Funding Lawsuit Ruling
Funding Lawsuit Ruling
Funding Lawsuit Ruling
On May 31, 2017, the Defendants Motions to Dismiss came before the Court for oral
argument. The Plaintiffs were represented by Attorneys Meghan Corbin, Cathy Cartee, and
Chase Cartee. The Defendants were represented by the Solicitor General for Iowa, Attorney Jeff
Thompson. After having considered the written and oral arguments of counsel and the applicable
law, the Court enters the following ruling on the pending motions.
BACKGROUND FACTS
In Iowa, school funding is governed by Iowa Code chapter 257. Chapter 257 establishes a
school funding formula to determine the amount of money school districts can spend per pupil.
Public schools are funded through a combination of state school foundation aid, state
supplemental funding, local property taxes, and local option sales taxes. A major purpose of
chapter 257 is to gradually narrow the funding gap between the highest- and lowest-spending
school districts.
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The funding formula in chapter 257 distinguishes between the state cost per pupil and the
district cost per pupil. See Iowa Code 257.9257.10. The formula applies to every school
district. The state cost per pupil establishes the funding floor for school districts. The formula for
determining the district cost per pupil includes, in part, the individual school districts prior
budget. If, after applying the district cost per pupil formula, the district cost is less than the state
cost, the district cost per pupil is increased to the state cost per pupil. As a result, for the
historically lower-spending school districts, the district cost per pupil equals the state cost per
pupil. If, after applying the formula, the district cost per pupil exceeds the state cost per pupil,
the district cost per pupil is limited to a certain percentage of the state cost per pupil. This
percentage is intended to decrease year to year in order to reduce the disparity between the
highest- and lowest-spending districts. Any district cost per pupil that exceeds the state cost is
At present, the difference between the district cost per pupil of the highest-spending
district and the lowest-spending district is approximately 2.65%. Currently, historically higher-
spending districts may spend as much as $175 per pupil more than the state cost per pupil.
school districts. Based on the funding formula, the Davenport Community School Districts
district cost per pupil equals the state cost per pupil. During the 20152016 school year,
Davenport Community Schools were permitted to spend $6,446.00 per pupil. For the 20162017
The Plaintiffs in this case are current and former students of the Davenport Community
School District. Plaintiffs assert that Davenport Schools are permitted to spend approximately
$175 less per pupil and approximately $2.7 million less in the aggregate than districts at the
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highest funding levels pursuant to the school funding formula in chapter 257. Plaintiffs assert
that there are a total of 171 school districts in Iowa that enroll students similarly situated to
Plaintiffs that are eligible to spend more money per pupil than Davenport schools pursuant to the
funding formula.
Plaintiffs contend that the Defendants are in control of the school funding formula in
chapter 257, and that the funding formula led to the inequities in school funding in the State.
Plaintiffs assert that the Defendants had the authority to change the funding formula but declined
to do so. Plaintiffs further contend that because of the inequity in funding, the Davenport
Community School District has been forced to make significant cuts in its operating budget,
resulting in fewer educational programs, increased class sizes, and diminished resources and
classroom supports.
On December 19, 2016, Plaintiffs Brean Woods and Becca Frederick filed a Petition
against Defendants that alleged three causes of action that are all predicated on a claim that the
Defendants Motion to Dismiss, the Plaintiffs filed an Amended Petition on April 10, 2017. The
Amended Petition added Kimberly Stumpf as parent and next friend of J.L.G., a minor, as a
Plaintiff and now asserts four causes of action: Count I: Violation of Equal Protection under the
Law; Count II: Violation of Due Process; Count III: Violation of Civil Rights; and Count IV:
Defendants have filed two Motions to Dismiss the Plaintiffs Amended Petition. The
Motion to Dismiss filed May 16, 2017, seeks to dismiss the Amended Petition based on a lack of
standing and a failure to state a claim upon which relief can be granted. The Motion to Dismiss
filed May 24, 2017, seeks to dismiss the Amended Petition for lack of subject matter jurisdiction
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based on the doctrine of sovereign immunity. Plaintiffs resist the motions. Counsel for both sides
agreed to orally argue and submit both motions to the Court at the hearing held on May 31st.
ANALYSIS
I. Sovereign Immunity
constitutional or statutory in origin. Segura v. State, 889 N.W.2d 215, 220 (Iowa 2017). In
1855, the Iowa Supreme Court noted It is well settled, too, that no action of any kind can be
sustained against the government itself for any supposed debt, unless by its own consent, under
some special statute allowing it. Chance v. Temple, 1 Iowa 179, 201 (1855). The general
principle of sovereign immunity is [t]hat there could be no legal right against the sovereign
authority that makes the law on which the right depends. Lee v. State, 815 N.W.2d 731, 737
Pursuant to the doctrine of sovereign immunity, the State is immune from suit unless the
State waives its immunity or Congress abrogates the States immunity in legislation. Id. at 737
38. Early cases of sovereign immunity arose in tort. Id. at 737. Iowa courts determined that
sovereign immunity could be impliedly waived, and also that consent to suit or waiver of
sovereign immunity need not always be restricted to legislative enactment. State v. Dvorak, 261
N.W.2d 486, 489 (Iowa 1978). A plaintiff cannot avoid sovereign immunity by naming
individual defendants because the suit is still, in effect, against the State:
While a suit against state officials is not necessarily a suit against the state, within
the rule of immunity of the state from suit without its consent, that rule cannot be
evaded by bringing an action nominally against a state officer or a state board,
commission, or department in his or its official capacity when the real claim is
against the state itself, and the state is the party vitally interested. If the rights of
the state would be directly and adversely affected by the judgment or decree
sought, the state is a necessary party defendant, and if * * * it has not consented to
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Megee v. Barnes, 160 N.W.2d 815, 819 (Iowa 1968) overruled on other grounds by Kersten Co.,
All of the cases the Defendants cite involve lawsuits in which the plaintiff is seeking
monetary relief against the State. Lee, 815 N.W.2d at 743 (The cloak of immunity granted to
the State precludes state employees from suing the state for monetary relief when denied self-
care leave under the FMLA.); Kersten Co., Inc., 207 N.W.2d at 122 (holding that when a State
enters into a contract, the State may be sued for breach of the contract); Megee, 160 N.W.2d at
816 (involving a plaintiff seeking to compel University of Iowa officials to pay her breach of
contract claim). The Defendants have not cited, and the Court is not aware of, any cases to
support the proposition that the doctrine of sovereign immunity bars constitutional claims for
declaratory relief.
Here, the Plaintiffs have raised three constitutional claims seeking declaratory judgment,
and one civil rights claim pursuant to which they are seeking damages. Constitutional claims
necessarily involve state action and require plaintiffs to sue the state or a state actor. See, e.g.,
King v. State, 818 N.W.2d 1, 25, 31 (Iowa 2012) (noting that equal protection claims require
state action, and [s]ubstantive due process prevents the government from engaging in
conduct that shocks the conscience or interferes with rights implicit in the concept of ordered
liberty). The Plaintiffs are not seeking damages with regard to their constitutional claims. For
that reason, and because the Defendants have not shown that sovereign immunity applies to
constitutional claims, the Court finds Counts I, II, and IV do not fall under the jurisdictional bar
of sovereign immunity. Because Count III is dismissed as discussed below in Part III.C, the
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Court declines to address the sovereign immunity issue as to Count III. The Defendants Motion
II. Standing
A plaintiff must show that he or she has standing prior to proceeding with a lawsuit.
Standing is the legal requirement that a plaintiff have sufficient stake in an otherwise justiciable
controversy to obtain judicial resolution of that controversy. Alons v. Iowa Dist. Ct., 698
N.W.2d 858, 86364 (Iowa 2005). The doctrine of standing has two elements: A plaintiff must
(1) have a specific personal or legal interest in the litigation and (2) be injuriously affected.
Godfrey v. State, 752 N.W.2d 413, 418 (Iowa 2008). The first element . . . is aligned with the
general concept of standing that a party who advances a legal claim must have a special interest
in the challenged action, as distinguished from a general interest. Id. at 419 (quoting City of
Des Moines v. PERB, 275 N.W.2d 753, 759 (Iowa 1979)). The second requirement . . . means
the plaintiff must be injured in fact. Id. This means that the plaintiff must show some specific
and perceptible harm from the challenged action, distinguished from those citizens who are
outside the subject of the action but claim to be affected. Id. (quoting United States v. Students
[C]ases involving actions by private persons to enforce public rights may be brought
under the personal-interest alternative to the first element. Id. at 420. [W]e require the litigant
to allege some type of injury different from the population in general. Id. Further, [t]h[e] injury
component . . . captures more than economic loss and includes conservational and other
Plaintiffs Brean Woods and Becca Frederick are Scott County residents and former
students of Davenport Schools. These two Plaintiffs assert they have standing because they are
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raising constitutional claims regarding their right to a free appropriate education. Further, these
Plaintiffs contend they have standing because they are recent graduates of the Davenport
Community Schools.
Plaintiffs Woods and Frederick have not established a specific and perceptible harm. The
Court finds that because these are former, and not current, students of the Davenport School
District, they cannot allege an injury distinguished from a general interest of other members of
the community. Consequently, the Court finds that Plaintiffs Brean Woods and Becca Frederick
Plaintiff Kimberly Stumpf is a Scott County resident and is the parent of J.L.G., a minor
and current student at Davenport schools. This Plaintiff asserts that because J.L.G. is a current
student, Stumpf has an individual interest in school funding. The Court finds that Plaintiff
Kimberly Stumpf, as parent and next friend of J.L.G., a minor, has alleged an injury different
from the population in general, and therefore has standing to pursue this claim. The Court will
next address whether the claims asserted by Plaintiff are sufficient to survive the Defendants
Motion to Dismiss.
Defendants claim that the Plaintiff has failed to state a claim upon which relief could be
granted. A motion to dismiss is sustainable only when it appears to a certainty that the plaintiff
would not be entitled to relief under any state of facts that could be proved in support of the
claims asserted. Haupt v. Miller, 514 N.W.2d 905, 911 (Iowa 1994). Therefore, a dismissal at
this stage must rest on legal grounds. Mlynarik v. Bergantzel, 675 N.W.2d 584, 586 (Iowa
2004).
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The Court consider[s] only the facts alleged in the petition or those of which judicial
notice may be taken in determining whether the plaintiff has stated a claim upon which relief
may be granted. Id. The Court views the plaintiffs allegations in the light most favorable to the
plaintiff with doubts resolved in that partys favor. Haupt, 514 N.W.2d at 911. Facts alleged in
the petition are recognized as true. Mlynarik, 675 N.W.2d at 586. To satisfy Iowas notice
pleading requirements, the Iowa Rules of Civil Procedure require only that a pleading shall
contain a short and plain statement of the claim showing that the pleader is entitled to relief and a
demand for judgment for the type of relief sought. Iowa R. Civ. P. 1.403(1).
All laws of a general nature shall have a uniform operation; the General Assembly
shall not grant to any citizen, or class of citizens, privileges or immunities, which,
upon the same terms shall not equally belong to all citizens.
[A]ny equal protection claim, whether in the education context or elsewhere, requires an
allegation of disparate treatment, not merely disparate impact. King, 818 N.W.2d at 24. To
allege a viable equal protection claim, plaintiffs must allege that the defendants are treating
similarly situated persons differently. Id. Unless a suspect class or a fundamental right is at
issue, equal protection claims are reviewed under the rational basis test. Id. at 25.
Plaintiff asserts that Iowa Code chapter 257 denies the Plaintiff equal protection both on
its face and as applied to the Plaintiff and others similarly situated because Davenport
Community Schools get less money per pupil than other schools in the State. Plaintiff does not
assert she is part of a suspect class, but instead asserts chapter 257 violates a fundamental right
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Defendants contend that the broad funding authority granted to the General Assembly
does not require dollar-for-dollar spending parity amongst school districts. The school financing
formula in chapter 257 creates a differential of approximately 2.65% between the historically
differential that existed before the implementation of the current chapter 257. Defendants argue
that any difference in per-pupil spending between districts does not create a constitutional
infirmity as a matter of law. Defendants also contend the differential in per-pupil spending is de
minimus and insufficient in itself to create a constitutional deprivation. Finally, Defendants argue
that the right to education is not a fundamental right and further that Plaintiff has not alleged she
Whether the right to education is a fundamental right remains an open question in Iowa.
King, 818 N.W.2d at 26. Because Iowa Courts do not currently recognize the right to education
as a fundamental right, the statute here must only pass rational basis review. Id. at 2526. Under
the rational basis test, we must determine whether the classification is rationally related to a
legitimate governmental interest Id. at 27 (quoting Ames Rental Prop. Assn v. City of Ames,
736 N.W.2d 255, 259 (Iowa 2007)). The classification is valid unless the relationship between
the classification and the purpose behind it is so weak the classification must be viewed as
In order to show the statute lacks a rational basis, the plaintiff must negate every
reasonable basis upon which the classification may be sustained. Id. at 28 (quoting Bierkamp v.
Rogers, 293 N.W.2d 577, 57980 (Iowa 1980)). Since the State does not have to produce
evidence, and only a plausible justification is required . . . there are certainly occasions where a
rational basis test can be applied on the pleadings without taking evidence. Id. If from the
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pleadings it is apparent that the Plaintiff cannot meet the rational basis test, there is no reason
In Exira Community School District v. State, 512 N.W.2d 787 (Iowa 1994), the Iowa
Supreme Court was presented with equal protection and due process challenges based on a
provision in the states open enrollment statute. The challenged provision required the school
district of residence to pay tuition to the district into which the student had open enrolled. King,
818 N.W.2d at 23 (discussing Exira). About 10% of Exiras students open enrolled into another
district, resulting in a financial shortfall in the district due to the amount of money being paid out
pursuant to the statute. The Court applied the rational basis test to the statute and found that the
plaintiffs equal protection claim failed. The Court in Exira found that a funding mechanism
that assured roughly the same amount of per-pupil funding regardless of the district did not treat
students differently or violate equal protection, even if it meant that the Exira district could not
Given this foundation, the Court finds that Iowas funding provision in chapter 257
plainly satisfies the rational basis test. As discussed further in Part III.D., the Iowa Constitution
gives the General Assembly broad authority to control school funds in the State. In order to
decrease the disparity in school funding, the Iowa General Assembly created the funding formula
in chapter 257. The intent of Iowa Code chapter 257 is to equalize educational opportunity, to
provide a good education for all the children of Iowa, to provide property tax relief, to decrease
the percentage of school costs paid from property taxes, and to provide reasonable control of
school costs. Iowa Code 257.31(10). While this funding formula may not result in dollar-for-
dollar parity between districts, students are guaranteed roughly the same amount of funds for his
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or her education. For these reasons, the Court grants the Defendants Motion to Dismiss Count I
property, without due process of law. Iowa Const. art. I, 9. The Iowa Supreme Court
Substantive due process prevents the government from engaging in conduct that
shocks the conscience or interferes with rights implicit in the concept of ordered
liberty. With a substantive due process claim, we follow a two-stage analysis.
First, we determine the nature of the individual right involved, then the
appropriate level of scrutiny. If the right at issue is fundamental, strict scrutiny
applies; otherwise, the state only has to satisfy the rational basis test. When the
rational basis test applies, there need only be a reasonable fit between the
legislatures purpose and the means chosen to advance that purpose.
To satisfy rational basis, [t]he legislature need not employ the best means of achieving
that interest. The plaintiff by contrast must negate every reasonable basis upon which the
In Exira, the Court found the financing provision of the open enrollment statute passed
rational basis review because it gave access to educational opportunities even though its
ultimate effect might mean the demise of some smaller schools. King, 818 N.W.2d at 32
(quoting Exira, 512 N.W.2d at 79596)). It is not for us to judge the wisdom of such a policy.
That was a legislative call. Exira, 512 N.W.2d at 795. Our clear duty is to interpret and apply
the law given to us, and not to develop or choose among schemes for public education. Id. at
796.
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Plaintiff asserts that Iowa Code chapter 257 violates due process both on its face and as
applied to the Plaintiff, and that Plaintiff has a fundamental right to a public education.
Defendants assert for the same reasons stated for the equal protection claim that Plaintiff has
failed to state a due process claim upon which relief could be granted.
Because the right to education is not recognized as a fundamental right in Iowa, the
rational basis test applies to chapter 257. The Court finds that chapter 257 satisfies the rational
basis test with regard to Plaintiffs due process claim. As noted in the discussion of Plaintiffs
equal protection claim, there is a reasonable fit between the legislatures goal of reducing the
funding disparity between districts and the funding formula in chapter 257. That it does not result
in dollar-for-dollar parity between districts is a result of the policy decision behind chapter 257.
Similar to Exira, it is not for the Court to judge the wisdom of such a policy. For this reason, the
Court concludes that Plaintiff cannot show a due process violation and Plaintiff has failed to state
a claim upon which relief could be granted. The Court grants the Defendants Motion to Dismiss
In Count III of the Amended Petition, Plaintiff alleges a violation of civil rights. The
Plaintiff does not establish what civil rights she claims were violated, and she does not identify
any state or federal constitutional provision or statutes as the basis for her claim. All Plaintiff
alleges is that Defendants actions herein alleged constitute an unfair and discriminatory practice
toward Plaintiff[] and other persons similarly situated, and that Plaintiff has suffered damages
as a result. Plaintiff filed an Amended Petition on April 10, 2017, but she did not further
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At oral argument on the Motion to Dismiss, Plaintiff alleged that Iowa Code chapter 257
creates a spending disparity and this disparity leads to a disparate impact on the students at the
Davenport schools. Plaintiff mentioned the number of students of color and students with
disabilities at the Davenport Public Schools, but did not allege racial or disability discrimination.
The Court finds that the Plaintiffs violation of civil rights claim fails to state a claim
upon which relief could be granted. Even under Iowas liberal notice pleading standard, the civil
rights claim fails to put the Defendants on notice as to what is being alleged, and does not show a
basis on which the Plaintiff would be entitled to relief. For all of these reasons, the Court grants
Regarding education of children in Iowa, the relevant portions of the Iowa Constitution
provide:
The Iowa Supreme Court has previously held that article IX, division 2, section 3 of the
Iowa Constitution is a funding provision, which allocated to the general assembly the authority
to provide money for education, and thereby to encourage [various forms of improvement] by
all suitable means. King, 818 N.W.2d at 14 (alterations in original). [T]he education clause
must be read in conjunction with the broad policy-making authority conferred by article IX,
division 1, section 15, which states that the general assembly shall have power after 1863 to
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provide for the educational interests of the state in any other manner that to them shall seem best
and proper. Id. at 17 (quoting Kinzer v. Dirs. of Indep. Sch. Dist., 105 N.W. 686, 687 (Iowa
1906)). Further it is an open question whether the education clause contains judicially
discoverable and manageable standards. Id. (quoting Des Moines Register and Tribune Co. v.
The Iowa Supreme Court has discussed challenges to the education clause of the Iowa
Constitution in other cases. In Kleen v. Porter, 23 N.W.2d 904 (Iowa 1946), the plaintiffs filed a
declaratory judgment asserting that two laws that appropriated money from the general fund to
school districts on a targeted basis to reimburse certain transportation expenses and bring all
districts up to a certain minimum level of per-pupil funding was unconstitutional. King, 818
N.W.2d at 16 (discussing Kleen). The plaintiffs asserted that pursuant to the Iowa Constitution,
these appropriations could only be made on a uniform statewide basis in proportion to the
numbers of youths between five and twenty-one years old in each district. Id.
The district court dismissed the action finding that the statutes did not violate sections 3
and 7 of Division 2 of article IX of the Iowa Constitution. Plaintiffs appealed. The Iowa Supreme
Court held that the enumeration requirement [of the Iowa Constitution] applied only to
appropriations from the permanent school fund established by article IX, division 2, not other
funding sources. Id. The Court found that the first sentence of section 3 give[s] the legislature
broad authority to augment the income from the permanent school fund without being subject to
the enumeration requirement in section 7. Id. Kleen saw the education clause as a grant of
In King, the plaintiffs alleged that the education clause of the Iowa Constitution imposes
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means. Id. at 13. The plaintiffs contended that the States current education laws failed to set
minimum educational standards, failed to provide an effective education, and violated the
education clause. The Iowa Supreme Court found that the plaintiffs had not raised a violation of
In King, the Court noted that [c]ourts are accustomed to dealing with questions of
financial discrimination. Id. at 18. However, the Court also noted Iowas education clause,
unlike the constitutions of most other states, does not mandate free public schools. Nor does the
education clause require that the states public education system be adequate, efficient, quality,
thorough, or uniform. Our founders did not make these choices. Id. at 2021 (internal quotation
marks omitted).
The question here is whether the Plaintiff has alleged acts that would establish a violation
of the education clause of the Iowa Constitution. Plaintiff contends that the General Assembly
has not used all suitable means to encourage and promote the Plaintiffs education because it
has not resolved the funding inequities she asserts are caused by Chapter 257. Plaintiff contends
the funding inequity has caused Davenport schools to cut the districts operating budget,
resulting in fewer educational programs, increased class sized, and diminished resources and
classroom supports. Plaintiff also asserts that the funding inequities violate her fundamental
The Iowa Constitution grants the Iowa General Assembly broad authority to decide how
to allocate money to school districts. The general assembly has decided the best way to allocate
this money is through the funding formula in chapter 257. Here, Plaintiff is not alleging that the
amount of money Davenport Schools receives per pupil is inadequate to provide an education to
its students. The Court determines that the allegations in the Plaintiffs amended petition do not
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state a claim under article IX, division 2, sections 1 or 3 of the Iowa Constitution. For this and all
of the reasons previously discussed, the Court grants the Defendants Motion to Dismiss Count
RULING
For all of the above-stated reasons, it is the ruling of the Court that the Defendants
Motion to Dismiss all of the counts set forth in Plaintiffs Amended Petition is GRANTED.
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So Ordered