BOARD OF EDUCATION OF THE CITY OF PEORIA, SCHOOL DISTRICT NO. 150, Plaintiff-Appellee, v. ILLINOIS STATE BOARD OF EDUCATION, Defendant-Appellant.
No. 85-2692.
United States Court of Appeals, Seventh Circuit.
Decided Jan. 27, 1987.
Rehearing and Rehearing En Banc Denied March 18, 1987.
810 F.2d 707
The finding that $271 was “advantageous” to the estate, however, means that the plaintiff cannot show that a higher price was available. Under the law of trusts, $271 was a favorable price or it could not properly have been approved. Harris Trust does not argue to us that, if the finding has preclusive effect, there is anything left to litigate. With damages out of the picture, and in the absence of a request for rescission, there is no point in deciding the merits. Mary‘s estate is not entitled to relief.
The same finding disposes of the RICO suit. That statute allows treble damages, but treble nothing is still nothing. Because relief is unavailable, we need not decide whether the complaint pleaded fraud with “particularity” under Rule 9(b) or established the necessary “pattern” of criminal offenses.
AFFIRMED
RIPPLE, Circuit Judge, concurring.
The court holds today that the appellant is precluded from asserting claims under the Securities Exchange Act and RICO because a previous valid judgment in the Illinois courts found that the selling price of the stock was “advantageous” to the estate. This finding, which we must respect under the mandate of
Julia Quinn Dempsey, Illinois State Board of Education, Chicago, Ill., for defendant-appellant.
David J. Dubicki, Kavanagh, Scully, Sudow, White, & Frederick, P.C., Peoria, Ill., for plaintiff-appellee.
Before CUDAHY and RIPPLE, Circuit Judges, and ESCHBACH, Senior Circuit Judge.
RIPPLE, Circuit Judge.
The Illinois State Board of Education (State Board) appeals the district court‘s dismissal of its counterclaim against the Board of Education of the City of Peoria, School District 150 (Peoria Board) for lack of standing. We affirm.
I
Statement of the Case
On March 26, 1984, the Peoria Board filed suit in district court against the United States Department of Education (USDE) and the State Board. The Peoria Board sought to enjoin the USDE from conducting an administrative hearing pursuant to
Eventually, the Peoria Board reached a settlement with the USDE. Consequently, the USDE was dismissed as a party. The Peoria Board‘s complaint against the State Board was also dismissed. Finally, the Peoria Board moved to dismiss the State Board‘s counterclaim against it. It submitted that the State Board had no standing to assert the matters raised in the counterclaim. In the alternative, the Peoria Board requested that the district court abstain and postpone further proceedings on the counterclaim until state law issues could be resolved in a state court action between the two parties.
On August 30, 1985, the district court granted the Peoria Board‘s motion to dismiss. It held that the State Board lacked standing to challenge intentional racial segregation by the Peoria School District.
II
The Holding of the District Court
In its memorandum opinion, the district court characterized the “thrust” of Peoria‘s motion as a contention that the State Board “lacks standing to challenge intentional racial discrimination by a local public school district.” R. 22 at 2. The court held that, under the law of Illinois, the State Board did not have authority to initiate litigation to eliminate racial segregation. Rather, held the court, the law of Illinois contemplates that, if the State Board determines that segregation exists, it may request that the Illinois Attorney General apply to the appropriate court for relief. In reaching this determination, the district court relied heavily upon Aurora East Public School District No. 131 v. Cronin, 92 Ill. 2d 313, 66 Ill. Dec. 85, 442 N.E.2d 511 (1982).
The district court also held that no federal constitutional or statutory provision imposed an affirmative obligation on the State Board to bring such a suit. “It is neither the letter nor spirit of applicable federal law to create authority on the part of the [State Board] to take any particular type of action. Rather, it is left to the states to determine how to fulfill their responsibilities under the United States Constitution and applicable federal statutes.” R. 22 at 4.
Finally, the district court held that the State Board did not have standing to assert the constitutional rights of the students.
III
Merits
A. The Issue
We believe that the district court correctly resolved the narrow question before it. While that court, responding to the submission of the parties, addressed the problem in terms of “standing,” we believe that the situation is more precisely analyzed as one of capacity to sue.3 “Capacity
B. The Role of the State Board
Through its state constitution and various legislative enactments, Illinois has divided responsibility for its school system between state and local authorities. When viewed in its entirety, the constitutional and legislative scheme reflects deliberate—and careful—choices with respect to the distribution of authority. Under Illinois law, the respective roles of the State Board and the local school boards are clearly defined. The Illinois Constitution, art. X, § 2(a) provides that the State Board, “except as limited by law, may establish goals, determine policies, provide for planning and evaluating education programs and recommend financing. The Board shall have such other duties and powers as provided by law” (emphasis supplied). The Illinois School Code provides that the State Board “shall recommend the passage and the legislation necessary to determine the appropriate relationship between the Board
The Illinois legislature has vested the local school boards with general authority to ensure that individual school systems are operated in a nondiscriminatory manner. The legislature has charged the local school boards:
To establish one or more attendance units within the district. As soon as practicable, and from time to time thereafter, the [local] board shall change or revise existing units or create new units in a manner which will take into consideration the prevention of segregation and the elimination of separation of children in public schools because of color, race or nationality.
[Local School Boards have the duty] [t]o assign pupils to the several schools in the district; to admit non-resident pupils when it can be done without prejudice to the rights of resident pupils and provide them with any services of the school including transportation; ... but no pupil shall be excluded from or segregated in any such school on account of his color, race, sex, or nationality. Nothing herein shall be construed to permit or empower the State Board of Education to order, mandate or require busing or other transportation of pupils for the purpose of achieving racial balance in any school.
The foregoing constitutional and legislative scheme represents Illinois’ decision as to how best to distribute responsibility within state government with respect to the important task of achieving and maintaining racial equality in education. While local boards have the primary duty to take appropriate action, they are subject to the supervision and oversight of the State Board. More precisely, the State Board investigates charges of segregation according to a well-defined statutory procedure.
Our interpretation of the division of responsibility contemplated by the Illinois constitutional and statutory scheme is confirmed by the decision of the Illinois Supreme Court in Aurora East Public School Dist. No. 131 v. Cronin, 92 Ill. 2d 313, 66 Ill. Dec. 85, 442 N.E.2d 511 (1982). In Aurora East, two school districts challenged the validity of desegregation rules adopted by the State Board. The circuit court and the intermediate appellate court found the rules to be invalid and enjoined their enforcement. 66 Ill. Dec. at 85-6, 442 N.E.2d at 512-13. In affirming the judgment of the Illinois Appellate Court, the Supreme Court emphasized that the State Board‘s authority to act has been “detailed by the legislature.”6 Id. 66 Ill. Dec. at 91, 442 N.E.2d at 517. Such a limitation was found in paragraph 22-19 of the School Code, which:
establishes the procedure by which defendants may combat segregation. In particular, if defendants investigate and determine that discrimination exists, they may request the Attorney General to file suit for appropriate relief.... Consequently, the proper course is for defendants to conduct a hearing and refer to the Attorney General any findings of discrimination. This is the extent of the [State] Board‘s obligation. It is for the Attorney General, as representative of the People, to file suit when a district engages in discriminatory practices.
Id. 66 Ill. Dec. at 94, 442 N.E.2d at 520. More recently, the Appellate Court of Illinois held that the State Board did not have the authority to withhold funds from the Peoria Board‘s gifted program which was allegedly operated in a discriminatory manner. The Appellate Court reasoned that “the proper course of action for the [State Board] to take if it investigates and determines discrimination exists, is to request the Attorney General to file suit for appropriate relief.” Board of Educ. of the City of Peoria, School Dist. No. 150 v. Sanders, 150 Ill. App. 3d 755, 104 Ill. Dec. 233, 239, 502 N.E.2d 730, 736 (1986).
It is clear that the Attorney General may act to remedy discrimination in Illinois schools.7 In such cases, the Attorney General acts on behalf of the people of the state, who are the real parties in interest. It is well-settled, under Illinois law, “that the Attorney General is the sole officer authorized to represent the People of [Illinois] in any litigation in which the People of the State are the real party in interest, absent a contrary constitutional directive.” People ex rel. Scott v. Briceland, 65 Ill. 2d 485, 500, 3 Ill. Dec. 739, 746, 359 N.E.2d 149, 156 (1976).
C. The Federal Dimension
The State Board also argues that, since its counterclaim arises under federal as well as state law, it may maintain this counterclaim. More specifically, the State Board submits that its action was required by the Equal Educational Opportunities Act of 1974 (EEOA),
No State shall deny equal educational opportunity to an individual on account of his or her race, color, sex, or national origin, by—
(a) the deliberate segregation by an educational agency of students on the basis of race, color, or national origin among or within schools;
(b) the failure of an educational agency which has formerly practiced such deliberate segregation to take affirmative steps ... to remove the vestiges of a dual school system....
Indeed, these cases help to underline the narrowness of today‘s holding. We hold only that the State Board does not have the competence to maintain an action to ensure equality in education because the Illinois legislature has chosen to give the Board a more limited role in fulfilling the State‘s overall responsibility and has vested the authority to bring such actions in its Attorney General. We do not hold that the State Board or any other governmental entity is unaccountable when it contributes to a violation of the constitution or laws of the United States simply because its role in the overall state activity is a limited one.
Accordingly, the judgment of the district court is affirmed.
AFFIRMED.
CUDAHY, Circuit Judge, dissenting:
The implications of the majority‘s result are not nearly as “narrow” as the majority suggests. The case before us significantly implicates the Supremacy Clause and furnishes a dangerous precedent for frustrating federal anti-discrimination statutes and the fourteenth amendment through allocations of responsibility for civil rights enforcement among state agencies and local governmental bodies under state law.
The majority opinion essentially makes two points: (1) under Illinois law, the local boards have primary responsibility to see that schools are operated in a nondiscriminatory manner; and (2) insofar as the Equal Educational Opportunities Act of 1974,
In concluding that the Illinois legislature intended that local boards have primary responsibility for desegregation, the majority relies heavily on Aurora East Public School District No. 131 v. Cronin, 92 Ill. 2d 313, 66 Ill. Dec. 85, 442 N.E.2d 511 (1982). Aurora East, however, does not bear the weight placed on it by the majority. That case merely held that under Illinois law, the State Board was not authorized to promulgate regulations under the Armstrong Act.
More important, the State of Illinois has a duty under the Constitution and the general federal civil rights statutes to combat intentional racial segregation. State educational officials, who are the members of the state‘s executive branch charged with the oversight of education in the state, have a duty under federal law to enforce the Constitution and the federal statutes which implement it. The State Board, as the only state-level watchdog for civil rights in education, has an obligation to enforce the Constitution and the general civil rights statutes. See Bradley v. Milliken, 484 F.2d 215, 238-44 (6th Cir. 1973) (en banc), rev‘d on other grounds, 418 U.S. 717 (1974).
The EEOA imposes specific responsibilities on the State Board:
No State shall deny equal educational opportunity to an individual on account
of his or her race, color, sex, or national origin, by—
(a) the deliberate segregation by an educational agency of students on the basis of race, color, or national origin among or within schools;
(b) the failure of an educational agency which has formerly practiced such deliberate segregation to take affirmative steps to remove the vestiges of a dual school system;
...
(d) discrimination by an educational agency on the basis of race, color, or national origin in the employment, employment conditions, or assignment to schools of its faculty or staff....
It is surely not an adequate answer to say that the state has delegated these duties to its local school districts and therefore that the state as such, through educational officials at the state level, has no further responsibility. To accept this proposition is to suggest that federal civil rights enforcement may be effectively nullified by entrusting it under state law to the very entities against which enforcement might be required.
Nor is reliance on the procedure provided in
The majority believes “that the Illinois legislature intended desegregation [including presumably the barring of de jure segregation] to be the primary responsibility of the local boards.” Op. at 711. I doubt that the Illinois legislature had any intent going beyond implementation of the Armstrong Act to confront de facto segregation. But, even if Illinois wanted to leave all civil rights enforcement to its local school districts, it had no power under federal law to do this when the school districts themselves were the likely civil rights violators. In general, a state may “distribute responsibility” within state government. But it may not do so when, as here, a federal duty has been placed on the state and the result of the state legislature‘s
I therefore respectfully dissent.
Cudahy, Circuit Judge, concurred in part, dissented in part, and filed opinion.
UNITED STATES of America ex rel. Donald C. VILLA, Petitioner-Appellant, v. J.W. FAIRMAN and Neil F. Hartigan, Respondents-Appellees.
No. 86-1758.
United States Court of Appeals, Seventh Circuit.
Decided Jan. 28, 1987.
Rehearing and Rehearing En Banc Denied April 9, 1987.
810 F.2d 715
Notes
The capacity of an individual, other than one acting in a representative capacity, to sue or be sued shall be determined by the law of his domicile. The capacity of a corporation to sue or be sued shall be determined by the law under which it was organized. In all other cases capacity to sue or be sued shall be determined by the law of the state in which the district court is held, except (1) that a partnership or other unincorporated association, which has no such capacity by the law of such state, may sue or be sued in its common name for the purpose of enforcing for or against it a substantive right existing under the Constitution or laws of the United States, and (2) that the capacity of a receiver appointed by a court of the United States to sue or be sued in a court of the United States is governed by Title 28, U.S.C. §§ 754 and 959(a).