Lake Ridge Sch. Corp. v. Holcomb
| Decision Date | 09 November 2022 |
| Docket Number | Court of Appeals Case No. 22A-PL-423 |
| Citation | 198 N.E.3d 715 |
| Parties | LAKE RIDGE SCHOOL CORPORATION and School City of Hammond, Appellants-Plaintiffs, West Lafayette Community School Corporation, Appellant-Intervenor, v. Eric HOLCOMB, in his official capacity as Governor of the State of Indiana; Indiana State Board of Education; Indiana Department of Education; and Todd Rokita, in his official capacity as Attorney General of the State of Indiana, Appellees-Defendants |
| Court | Indiana Appellate Court |
Attorneys for Appellants: Ryan C. Munden, Robert C. Reiling, Jr., Reiling Teder & Schrier, LLC, Lafayette, Indiana
Attorneys for Appellees: Theodore E. Rokita, Attorney General, Aaron T. Craft, Section Chief, Civil Appeals, Benjamin M.L. Jones, Assistant Section Chief, Civil Appeals, Indianapolis, Indiana
[1] Between 2018 and 2020, Lake Ridge School Corporation ("Lake Ridge"), School City of Hammond ("Hammond"), and West Lafayette Community School Corporation ("West Lafayette") (collectively, "the School Corporations"), each closed public-school buildings. Under Indiana Code sections 20-26-7-1 and 20-26-7.1-4, the School Corporations were required to sell or lease those properties no longer in use to any interested charter schools or state educational institutions (i.e., public colleges or universities) for $1. The School Corporations sued the governor in his official capacity, the attorney general in his official capacity, the Indiana State Board of Education, and the Indiana Department of Education (collectively "the State"), arguing these statutes violate the takings clauses of the state and federal constitutions. The State moved for summary judgment, which the trial court granted, and the School Corporations now appeal. Because we agree with the State that the School Corporations, as political subdivisions, cannot assert takings claims against the State, we affirm.1
[2] Indiana Code sections 20-26-7-1 and 20-26-7.1-4 (collectively, "the Statutes"), provide that within ten days of taking official action to close or no longer use a school building previously used for classroom instruction, the governing body of the school must notify the Department of Education, make the building available to any interested charter school or state educational institution, and ultimately sell or lease the building to the interested charter school or statute educational institution for $1. If no interest is expressed, then the governing body may otherwise dispose of the building in accordance with Indiana law. Ind. Code § 20-26-7.1-4.2
[3] In 2019 and 2020, Lake Ridge and Hammond each closed schools but failed to notify the Department of Education or otherwise comply with the Statutes. In 2020, Lake Ridge and Hammond sued the State, alleging the Statutes violate the takings clauses of the Fifth Amendment to the United States Constitution and Article 1, Section 21 of the Indiana Constitution and seeking declaratory and injunctive relief.
[4] In August 2020, West Lafayette moved to intervene in the suit. West Lafayette closed one of its elementary schools in 2018 and is also seeking declaratory and injunctive relief on the ground that the Statutes violate the takings clauses. Unlike Lake Ridge and Hammond, West Lafayette notified the Department of Education of the school's closing, but no charter school or state educational institution expressed interest in the building. The trial court granted West Lafayette's motion to intervene over the State's objection.
[5] Ultimately, the parties cross-moved for summary judgment, with the State arguing in part that the School Corporations cannot assert takings claims against the State. The trial court granted the State's motion, finding the Statutes do not constitute a taking without just compensation in violation of the state or federal constitution.
[6] The School Corporations now appeal.
[7] The School Corporations renew their argument that the Statutes violate the state and federal takings clauses. We review the constitutionality of a statute de novo. Himsel v. Himsel , 122 N.E.3d 935, 945 (Ind. Ct. App. 2019), reh'g denied , trans. denied. "Statutes come before us ‘clothed with the presumption of constitutionality until clearly overcome by a contrary showing.’ " Id. (quoting Zoeller v. Sweeney , 19 N.E.3d 749, 751 (Ind. 2014) ). "The party challenging the constitutionality of a statute bears the burden of proof, and all doubts are resolved against that party and in favor of the legislature." Id. (citation omitted).
[8] Article 1, Section 21 of the Indiana Constitution states, in part, "No person's property shall be taken by law, without just compensation[.]" The Fifth Amendment to the United States Constitution similarly provides "nor shall private property be taken for public use, without just compensation." The Fifth Amendment's takings clause applies to the states via the Due Process Clause of the Fourteenth Amendment. State v. Kimco of Evansville, Inc. , 902 N.E.2d 206, 210 (Ind. 2009). As both parties note, the federal and state takings clauses are not identical, but our Supreme Court has held we analyze them identically.3 Id.
[9] The State argues the School Corporations, as political subdivisions, cannot sue the State under the takings clauses because "the U.S. Supreme Court has long held that the Takings Clause has no role to play in intragovernmental disputes between a State and one of its agencies or political subdivisions." Appellee's Br. p. 19. We agree.
[10] The United States Supreme Court addressed the relationship between states and municipalities in Hunter v. City of Pittsburgh , 207 U.S. 161, 178-79, 28 S.Ct. 40, 52 L.Ed. 151 (1907), stating:
Municipal corporations are political subdivisions of the state, created as convenient agencies for exercising such of the governmental powers of the state as may be intrusted to them. For the purpose of executing these powers properly and efficiently they usually are given the power to acquire, hold, and manage personal and real property. The number, nature, and duration of the powers conferred upon these corporations and the territory over which they shall be exercised rests in the absolute discretion of the state .... The state, therefore, at its pleasure, may modify or withdraw all such powers, may take without compensation such property , hold it itself, or vest it in other agencies, expand or contract the territorial area, unite the whole or a part of it with another municipality, repeal the charter and destroy the corporation.
(Emphasis added). Given this relationship, courts generally hold municipalities and political subdivisions cannot bring constitutional claims against their states. See, e.g., Williams v. Mayor & City Council of Baltimore , 289 U.S. 36, 40, 53 S.Ct. 431, 77 L.Ed. 1015 (1933) (); Vill. of Arlington Heights v. Reg'l Transp. Auth. , 653 F.2d 1149, 1152 (7th Cir. 1981) ().
[11] The Court specifically addressed a municipality's ability to sue its state under the federal takings clause in City of Trenton v. State of New Jersey , 262 U.S. 182, 43 S.Ct. 534, 67 L.Ed. 937 (1923). The Court held the takings clause "do[es] not apply against the state in favor of its own municipalities" because a "municipality is merely a department of the state, and the state may withhold, grant or withdraw powers and privileges as it sees fit." Id. at 187, 192, 43 S.Ct. 534. Since Trenton , federal courts have continued to hold political subdivisions cannot sue their states, or other state agencies, under the takings clause. See Bd. of Levee Com'rs of the Orleans Levee Bd. v. Huls , 852 F.2d 140, 142 (5th Cir. 1988) (); City of South Lake Tahoe v. Cal. Tahoe Reg'l Planning Agency , 625 F.2d 231, 233-34 (9th Cir. 1980) ().4
[12] The School Corporations note that the U.S. Supreme Court in Gomillion v. Lightfoot , 364 U.S. 339, 342, 81 S.Ct. 125, 5 L.Ed.2d 110 (1960), explained a state's power over municipalities is not "absolute." While this is true, Gomillion also states the explicit holdings in Hunter and its progeny, including Trenton , remain good law. Id. at 344, 81 S.Ct. 125 (...
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