Zuni Pub. Sch. Dist. # 89 v. State Pub. Educ. Dep't
| Decision Date | 12 April 2012 |
| Docket Number | No. 30,861.,30,861. |
| Citation | 277 P.3d 1252,280 Ed. Law Rep. 490,2012 -NMCA- 048 |
| Parties | ZUNI PUBLIC SCHOOL DISTRICT, # 89, Petitioner–Appellee, v. STATE of New Mexico PUBLIC EDUCATION DEPARTMENT and Veronica Garcia, Secretary of Education, Respondents–Appellants. |
| Court | Court of Appeals of New Mexico |
OPINION TEXT STARTS HERE
VanAmberg, Rogers, Yepa, Abeita & Gomez, LLP, C. Bryant Rogers, Ronald J. Vanamberg, Santa Fe, NM, for Appellee.
Gary K. King, Attorney General, Andrea R. Buzzard, Assistant Attorney General, Santa Fe, NM, Willie R. Brown, General Counsel, Public Education Department, Santa Fe, NM, for Appellants.
{1} The sole question before us is whether sovereign immunity bars Zuni Public School District # 89 (Zuni) from bringing suit against the New Mexico Public Education Department and its secretary (State) for reimbursement of funds that Zuni claims were wrongfully deducted from its portion of state funding for public schools. Deciding that such cause of action does not violate the doctrine of sovereign immunity, we affirm the district court's denial of the State's motion to dismiss on that ground.
{2} Zuni, a New Mexico Public School District as defined in NMSA 1978, Section 22–1–2(R) (2010), filed a petition for writ of mandamus, declaratory relief, and injunctive relief in district court. The petition seeks to compel the State to reimburse Zuni for funds withheld by the State before the federal-equalization certification was issued by the federal government on April 26, 2010. The State filed a motion to dismiss Zuni's complaint based on a claim of sovereign immunity and other grounds. The district court denied the motion but allowed for interlocutory appeal. This Court considered the State's application for interlocutory appeal as one for writ of error and granted the application only on the issue of sovereign immunity. Before we begin our discussion of the question regarding sovereign immunity, we provide a brief explanation of the New Mexico public school funding formula.
{3} The Public School Finance Act, NMSA 1978, §§ 22–8–1 to –48 (1967, as amended through 2011), “governs the operational funding of New Mexico's public schools.” Taos Mun. Schs. Charter Sch. v. Davis, 2004–NMCA–129, ¶ 10, 136 N.M. 543, 102 P.3d 102,abrogated on other grounds by Smith v. City of Santa Fe, 2007–NMSC–055, 142 N.M. 786, 171 P.3d 300. An overview and history of funding for public schools is found in Lynn Carrillo Cruz, No Cake for Zuni: The Constitutionality of New Mexico's Public School Capital Finance System, 37 N.M. L.Rev. 307, 314–24 (2007). “A key feature of New Mexico's public school operational funding scheme is the state equalization guarantee distribution, which is a formula through which the [s]tate apportions federal and local revenue for schools equitably among the state's school districts.” Taos Mun. Sch. Charter Sch., 2004–NMCA–129, ¶ 12, 136 N.M. 543, 102 P.3d 102;see§ 22–8–25(A).
{4} The implementation of the formula is guided by both state and federal statutes. Federal statute 20 U.S.C. § 7709 (2002) governs the provision of Federal Impact Aid to local school districts affected by federal activities that decrease the school districts' tax base. Land, such as military bases and Indian reservations, are exempt from local property taxes—the taxes that serve as the main source of school funding. To address this potential shortfall in funding, Federal Impact Aid provides revenue to supplement the budgets of schools so affected. Id. However, that revenue may be offset by states when distributing state monies in order to equalize funding throughout the state and provide fairness to all local districts. 20 U.S.C. § 7709; § 22–8–25. States may offset federal revenue going to local districts as long as the state is granted certification to do so by the federal Department of Education (DOE). Id. This funding system, and New Mexico's implementation of it, was endorsed by the United States Supreme Court in Zuni Public School District No. 89 v. Department of Education, 550 U.S. 81, 100, 127 S.Ct. 1534, 167 L.Ed.2d 449 (2007). In effect, the State guarantees each school district the funds needed to meet its operating budget; the State reduces state revenues based on state and federal law for districts that get federal funds such as the Federal Impact Aid received by Zuni.
{5} The Zuni school district receives Federal Impact Aid each year. However, 75 percent of that money is offset by a matching reduction in state revenues to Zuni, provided that the DOE Secretary grants certification to the State before the end of the fiscal year, which is June 30. In this dispute, Zuni objects to the fact that the State implemented a pro-rated 75 percent reduction in state revenues in each monthly installment starting at the beginning of the fiscal year, in July 2009, despite the fact that the State did not receive federal certification until April 26, 2010. Zuni does not challenge the State's ability to implement the 75 percent offset after receiving certification; Zuni instead argues that the State was prohibited from implementing the offset for those first ten months of the fiscal year before the April certification.
{6} The State's position is that certification may be granted at any time before the end of the fiscal year on June 30; that monthly allocations are merely estimates throughout the fiscal year; and that funding figures are not final until after certification is granted and the school districts modify their budgets. Thus, according to the State, everything evens out by the end of the fiscal year, and no district receives less money than it needs to operate. In fiscal year 2009–10, the year in question, Zuni had an operating budget of $10.5 million and was calculated to receive $6.2 million in Federal Impact Aid. The State, though, offset that latter amount by 75 percent, or $4.6 million in withheld state funding. Zuni challenges the offset and argues that it should be able to pursue its suit in New Mexico district court.
{7} On appeal, the State essentially makes two arguments. First, it contends that Zuni's claim is based on a federal statute and that, therefore, the State retains constitutional sovereign immunity from suit in its own state courts. Second, the State argues that Zuni's action for money damages is barred by the State's common law sovereign immunity. We address each argument below.
{8} “We issue writs of error to review immunity from suit cases because we consider them collateral order[s] affecting interests that would be irretrievably lost if the case proceeded to trial.” Campos de Suenos, Ltd. v. Cnty. of Bernalillo, 2001–NMCA–043, ¶ 15, 130 N.M. 563, 28 P.3d 1104 (alteration in original) (internal quotation marks and citation omitted). “We review de novo the validity of a claim of sovereign immunity.” State ex rel. San Miguel BCC v. Williams, 2007–NMCA–036, ¶ 20, 141 N.M. 356, 155 P.3d 761. “Mandamus is appropriate to compel the performance of an affirmative act by another where the duty to perform the act is clearly enjoined by law and where there is no other plain, speedy[,] and adequate remedy in the ordinary course of law.” West v. San Jon Bd. of Educ., 2003–NMCA–130, ¶ 9, 134 N.M. 498, 79 P.3d 842 (internal quotation marks and citation omitted). A motion to dismiss pursuant to Rule 1–012(B)(6) NMRA tests the legal sufficiency of the complaint. Howse v. Roswell Indep. Sch. Dist., 2008–NMCA–095, ¶ 14, 144 N.M. 502, 188 P.3d 1253. The review of an order granting or denying a motion to dismiss is a question of law that we review de novo. Garcia v. Dorsey, 2006–NMSC–052, ¶ 13, 140 N.M. 746, 149 P.3d 62.
B. State vs. Federal Claim
{9} Zuni asserts that its petition is based on the state funding statute. The State, on the other hand, contends that Zuni's petition is grounded in the Federal Impact Aid statute. The distinction is key to resolving whether the State is shielded from this action by sovereign immunity.
{10} The Eleventh Amendment of the United States Constitution immunizes states and their officers acting in an official capacity from claims for money damages or in equity arising under a federal question, unless the state consents to suit. U.S. Const. amend. XI. States enjoy sovereign immunity not only in suits arising from the Constitution of the United States but also from suits grounded in acts of Congress and brought in federal court. Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 116 S.Ct. 1114, 134 L.Ed.2d 252 (1996). Congress also is barred from subjecting states to federal claims that are brought in state courts. Alden v. Maine, 527 U.S. 706, 716, 119 S.Ct. 2240, 144 L.Ed.2d 636 (1999) (). Our own Supreme Court has stated: “Alden and its progeny stand for the proposition that state constitutional sovereign immunity bars individual claims for damages that are based on legislation passed by Congress pursuant to its Article I powers.” Manning v. N.M. Energy, Minerals & Natural Res. Dep't, 2006–NMSC–027, ¶ 24, 140 N.M. 528, 144 P.3d 87;see Gill v. Pub. Emps. Ret. Bd., 2004–NMSC–016, ¶ 15, 135 N.M. 472, 90 P.3d 491;Cockrell v. Bd. of Regents of N.M. State Univ., 2002–NMSC–009, ¶ 7, 132 N.M. 156, 45 P.3d 876. Thus, if this action is based on 20 U.S.C. § 7709, as the State claims, it would be barred under the doctrine of constitutional sovereign immunity.
{11} As United States Supreme Court Justice Cardozo said: “Not every question of federal law emerging in a suit is proof that a federal law is the basis of the suit.” Gully v. First Nat'l Bank, 299 U.S. 109, 115, 57 S.Ct. 96, 81 L.Ed. 70 (1936). An action brought under state statutes will not implicate original federal jurisdiction “unless it appears that some substantial, disputed...
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