SID No. 1 v. Adamy
289 Neb. 913
| Neb. | 2015Background
- Sanitary and Improvement District No. 1, Butler County (SID #1) filed two class actions alleging county treasurers deducted 2% fees from collections that should have been charged at 1% (municipal taxes) or 1.5% (special assessments) under Neb. Rev. Stat. § 33-114(3) & (4).
- First complaint (Dec. 2012) challenged deductions from special assessments; second complaint (Mar. 2013) challenged deductions from municipal taxes; both sought damages and class certification.
- County treasurers moved to dismiss for failure to state a claim; district court granted dismissal, holding (1) counties had waived sovereign immunity and (2) SIDs are not municipal corporations so their assessments/taxes were not “municipal” under § 33-114.
- SID #1 appealed; county treasurers cross-appealed on sovereign immunity and jurisdiction grounds; appeals were consolidated in the Nebraska Supreme Court.
- The Nebraska Supreme Court reviewed de novo, considered statutory interpretation of § 33-114, and addressed sovereign immunity and whether a sanitary and improvement district can levy "municipal" taxes/assessments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether counties waived sovereign immunity allowing damages against counties/treasurers | SID #1: statutes and precedent (Hoiengs-style contract theory) permit suit/waiver | Counties: sovereign immunity protects counties and official-capacity suits; no statutory waiver exists | Court: No waiver — counties retain sovereign immunity; money damages barred absent explicit waiver |
| Whether county treasurers sued in individual or official capacity | SID #1: Complaint permitted relief against treasurers (implicitly seeking accountability) | Counties: suits are official-capacity; thus barred as suits against the state/ county | Court: Plaintiffs did not expressly sue treasurers individually; presumed official-capacity; claims for money damages are barred by sovereign immunity |
| Whether SID #1's taxes/assessments are "municipal" under § 33-114 | SID #1: SIDs are local governmental units with power to levy taxes, issue bonds, and make public improvements; therefore assessments/taxes are "municipal" | Counties/district court: SIDs are not municipal corporations so their levies are not "municipal" under § 33-114 | Court: "Municipal" refers to local governmental unit activity; SIDs can levy municipal taxes and make municipal improvements; SID stated a cause of action under § 33-114 |
| Appropriate relief available to SID #1 | SID #1: seeks damages and declaratory relief that treasurers misapplied § 33-114 | Counties: sovereign immunity bars monetary relief; jurisdictional defenses | Court: Prospective declaratory relief is permitted (not barred by immunity); monetary recovery against counties/officials in official capacity is barred; remanded to grant prospective declaratory relief |
Key Cases Cited
- Hoeings v. County of Adams, 245 Neb. 877, 516 N.W.2d 223 (1994) (statutory waiver based on contract-like claims under limited circumstances)
- Anthony K. v. State, 855 N.W.2d 802 (Neb. 2014) (overview of sovereign immunity and official-capacity suits)
- Doe v. Board of Regents, 280 Neb. 492, 788 N.W.2d 264 (2010) (limitations of declaratory-judgment statutes to waive sovereign immunity)
- Rexroad, Inc. v. S.I.D. No. 66, 222 Neb. 618, 386 N.W.2d 433 (1986) (recognition of SIDs as legislative/political subdivisions)
- City of Falls City v. Nebraska Mun. Power Pool, 279 Neb. 238, 777 N.W.2d 327 (2010) (discussion of quasi-municipal status and limited-purpose municipal entities)