Graney v. Board of Regents of University of Wisconsin System

• Decision Date: 08 October 1979
• Docket Number: No. 79-202,79-202
• Citation: 92 Wis.2d 745,286 N.W.2d 138
• Parties: Richard GRANEY, F. Russell James, Glenn Douglas Johnson, Stanley Lokken, Gediminas Marchertas, Richard B. Orr, Diane M. Putz, Jesse Reinstein, Barbara Segnitz, Stanley Shaloff, Barbara Sniffen, C. A. Stern, Robert Weber, Thomas White, Douglas Wikum and Richard Witt, Plaintiffs-Appellants, v. The BOARD OF REGENTS OF the UNIVERSITY OF WISCONSIN SYSTEM, Nancy M. Barkla, Roland B. Day, Arthur De Bardeleben, John H. Dixon, Ody J. Fish, Charles D. Gelatt, Edward E. Hales, W. Roy Kopp, John M. Lavine, Bertram M. McNamara, Milton E. Neshek, Frank J. Pelisek, Walter F. Renk, Mrs. Howard V. Sandin, James G. Solberg, Barbara Thompson, Mary M. Walter, Mary M. Williams, John Zancanaro, Bernard G. Ziegler, Regents of the Board of Regents of the University of Wisconsin System, Defendants-Respondents. *
• Court: Wisconsin Court of Appeals

Page 138

286 N.W.2d 138

92 Wis.2d 745

Richard GRANEY, F. Russell James, Glenn Douglas Johnson Stanley Lokken, Gediminas Marchertas, Richard B. Orr, Diane M. Putz, Jesse Reinstein, Barbara Segnitz, Stanley Shaloff Barbara Sniffen, C. A. Stern, Robert Weber, Thomas White Douglas Wikum and Richard Witt, Plaintiffs-Appellants, v. The BOARD OF REGENTS OF the UNIVERSITY OF WISCONSIN SYSTEM Nancy M. Barkla, Roland B. Day, Arthur De Bardeleben, John H. Dixon, Ody J. Fish, Charles D. Gelatt, Edward E. Hales, W. Roy Kopp, John M. Lavine, Bertram M. McNamara, Milton E. Neshek, Frank J. Pelisek, Walter F. Renk, Mrs. Howard V. Sandin, James G. Solberg, Barbara Thompson, Mary M. Walter, Mary M. Williams, John Zancanaro, Bernard G. Ziegler, Regents of the Board of Regents of the University of Wisconsin System, Defendants-Respondents. ^*

No. 79-202.

Court of Appeals of Wisconsin.

Argued July 26, 1979.

Opinion Released Oct. 8, 1979.

Opinion Filed Oct. 8, 1979.

Bruce M. Davey (argued), and Lawton & Cates, Madison, on brief, for plaintiffs-appellants.

Bronson C. La Follette, Atty. Gen., and Leroy L. Dalton, Asst. Atty. Gen. (argued), on brief, for defendants-respondents.

Before GARTZKE, P. J., and BABLITCH and DYKMAN, JJ.

DYKMAN, Judge.

Plaintiffs appeal from an order of the Dane County Circuit Court entered December 6, 1978, granting defendants' motion for summary judgment. The court's order dismissed plaintiffs' action seeking damages and declaratory and injunctive relief for seventeen University of Wisconsin System tenured faculty members laid off or terminated by the defendants.

The plaintiffs were tenured members of the University of Wisconsin System under sec. 37.31, Stats. (1971). In the spring of 1973, the Board of Regents determined that several campuses of the University of Wisconsin System were experiencing a financial exigency which required a layoff of several tenured faculty members throughout the system. In a letter dated April 4, 1973, the president of the university directed each chancellor at the state campuses to select tenured faculty members for layoff effective June, 1974. A letter of May 14, 1973, sent to each chancellor explained that these actions would be considered layoffs rather than terminations, so that the tenured faculty members could retain their tenure status and employment benefits if they were rehired. About May 15, 1973, each of the plaintiffs received notification that he or she would be laid off as of June 30, 1974, due to financial exigency existing at their campuses. The Board of Regents adopted a review procedure in which the plaintiffs' layoffs were reconsidered by a committee consisting of other faculty members. Although the reconsideration committees at each state campus, with the exception of UW-Platteville, voted to rescind the layoff decisions, the chancellors reinstated the layoffs and the Board of Regents affirmed the chancellors' decisions.

Plaintiffs moved for a preliminary injunction in federal district court, alleging deprivation of their tenure rights in violation of their rights of due process and free speech protected by the first and fourteenth amendment of the United States Constitution. The preliminary injunction was denied, and the Seventh Circuit Court of Appeals affirmed the district court decision. Johnson v. Bd. of Regents, 377 F.Supp. 227 (W.D. 1974) Aff'd. 510 F.2d 975 (7th Cir. 1975). Plaintiffs brought this action in April, 1976.

Plaintiffs assert six causes of action: (1) that sec. 37.31, Stats. (1971) ¹ creates a contract between the state and tenured faculty members which was breached by the defendants; (2) that sec. 37.31, creates vested statutory rights which only the legislature, not the Board of Regents, can modify; (3) that the Board of Regent's power to terminate tenure rights because of a financial exigency may not be delegated to the president or chancellors of the university; (4) that the procedures used to terminate plaintiffs violated their due process rights under the fourteenth amendment to the United States Constitution and art. 1, secs. 1, 13 and 22 of the Wisconsin Constitution; (5) that the defendants unlawfully terminated the plaintiffs' contracts without adopting rules pursuant to secs. 37.31 and 227.13, Stats.; and (6) that the terminations abridged plaintiffs' contract rights in violation of art. 1, sec. 10 of the United States Constitution.

We find that the plaintiffs are precluded from bringing this action against the Board of Regents because of the doctrines of sovereign immunity and public officer civil immunity and because they failed to exercise their exclusive method of review through ch. 227 administrative procedures.

Article 4, sec. 27, Wisconsin Constitution provides: "The legislature shall direct by law in what manner and in what court suits may be brought against the state." Express legislative consent is required to sue an agency or officer of the state. Lister v. Board of Regents, 72 Wis.2d 282, 240 N.W.2d 610 (1976); Metzger v. Department of Taxation, 35 Wis.2d 119, 150 N.W.2d 431 (1967); Cords v. State, 62 Wis.2d 42, 214 N.W.2d 405 (1974); Kenosha v. State, 35 Wis.2d 317, 151 N.W.2d 36 (1967); Sullivan v. Board of Regents of Normal Schools, 209 Wis. 242, 244 N.W. 563 (1932).

Independent Going Concern

The doctrine of sovereign immunity does not apply when an agency has "independent proprietary functions and powers" or is an "independent going concern," Sullivan v. Board of Regents of Normal Schools, 209 Wis. at 244, 244 N.W. 563; Lister v. Board of Regents, 72 Wis.2d at 292-93, 240 N.W.2d 610; Majerus v. Milwaukee County, 39 Wis.2d 311, 159 N.W.2d 86 (1968). Sullivan and Lister held that the Board of Regents did not have sufficient characteristics to be an "independent going concern." In Sullivan the court found that the board could not collect funds, incur debts or liabilities or dispose of property without legislative approval, and thus, was not sufficiently independent to be sued. Lister held that a suit against the Board of Regents for damages constituted a suit against the state and that the board was not an "independent going concern" amenable to suit. The powers now held by the Board of Regents are essentially the same as the powers of the board at the time Lister was decided. We conclude that the Board is not an independent going concern for purposes of liability.

Actions in Excess of Constitutional or Jurisdictional Authority

The doctrine of sovereign immunity also does not bar an action to enjoin officials from acting beyond their constitutional or jurisdictional authority. Barry Laboratories, Inc. v. State Bd. of Pharm., 26 Wis.2d 505, 132 N.W.2d 833 (1965) and Lister, 72 Wis.2d 282, 240 N.W.2d 610. Plaintiffs allege that the defendants have violated their due process rights protected by the fourteenth amendment of the United States Constitution and art. 1, sec. 1, 13, and 22 of the Wisconsin Constitution and have interfered with their contract rights under art. 1, sec. 10, United States Constitution.

In addition, plaintiffs claim that the defendants acted in excess of their authority by delegating the termination decision to other university officials and by failing to adopt rules governing the termination of plaintiffs' contracts.

Plaintiffs are precluded from asserting the due process issue under the doctrine of Res judicata because that issue was determined in plaintiffs' federal court action. See McCourt v. Algiers, 4 Wis.2d 607, 610-11, 91 N.W.2d 194 (1958), where the supreme court found that issues litigated and determined in a federal court action could not be relitigated in a state court action arising from the same facts.

The remaining constitutional issue raised by the plaintiffs alleges a violation of the contract clause of art. 1, sec. 10, United States Constitution. ² Plaintiffs assert that the tenure statute, sec. 37.31, Stats. (1971), creates a contract between the state and tenured faculty members which only the legislature can modify. In Morrison v. Board of Education, 237 Wis. 483, 487, 297 N.W. 383 (1941) the Wisconsin Supreme Court held that the Teacher Tenure Act, sec. 39.40(2), Stats. (1939), was a declaration of legislative policy and did not create a contract between teachers and school boards. Plaintiffs contend that Morrison is an aberration in Wisconsin law and that the correct law is represented by Butler v. The Regents of the University, 32 Wis. 124 (1873), which described the relationship between a professor and the University of Wisconsin as contractual. More recently, the Wisconsin court in State ex rel. Farley v. Bd. of School Directors, 49 Wis.2d 765, 771, 183 N.W.2d 148, 152 (1971), stated that "Teacher tenure laws are in derogation of the common law, creating a contract between the parties by operation of law."

The cases presented by the parties show two distinct contexts in which the court considered the effect of the tenure statute. In Morrison, 237 Wis. 483, 297 N.W. 383, and similar cases, the court considered the legislature's power to alter provisions of the teacher tenure statute. In the cases represented by Butler, 32 Wis. 124, and Farley, 49 Wis.2d [92 Wis.2d 753] 765, 183 N.W.2d 148, the court examined the nature of the relationship between teachers or professors and their respective employers.

Chapter 227 Review Exclusive

The legislature has in fact consented to judicial review of the board's acts by means of ch. 227 administrative review.

Section 37.31(1)(b), Stats. (1971), provides that the actions and decisions of the board in faculty terminations "shall be final, subject to judicial review under ch. 227."

The scope of review under ch. 227 is outlined in ch. 227.20, Stats. (1971):

(1) The review shall be conducted by the court without a jury and shall be confined to the record, except that in cases of alleged irregularities in procedure before the agency, testimony thereon may be taken in the court. The court may affirm...