holding San Antonio Independent School District amenable to suit in federal court under Eleventh Amendment in part because a “judgment against [it] must be paid from the funds of the schoo! district, whether generated locally or appropriated by the State, not from the state treasury”
How later courts described this case
- holding San Antonio Independent School District amenable to suit in federal court under Eleventh Amendment in part because a “judgment against [it] must be paid from the funds of the schoo! district, whether generated locally or appropriated by the State, not from the state treasury”
- holding that prior federal court judgment was not res judicata to later state court action because federal court would have lacked jurisdiction to hear claims based on Eleventh Amendment immunity
- holding that “an independent school district is more like a city or county than it is like an arm of the State of Texas and is amenable to suit in federal court under the Eleventh Amendment”
- explaining that even if all four res judicata requirements are established, “res judicata will not apply if the federal court [] lacked jurisdiction over the omitted state law claims”
Written by the judges who cited it.
The opinion
Justice GONZALEZ,
dissenting.
The Court holds that a federal court judgment on federal issues is res judicata, barring McKinney’s attempt to enforce a state administrative order in state court. I disagree. Under the Texas Constitution and our statutes, Texas school districts are arms of the state. 1 Inevitably, funds of the state will be tapped to pay any judgment. Thus, in my opinion, Texas school districts are entitled to a state’s protection from suit in federal court provided by the Eleventh Amendment to the United States Constitution. I would affirm the judgment of the court of appeals.
Eleventh Amendment jurisprudence is grounded in the concept that the constituent states of our union “maintain certain attributes of sovereignty, including sovereign immunity.” Hess v. Port Authority Trans-Hudson Corp., 513 U.S. 30, 39 , 115 S.Ct. 394, 400 , 130 L.Ed.2d 245 (1994), citing Hans v. Louisiana, 134 U.S. 1, 13 , 10 S.Ct. 504, 506 , 33 L.Ed. 842 (1890). The principle of a state’s sovereign immunity is a constitutional limitation on federal court’s judicial power. Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89, 98 , 104 S.Ct. 900, 906-07 , 79 L.Ed.2d 67 (1984). Political entities distinct from a state are not entitled to deference in our federal system. Lincoln County v. Luning, 133 U.S. 529, 530 , 10 S.Ct. 363, 363 , 33 L.Ed. 766 (1890). However, a state need not be a named party if an action is in practical effect one for recovery of money from the state. Edelman v. Jordan, 415 U.S. 651, 663 , 94 S.Ct. 1347, 1355-56 , 39 L.Ed.2d 662 (1974). If “indicators of immunity point in different directions,” courts should “home in on the impetus for the Eleventh Amendment: the prevention of federal court judgments that must be paid out of a State’s treasury.” Hess, 513 U.S. at 47 , 115 S.Ct. at 404 (1994). See also Hess, 513 U.S. at 60-61 , 115 S.Ct. at 410 (O’Connor, J., joined by Rehnquist, C.J., and Scalia and Thomas, JJ., dissenting) (agreeing with the majority that “if an entity’s bills will be footed by the State, the Eleventh Amendment clearly precludes the exercise of federal jurisdiction”). 2
Our Constitution charges the State Legislature with the responsibility for educating our children. Article VII, section 1 of the Texas Constitution commands state involvement in and funding of school districts: “A general diffusion of knowledge being essential to the preservation of the liberties and rights of the people, it shall be the duty of the Legislature of the State to establish and make suitable provision for the support and maintenance of an efficient system of public free schools.” 3 To this end, the Legislature *286 has created school districts to help discharge this duty. Sixty-five years ago we unequivocally stated that Texas school districts “are state agencies, erected and employed for the purpose of administering the state’s system of public schools.” Love v. City of Dallas, 120 Tex. 351 , 40 S.W.2d 20, 26 (1931). We have held that “[t]he law is well settled in this state that an independent school district is an agency of the state” enjoying sovereign immunity for its negligence. See Barr v. Bernhard, 562 S.W.2d 844, 846 (Tex.1978); see also Mumme v. Marrs, 120 Tex. 383 , 40 S.W.2d 31, 35 (1931)(public schools “are essentially state schools.”); Lewis v. Independent Sch. Dist. of City of Austin, 139 Tex. 83 , 161 S.W.2d 450, 452 (1942)(school districts are a “subdivision of the state.”). Moreover, the Legislature labeled school districts as Texas state governmental units in the Texas Tort Claims Act. See Tex.Civ.Prac. & Rem. Code 101.001(2)(B). The Act states that Texas school districts enjoy a greater level of immunity than any other “state entity”: Sovereign immunity bars recovery against a Texas school district except when the claimed injury or injuries arise from the “operation or use” of a motor vehicle. See id. § 101.051.
In 1987, the Fifth Circuit held that Texas school districts were sufficiently distinct from the state to be outside of Eleventh Amendment protection. Lopez v. Houston Indep. Sch. Dist., 817 F.2d 351, 353 (5th Cir.1987), overruled on other grounds, Walton v. Alexander, 44 F.3d 1297 , 1304 n. 4 (5th Cir.1995). The court based its conclusion not on a detailed analysis of the political school district in that case, but on an earlier case which did not involve Eleventh Amendment principles. Id., citing Kingsville Ind. School Dist. v. Cooper, 611 F.2d 1109 (5th Cir.1980). The court’s conclusion that Texas school districts were not entitled to Eleventh Amendment protection may or may not have been correct in 1987, but '.profound changes in our system of education since Lopez would require federal courts to reach a different result.
Since 1987, the relationship between the State and the school districts has radically altered in response to our decision in Edgewood Indep. Sch. Dist. v. Kirby, 777 S.W.2d 391 (1989). The Legislature’s response to our decision was to pass legislation which had the practical effect of converting school district ad valorem taxes into a state tax. See Carrollton-Farmers Branch Indep. Sch. Dist. v. Edgewood Indep. Sch. Dist., 826 S.W.2d 489, 524 (Tex.1992). Thus, at the time of the Carrollton-Farmers decision, virtually all funds to support education in Texas public schools were state funds.
When the federal court rendered the judgment at issue in this case on June 10, 1993, the Texas Legislature had just enacted Senate Bill 7. Act of May 28, 1993, 73rd Leg., R.S., ch 347, 1993 Tex.Gen.Laws 1479, discussed in Edgewood Ind. Sch. Dist. v. Meno, 917 S.W.2d 717 (1995). It provided a two-tier structure for education finance, a basic allotment (tier 1) and a guaranteed yield (tier 2). In essence, the State guaranteed that a school district would receive a certain amount per child based on the local taxing effort between $0.86 and $1.50 per $100 valuation of property within the district. The State was obligated to make up the difference to the extent the local taxing effort failed to yield the benchmark amount. Tex. Educ.Code §§ 16.254 (repealed 1995); see generally Edgewood Ind. Sch. Dist. v. Meno, 917 S.W.2d at 726-27 . Additionally, Senate Bill 7 imposed a cap on a school district’s taxable property at a level of $280,000 per student. Tex.EdttC.Gode § 36.002 (repealed 1995).
Thus it can be seen that State funds are inextricably intertwined with local funds. Reviewing a similar system of school finance, the court in Belanger v. Madera Unified School Dist., 963 F.2d 248 (9th Cir.1992), cert. denied, 507 U.S. 919 , 113 S.Ct. 1280 , 122 L.Ed.2d 674 (1993), held that a judgment against a California school district would be tantamount to a judgment against the State, and therefore the district was entitled to Eleventh Amendment protection. Under California law:
The state sets a revenue limit for each school district based on average attendance, subtracts property tax revenues from that limit, and allocates the balance to the school district from the state school fund.
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*287 Under the centralized revenue limit system, the allocation of property tax revenue is hopelessly intertwined with the allocation of state funds, and any change in the allocation property tax revenue has a direct effect on the allocation of state funds.
Id. at 252.
Given this background, it strains credulity to argue that a money judgment against a district is not paid in whole or in part from state funds. I believe that our laws authorize school districts to take advantage of Eleventh Amendment immunity. The San Antonio Independent School District retains its immunity as an arm of the state for sovereign immunity and Texas Tort Claims Act purposes. I would hold that because of Eleventh Amendment immunity, the judgment in federal court on federal issues is not a bar when a plaintiff such as Charles McKinney seeks to enforce a state administrative order in state court. Therefore, I dissent.
. We have previously held that ‘‘[t]he school district’s rights [to tax], to the extent they exist, are derived solely from the statutes that the Legislature .may enact under the authority granted [by the Texas Constitution].” Edgewood Indep. Sch. Dist. v. Meno, 917 S.W.2d 717, 739 (Tex.1995).
. Even though the U.S. Supreme Court has emphasized that the source of funding money judgments is a critical tool for evaluating Eleventh Amendment questions, it recently reiterated that immunity applies to suits seeking either monetary or nonmonetary relief. See Seminole Tribe v. Florida, - U. S. -, -, 116 S.Ct. 1114 , -, 134 L.Ed.2d 252 (1996).
.The Texas Education Code provides that "[i]t is the policy of this state that the provision of public education is a state responsibility and that a thorough and efficient system be provided and substantially financed through state revenue sources.” Tex.Educ.Code § 42.001.