400 F.Supp.3d 117
M.D. Penn.2019Background
- Three tenured Scranton School District teachers were furloughed after the School Board voted to suspend certain professional employees following budget actions and program curtailments in 2018. Plaintiffs challenged their suspensions after evidentiary hearings and final Board votes.
- Plaintiffs filed a five-count complaint in state court asserting (1) Local Agency Law appeals that the Board failed to comply with 24 P.S. § 11-1124, (2) a § 1983 Contracts Clause claim (U.S. Const. art. I, § 10), (3) a Pennsylvania constitutional-contract claim, and (4) declaratory and injunctive relief; defendants removed based on federal question jurisdiction.
- Relevant statutory framework: the School Code requires written tenure contracts that expressly state they are “subject to the provisions of the ‘Public School Code of 1949’ and the amendments thereto” (24 P.S. § 11-1121), and Act 55 (2017) amended § 11-1124 to add suspension for "economic reasons" and revised suspension order rules.
- Defendants moved to dismiss under Rule 12(b)(6), arguing (a) no private § 1983 cause exists for a Contracts Clause claim, (b) no contractual right protected by the Contracts Clause exists here, (c) Act 55 did not substantially impair any contract, and (d) remaining state claims should be dismissed if the federal claim fails.
- The court (M.D. Pa.) assumed, for purposes of the motion, that a Contracts Clause § 1983 action could proceed, but held Plaintiffs’ § 1983 claim fails because (1) Plaintiffs reasonably could not expect the statutory suspension scheme to remain immutable given express contract language incorporating statutory amendments and the longstanding regulatory context, and (2) Act 55’s change was foreseeable and did not substantially impair the contractual rights. The court dismissed the § 1983 claim with prejudice and declined supplemental jurisdiction over the remaining state-law claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Availability of private § 1983 claim for Contracts Clause violation | § 1983 should be broadly read to permit Contracts Clause claims | Carter v. Greenhow bars private actions under § 1983 for Contracts Clause violations | Court assumed § 1983 claim available (followed narrow reading of Carter per Dennis and Ninth Circuit) for purposes of motion, but resolved case on other grounds |
| Whether the School Code / tenure contracts create a "contractual" right protected by Contracts Clause | Tenure/mandated written contracts and statutory language create enforceable contractual rights | Statutes presumptively are not contracts; plaintiffs cannot overcome that presumption | Court assumed, for motion purposes, that a contractual right exists (statutory language could support a contract) |
| Whether Act 55 substantially impaired Plaintiffs' contractual rights | Act 55 eliminated tenure protections and thus substantially impaired vested contractual expectations | Contracts expressly incorporate statutory amendments; the change was foreseeable and not a substantial impairment | Held: No substantial impairment. Amendment clause and foreseeability meant Plaintiffs had no reasonable expectation of immutability; § 1983 claim dismissed with prejudice |
| Whether federal court should retain supplemental jurisdiction over remaining state-law claims | Plaintiffs preferred federal adjudication of state-law claims | Defendants asked dismissal of federal claims and remand/dismiss state claims | Court declined to exercise supplemental jurisdiction and dismissed remaining state claims without reaching their merits |
Key Cases Cited
- Carter v. Greenhow, 114 U.S. 317 (1885) (historical authority about Contracts Clause remedies; read narrowly in later Supreme Court decisions)
- Dennis v. Higgins, 498 U.S. 439 (1991) (broad construction of § 1983; narrow reading of Carter)
- Allied Structural Steel Co. v. Spannaus, 438 U.S. 234 (1978) (Contracts Clause protects reasonable contractual expectations; severity of impairment governs scrutiny)
- Energy Reserves Group, Inc. v. Kansas Power & Light Co., 459 U.S. 400 (1983) (Contracts Clause balancing; police power and public purpose inquiry)
- Nat'l R.R. Passenger Corp. v. Atchison, Topeka & Santa Fe Ry. Co., 470 U.S. 451 (1985) (presumption that statutes do not create contractual obligations; examine statutory language closely)
- Dodge v. Board of Education, 302 U.S. 74 (1937) (presumption against statutes creating contractual or vested rights)
- Indiana ex rel. Anderson v. Brand, 303 U.S. 95 (1938) (statute construed to create contractual tenure rights under facts showing legislative intent)
- Transport Workers Union of Am. v. SEPTA, 145 F.3d 619 (3d Cir. 1998) (Contracts Clause analysis: identify contractual relation, impairment, and substantiality)
- Southern Cal. Gas Co. v. City of Santa Ana, 336 F.3d 885 (9th Cir. 2003) (§ 1983 may support Contracts Clause claim; cites Dennis)
- Elliott v. Bd. of Sch. Trs. of Madison Consol. Schs., 876 F.3d 926 (7th Cir. 2017) (analyzes foreseeability and centrality of the impaired term in teacher-tenure Contracts Clause claims)