Hallberg v. S.D. Board of Regents, 937 N.W.2d 568

Hallberg was hired as Director of the Counseling Center at Northern State University and observed student employees counseling and signing therapy notes without licenses and with access to confidential records.
She reported concerns to her supervisors and the state licensing board, restricted access to records, and reassigned the primary intake phone; a staff member objected.
After presenting concerns at a staff meeting, Hallberg received a termination letter alleging she disrupted departmental efficiency and morale.
Hallberg sued the South Dakota Board of Regents and two supervisors (Leinwall and Reed), alleging retaliatory discharge/whistleblower retaliation and seeking damages; she did not file a grievance with the Civil Service Commission before suing.
The circuit court dismissed the suit, ruling the Board retained sovereign immunity (waived only to the extent of Commission grievance procedures) and that the supervisors’ termination decision was a discretionary act protected by sovereign immunity.
On appeal, the Supreme Court affirmed dismissal as to the Board, reversed as to Leinwall (retaliatory-discharge claim adequately pled), and affirmed dismissal as to Reed (insufficient pleading against him).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the circuit court erred dismissing claims against the Board of Regents (sovereign immunity/waiver under SDCL 3-16-9)	Hallberg argued SDCL 3-16-9 permits filing in circuit court ("may file" means alternative) and the open-courts provision supports a court action	The Board argued sovereign immunity is waived only to permit filing a grievance with the Civil Service Commission; Hallberg failed to use that administrative remedy	Court: Affirmed. SDCL 3-16-9 waives immunity only to the extent the Legislature provided (grievance to the Commission); no right to sue in circuit court absent express statutory language
Whether the circuit court erred dismissing claims against Leinwall and Reed (individual-capacity tort/intentional-tort exception to immunity)	Hallberg argued she sued the supervisors individually and alleged retaliatory discharge (an intentional tort/ultra vires act) outside discretionary immunity	Defendants argued termination is a discretionary personnel decision protected by sovereign immunity; Hallberg failed to plead intentional tort facts against Reed	Court: Mixed. Reversed as to Leinwall (complaint pleaded facts sufficient to put her on notice of retaliatory discharge); affirmed as to Reed (complaint failed to plead Reed personally acted outside his authority or committed an intentional tort)

Pennington Cty. v. State ex rel. Unified Judicial Sys., 641 N.W.2d 127 (S.D. 2002) (state entities and official-capacity suits are protected by sovereign immunity)
Sisney v. Reisch, 754 N.W.2d 813 (S.D. 2008) (official-capacity suits are suits against the State; individual immunity depends on function performed)
Montgomery v. Big Thunder Gold Mine, Inc., 531 N.W.2d 577 (S.D. 1995) (interpretation that "may" does not create an alternative forum or a right to sue in court)
Fort Bend Cty. v. Davis, 139 S. Ct. 1843 (U.S. 2019) (distinguishing jurisdictional rules from nonjurisdictional claim-processing rules)
Dahl v. Combined Ins. Co., 621 N.W.2d 163 (S.D. 2001) (recognizing retaliatory-discharge tort to protect whistleblowing as public policy)
Bego v. Gordon, 407 N.W.2d 801 (S.D. 1987) (state-employee immunity does not protect intentional torts or acts beyond official authority)
Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (complaints must plead more than labels and conclusions to survive dismissal)
Gruhlke v. Sioux Empire Fed. Credit Union, Inc., 756 N.W.2d 399 (S.D. 2008) (pleading standards require factual allegations showing claims outside scope of official authority)