed, the Court would dismiss the LCBER from the case. [DE 29]. The Court granted the agreed motion [DE 30],

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and then entered an order dismissing Plaintiffs' claims against the LCBER with prejudice [DE 33], leaving the two yet-to-be-served new parties-the State of Indiana and McNulty-as the only defendants in the case.

The currently operative Amended Complaint [DE 31] includes eight counts against the State of Indiana and two counts against McNulty, all brought pursuant to 42 U.S.C. § 1983. The counts against the State of Indiana include the following:

(1) Count I-denial of equal protection and violation of right to no taxation without representation based on the November 3, 2020 public referendum

(2) Count II-violation of the First Amendment based on the 250-signature requirement in IC 6-1.1-20.3-9.9;

(3) Count V-violation of the First Amendment based on the DUAB's refusal to allow public comments at a board meeting held on July 9, 2020;

(4) Count VI--denial of equal protection primarily based on the Indiana General Assembly's elimination of the GCSC's governing body, and disparate treatment of the MCSC;

(5) Count VII--denial of equal protection primarily based on the Indiana General Assembly's failure to repeal or end its designation of the GCSC as a distressed school corporation, and disparate treatment of the MCSC;

(6) Count VIII--injunctive relief seeking the repeal of the state statutes related to the designation of the GCSC as a distressed political subdivision and elimination of the GCSC's elected governing body;

(7) Count IX--Monell claim alleging state liability for the actions of McNulty; and

(8) Count X--indemnification claim for the actions of McNulty.

The two counts against Defendant McNulty include the following:

(1) Count III--violation of the First Amendment arising out of an event to support the public referendum held at the West Side Leadership Academy on September 10, 2020, where McNulty did not allow opposing views to be expressed;

(2) Count IV--violation of the First Amendment arising out of a meeting of the GCSC Advisory Board on September 21, 2020, where McNulty stopped the

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meeting and denied Plaintiff Carter the opportunity to ask questions regarding the finances of the GCSC.

Following the Court's dismissal of Plaintiffs' claims against the LCBER, the newly named defendants were served with the Amended Complaint, and each then filed a motion to dismiss. [DE 47, 49]. The State of Indiana's motion to dismiss argued that: (1) all of Plaintiffs' damages claims against it are barred by the Eleventh Amendment; (2) the Ex parte Young exception to Eleventh Amendment immunity only applies when the defendant is a state official, not the state itself; (3) Count IX is legally insufficient because Monell only applies when a plaintiff seeks to hold a municipality liable and the State of Indiana is not a municipality, and (4) Count X is unnecessary because the State of Indiana's indemnification of public officials for acts within the scope of their employment is automatic. [DE 50].

Defendant McNulty's motion to dismiss argued the following: (1) McNulty was appointed Emergency Manager by the DUAB, and the DUAB is a state entity; therefore, the State of Indiana is McNulty's employer, and therefore she is a state official entitled to immunity under the Eleventh Amendment; (2) Plaintiffs Byrd and Sparks-Wade lack standing to bring the free speech claims in Counts III and IV because they do not allege they attended the meetings at issue; and (3) McNulty is entitled to immunity from Plaintiffs' claims under IC 6-1.120.3-7.5(e) because the Amended Complaint affirmatively pleads that she was acting within the scope of her employment but does not plead that she acted with gross negligence or willful misconduct.^[1] See [DE 48].

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3. The Proposed Second Amended Complaint

On June 7, 2022, Plaintiffs once again responded to the pending motions to dismiss by filing a motion for leave to amend the complaint. [DE 53]. The proposed Second Amended Complaint purports to no longer sue the State of Indiana, and, in the State's place, names two new defendants: Justin McAdam, in his official capacity as the Chairman of the DUAB,^[2] and Eric Holcomb, in his official capacity as Governor of the State of Indiana. Plaintiffs also seek to add class action claims on behalf of two classes: (1) all registered voters in the November 3, 2020 election in Gary, Indiana, where the public question was placed on the ballot; and (2) all property owners in Gary, Indiana, who are required to pay additional property taxes due to...