Indiana Law Review

Indiana Law
Review

ARTICLE

Opting Only in: Contractarians, Waiver of Liability Provisions, and the

Race to the Bottom

J. Robert Brown, Jn

Sandeep Gopalan

PROGRAM ON LAW AND STATE GOVERNMENT
:^^^:,c FELLOWSHIP SYMPOSIUM

Education Reform and State Government: The Role of
Tests, Expectations, Funding, and Failure

What Do We Expect?: An Introduction to the Law, Money, and

Results of State Educational Systems

Cynthia A. Baker

Courting Trouble: Litigation, High-Stakes Testing, and Education Policy

Michael Heise

State Takeovers of School Districts: Race and the Equal Protection Clause

Joseph O. Oluwole
Preston C. Green, III

NOTES

Overkill: An Exaggerated Response to the Sale of Murderabilia

Ellen Hurley

The Effect of Indiana Code Section 22-9-1-16 on Employee Civil Rights

Kathryn E. Olivier

Teachers' Sexual Harassment Claims Based on Student Conduct: Do Special Education

Teachers Waive Their Right to a Harassment-Free Workplace?

David Thompson

The Problematic Application of Title VII's Limitations Period in the Pay Discrimination
Context: Ledbetter v. Goodyear, the Ledbetter Fair Pay Act, and an Argument

for a Modified Balancing Test
Jonathon Wright

*

INDIANA UNIVERSITY

SCHOOL OF LAW-INDIANAPOLIS

lUPUI

Volume 42 No. 2 2009

BNA's Law School Program

Multiple platforms, more choices
— for staff and students.

Delivery of timely information is one of the cornerstones
of BNA's success. Now, BNA delivers services
electronically, through IP authentication, to all law
school faculty staff and their students.

By subscribing to any of four law school-wide electronic
packages or building your own custom package, you
can give your students access to the same valuable
information as practicing attorneys. They'll conduct
research and follow changes in the law in the same
way senior partners do. Your students will not only be
prepared for internships and clerkships, they'll be better
equipped for any job.

To learn more about BNA's law school program, call
BNA Customer Service at 800-572-3374 or visit us at
www.bna.com/lawschool.

I02354

Essential information. Expert analysis.

Indiana Law Review

Volume 42

2008-2009

Editor-in-Chief

Jonathan Hughes

Executive Managing Editor

Kathryn Olivier

Senior Executive Editor

Matt Ehinger

Symposium Editor

Ellen Hurley

Articles Editors

Samuel Adams

Eric Brauer

Victoria Calhoon

Steven Frank

Ryan Hall

Nicholas Heiny

Jessica Moland

Matt Phillips

Eric Williams

Jonathon Wright

Executive Notes Editor

Michele Richey

Executive Articles Editors

Ashleigh Hall
Erik Long

Note Development Editors

Kyle Baltes

Corrie Bilke

Rozlyn Fulgoni-Britton

Ashley Humphries

Jeremiah Kline

Jessica Mitchell

Paul Musser

James Piatt

David Thompson

J. Alex Bruggenschmidt

Michael Eddy

Amanda Maxwell

Associate Editors

Andrew McCoy
Trent Meltzer

Robert Sahr

Annchyi Tan

Tabitha Truax-Haynes

Marie Alexander
Jon Bont
Laura Boren
Kayla Britton
Dawn Butler
Dan Cicchini
James Ciula
John Delaney
Justin Forkner

Members

Kyle Gobel

Hattie Harman

Ann Harris Smith

Glen Koch

Victoria Lewinski

Duane Marks

Tim McKay

Lauren Miller

Matthew Neumann

Caitlin NichoU

Elizabeth Ashley Paynter

Chad Pryor

Daniel Pulliam

Emily Slaten

Peter Tschanz

Danielle Tucker

KyU Willis
Justin Walton

Editorial Specialist

Chris Paynter

Faculty Advisors

Andrew R. Klein
R. George Wright

Indiana Law REvmw

(ISSN 0090-4198)

Published four times a year by Indiana University. Editorial and Business Offices are located at:

Indiana Law Review

Lawrence W. Inlow Hall

530 W. New York Street

Indianapolis, IN 46202-3225

(317)274-4440

Subscriptions. Current subscription rates for an academic year are $30.00 (domestic mailing) and
$35.00 (foreign mailing) for four issues. Unless the Business Office receives notice to the contrary,
all subscriptions will be renewed automatically. Address changes must be received at least one
month prior to publication to ensure prompt delivery and must include old and new address and
the proper zip code.

Single and Back Issues. Current single regular issues may be obtained from the Indiana Law
Review Business Office for $10.00. Current Survey issues may be purchased for $20.00. The
Symposium Issue may be purchased for $15.00. Please enclose payment with order. Claims for
nonreceipt of current year's issues must be made within six months of the mailing date. Back issues
may be ordered from: WiUiam S. Hein & Co., Inc., 1285 Main St., Buffalo, NY 14209-1987,
(800) 828-7571, (716) 883-8100 fax, mail@wshein.com (e-mail for orders). Back issues are also
available in an image-based format through HeinOnline, www.heinonline.org.

Manuscripts. The Indiana Law Review invites submission of unsolicited manuscripts. All
citations should conform to The Bluebook A Uniform System of Citation (18th ed. 2005).
Manuscripts should be double-spaced with standard one-inch margins. The Indiana Law Review,
as a matter of policy, promotes the use of gender-neutral language, and alternate use of the female
or male pronoun is intended to refer to both female and male.

Copyright: Copyright 2009. The Trustees of Indiana University. Except as may be expressly
provided elsewhere in this publication, permission is hereby granted to produce and distribute
copies of individual works from this publication for nonprofit education purposes, provided that
copies are distributed at or below cost, and that the author, source, and copyright notice are
included on each copy. This permission is in addition to rights of reproduction granted under
Sections 107, 108, and other provisions of the U.S. Copyright Act.

The INDIANA LAW REVIEW (ISSN 0090-4198) is the property of Indiana University and
is published quarterly by the Indiana University School of Law — Indianapolis, which assumes
complete editorial responsibility thereof Current subscription rates for an academic year are: one
year domestic $30.00; foreign $35.00. Send all correspondence to Editorial Specialist, Indiana Law
Review, Indiana University School of Law — Indianapolis, Lawrence W. Inlow Hall, 530 W. New
York Street, Indianapolis, Indiana 46202-3225. Publication office: 530 W. New York Street,
Indianapolis, Indiana 46202-3225. Periodicals postage paid at Indianapolis, Indiana 46201.

POSTMASTER: Send address changes to INDIANA LAW REVIEW, Lawrence W. Inlow
Hall, 530 W. New York Street, Indianapolis, Indiana 46202-3225.

0

The entire text of this Law Review is printed on recycled paper.

Name
Address

Please enter my subscription

to the

INDIANA LAW REVIEW

Enclosed is $

for

subscription(s)

Mail to: ATTN: Editorial Specialist

at

INDIANA LAW REVIEW

INDIANA UNIVERSITY SCHOOL OF LAW— INDIANAPOLIS

Lawrence W. Inlow Hall

530 West New York Street

Indianapolis, Indiana 46202-3225

For an academic year, the subscription rate for four issues is:
Domestic, $30; Foreign, $35; Student, $20

Single Issue, $10; Survey Issue $20
Symposium Issue, $15

Indiana

International &
Comparative
Law Review

The Indiana International & Comparative Law Review, published by the Indiana
University School of Law - Indianapolis since 1991, is a student-edited law journal that
provides a forum for the discussion and analysis of contemporary issues in public and
private international law. The Review publishes articles by prominent legal scholars,
practitioners, and policy makers from around the world, as well as student-written notes
and comments.

The Review is published twice annually, with a periodic third issue devoted to a
specific topic in international or comparative law. In 1994, in conjunction with the Italian
Academy for Advanced Studies in America at Columbia University, the Review published
a special issue on the political and social aspects of Italian law. In 1996, the Review
published an issue addressing various aspects of Chinese law.

Name

School/Firm/Business

Address

City, State, Zip Code

Subscriptions within the U.S. are $18.00 per year and outside the U.S. are

$21.00 per year. I enclose $ for subscription(s) to the Indiana

International & Comparative Law Review. Please make your check payable to Indiana
International & Comparative Law Review.

Mail to: Executive Production Editor

Indiana International & Comparative Law Review
Lawrence W. Inlow Hall
530 West New York Street
Indianapolis, Indiana 46202

Digitized by the Internet Archive

in 2011 with funding from

LYRASIS JVIembers and Sloan Foundation

http://www.archive.org/details/indianalawreview42309unse

In 2003, Indiana University School of Law - Indianapolis established a
specialty law review focused specifically on health care law and policy:

The scope of the Indiana Health Law Review includes bioethics,
malpractice liability, managed care, anti-trust, health care organizations,
medical-legal research, legal medicine, food and drug, and other current

health-related topics.

Detach and mail this subscription form today to receive
future issues

Subscription Price: $20.00

■ Two (2) Issues

■ Automatic Renewal
■ Foreign Mailing Is Extra

Mail form to:

Indiana Health Law Review

Indiana University School of Law - Indianapolis

Attn: Executive Business Editor

Lawrence W. Inlow Hall, Room 136C

530 W. New York Street

Indianapolis, IN 46202-3225

Questions?

Email: ihlr@iupui.edu

Phone:(317)278-9519

www.indylaw.indiana.edu/~ihlr

Mailing Address:

Name/Title

Company/School
Address

City_
Email

State ZIP

Payment Method: D

Enclosed

(Make Check Payable to

Indiana Health Law Review)

D Bill Me Later

Indiana University School of Law — Indianapolis
2008-2009 ADMINISTRATIVE OFFICERS AND FACULTY

Administrative Officers

Michael A. McRobbie, President of the University. Ph.D., Australian National University.
Charles R. Bantz, Chancellor, Indiana University-Purdue University — Indianapolis. B.A.,

M.A., University of Minnesota; Ph.D., The Ohio State University.
Gary R. Roberts, Dean and Gerald L. Bepko Professor of Law. B.A., Bradley University;

J.D., Stanford University.
PaulN. Cox, Vice Dean and Centennial Professor of Law. B.S., Utah State University; J.D.,

University of Utah; LL.M., University of Virginia.
Angela M. Espada, Associate Dean for Student Services. B.A., Indiana Central University;

M.A., Indiana University; J.D., Indiana University School of Law — Bloomington.
Matthew J. Banker, Assistant Dean for Student Affairs. B.A., University of St. Thomas

(MN); J.D., Marquette University.
Claire Grove, Assistant Dean for Graduate Studies. B.A., Indiana University; J.D., Indiana

University School of Law — Indianapolis.
}ON^\KANEMACY)0\]GALL,Assistant Dean for Institutional Advancernent. B.S., M.A., Indiana

University; J.D., Indiana University School of Law — Indianapolis.
Chastity Thompson, Assistant Dean Office of Professional Development. A.S., B.A.,

Alabama State University; M.B.A., Auburn University; J.D., Indiana University

School of Law — Indianapolis.
Elizabeth Allington, Director of External Affairs. B.A., Indiana University; M.A., M. Phil.,

New York University.
Teresa (Terri) J. Cuellar, Director of Technology Services. B.S., St. Bonaventure

University, New York.
Joyce M. Hertko, Director of Major Gifts. B.A., Knox College; M.S., Western Illinois

University; Ph.D., Indiana University.
Amanda Kamman, Director of Development. B.A., Indiana University.
Patricl\K. Kinney, Director of Admissions. B.S., Purdue University; J.D., Indiana University

School of Law — Indianapolis.
Virginia Marschand, Director of Administrative and Fiscal Affairs. B.A., M.P.A., Indiana

University; J.D., Indiana University School of Law — Indianapolis.
Heather McCabe, Director, Public Health Law Program, William S. and Christine S. Hall

Center for Law and Health. B.A., M.S.W., Indiana University; J.D., Indiana

University School of Law — Indianapolis.
La Wanda W. Ward, Director of Pro Bono Program and Public Interest. B.A., Murray State

University; M.A., Illinois State University; M.S., Old Dominion University; J.D.,

Indiana University School of Law — Indianapolis.

Faculty

Cynthia M. Adams, Clinical Professor of Law and Co-Director of the Latin American Law

Program. B.A., Kentucky Wesleyan College; J.D., Indiana University School of

Law — Indianapolis.
Judith Ford Anspach, Professor of Law and Director, Ruth Lilly Law Library. B.S., M.L.S.,

Kent State University; J.D., Mississippi College School of Law.
CynthiaBaker, Clinical Associate Professor of Law and Director, Program on Law and State

Government. B.A., J.D., Valparaiso University.
GeraldL.Bepko, Indiana University-Purdue University — Indianapolis Chancellor Emeritus,

Indiana University Trustee Professor and Professor of Law. B.S., Northern Illinois

University; J.D., ITT/Chicago-Kent College of Law; LL.M., Yale Law School.
Shawn Boyne, Associate Professor of Law. B.A., Cornell University; M.B.A., University of

Minnesota, J.D., University of Southern California's Gould School of Law, M.A.,

University of Wisconsin, L.L.M., Justus-Liebig-Universtat.
Karen E. Bravo, Associate Professor Law; John S. Grimes Fellow and Dean 's Fellow. B.A.,

The University of the West Indies; J.D., Columbia University School of Law; LL.M.,

New York University School of Law.
Robert Brookins, Professor of Law. B.S., University of South Florida; J.D., Ph.D., Cornell

University.
Kenneth D. Chestek, Clinical Associate Professor of Law. B.A., Pennsylvania State

University; J.D., University of Pittsburgh School of Law.

Daniel H. Cole, R. Bruce Townsend Professor of Law. A.B., Occidental College; A.M.,

University of Chicago; J.D., Lewis and Clark Law School; J.S.M., J.S.D., Stanford

Law School.
Jeffrey O. Cooper, Associate Professor of Law. A.B., Harvard University; J.D., University of

Pennsylvania Law School.
PaulN. Cox, Vice Dean and Centennial Professor of Law. B.S., Utah State University; J.D.,

University of Utah College of Law; LL.M., University of Virginia School of Law.
Eric Danjnenmaier, Associate Professor of Law and Dean's Fellow. B.A., Drury College;

J.D., Boston University; LL.M., Columbia University; M. St., Oxford University.
James D. Dimitri, Clinical Associate Professor of Law. B.S., Indiana University; J.D.,

Valparaiso University School of Law.
Jennifer Ann Drobac, Professor of Law and Director, Central and Eastern European Law

Summer Program. B.A., M.A., Stanford University; J.D,, J.S.D., Stanford Law

School.
George E. Edwards, Carl M. Gray Professor of Law; Faculty Advisor to the L.L.M. track in

International Human Rights Law; Director, Program in International Human Rights

and John S. Grimes Fellow. B.A., North Carolina State University; J.D., Harvard

Law School.
Frank Emmert, John S. Grimes Professor of Law and Executive Director, Center for

International and Comparative Law. Erstes Juristisches Staatsexamen (J.D.),

University of Munich Law School; LL.M., The University of Michigan Law School;

Ph.D., University of Maastricht; Diploma, European University Institute.
Nicholas Georgakopoulos, Harold R. Woodard Professor of Law. Ptyhion Nomikis, Athens

University School of Law; LL.M., S.J.D., Harvard Law School.
John Lawrence Hill, Professor of Law; Adjunct Professor of Philosophy and John S. Grimes

Fellow. B.A., Northern Illinois University; J.D., Ph.D., Georgetown University.
Linda Kelly Hill, M. Dale Palmer Professor of Law. B.A., J.D., University of Virginia.
Max Huffman, Associate Professor of Law. B.A., Cornell University, J.D., University of

Chicago College of Law.
Lawrence A. Jegen, III, Thomas F. Sheehan Professor of Tax Law and Policy. A.B., Beloit

College; J.D., M.B.A., The University of Michigan; LL.M., New York University

School of Law.
Robert A. Katz, Professor of Law and John S. Grimes Fellow. A.B., Harvard College; J.D.,

University of Chicago Law School.
Eleanor D. Kinney, Hall Render Professor of Law, Co-Director of the William S. and

Christine S. Hall Center for Law and Health. B.A., Duke University; M.A.,

University of Chicago; J.D., Duke University School of Law; M.P.H., University of

North Carolina.
Andrew R. Klein, Paul E. Beam Professor of Law. B.A., University of Wisconsin; J.D.,

Emory University School of Law.
Robert E. Lancaster, Clinical Professor of Law, Director, Chinese Law Summer Program.

B.A., Millsaps College; J.D., Tulane Law School.
Norman Lefstein, Professor of Law and Dean Emeritus. LL.B., University of Illinois College

of Law; LL.M., Georgetown University Law School.
Maria Pabon Lopez, Professor of Law; Co-Director, Latin American Law Summer Program.

and Dean 's Fellow. B.A., Princeton University; J.D., University of Pennsylvania Law

School.
Gerard N. Magliocca, Professor of Law; Co-Director, Chinese Law Summer Program and

John S. Grimes Fellow. B.A., Stanford University; J.D., Yale Law School.
Aluson Martin, Clinical Associate Professor Law. B.S., J.D., University of Illinois.
Deborah McGregor, Clinical Professor of Law and Assistant Director of Legal Analysis,

Research and Communication. B.A., University of Evansville; J.D., Georgetown

University Law School.
SUSANAH M. Mead, Professor of Law. B.A., Smith College; J.D., Indiana University School

of Law — Indianapolis.
Mary H. Mitchell, Alan H. Cohen Professor of Law. A.B., Butler University; J.D., Cornell

Law School.
Emily Morris, Associate Professor of Law. A.B., Harvard University, J.D., University of

Michigan Law School.
Novella Nedeff, Clinical Associate Professor of Law. B.A., J.D., Indiana University.
James P. Nehf, Cleon H. Foust Fellow; Professor of Law and John S. Grimes Fellow. B.A.,

Knox College; J.D., University of North Carolina Law School.

David Orentlicher, Samuel R. Rosen Professor of Law and Co-Director of the William S.

and Christine S. Hall Center for Law and Health. A.B., Brandeis University; J.D.,

M.D., Harvard College.
Joanne Orr, Clinical Professor of Law. B.S., Indiana State University; J.D., California

Western School of Law.
Antony Page, Associate Professor of Law and Dean 's Fellow. B. Comm., McGill University;

M.B.A., Simon Fraser University; J.D., Stanford Law School.
H. Kathleen Patchel, Associate Professor of Law. A.B., Huntington College; J.D.,

University of North Carolina Law School; LL.M., Yale Law School.
Michael J. Pitts, Associate Professor of Law; Dean's Fellow and John S. Grimes Fellow.

B.S.J., Northwestern University; J.D., Georgetown University Law Center.
Florence Wagman Roisman, William F. Harvey Professor of Law. B.A., University of

Connecticut; LL.B., Harvard Law School.
Gary R. Roberts, Dean and Gerald L. Bepko Professor of Law. B.A., Bradley University;

J.D., Stanford University.
Joan M. Ruhtenberg, Professor of Law and Director of Legal Analysis, Research and

Communication. B.A., Mississippi University for Women; J.D., Indiana University

School of Law — Indianapolis.
JoelM. Schumm, Clinical Professor of Law and Director, Judicial Extemship Program. B.A.,

Ohio Wesleyan University; M.A., University of Cincinnati; J.D., Indiana University

School of Law — Indianapolis.
Frances Watson, Clinical Professor of Law. B.S., Ball State University; J.D., Indiana

University School of Law — Indianapolis.
Lawrence P. Wilkins, William R. Neale Professor of Law. B.A., The Ohio State University;

J.D., Capital University Law School; LL.M., University of Texas School of Law.
Lloyd T. Wilson, Jr., Professor of Law and Co-Director, Chinese Law Summer Program.

B.A., Wabash College; M.A., Duke University; J.D., Indiana University School of

Law — Bloomington.
Mary T. Wolf, Clinical Professor of Law and Director of Clinical Programs. B.A., Saint

Xavier College; J.D., University of Iowa College of Law.
R. George Wright, Lawrence A. Jegen III Professor of Law. A.B., University of Virginia;

Ph.D., Indiana University; J.D., Indiana University School of Law — Indianapolis.

Emeriti Faculty

ThomasB. Allington, Professor of Law Emeritus. B.S., J.D., University of Nebraska; LL.M.,

New York University School of Law.
Edward P. Archer, Professor of Law Emeritus. B.M.E., Renesselaer Polytechnic Institute;

J.D., LL.M., Georgetown University Law School.
James F. Bailey, III, Professor of Law Emeritus and Director of the Law Library Emeritus.

A.B., J.D., M.A.L.S., The University of Michigan.
Clyde Harrison Crockett, Professor of Law Emeritus. A.B., J.D., University of Texas;

LL.M., University of London (The London School of Economics and Political

Science).
Debra A. Falender, Professor of Law Emerita. A.B., Mount Holyoke College; J.D., Indiana

University School of Law — Indianapolis.
David A. Funk, Professor of Law Emeritus. A.B., College of Wooster; J.D., Case Western

Reserve University School of Law; M.A., The Ohio State University; LL.M., Case

Western Reserve University; LL.M., Columbia Law School.
Paul J. Galanti, Professor of Law Emeritus. A.B., Bowdoin College; J.D., University of

Chicago Law School.
Helen P. Garfield, Professor of Law Emerita. B.S.J., Northwestern University; J.D.,

University of Colorado School of Law.
Harold Greenberg, Professor of Law Emeritus. A.B., Temple University; J.D., University

of Pennsylvania Law School.
Jeffrey W. Grove, Professor of Law Emeritus. A.B., Juniata College; J.D., George

Washington University Law School.
William F. Harvey, Carl M. Gray Professor of Law Emeritus. A.B., University of Missouri;

J.D., LL.M., Georgetown University Law School.
W. WHJJAM HODES, Professor of Law Emeritus, A.B., Harvard College; J.D., Rutgers

University School of Law — Newark.
Henry C. Karlson, Professor of Law. A.B., J.D., LL.M., University of Illinois College of

Law.

William Andrew Kerr, Professor of Law Emeritus. A.B., West University; B.S., Duke

University; J.D., LL.M., Harvard Law School.
WnjJAM E. Marsh, Professor of Law Emeritus. B.S., J.D., University of Nebraska.
Ronald W. Polston, Professor of Law Emeritus. B.S., Eastern Illinois University; LL.B.,

University of Illinois College of Law.
Kenneth M. Stroud, Professor of Law Emeritus. A.B., J.D., Indiana University —

Bloomington.
James W. Torke, Carl M. Gray Professor of Law Emeritus. B.S., J.D., University of

Wisconsin.
James Patrick White, Professor of Law Emeritus. A.B., University of Iowa; J.D., LL.M.,

George Washington University Law School.

Law Library Faculty

Judith Ford Anspach, Professor of Law and Director, Ruth Lilly Law Library. B.S., M.L.S.,

Kent State University; J.D., Mississippi College School of Law.
Susan BOLAND, Head of Information Services. B.A., Monmouth College; M.S., University of

Illinois; J.D., Illinois University College of Law.
Debra Denslaw, Reference Librarian. B.A., Franklin College; M.S., University of Illinois,

Urbana-Champaign; J.D., Valparaiso School of Law.
Richard Humphrey, Reference Librarian. A.A., Brewton-Parker Junior College; B.A.,

Georgia Southwestern College; M.L.S., University of Kentucky.
Wendell E. Johnting, Assistant Director for Technical Services. A.B., Taylor University;

M.L.S., Indiana University.
Chris E. Long, Cataloging Librarian. B.A., Indiana University; M.A., Indiana University;

M.L.S., Indiana University.
StevenR. Miller, Reference Librarian. B.S., Lebanon Valley College of Pennsylvania; M.A.,

Dominican University; M.S., Northwestern University; J.D., The John Marshall Law

School.
Mahnaz K. Moshfegh, Serials/Acquisitions Librarian. B.A., National University of Iran;

M.S., Tehran University; M.A., Ball State University; M.L.S., Ph.D., Indiana

University.
Miriam A. Murphy, Associate Director. B.A., Purdue University; J.D., M.L.S., Indiana

University — B loomington .
KlYOSHI Otsu, Automated Services and Media Librarian. A. A., Parkland College; A.B ., M.S.,

C.A.S., University of Illinois.

Indiana Law Review

Volume 42 2009 Number 2

Copyright © 2009 by the Trustees of Indiana University

TABLE OF CONTENTS
ARTICLE

Opting Only in: Contractarians, Waiver of Liability

Provisions, and the Race to the Bottom /. Robert Brown, Jr. 285

Sandeep Gopalan

PROGRAM ON LAW AND STATE GOVERNMENT
FELLOWSHIP SYMPOSIUM

Education Reform and State Government: The Role of
Tests, Expectations, Funding, and Failure

What Do We Expect?: An Introduction to the Law, Money,

and Results of State Educational Systems Cynthia A. Baker 317

Courting Trouble: Litigation, High-Stakes Testing,

and Education Policy Michael Heise 327

State Takeovers of School Districts: Race and

the Equal Protection Clause Joseph O. Oluwole 343

Preston C. Green, III

NOTES

Overkill: An Exaggerated Response to the Sale

of Murderabilia Ellen Hurley 411

The Effect of Indiana Code Section 22-9-1-16

on Employee Civil Rights Kathryn E. Olivier 441

Teachers' Sexual Harassment Claims Based on
Student Conduct: Do Special Education
Teachers Waive Their Right to a
Harassment-Free Workplace? David Thompson 475

The Problematic Application of Title VII's Limitations Period in the
Pay Discrimination Context: Ledbetter v. Goodyear, the
Ledbetter Fair Pay Act, and an Argument for
a Modified Balancing Test Jonathon Wright 503

Volume 42 Number 2

Indiana Law Review

Volume 42 2009 Number 2

ARTICLE

Opting Only in: Contractarians, Waiver of
Liability Provisions, and the Race to the Bottom

J. Robert Brown, Jr.'
Sandeep Gopalan**

Abstract

This paper will test the core claim of scholars in the nexus of
contracts tradition — that private ordering as a process of bargaining
creates optimal rules. We do this by analyzing empirical evidence in the
context of waiver of liability provisions. These provisions allow
companies to eliminate monetary damages for breach of the duty of care
through amendments to the articles of incorporation. With all states
allowing some form of these provisions, they represent a good laboratory
to examine the bargaining process between management and
shareholders. The contractarian approach would suggest that
shareholders negotiate with management to obtain agreements that are in
their best interests. If a process of bargaining is at work as they claim,
the opt-in process for waiver of liability provisions ought to generate a
variety of approaches. Shareholders wanting a high degree of
accountability would presumably not support a waiver of liability. In
other instances, shareholders might favor them in order to attract or retain
qualified managers. Still others would presumably want a mix, allowing
waiver but only in specified circumstances.

Our analysis reveals that the diversity predicted by a private ordering
model is not borne out by the evidence with waiver of liability provisions
for Fortune 100 companies. All states permit such provisions and in the
Fortune 100, all but one company has them. Moreover, they are
remarkably similar in effect, waiving liability to the fullest extent

* Professor of Law, University of Denver Sturm College of Law. Professor Brown operates
a blog that addresses corporate governance topics, The Race to the Bottom, http://www.theracetothe
bottom.org (last visited Oct. 14, 2008). Special thanks to Jamie Boyd, my research assistant, who
put together all of the empirical data used in this paper. We are also grateful to Professor Doug
Branson for his insightful comments and suggestions. Errors and omissions are our own.

** Reader (Associate Professor) in Law, University of Reading, United Kingdom. Professor
Gopalan also contributes to the blog. The Race to the Bottom, http://www.theracetothebottom.org
(last visited Oct. 14, 2008).

286 INDIANA LAW REVIEW [Vol. 42:285

permitted by law. In other words, one categorical rule was merely
replaced by another, dealing a significant blow to the contractarian thesis.

Introduction

The contractarian^ strain of corporate law scholarship treats corporations as
a nexus of contracts, allocating rights and obligations to the various
constituencies that make up the legal fiction that is the firm.^ It eschews a ''one
size fits all" approach to regulation and instead favors the use of enabling
provisions that allow companies to opt in or opt out. Unlike categorical rules
imposed by the state, market actors can engage in private ordering and bargain
for the most efficient arrangements.^ Contractarians argue that the state possesses
no advantages vis-a-vis market actors in crafting rules of the game. To the extent
that the state prescribes mandatory rules, they are likely to come with significant
costs that could have been avoided had the parties been allowed to design their
own rules.

Whatever the precise formulation of the view, contractarians, in the end,
place an almost talismanic faith in private ordering and on the market as the final
arbiter of efficiency. While private ordering will not ineluctably lead to greater
efficiency, the market can be counted on to weed out the inefficient. In contrast,
the inefficiencies arising from categorical rules are not susceptible to the same
correction mechanism.

As a corollary to this approach, contractarians characterize the evolution of
corporate law as a race to the top.'^ Under state law, categorical rules have

1. Professor Bebchuk prefers to label them "deregulators" writing that calling them
contractarians implies that their arguments are rooted in "the contractual view of the corporation."
Lucian Arye Bebchuk, The Debate on Contractual Freedom in Corporate Law, 89 COLUM. L. Rev.
1 395, 1 399 ( 1 989) [hereinafter Bebchuk, The Debate on Contractual Freedom] . He points out that
"deregulators do not have a monopoly over the contractual view." Id.

2. The "nexus of contracts" concept apparently is first alluded to in Michael C. Jensen &
William H. Meckling, Theory of the Firm: Managerial Behavior, Agency Costs and Ownership
Structure, 3 J. FiN. ECON. 305, 310-11 (1976) (noting a "nexus of a set of contracting
relationships").

3. The rise of this view is generally traced to the University of Chicago and the law and
economics movement. See Charles R.T. O' Kelley, The Entrepreneur and the Theory of the Modem
Corporation, 31 J. CORP. L. 753, 755 (2006) ("Disciples of the Chicago School of Law and
Economics controlled the agenda. Their swift rise to dominance coincided with the ascendancy in
corporation law of a new hegemonic paradigm, founded on the view that the corporation is a nexus-
of-contracts — a consensual ordering of relations generally to be governed by private ordering and
not government regulation.").

4. See Ralph K. Winter, Jr., State Law, Shareholder Protection, and the Theory of the
Corporation, 6 J. LegalStud. 25 1 , 255-58 (1977). In an influential recent article. Professor Mark
Roe refutes the state competition argument claiming that the possibility of federal intervention
clouds a pure "race." See Mark J. Roe, Delaware 's Competition, 1 17 Harv. L. Rev. 588, 602-03
(2003).

2009] OPTING ONLY Csf 287

gradually been replaced with enabling provisions, sometimes by transferring
authority from shareholders to the board of directors, and sometimes through
shareholder and board approval mechanisms. The system, therefore, allows
companies to opt in or opt out of particular legal regimes, freeing managers to
negotiate and engage in the most efficient arrangements.^

This Article examines an aspect of the contractarian approach to corporate
law. The approach presupposes some ability of shareholders to "negotiate" with
management to obtain agreements that are in the collective best interests of both
groups. Presumably, the mechanism for asserting these interests in many cases
is the ability to vote for or against a decision by management. This might occur,
for example, where management can opt in or out of a regulatory regime through
an amendment to the articles of incorporation. The need for shareholder approval
would cause some companies not to seek the opt-in or opt-out authority and for
others to limit the terms of the opt-in or opt-out regime in order to gamer
sufficient support. In other words, the regime would reflect ''bargaining" between
shareholders and management with the goal of achieving the most efficient
relationship. If indeed some bargaining transpires between the competing
interests, some degree of variance in practice would be expected.^

While bargaining between competing interests is plausible in theory, in
reality the management domination of the approval process and the severe
problems of collective action confronted by shareholders make it all but
impossible.^ As a result, the process of management submitting matters to
shareholders cannot accurately be characterized as bargaining in any meaningful
sense of the term. It is management that drafts the proposal, management that has
the authority to initiate the proposal, management that decides the most propitious
moment to put forth the proposal, and management that has the corporate treasury
at its disposal to ensure adoption of the proposal. Moreover, once passed,
shareholders typically lack the authority to initiate repeal.^ The consequences are
stark: once management obtains adoption, the provision remains in place,
irrespective of the wishes of shareholders, until management decides to initiate
a change.

This Article examines whether the core claim of contractarians — that private
ordering as a process of bargaining creates optimal rules — is borne out by the
empirical evidence in the context of waiver of liability provisions. These

5. See Bebchuk, The Debate on Contractual Freedom, supra note 1 , at 1 397 ("The primary
function of coqjorate law, they suggest, should be to facilitate the private contracting process by
providing a set of nonmandatory 'standard-form' provisions, with private parties free to adopt
charter provisions that opt out of any of these standard arrangements.").

6. This is not to say that an efficient result that applies equally to all companies and all kinds
of shareholders and managements should not be replicated in all companies. But for this to happen,
it must be shown that the uniform result is the most efficient arrangement possible in all or most
situations. If such a uniformly efficient arrangement cannot be crafted, variance is inevitable.

7. Bebchuk, The Debate on Contractual Freedom, supra note 1, at 141 1-12.

8. Lucian Bebchuk, The Case for Increasing Shareholder Power, 118 Harv. L. Rev. 835,
836 (2005).

288 INDIANA LAW REVIEW [Vol. 42:285

provisions allow companies to eliminate monetary damages for breach of the duty
of care through amendments to the articles of incorporation.^ With all states
allowing some form of these provisions, they represent a good laboratory to
examine the bargaining process between management and shareholders.^^

The choice of waiver of liability provisions for study is particularly
appropriate because they exemplify a contractarian approach to regulation. They
were a reaction to purported problems created by a mandatory approach and
allowed companies to opt out of a regime that imposed liability on managers for
breach of the duty of care.^' Moreover, as amendments to the articles, they
require the assent of both managers and owners. The outcome, therefore,
presumably results from negotiations between these two groups and ought to be
a good example of private ordering by contract.

If a process of bargaining is at work as the contractarians claim, then the opt-
in process for waiver of liability provisions ought to generate a variety of
approaches. Shareholders wanting a high degree of accountability would
presumably not support a waiver of damages. In other instances, shareholders
might favor them in order to attract or retain qualified managers. Still other
shareholders would presumably want a mix, allowing waivers only in specified
circumstances.

In fact, as the analysis shows, none of the diversity predicted by a private
ordering model appears in connection with waiver of liability provisions. They
are permitted by every state and are used by all but one Fortune 100 company. ^^
Moreover, they are remarkably similar in effect, waiving liability to the fullest
extent permitted by law. In other words, one categorical rule was merely replaced
by another, with no evidence that a categorical waiver of liability was any more
efficient than a categorical rule imposing liability. At the same time, the change
benefited management, suggesting that the motivation was not efficiency but self-
interest of one of the groups involved. Moreover, whatever one might think
about the benefits of private ordering and bargaining, the evidence suggests that
it is not taking place in the waiver of liability context.

This Article briefly reviews the position of contractarians in the debate on the
evolution of corporate law. The Article then examines the impetus for waiver of
liability provisions which, contrary to claims, was not from the excesses of Smith

9. Del. Code Ann. tit. 8, § 102(b)(7) (West 2006 & Supp. 2009).

10. Delaware originated the opt-in model, whereby companies could reduce liability by
affirmatively amending their articles of incorporation. Indiana, some months earlier, adopted the
first opt-out model, whereby the statute eliminated monetary damages for grossly negligent
behavior by the board of directors but allowed companies to opt out of the regime in their articles
of incorporation. See Roberta Romano, The States as a Laboratory: Legal Innovation and State
Competition for Corporate Charters, 23 YALE J. ON REG. 209, 221-22 (2006) [hereinafter Romano,
The States as a Laboratory].

11. Smith V. Van Gorkom, 488 A.2d 858, 893, 898 (Del. 1985), overruled by Gantler v.
Stephens, 965 A.2d 695, 713 n.54 (Del. 2009).

12. See Appendix, http://papers.ssm.com/sol3/papers.cfm?abstract_id=1088414 (follow
"download" hyperlink at top of page).

2009] OPTING ONLY IN 289

V. Van Gorkom^^ but from a disguised attempt to pass along some of the costs of
Directors and Officers' (D&O) insurance to shareholders. Thereafter the Article
analyzes the waiver provisions actually adopted by the Fortune 100 to determine
whether the variance predicted by the bargaining model has occurred. Finally,
the piece ends with some observations and identifies some of the reforms
necessary to implement a private ordering model.

I. A Brief Exegesis on the Nexus of Contracts and
THE Race to the Bottom

A widespread view in the academy is that corporations are best analyzed as
a "nexus of contracts."'"^ As Professor Eisenberg notes, "[u]nder the nexus-of-
contracts conception, the body of shareholders is not conceived to own the
corporation. Rather, shareholders are conceived to have only contractual claims
against the corporation."^^ The corporation is created by a "nexus of reciprocal
arrangements,"^^ and the role of the law should be to facilitate this contracting
process. ^^ Managers, owners, and others bargain for the most efficient
relationships, which are ones that uniquely reflect the interests of the particular
parties involved.

While recognizing that managers have self-interested motivations to pursue
their aims at the expense of the shareholders, contractarians rely on the "invisible
hand" to constrain such behavior. ^^ Investors will punish self-interested behavior

13. 488 A.2d 858 (Del. 1985), overruled by Gantler v. Stephens, 965 A.2d 695, 713 n.54
(Del. 2009).

14. William W. Bratton, Jr., The "Nexus of Contracts" Corporation: A Critical Appraisal,
74 Cornell L. Rev. 407, 409 (1989). For a critical view, see Victor Brudney, Corporate
Governance, Agency Costs, and the Rhetoric of Contract, 85 COLUM. L. REV. 1403, 1407-10
(1985).

15. Melvin A. Eisenberg, The Conception That the Corporation is a Nexus of Contracts, and
the Dual Nature of the Firm, 24 J. CORP. L. 819, 825 (1999).

16. Id. at 822. Professor Eisenberg writes that

the nexus-of-contracts conception . . . neither can nor does mean what it literally says.
In ordinary language, the term contract means an agreement. In law, the term means
a legally enforceable promise. Pretty clearly, however, the nexus-of-contracts
conception does not mean either that the corporation is a nexus of agreements or that
it is a nexus of legally enforceable promises.
Id.

17. Frank H. Easterbrook & Daniel R. Fischel, The Corporate Contract, 89 COLUM. L. REV.
1416, 1418 (1989) [hereinafter Easterbrook & Fischel, The Corporate Contract] ("The corporation
is a complex set of explicit and implicit contracts, and corporate law enables the participants to
select the optimal arrangement for the many different sets of risks and opportunities that are
available in a large economy. No one set of terms will be best for all; hence the 'enabling' structure
of corporate law.").

18. /J. at 1419 ("Managers may do their best to take advantage of their investors, but they
find that the dynamics of the market drive them to act as if they had investors' interests at heart.
It is almost as if there were an invisible hand.").

290 INDIANA LAW REVIEW [Vol. 42:285

by discounting the securities issued by those companies, thus presenting an
effective incentive for managers to act in ways that maximize shareholder
welfare. ^^ Over a period of time companies having poor governance
arrangements will be weeded out by the market, and those exhibiting optimal
arrangements will thrive.^^ Contractarians, therefore, favor enabling provisions
where parties can opt-in or opt-out and eschew the one-size-fits-all approach of
categorical rules.^* Corporate law, in this framework, should merely provide a set
of default rules.^^

The opposition to categorical rules has influenced the view of contractarians
on the evolution of corporate law. The paradigmatic example is Delaware
— where companies choose to incorporate there because of its expert judiciary, ^^
sophisticated bar,^"^ and a commitment to maintaining a climate for private
ordering.^^ Contractarians view corporate law as a good that states are competing
to supply and that companies choose because of the efficiency of the legal
regimes offered. They characterize the predominance of companies incorporated
in Delaware as a race to the top^^ rather than to the bottom.^^

19. See id.

20. Id.

21 . See generally Roberta Romano, Answering the Wrong Question: The Tenuous Case for
Mandatory Corporate Laws, 89 COLUM. L. REV. 1599 (1989); E. Norman Veasey, The Stockholder
Franchise is Not a Myth: A Response to Professor Bebchuk, 93 Va. L. Rev. 811, 825 (2007).

22. Easterbrook & Fischel, The Corporate Contract, supra note 17, at 1444-45. This begs
the question as to why parties could not come up with their own arrangements in the absence of any
demonstrably unique advantages that the state enjoyed in crafting such rules. Default rules could
be crafted by private parties themselves. All that is required for the elimination of repeat drafting
cost is that one party (or an industry group) publishes its draft, which can then be copied by all
other parties to the extent that they are efficient. If corporate law's function is only to supply
default rules, it would seem that it is of very little relevance. This would hardly explain the
enormous expenditure of resources by state agencies in crafting them or of contractarians in
studying them.

23. Veasey, supra note 21, at 817 (noting "Delaware's enabling statutory model, with a
unique overlay of expert judicial case law").

24. See id.

25. This view was excoriated by William Gary over three decades ago, but it has been
perniciously hard to displace. See William L. Gary, Federalism and Corporate Law: Reflections
upon Delaware, 83 YALE L.J. 663, 701 (1974) ("[A] pygmy among the 50 states prescribes,
interprets, and indeed denigrates national corporate policy as an incentive to encourage
incorporation within its borders, thereby increasing its revenue.").

26. See Daniel R. Fischel, The "Race to the Bottom" Revisited: Reflections on Recent
Developments in Delaware's Corporation Law, 76 Nw. U. L. Rev. 913, 919-20 (1982); Ralph
Winter, Private Goals and Competition Among State Legal Systems, 6 Harv. J.L. & PUB. POL'Y
127, 129 (1982).

27 . There tends to be an all or nothing approach in discussing this issue. A race to the bottom
may explain some corporate law reforms but certainly not all. See generally J. Robert Brown, Jr.,
The Irrelevance of State Corporate Law in the Governance of Public Companies, 38 U. RICH. L.

2009] OPTING ONLY IN 291

With evidence mounting that Delaware's legislature was captured by
management interests,^^ the race to the top theory has taken a beating.^^ The pro-
management capture, has, for obvious reasons, maintained Delaware's
preeminent position as the supplier of corporate law, despite copycat legislation
from other states.^^ With Delaware resolutely engaging in an almost continuous
process of eliminating categorical rules,^^ the opportunities for private ordering
have increased, and corporate law has inexorably moved away from the
mandatory approach. ^^

For a time, contractarians comfortably took an uncompromising view on the
need for, and benefits from, enabling provisions.^^ Private ordering did not
always have to result in a more efficient arrangement so long as the market stood
poised to weed out those that were inefficient.^"^ The contractarian universe

Rev. 317 (2004) [hereinafter Brown, The Irrelevance of State Corporate Law]; Ralph K. Winter,
The "'Race for the Top'' Revisited: A Comment on Eisenberg, 89 COLUM. L. REV. 1526 (1989).

28. Delaware benefits financially from its pro-management bias. See Lawrence A.
Hamermesh, The Policy Foundations of Delaware Corporate Law, 106 COLUM. L. REV. 1749,
1753-54 (2006). Professor Hamermesh writes that "[r]evenue from the state corporate franchise
tax alone has in recent years constituted over twenty percent of the state's budget, a fact of which
Delaware legislators are intensely aware." Id.

29. See William W. Bratton & Joseph A. McCahery, Regulatory Competition, Regulatory
Capture, and Corporate Self-Regulation, 73 N.C. L. Rev. 1861, 1925-48 (1995); Roberta S.
Karmel, Is it Time for a Federal Corporation Law?, 57 Brook. L. Rev. 55, 91-96 (1991).

30. One theory suggests that Delaware courts create indeterminacy in their case law as a
strategic choice to make it difficult for other states to copy, which explains why it is not possible
for other states to effectively compete with it. See Ehud Kamar, A Regulatory Competition Theory
of Indeterminacy in Corporate Law, 98 COLUM. L. REV. 1908, 1927-28 (1998); see also Douglas
M. Branson, Indeterminacy: The Final Ingredient in an Interest Group Analysis of Corporate Law,
43 Vand. L. Rev. 85, 1 12 (1990).

3 1 . See the article by Delaware Chancellor William T. Allen, Contracts and Communities
in Corporation Law, 50 WASH. & LEE L. REV. 1395, 1400 (1993) (noting that the contractarian
model is now the "dominant legal academic view"). The best example may be the elimination of
the prohibition on discriminating among shareholders of the same class. See Unocal Corp. v. Mesa
Petroleum Co., 493 A.2d 946, 956 (Del. 1985). Delaware was the first state to permit companies,
in their charter, to waive liability for directors. For the international perspective on this, see
Organisation for Economic Co-Operation and Development, OECD Principues of
Corporate Governance 20 (2004), available at http://www.oecd.org/dataoecd/32/l 8/3 1 557724.
pdf ("All shareholders of the same series of a class should be treated equally.").

32. Some have taken the position that the state law requirements are largely enabling, with
the remaining categorical rules "trivial." See generally Bernard S. Black, Legal Theory: Is
Corporate Law Trivial?: A Political and Economic Analysis, 84 Nw. U. L. Rev. 542 (1990).

33. Contractarians relied upon the market, specifically hostile takeovers, for corporate
control. For a criticism of this reliance, see generally J. Robert Brown, Jr., In Defense of
Management Buyouts, 65 TUL. L. REV. 57 (1990).

34. Thus, even fiduciary duties should be subject to private ordering. See Henry N. Butler
& Larry E. Ribstein, Opting Out of Fiduciary Duties: A Response to the Anti-Contractarians, 65

292 INDIANA LAW REVIEW [Vol. 42:285

posited that those entering into inefficient arrangements would be penalized by
the market through lower share prices.^^ The market for corporate control,^^
specifically hostile takeovers, would ensure that inefficient managers would be
eliminated.^^ Thus, irrespective of the number of inefficient arrangements, only
the efficient would survive.

The view was always simplistic. But in any event, the mechanism can no
longer be relied upon to police the efficiency of arrangements arising out of
private ordering. Hostile tender offers have disappeared from the landscape.^^
No longer able to show the ineluctable elimination of inefficient bargains,
contractarians were forced to argue that the enabling approach in Delaware
somehow resulted in greater aggregate efficiency. That is, while conceding that
some managers and owners enter into inefficient arrangements, arrangements that
would not necessarily be eliminated by market forces, the enabling approach, in
the aggregate, produced more efficient behavior. ^^

There is little evidence to support this sweeping conclusion. Some
contractarians have pointed to a handful of event studies purporting to show that
share prices increased upon reincorporation in Delaware. "^^ This ostensibly

Wash. L. Rev. 1, 32 (1990) [hereinafter Butler & Ribstein, Opting Out of Fiduciary Duties]
(stating that "the fundamentally contractual nature of fiduciary duties means that they should be
subject to the same presumption in favor of private ordering that applies to other contracts").

35. See generally Brown, supra note 33.

36. Henry G. Manne, Mergers and the Market for Corporate Control, 73 J. POL. ECON. 110,
112-14(1965).

37. Of course, there is one substantial exception: contractarians did not favor broad
managerial discretion in the area of antitakover tactics. See Frank H. Easterbrook & Daniel R.
Fischel, The Proper Role of a Target's Management in Responding to a Tender Offer, 94 Harv.
L.Rev. 1161, 1201-03(1981).

38. Lucian Arye Bebchuk & Allen Ferrell, Federalism and Corporate Law: The Race to
Protect Managers from Takeovers, 99 COLUM. L. REV. 1 168, 1 177-78 (1999) [hereinafter Bebchuk
& Ferrell, Federalism and Corporate Law] ; Lucian Arye Bebchuk et al.. The Powerful Antitakeover
Force of Staggered Boards: Theory, Evidence, and Policy, 54 STAN. L. REV. 887, 890-91 (2002)
[hereinafter Bebchuk et al.. The Powerful Antitakeover Force].

39. Bebchuk et al.. The Powerful Antitakeover Force, supra note 38, at 890-91.

40. See Lucian Bebchuk et al.. Does the Evidence Favor State Competition in Corporate
Law?, 90 Cal. L. Rev. 1775, 1781 (2002) [hereinafter Bebchuk et al.. Does the Evidence Favor
State Competition]. Some scholars attempt to show that particular categories of issuers benefit
from incorporation in Delaware. For example, they argue that IPOs of Delaware companies receive
increased valuation. See Robert Daines, The Incorporation Choices of IPO Firms, 77 N.Y.U. L.
Rev. 1559, 1571-72 (2002). But if it were that clear that incorporating in Delaware improved
shares prices, all similarly situated companies would do so, and they do not. See Bebchuk et al..
Does the Evidence Favor State Competition, supra, at 1789 ("While Daines' s study makes an
impressive effort to control for as many parameters as possible, including type of business and firm
size, it nonetheless remains true that if in a group of seemingly identical firms, some firms
incorporate in Delaware and others do not, there must be omitted variables that produce this
differential behavior. This is all the more true if it is supposed that one choice produces a

2009] OPTING ONLY IN 293

represented the market's judgment that Delaware's law was more efficient than
the alternatives/^ The studies, however, do not make a strong case. The results
are inconsistent"^^ and focus on short term results. "^^ They do not offer a view on
the long term impact."^ They also conflict with the facts on the ground. To the
extent re-incorporation results in a predictable increase in share prices, the
impetus for engaging in the transaction ought to come from financial experts. In
fact, the literature indicates that re-incorporations were promoted by lawyers, not
investment bankers. ^^ Finally, corporate law reform often has managerial self-
interest at its core rather, than efficiency."*^

The debate over enabling versus categorical rules surfaced with a vengeance
in the commentary surrounding the adoption of the Sarbanes-Oxley Act of 2002
(the Act) providing a judgment of sorts on the approach. "^^ The Act summarily
rejected the contractarian approach, adopting a host of categorical rules ."^^ The

substantial increase in firm value and the other does not.").

4 1 . William J. Carney, The Political Economy of Competition for Corporate Charters, 26 J.
Legal Stud. 303, 327-29 (1997).

42. See Bebchuk et al.. Does the Evidence Favor State Competition, supra note 40, at 1 79 1 -
92 ("These six studies . . . present a rather mixed picture. Roberta Romano's study, the earliest and
most influential of the six, found a positive abnormal return of 4.18%. However, three of the
subsequent five studies found abnormal returns in the vicinity of 1%, and two of the subsequent
five studies, including the most recent event study which used the largest sample size, did not find
an abnormal return that differed from zero in a statistically significant way.") (footnotes omitted).

43. See Roberta Romano, Empowering Investors: A Market Approach to Securities
Regulation, 107 YALE L.J. 2359, 2384 n.76 (1998) [hereinafter Romano, Empowering Investors].

44. Id. Similarly, during the takeover era, the tendency was to note the short term value of
acquisitions to the bidder (generally neutral) without attempting to assess the longer term impact.
See Brown, supra note 33, at 87.

45. See Jonathan R. Macey & Geoffrey P. Miller, Toward an Interest-Group Theory of
Delaware Corporate Law, 65 Tex. L. Rev. 469, 472 (1987) (stating that "the rules that Delaware
supplies often can be viewed as attempts to maximize revenues to the bar, and more particularly
to an elite cadre of Wilmington lawyers who practice corporate law in the state").

46. Not all corporate law reforms are explainable as a product of the race to the bottom. See
generally Brown, The Irrelevance of State Corporate Law, supra note 27. One reform that is
explainable, however, is the widespread adoption of waiver of liability provisions. These
provisions benefit management by including in the articles, a provision that eliminates monetary
damages for breach of the duty of care. Nonetheless, in the last twenty years, a remarkably short
period of time for legal reform, all fifty states put some type of reduced liability provision in place.
While a possible example of "private ordering," these provisions have become ubiquitous,
suggesting that they are not in fact a result of individual negotiation. Moreover, even if a waiver
were necessary to attract the most efficient management in a particular case, the provision applied
to all subsequent managers. Thus, these provisions essentially result in shareholders indefinitely
ceding away damages for mismanagement irrespective of the particular management involved.

47. Sarbanes-Oxley Act of 2003, 15 U.S.C. §§ 7201-7266 (2006). The Act preempts a
number of state law provisions and imposes a series of mandatory requirements.

48. See generally J. Robert Brown, Jr., Criticizing the Critics: Sarbanes-Oxley and Quack

294 INDIANA LAW REVIEW [Vol. 42:285

response was a fusillade of criticism and invective, with at least one scholar
labeling the Act ''quack corporate govemance,'"^^ a judgment offered hardly
before the ink was dry.^^ Yet as the stock market hit record highs and the number
of fraud actions fell, the evidence suggested that the categorical approach in fact
improved the integrity of the capital markets.^^

But the contractarian approach had an even greater fundamental problem in
that it simply assumed the conditions necessary for private ordering. Proponents
had little to say about the disparate bargaining positions of managers and owners,
the problems of collective action and, most critically, the management's
monopoly to initiate the process of, or changes to, the opt-in or opt-out process.^^
In other words, the opt-in or opt-out provisions did not allow private ordering.^^

n. Private Ordering and Waiver of Liability Provisions

A. Overview

Delaware became the first state to adopt an "opt-in" approach to waivers of
liability in 1986.^"^ The provision allowed companies to insert into their articles
of incorporation provisions that waived monetary damages for breaches of the
duty of care.^^ These provisions had to be approved by both directors and
shareholders, presumably giving rise to a bargaining process.

Corporate Governance, 90 Marq. L. Rev. 309 (2006).

49. See generally Roberta Romano, The Sarbanes-Oxley Act and the Making of Quack
Corporate Governance, 114 YALE L.J. 1521 (2005).

50. These criticisms are discussed and largely dismissed. Brown, supra note 48, at 309.

51. See Stanford Law School Securities Class Action Clearinghouse, http://securities.
stanford.edu/ (last visited Feb. 25, 2009) (reporting a ten-year low in the number of securities fraud
suits brought in 2006). The number of suits increased in 2007 but still represented the third lowest
total since the adoption of the Private Securities Litigation Reform Act (PSLRA) in 1995. Id.

52. See Lucian Arye Bebchuk & Assaf Hamdani, Optimal Defaults for Corporate Law
Evolution, 96 Nw. U. L. Rev. 489, 492 (2002) [hereinafter Bebchuk & Hamdani, Optimal Defaults]
("To be sure, a charter amendment requires a vote of shareholder approval. Such votes, however,
take place only on amendments initiated by management. Management thus has an effective veto
power over charter amendments. As a result, for any level of shareholder support, corporations are
much more likely to adopt amendments management favors than amendments management
disfavors.").

53. This may be a result of what Professor Bebchuk calls "network externalities." Lucian
Arye Bebchuk, The Case for Increasing Shareholder Power, 118 Harv. L. Rev. 833, 890 (2005).

It is advantageous for a company to offer an arrangement that is familiar to institutional
investors, that facilitates pricing relative to other companies, that is backed by a
developed body of precedents and judges familiar with the arrangement. Conversely,
companies are discouraged from adopting arrangements that are unconventional and
radically different from those in other companies.
Id.

54. See Del. Code Ann. tit. 8, § 102(b)(7) (West 2006 & Supp. 2009).

55. See id.

2009] OPTING ONLY IN 295

The provisions replaced a categorical rule with an enabling provision, the
very sort of arrangements contractarians favor.^^ Enabling provisions permitted
private ordering, facilitating greater efficiency.^^ By requiring shareholder and
management approval, the contractarian thesis would predict a multitude of
variations in waiver of liability provisions, each designed to promote efficiency.^^

As the data shows, these "benefits" have not materialized. There has been no
evidence of bargaining and no evidence of true private ordering. Instead, one
categorical rule has merely replaced another. In other words, the empirical
evidence shows implementation of a "one-size-fits-all" approach, the very thing
that contractarians vehemently oppose.^^ The only difference is that the new

56. Ann E. Conaway Stilson, Reexamining the Fiduciary Paradigm at Corporate Insolvency
and Dissolution: Defining Directors' Duties to Creditors, 20 DEL. J. CORP. L. 1, 7 n.l6 (1995)
("Accordingly, contractarians support enforcement of corporate provisions which eliminate or
restrict managerial duties and liabilities."); see also Margaret M. Blair & Lynn A. Stout, Trust,
Trustworthiness, and the Behavioral Foundations of Corporate Law, 149 U. Pa. L. Rev. 1735,
1781-82(2001).

57. See Henry N. Butler & Larry E. Ribstein, The Contract Clause and the Corporation, 55
Brook. L. Rev. 767, 776 (1989) [hereinafter Butler & Ribstein, The Contract Clause] ("Corporate
terms are, in fact, efficiently priced in these markets. It follows that improving the terms of a
corporate contract — by adding or deleting fiduciary duties where appropriate — will positively affect
the price of the corporation's securities. This gives a control purchaser the opportunity to profit by
changing the terms of the contract.").

58. As Roberta Romano has said:

State law is an enabling approach. It is a set of default rules. Sometimes firms opt out

of them and sometimes they opt in, and I think that reflects the essential variation in

firms about what they think is the best governance structure, the best Board of Directors

for each firm, so we tailor it.

Transcript of Roundtable Discussions Regarding the Federal Proxy Rules and State Corporation

Law at 26, Securities and Exchange Commission (2007), available at http://www.sec.gov/spotlight/

proxyprocess/proxy-transcript050707.pdf; see also Jonathan R. Macey, Fiduciary Duties as

Residual Claims: Obligations to Nonshareholder Constituencies from a Theory of the Firm

Perspective, 84 CORNELL L. REV. 1266, 1272 (1999) ("Stated another way, from a nexus-of-

contracts perspective, because firms consist of a complex web of contractual relationships, firm

behavior depends critically on what those contracts provide. In turn, the contract provisions

themselves depend on the outcome of the bargaining process that takes place between the

contracting parties.").

59. The numbers here are too great to cite thoroughly. Suffice it to say that it is the view of
Stephen Bainbridge at UCLA. See Stephen M. Bainbridge, Community and Statism: A
Conservative Contractarian Critique of Progressive Corporate Law Scholarship, 82 CORNELL L.
Rev. 856, 891 n.l77 (1997) (book review) ("As such, a one-size-fits-all state-sanctioned code of
behavior cannot fit everyone and may not fit anyone."); Stephen M. Bainbridge, Corporate
Decisionmaking and the Moral Rights of Employees: Participatory Management and Natural Law,
43 ViLL. L. Rev. 741, 775 (1998) ("As a result, legislative action is likely to take on a one-size-fits-
all approach, which in turn is unlikely to fit anyone."); see also Henry N. Butler, Smith v. Van
Gorkom, Jurisdictional Competition, and the Role of Random Mutations in the Evolution of

296 INDIANA LAW REVIEW [Vol. 42:285

categorical rule favors managers over shareholders.

Further, it is arguable that the waiver of liability provision is not in the nature
of a default rule at all. As Professor Eisenberg notes, "[t]he standard
methodology for establishing the content of a default rule is that the rule should
have the content that the affected parties would have agreed upon if they had
costlessly negotiated on the matter."^^ If this is indeed the test of a default rule,
it would be strange to suppose that shareholders would negotiate with
management to absolve directors of liability for breaches of their fiduciary duties.
If the rule was that directors were personally liable for breaches of the duty of
care, but the more efficient rule was that they should not be personally liable, the
parties would contract around the rule to reach a more efficient outcome.
Bargaining around the rule can only occur when transaction costs are low. If the
transaction costs are high, then the parties would be forced to live with the
inefficient categorical rule imposing personal liability. In such scenarios, a
default rule absolving directors of personal liability would make sense.

Would such a rule be more efficient? Shareholders would sue directors
individually or jointly, and shareholders could elect to sue those with the deepest
pockets. These directors would have to sue the others for contribution. In this
circumstance, individuals with significant personal resources would decline
directorships so the board would be comprised of individuals with little or
nothing at stake, possibly even by individuals who are in serious debt. Personal
liability is of little avail because a successful shareholder would collect nothing.
Furthermore, if personal liability were the rule, even good candidates who are
mired in debt might shirk directorships, which would uninjure shareholders by
forcing them to accept less than ideal candidates as directors.

Waiver of liability is clearly not the only option. It is entirely possible to
externalize some of these risks — whether it is by insurance, limitations of
liability, or selective waivers. If true bargaining was at work, one would expect
to see a range of these outcomes, with the most efficient being replicated. What
we have, instead, is waiver of liability to the fullest extent allowed by the law.^^
This leads to the conclusion that the provisions are pro-management categorical
rules, rather than efficient default rules that the parties themselves might have
designed had they been negotiating with low contracting costs. It is curious that
contractarians have no problem with categorical rules when they are pro-
management.

There is not any evidence that the new categorical rule results in greater
efficiency. The provision was adopted not because of the reasoning in Smith v.
Van Gorkom,^^ at least not overtly. Instead, the perceived "crisis" in D&O

Corporate Law, 45 WASHBURN LJ. 267, 277 (2006); Butler & Ribstein, Opting Out of Fiduciary
Duties, supra note 34, at 46; Romano, Empowering Investors, supra note 43, at 2427-28.

60. Eisenberg, supra note 15, at 833.

6 1 . See, e.g. , Dell Inc., Restated Certificate of Incorporation, http://public.thecorporatelibrary.
net/charters/cha_ 13349.htm (last visited Mar. 9, 2009).

62. 488 A.2d 858 (Del. 1985), overruled by Gantler v. Stephens, 965 A.2d 695, 713 n.54 (De.
2009).

2009] OPTING ONLY IN 297

insurance, something that was well in process long before the court opted to
enforce the duty of care, induced the change. In other words, the ostensible
reason for waiver of liability provisions was to intervene in the market for D&O
insurance, presumably to lower the costs. There was no evidence that the
approach taken by the Delaware legislature was necessary, would have any
significant impact on the market for D&O insurance, or was likely to result in
greater efficiency than allowing for the inevitable market correction. In fact,
almost as the ink dried on the legislation, the D&O "crisis" ended.^^ At the same
time, while having little or no impact on D&O insurance, the provisions benefited
managers by reducing their exposure to liability.

B. Waiver of Liability: An Exegesis

D&O insurance had, by the 1980s, become a fixture in the corporate board
room. As the decade opened, however, a "crisis" occurred.^ In renewing their
policies, companies often found that the costs had risen sharply, the exclusions
had increased, and the amount of coverage was reduced.^^ There were various
reasons for the crisis, including traditional cycles that affected all types of
commercial insurance.^^

63. Even Romano acknowledges that by "late 1987, the D & O insurance market was no
longer in turmoil." Roberta Romano, Corporate Governance in the Aftermath of the Insurance
Crisis, 39 EMORY L.J. 1 155, 11 56 (1990) [hereinafter Romano, Corporate Governance].

64. Some have questioned whether "crisis" is an appropriate term, at least with respect to the
allegations that the shifts in the insurance market affected the pool of qualified candidates willing
to serve on the board. See Elizabeth A. Nowicki, Not in Good Faith, 60 SMU L. Rev. 44 1 , 478-79
(2007).

65. 5^^ Dennis J. Blocketal., Advising Directors on the D&O Insurance Crisis, 14SEC.REG.
L.J. 130, 130-31 (1986) ("The market for directors and officers . . . liability insurance is currently
is in a state of crisis. Premiums are skyrocketing, deductibles are increasing at an extraordinary
rate, coverage is shrinking, and more and more insurance companies are terminating their D&O
programs. At the same time, policy durations are becoming shorter, and the policies themselves
have an increasing number of exclusions.") (footnotes omitted); see also Michael D. Sousa, Making
Sense of the Bramble-Filled Thicket: The "Insured vs. Insured" Exclusion in the Bankruptcy
Context, 23 EMORY Bankr. Dev. J. 365, 375 (2007) ("For example, 50% of the corporate
respondents to a survey released in 1987 and conducted by the actuarial and insurance consulting
firm the Wyatt Company reported that their directors and officers liability insurance premiums had
been recently increased by 300% or more; 27% of the respondents reported deductibles increased
by 300% or more; and 27% of the respondents reported that their maximum coverage had been
reduced by 50% or more.").

66. In hindsight, it is clear that the insurance market goes through periodic boom and bust
cycles, and a bust cycle occurred during this time period. See Tom Baker & Sean J. Griffith,
Predicting Corporate Governance Risk: Evidence from the Directors ' & Officers ' Liability
Insurance Market, 74 U. Cffl. L. REV. 487, 507 (2007) ("The D&O insurance market went through
this 'hard' phase in the mid-1980s and again in 2001-2003. More recently, the D&O insurance
market has been shifting to the 'soft' phase.") (footnotes omitted). These boom and bust cycles are
"correlated" with other business cycles. Id. at 506.

298 INDIANA LAW REVIEW [Vol. 42:285

One development that did not explain the "crisis," however, was the
Delaware Supreme Court's decision in Van Gorkom. For much of this century,
the duty of care in Delaware led, what one commentator labeled, a "humble
existence."^^ However, "comatose" was perhaps a more apt description.
Delaware courts simply did not find violations of the duty of care. Directors
confronted little or no risk of liability for ordinary business decisions. Only suits
alleging conflicts of interest had any realistic hope of success. ^^

This placid state of affairs was disrupted by the Delaware Supreme Court's
decision in Smith v. Van Gorkom.^^ The court found the business judgment rule
inapplicable to an "uninformed" board.^^ The directors found themselves in the
unusual position of having to show the fairness of the transaction in which they
received no personal benefit. The case ultimately settled for more than $23
million,^ ^ an amount paid not by the directors but by Jay Pritzker, the acquirer,
and the D&O insurance policy.^^

67. Stephen J. Lubben & Alana Darnell, Delaware 's Duty of Care, 3 1 DEL. J. CORP. L. 589,
590 (2006).

68. Delaware courts are still unwilling to find violations of the duty of care. In the period
1980 until 2004, research uncovered only five derivative and twelve direct actions against outside
directors that went to trial. Bernard Black et al., Outside Director Liability, 58 Stan. L. Rev. 1055,
1064-66 (2006).

69. 488 A.2d 858 (Del. 1985), overruled by Gantler v. Stephens, 965 A.2d 695, 713 n.54
(Del. 2009).

70. Id. at 889. The directors of Trans Union appeared beholden and under the influence of
Van Gorkom, who wanted the merger approved so that he could sell his interest before retiring.
See id. at 865-66, 869. The case was not brought under the duty of loyalty because Van Gorkom
got a benefit shared by the other stockholders, a Delaware crafted exception. Id. at 872-73. As two
commentators noted before the case was decided, "courts have proven remarkably reluctant to
impose liability where no element of self-dealing or personal benefit was present." John C. Coffee,
Jr. & Donald E. Schwartz, The Survival of the Derivative Suit: An Evaluation and a Proposal for
Legislative Reform, 81 COLUM. L. REV. 261, 317 (1981).

71. See Stephen A. Radin, The Director's Duty of Care Three Years After Smith v. Van
Gorkom, 39 HASTINGS L.J. 707, 719 (1988) ("The court accordingly remanded the case for a
determination of the fair value of the Trans Union shares at the time of the board's decision, and
for an award of damages to the extent that the fair value exceeded $55 per share. The case was
settled prior to such a determination for $23.5 million, amounting to approximately $ 1 .87 per share.
The settlement was conditioned upon a $10 million payment by either Trans Union's or the
individual directors' insurance carrier; most of the remaining $13.5 million was contributed by the
Pritzker company that had acquired Trans Union.") (footnotes omitted).

72. Id. ; see also Bayless Manning, Reflections and Practical Tips on Life in the Boardroom
after Wan Gorkom, 41 Bus. Law. 1, 1 n.al (1985) (editor's note) ("[A]n agreement was reached
to settle the Van Gorkom litigation by the payment of $23.5 million to the plaintiff class. Of that
amount, a reported $10 million, the policy limit, is to be provided by Trans Union's directors and
officers liability insurance carrier. Although the group which acquired Trans Union in the disputed
acquisition was not a defendant, according to a newspaper account nearly all of the $13.5 million
balance will be paid by the acquiring group on behalf of the Trans Union defendant directors.");

2009] OPTING ONLY IN 299

The decision drew an outcry from corporate America^^ and fueled loud
criticism/'^ Some complained that the case applied a negligence rather than gross
negligence standard, a characterization hard to justify on the facts7^ Others saw
dire consequences, asserting that qualified persons would be unwilling to serve
as directors of public companies 7^ Law and economics scholars denounced the
categorical nature of the decision 7^

In fact, the criticisms were overwrought. There was little chance that Van
Gorkom would presage a broad reexamination of, or change in, the duties of
directors. For one thing, the case was decided by a 3-2 margin,^^ a departure from
the usual display of unanimity in fiduciary duty cases. For another, the case
involved a pseudo-loyalty claim, which perhaps explained the heightened
scrutiny.^^ Third, the threatened uncertainty was exaggerated.^^ The case made

see also Black et al., supra note 68, at 1067 ("The settlement was for $23.5 million, which
exceeded Trans Union's $10 million in D&O coverage. The public story is that the acquirer,
controlled by the Pritzker family, voluntarily paid the damage award against the directors, and the
Pritzkers asked only that each director make a charitable contribution equal to ten percent of the
damages exceeding the D&O coverage ($135,000 per person).").

73. See Sarah Helene Duggin & Stephen M. Goldman, Restoring Trust in Corporate
Directors: The Disney Standard and the "New" Good Faith, 56 AM. U. L. REV. 21 1, 231 (2006)
("The court' s decision shook the foundations of the corporate world."); Fred S. McChesney, A Bird
in the Hand and Liability in the Bush: Why Van Gorkom Still Rankles, Probably, 96 Nw. U. L. Rev.
631, 631 (2002) ("Considered a legal disaster in 1985, it is judged no less disastrous today.")
(footnote omitted).

74. See, e.g., Radin, supra note 71, at 707-08.

75. See Daniel R. Fischel, The Business Judgment Rule and the Trans Union Case, 40 Bus.
Law. 1437, 1445 (1985) [hereinafter Fischel, The Business Judgment Rule\, Manning, supra note
72,atl.

76. The "evidence" was almost entirely anecdotal. See Faye A. Silas, Risky Business:
Corporate Directors Bail Out, 72 A.B.A. J. 24, 24 (June 1986). A study during the period by
Kom/Ferry reported that twenty percent of "companies reported that qualified candidates had
refused an invitation to serve as directors in 1985." Id. Thus, for example, two prominent lawyers
in Delaware justified the state's waiver of liability provision in part because of the difficulty
companies were having attracting qualified candidates to the board. See R. Franklin Balotti &
Mark J. Gentile, Elimination or Limitation of Director Liability for Delaware Corporations, 12
Del. J. Corp. L. 5, 18 (1987). Their support? Id. at 9 n. 18 (citing Laurie Baum & John A. Byrne,
The Job Nobody Wants, Bus. Wk., Sept. 8, 1986, at 56; Business Struggles to Adopt as Insurance
Crises Spreads, WALL ST. J., Jan. 21, 1986, at 31; WALL ST. J., Aug. 26, 1986, at 32.).

77. Fischel, The Business Judgment Rule, supra note 75, at 1455 (labeling decision as "one
of the worst decisions in the history of corporate law").

78. Smith v. Van Gorkom, 488 A.2d 858, 893, 898 (Del. 1985), overruled by Gantler v.
Stephens, 965 A.2d 695, 713 n.54 (Del. 2009).

79. Id. at 874 ("The directors (1) did not adequately inform themselves as to Van Gorkom' s
role in forcing the 'sale' of the Company and in establishing the per share purchase price. . . .").
The sale to Pritzker was engineered by Van Gorkom, the CEO of Transunion. Id. at 866-67.
Stepping down as CEO and chairman. Van Gorkom wanted to sell the company as a way of cashing

300 INDIANA LAW REVIEW [Vol. 42:285

no new law,^^ did not second guess the board, and relied on a relatively objective
element of the business judgment rule.^^

Most importantly, the decision arose in Delaware.^^ There was no reason to
believe that a decision perceived as anti-management would somehow become
a mainstay of the corporate governance process. Indeed, Delaware courts quickly
isolated the decision and limited its impact.^"^

Van Gorkom created consternation in the boardroom but did not significantly
contribute to the D&O insurance crisis, which was already well underway.^^

out his large ownership interest. Id. at 865-66. Because, however, he was to receive a benefit in
the sale that was shared by all stockholders, the Delaware courts categorically excluded
consideration under the duty of loyalty. See Sinclair Oil Corp. v. Levien, 280 A.2d 717, 722 (Del.
1971).

80. Instead, the decision merely required that the file contain sufficient paper to support the
decision, often in the form of a fairness opinion. See Andrew Ross Sorkin, Mergers: Fair Should
Be Fair, N.Y. TIMES, Mar. 20, 2005, at 36.

81. The court repeated that shareholders had the burden of overturning the presumption of
the business judgment rule and that the applicable standard was gross negligence. See Dennis R.
Honabach, Smith v. Van Gorkom; Managerial Liability and Exculpatory Clauses — A Proposal to
Fill the Gap of the Missing Officer Protection, 45 WASHBURN L.J. 307, 322 (2006) ("In short,
despite the hysteria of the moment, directors were no more at risk after Wan Gorkom than they ever
were before."); see also Morton Moskin, Trans Union: A Nailed Board, 10 Del. J. Corp. L. 405,
406 (1985) ("The Trans Union court did not depart fi-om the established rules.").

82. See Mark J. Lowenstein, A. Fleischer, Jr., G. Hazard, Jr., andM. Klipper, Board Games,
15 Del. J. Corp. L. 135, 138 (1990) (book review) ("The lasting practical effect oi Smith may be,
at best, that directors more careftilly document the reasons that they proceeded as they did.
Corporate counsel are likely to integrate the teachings of Smith in their standard advice for
corporate board meetings to remove any doubt that the board action was properly approved. One
cannot conclude from Smith that directors will exercise greater control over senior management or
more independence from it. The real question following Smith is whether the courts will cut
through this formalism when director action is challenged and the board can demonstrate the due
deliberation called for by Smith.") (footnote omitted).

83. See Renee M. Jones, Rethinking Corporate Federalism in the Era of Corporate Reform,
29 J. Corp. L. 625, 647 (2004) ("Although Van Gorkom raises the specter of potentially limitless
personal liability for directors, the decision was an aberration in Delaware jurisprudence and has
been almost uniformly criticized. No subsequent Delaware decision has premised director liability
on a breach of the duty of care.") (footnotes omitted).

84. See Rachel A. Fink, Social Ties in the Boardroom: Changing the Definition of Director
Independence to Eliminate "Rubber-Stamping" Boards, 79 S. Cal. L. Rev. 455, 487 (2006)
("Similarly, the Delaware Supreme Court weakened the stringent Unocal and Revlon duties through
subsequent decisions, just as it had done after the first wave of proshareholder decisions.")
(footnote omitted).

85 . See Honabach, supra note 8 1 , at 324 ("The causes for the increased rates were multifold,
but it became a popular, yet misguided, sport to point to the Van Gorkom decision as a major
contributing cause."). Thus, Romano notes that: "Many factors contributed to the market's
turbulence, including the expansion of directors' liability. The most important case in this regard

2009] OPTING ONLY IN 301

Indeed, an argument could be made that, if anything, the case encouraged greater
diligence by directors in the boardroom and should have reduced liability and the
cost of coverage.^^ Nonetheless, it was no coincidence that waiver of liability
provisions followed quickly in the aftermath of the decision.

C Section 102(b)(7)

The consternation caused by Van Gorkom threatened Delaware's pro-
management position. Not lost on the Delaware bar and legislature, the Council
of the Corporation Law Section of the Delaware State Bar Association set to work
on a legislative response. That Indiana passed a statute designed to reduce
liability no doubt increased the pressure on Delaware to act.^^ Rejecting a
number of other approaches,^^ the Council ultimately settled on what was to
become Section 102(b)(7).^^ Relying on an ''opt-in" approach, the provision

was a 1985 Delaware decision. Smith v. Van Gorkom.'" Romano, The States as a Laboratory, supra
note 10, at 220 (footnote omitted). Given the reasons noted above, see supra notes 83-84 and
accompanying text, and the fact that Van Gorkom was decided in 1985, only a year before the
"crisis" ended, it is inaccurate to suggest that this decision played a significant role in the "crisis."
Romano herself is forced to concede that ''Van Gorkom was decided after the D & O crisis is
thought to have begun, so it is best considered a contributing, rather than causal, factor for the
market disruption." Romano, The States as a Laboratory, supra note 10, at 221 n.25.

86. See William T. Allen, Ambiguity in Corporation Law, 22 Del. J. CORP. L. 894, 898
(1997) ("[CJertainty . . . also creates the risk that agents — such as corporate management — might
deploy such well-defined rules cleverly (and technically correctly), but with the purpose in mind

not to advance long-term interests of investors, but to pursue some different purpose Thus, at

least in that comer of contract law occupied by corporation law, clarity itself may be thought to be
a qualified good, not an unqualified good.").

87 . James J. Hanks, Jr. , Evaluating Recent State Legislation on Director and Officer Liability
Limitation and Indemnification, 43 BUS. LAW. 1207, 1209 (1988) ("The first state to respond to
the developments of the mid-1980s was Indiana, in April 1986, followed by Delaware in June.").

88. Balotti & Gentile, supra note 76, at 9 n.21 ("Among the proposals considered and
rejected were amending § 145(b) to permit indemnification of judgments or amounts paid in
settlement of derivative suits, amending § 145(g) to permit wholly-owned 'captive' subsidiaries to
provide 'insurance' to the parent corporation, providing a statutory 'cap' for personal liability of
directors, and providing an automatic statutory exemption from certain types of liability."). Other
models were adopted in the early years. Roberta Romano has a thorough discussion of the
development of these provisions. See Romano, The States as a Laboratory, supra note 10, at 220-
23.

89. Support for the approach could only be found in a turn of the century case in England,
upholding a charter provision waiving liability. See E. Norman Veasey et al., Delaware Supports
Directors with a Three-Legged Stool of Limited Liability, Indemnification, and Insurance, 42 Bus.
Law. 399, 403 (1987) ("The concept of a provision in the certificate of incorporation limiting or
eliminating the liability of directors was not without precedent. Some scholars had suggested that
the certificate of incorporation of Delaware corporations could be amended to limit or eliminate
liability of directors without enabling legislation under existing law by analogy to trust law in an
old English Chancery decision that appeared to sanction a corporate charter provision limiting

302 INDIANA LAW REVIEW [Vol. 42:285

authorized companies to insert into their articles a provision that essentially
allowed for the waiver of monetary damages against the board for violations of
the duty of care.^^ In other words, companies could absolve their directors for
grossly negligent behavior.^^

Despite the temporal proximity to Van Gorkom, the legislative history of the
provision indicated that the impetus was the "crisis" in the D&O insurance
market:

Section 102(b)(7) and the amendments to Section 145 represent a
legislative response to recent changes in the market for directors' liability
insurance. Such insurance has become a relatively standard condition of
employment for directors. Recent changes in that market, including the
unavailability of the traditional policies (and, in many cases, the
unavailability of any type of policy from the traditional insurance
carriers) have threatened the quality and stability of the governance of
Delaware corporations because directors have become unwilling, in
many instances, to serve without the protection which such insurance
provides and, in other instances, may be deterred by the unavailability of
insurance from making entrepreneurial decisions. The amendments are
intended to allow Delaware corporations to provide substitute protection,
in various forms, to their directors and to limit director liability under
certam circumstances.

Aware that the "crisis" was economic in nature (reflecting increased costs of
insurance), the legislature attempted to link the reform to improved governance.
Waiver of liability provisions would ensure a steady supply of qualified
directors.^^

liability."). The Chancery case mentioned is In re Brazilian Rubber Plantations and Estates, Ltd. ,
(1911) ICh. 425.

90. Del. Code Ann. tit. 8, § 102(b)(7) (West 2006 & Supp. 2009). The provision allowed
companies to "eliminate or limit personal liability of . . . directors ... for violations of a director's
fiduciary duty of care." Conmientary on Section 102(b)(7), S. 533, 133d Gen. Assembly 2, 65 Del.
Laws ch. 289(1986).

91. Veasey et al., supra note 89, at 402 ("In essence, the new legislation permits a
corporation, by a provision in its certificate of incorporation, to protect its directors from monetary
liability for duty of care violations, i.e., liability for gross negligence.").

92. Balotti & Gentile, supra note 76, at 9 (quoting the synopsis accompanying Senate Bill
No. 533, proposing the legislative amendments); see also Leo Herzel, Relief For Directors, FiN.
Times (London), July 17, 1986, § 1, at 11 ("The immediate cause for the enactment of the new
Delaware statute is a sharp change, adverse to directors, in the market for director and officer (D
and O) liability insurance.").

93. Herbert S. Wander & Alain G. LeCoque, Boardroom Jitters: Corporate Control
Transactions and Today's Business Judgement Rule, 42 Bus. Law. 29, 40 n.57 ("The Delaware
legislature has responded to the increased judicial scrutiny of the boardroom (particularly the Van
Gorkom decision) and to the dramatic reductions in available directors' and officers' liability
insurance."); see also Duggin & Goldman, supra note 73, at 23 1-32 ("The legislative history of the

2009] OPTING ONLY IN 303

The rationale was suspect, solving a problem in the D&O insurance market
that either did not exist or could have been more appropriately corrected by the
market.^"^ First, it presupposed that the insurance "crisis" resulted from an
increased risk of liability^^ under the duty of care, an unproven assumption at the
time^^ that ultimately proved incorrect.^^ Second, there was every reason to

statute is sparse, but it is clear that the legislature's objective was to undo a decision that many
believed would discourage qualified people fi*om serving as corporate directors."); James L.
Griffith, Jr., Director Oversight Liability: Twenty-First Century Standards and Legislative Controls
on Liability, 20 DEL. J. CORP. L. 653, 688 (1995) ("Most commentators attribute enactment of
section 102(b)(7) to the Delaware Supreme Court's decision in Smith v. Van Gorkom. There is no
direct evidence in the legislative history to support such a contention. Rather, the General
Assembly seemed concerned that director and officer insurance was becoming unavailable and, as
a result, the best directors would not serve on the boards of Delaware corporations.") (footnotes
omitted).

94. David Rosenberg, Making Sense of Good Faith in Delaware Corporate Fiduciary Law:
A Contractarian Approach, 29 Del. J. CORP. L. 491, 497 (2004) ("Delaware did not become the
center of American corporate law by ignoring the needs and worries of corporate directors.").

95. The number of law suits against directors apparently doubled between 1974 and 1984.
Romano, Corporate Governance, supra note 63, at 1 158; see also Griffith, supra note 93, at 688
n.210 ("First, the market was probably already in the early stages of an unavailability crisis, as
government regulation was on the rise, and government and private lawsuits were around every
comer.").

96. Premiums began to escalate even before the Delaware Supreme Court's decision in Van
Gorkom. See Griffith, supra note 93, at 688 n.210. Yet oddly, Romano notes that the D&O
insurance market had "changed dramatically" by 1984, with "premiums skyrocketing at the same
time that coverage was shrinking and deductible increasing." Romano, The States as a Laboratory,
supra note 10, at 220. She notes that "many factors" contributed to this increase, "including the
expansion of directors' liability" and describes Van Gorkom as "[t]he most important case in this
regard." See id. However, Van Gorkom was decided in 1985, after the dramatic change, and even
Romano acknowledges that the crisis had largely passed by 1986, shortly after the decision was
rendered. See id. at 221 n.25 ("It should be noted that Van Gorkom was decided after the D&O
crisis is thought to have begun, so it is best considered a contributing, rather than causal, factor for
the market disruption.").

97. During the period, for example, the costs of insurance increased for other types of
liability, which suggests that the problem was industry-wide. Romano, Corporate Governance,
supra note 63, at 1161 ("D & O insurers did not respond to the enactment of limited liability
statutes by lowering premiums, although the vast majority of corporations that had the opportunity
to opt for these new regimes did so."); see also Roberta Romano, What Went Wrong with Directors '
and Officers ' Liability Insurance ?, 14 DEL. J. CORP. L. 1,31 -32 ( 1 989) [hereinafter Romano, What
Went Wrong] ("Insurers did not respond to the enactment of these statutes by reducing 1987 policy
rates, although many firms acted immediately to amend their charters."). Romano, who clearly
favored the provisions, came up with two possible explanations. "First, the statutes in most states
do not exempt from liability claims for breach of the duty of loyalty, violation of federal securities
laws, and breach of the duty of care by directors who are also officers." Romano, Corporate
Governance, supra note 63, at 1 161. In other words. Van Gorkom and the duty of care had little

304 INDIANA LAW REVIEW [Vol. 42:285

believe that the problem would be short-lived,^^ with the market, in time,
establishing a new equilibrium.^^ In fact, by 1987, the "crisis" was largely
over.^^

The purported concern over corporate governance was never established.
While some anecdotal "evidence" indicated a growing number of resignations, ^^^
the evidence was never marshaled to show that this resulted from problems in the
D&O insurance market or that adequate replacements were unavailable. ^^^
Indeed, some of the evidence suggested that directors quit not because of a threat
of liability but because, in the aftermath of Van Gorkom, they had to work
harder. ^^^ Moreover, even if the pool had declined, companies had a ready
mechanism for correcting the imbalance: increasing directors' fees.^^

The adoption of waiver of liability amounted to an overbroad response to the
purported concerns about "uncertainty" in the application of the duty of care. The
issues arising out of Van Gorkom could have been addressed in a narrower
fashion, ^^^ focusing, for example, on the basis for establishing an informed
decision. ^^^ The provision, however, went beyond the purported problems created

impact on the D&O policies. "Second, and perhaps more important, the statutes' effectiveness will
depend on how courts interpret them." Id.

98. As insurance companies proved better able to assess the risks associated with D&O
insurance, premiums would presumably stabilize and additional carriers would enter the market.
This is apparently what occurred. See Romano, The States as a Laboratory, supra note 10, at 221
n.25.

99. See Baker & Griffith, supra note 66, at 507 ("The tightening of underwriting standards
accompanies a 'hard market' in which premiums and, after a lag, underwriting profits, rise.
Increased underwriting profits, of course, spur competition, whether from new entrants or
established companies seeking to increase market share, and competition leads to another 'soft
market' of loosening of underwriting standards and declining profits. The process is described as
cyclical because each market condition contains the seed to generate the other.") (footnote omitted).

100. See Romano, What Went Wrong, supra note 97, at 2 ("The turbulent conditions in the
D&O insurance market persisted until mid- 1986, when the rate of cost escalation and capacity
reduction declined. While many corporations reported having difficulty in securing D&O insurance
coverage in 1986, only a small number failed to resolve the problem.").

101. Id. at \ -2; see also Kristen A. Linsley, Comment, Statutory Limitations on Directors'
Liability in Delaware: A New Look at Conflicts of Interest and the Business Judgment Rule, 24
Harv. J. ON Legis. 527, 531 (1987) (noting that concern that qualified individuals would be
unwilling to serve as directors after Van Gorkom led to enactment of Delaware's Section
102(b)(7)).

102. For an excellent discussion of the paucity of data on this issue, see Nowicki, supra note
64, at 478-79.

103. See Silas, supra note 76, at 24.

104. Id.

105. The legislature could, for example, have increased the circumstances when directors
could rely on the CEO or market price in making informed decisions.

106. For those companies putting in place a waiver of liability provision, actions seeking to
impose liability for breach of the duty of care could be summarily dismissed. As the Delaware

2009] OPTING ONLY IN 305

by the decision, eliminating liability even in circumstances where no uncertainty
existed. ^^^

In other words, the Delaware legislature adopted waiver of liability
provisions to cure an insurance "crisis" that was short-lived, and likely structural,
in order to prevent adverse consequences which were unproven for boards of
directors. Rather than fix the perceived concerns with Van Gorkom through a
narrowly tailored approach, Delaware's legislature opted for an overbroad
solution that exonerated directors for breach of the duty of care in all
circumstances. In short, it was a provision designed less to solve a real
governance problem and more to use the surrounding din as cover to reduce
director liability.

Waiver of liability did not, therefore, restore the D&O insurance market. It
did, however, restore Delaware's pro-management position, something that had
taken a beating in the aftermath of Van Gorkom. The ''crisis" was little more than
a cover for a substantial, pro-management change in fiduciary obligations. ^^^

Even as the insurance crisis dissipated, other states passed copycat legislation.
By corporate law reform standards, the speed with which other states fell in line
was nothing short of remarkable. ^^ Within a few years of the new millennium,

Supreme Court noted in Emerald Partners v. Berlin, 1%1 A.2d 8 (Del. 2001),

unless there is a violation of the duty of loyalty or the duty of good faith, a trial on the

issue of entire fairness is unnecessary because a Section 102(b)(7) provision will

exculpate director defendants from paying monetary damages that are exclusively

attributable to a violation of the duty of care.

Id. at 92; see Lubben & Darnell, supra note 67, at 591 ("We answer the first question by tracing

the waning of the duty of care — a rule that now requires little more of a director than a ritualistic

consideration of relevant data. Today, after the director engages in this ritual, her decision will not

violate the duty. In short, the classic duty of care no longer exists in Delaware."); see also Malpiede

V. Townson, 780 A.2d 1075, 1096-97 (Del. 2001).

107. Thus, for example, the "best interests of shareholders" is met by any rational purpose.
See, e.g., J. Robert Brown, Portnoy v. Cryo-Cell; Vote Buying, Manipulation of the Voting
Process, and the Race to the Bottom — The Last Word, http://www.theracetothebottom.org/
preemption-of-delaware-law/portnoy-v-cryo-cell-vote-buying-manipulation-of-the-voting-p-3.html
(Feb. 14, 2008, 06:15 MST).

108. Which at least, in part, explains why so many commentators continue to ascribe the
reform to an attempt to overturn Van Gorkom. See Sean J. Griffith, Good Faith Business
Judgment: A Theory of Rhetoric in Corporate Law Jurisprudence, 55 DukeL.J. 1,14 (2005) ("The
passage of 102(b)(7), in other words, was the legislature's affirmation of the principle that the
judiciary would stay out of corporate governance, provided that the board did not behave disloyally
or, as the statute added, in bad faith.").

109. For at least some, the insurance crisis was the ostensible justification. See generally
James J. Hanks, Jr., State legislative Responses to the Director Liability Crisis, 20 REV. SEC. &
Commodities Reg. 23 (Feb. 11, 1987). Eventually, that could no longer be the explanation. See
Douglas M. Branson, Recent Changes to the Model Business Corporation Act: Death Knells for
Main Street Corporation Law, 72 Neb. L. Rev. 258, 27 1 (1993) ("Thus, in response to a temporary
problem, a liability insurance crunch that had affected most forms of liability insurance, and not

306 INDIANA LAW REVIEW [Vol. 42:285

all states had some version of waiver of liability."*^ A modest number of states
chose an "opt-out" approach, eliminating monetary damages for breach of the
duty of care but allowing companies to reinstate damages through amendments
to the articles.^ ^^ The vast majority of states, however, followed the Delaware
model and reUed on an "opt-in" approach. ^^^

What could be the reasons? Not the D&O insurance crisis; that was over.^^^
Not efficiency. Instead, the statutes were designed to prevent companies from
moving to Delaware. ^^"^ Whatever Delaware's motivation, other states adopted
comparable provisions not because of improved governance or efficiency, ^^^ but
because the statutes benefited management and avoided re-incorporation, even
though some evidence suggested harm to shareholder values.^ ^^

D&O coverage alone, most American legislatures let themselves be goaded into adopting a
permanent change to bedrock common law.") (footnote omitted).

110. Romano has reported that it took only fourteen years for forty-nine states to adopt some
form of liability limitation. See Romano, The States as a Laboratory, supra note 10, at 224.

111. See id. at 222-23.

112. See id.

113. In time, however, even Delaware stopped using the insurance crisis as the justification.
See William T. Allen et al., Realigning the Standard of Review of Director Due Care with
Delaware Public Policy: A Critique of Van Gorkom and its Progeny as a Standard of Review
Problem, 96 Nw. U. L. REV. 449, 462-63 (2002) ("That statute, which was enacted in direct
response to Van Gorkom, permits certificates of incorporation to contain a provision that exculpates
directors fi"om damages liability for breaches of the duty of care. That statute thus restored most
of the liability protections afforded by a consistently applied gross negligence standard."); see also
Cinerama, Inc. v. Technicolor, Inc., 663 A.2d 1156, 1166 n.l8 (Del. 1995) (stating that "[t]he
statute was, in fact, a legislative response to [the Supreme Court of Delaware's] liability holding
in Van Gorkom").

114. Romano, The States as a Laboratory, supra note 10, at 224 ("Commentaries by
practitioners in several states refer to concern that firms would reincorporate if the state did not
adopt a limited liability statute similar to the Delaware provision."). Romano also contends that
the provisions were adopted because of "the perceived insurance crisis." Id. at 221. States that
followed on the heels of Delaware could perhaps claim with a straight face that they acted in
response to the perceived crisis. However, surely such a claim would be stretching credulity for
those acting several years later.

115. Some have tried to argue that these provisions arose not out of self-interest, but
efficiency. Roberta Romano notes that the provisions are "uniformly approved by shareholders"
and that the evidence "suggests that investors find the Delaware approach attractive." Id. at 224.
Having the provisions, she surmises, is "consistent" with "attracting higher quality outside
directors." Id. at 224-25. Interestingly, she has apparently abandoned other rationale used in the
past to argue that these provisions are really beneficial. See Romano, Corporate Governance,
supra note 63, at 1 156 ("But the most popular reform, limited liability statutes, most likely will
prove to be beneficial for shareholders, by eliminating a class of lawsuits where insurance payouts
defray legal costs rather than compensate shareholders, and any deterrent effect is quite
problematic").

116. See generally Michael Bradley & Cindy A. Schipani, The Relevance of the Duty of Care

2009] OPTING ONLY IN 307

m. The Corporate Response

The conclusion that Delaware authorized waiver of liability provisions to
restore its pro-management reputation does not necessarily preclude a finding of
increased efficiency. ^^^ The Delaware model relied upon an opt-in approach,
which theoretically allows owners and managers to bargain for the most efficient
arrangements.

In practice, however, this has not been the case.'^^ The "opt-in" approach
used by the Delaware statute places exclusive authority in the hands of
management to institute a waiver of liability provision and to draft the appropriate
language. Structured as amendments to the articles, only the board can initiate
the change. ^^^ The monopoly over initiation effectively bars shareholders from
opting back into the default regime. '^° Management, therefore, can pick the most

Standard in Corporate Governance, 75 IowaL. Rev. 1 (1989) (discussing how legal rules and
economic forces interact to facilitate corporate prosperity). See also Honabach, supra note 81, at
312 ("Some also believe that both the enactment of section 102(b)(7) and the individual corporate
decisions to add an exculpatory provision to corporate charters resulted in a loss of shareholder
value."). As for attracting outside directors, there is simply no evidence that companies have
trouble attracting these types of directors, with or without waiver of liability provisions. With
expanded indemnification, D&O insurance (no more crisis there), and director fees that can run
over a half a million dollars, it cannot be argued with a straight face that, absent waiver of liability,
a large public company would have trouble obtaining enough qualified outside directors.

117. The repeal on size limits just before the turn of the nineteenth century may have arisen
from self interest but resulted in improved efficiencies.

118. See McChesney, supra note 73, at 648-49 ("As shareholders confronted the implications
of Van Gorkom, a second development was predictable. In the contractarian model, faced with a
decision that swept away existing contracts between shareholders and their management, competing
state legislatures would seek to restore the value-maximizing status quo ante. Delaware's
imposition of an inefficient law (one whose costs exceeded its benefits) created a profit opportunity
for politicians in other states to install rules guaranteeing that Van Gorkom could not happen in
their jurisdictions. That competition would force Delaware to mitigate the effects of the inefficient
rule it created.").

1 19. But see North Dakota Publicly Traded Corporations Act, N.D. Cent. Code Ann. §§ 10-
35-01 to -33 (Supp. 2007) (providing shareholders of public companies with the right to initiate
amendments to the articles of incorporation).

120. See Bebchuk & Hamdani, Optimal Defaults, supra note 52, at 502 ("On most important
issues, corporate law requires companies wishing to opt out of a default arrangement to do so by
amending their charters. Charter amendments, in turn, require approval by shareholders
representing a majority of the outstanding shares. Shareholders can only act, however, on the basis
of proposals put forward by the board of directors. Shareholders can never initiate charter
amendments, and the board thus enjoys a veto power over such amendments.") (footnote omitted).
This is critical. Even if management is eventually replaced, the new set of directors would
presumably want to retain the waiver of liability provision and would, therefore, be unlikely to
initiate an opt-out process. It should be noted that Pennsylvania allows the provision to be included
in the bylaws which may permit shareholder initiation. See 15 Pa. Cons. Stat. Ann. § 5 13 (West

308 INDIANA LAW REVIEW [Vol. 42:285

propitious moment to make a proposal, and, once in place, shareholders cannot
initiate repeal/^' Finally, as the proponent, it is management that drafts the
language in the waiver provisions. ^^^

The adoption process, predictably, contains no element of bargaining or
private ordering. Instead, it is a management-dominated process. ^^^ Given the
benefits to management resulting from adoption, its control over the process, and
the inability of shareholders to initiate repeal, it is difficult to see the
opportunities for bargaining and private ordering.*^'* Instead, one could
reasonably predict that over time all companies would put these provisions in
place^^^ and all provisions would waive Uability to the fullest extent permitted by
law. ^2^

With these predictions in mind, let us turn to the empirical evidence. Many
authors have already noted the popularity of waiver of liability provisions. *^^ No

1995).

121. Bebchuk & Hamdani, Optimal Defaults, supra note 52, at 503 ("For our purposes, what
is critical is only that there are impediments to reversing a default arrangement favored by
managers and that such an arrangement thus might not be reversed even if the arrangement is value
decreasing and the transaction costs of changing it are small. The problem is that default
arrangements favoring managers are likely to 'stick.'").

122. See Rutheford B. Campbell, Jr., Corporate Fiduciary Principles for the Post-
Contractarian Era, 23 FLA. ST. U. L. Rev. 561, 585 (1996) ("Relatedly, one should not forget that
managers control the process by which such opting out terms are constructed, implemented, and
priced. Managers or their agents typically bear responsibility for drafting the opt-out provisions,
and typically mangers establish the process through which the corporation or the corporate
constituencies 'consent' to the opt-out provisions.").

1 23 . Others have noted the problem with suggesting that a corporation is a nexus of contracts
negotiated by the relevant parties. See Brudney, supra note 14, at 1412 ("It stretches the concept
'contract' beyond recognition to use it to describe either the process of bargaining or the
arrangements between investors of publicly held corporations and either theoretical owners first
going public or corporate management. Scattered stockholders cannot, and do not, negotiate with
owners who go public (or with management — either executives or directors) over hiring managers,
over the terms of their employment, or over their retention.").

1 24. See Archer-Daniels-Midland Co., Definitive Proxy Solicitation Material (Form DBF 14A)
(Sept. 25, 1996) ("RESOLVED: The shareholders of Archer Daniels Midland Company urge the
Board of Directors to take such action as is necessary to provide for directors personal monetary
liability for acts or omissions that constitute a breach of a director's fiduciary duty of care resulting
from gross negligence.").

1 25. See McChesney, supra note 73, at 649 ("Shareholders have overwhelmingly responded
to the opportunity by adopting the director-protecting charter amendments permitted by these new
statutes. So has been restored the status quo ante in corporate law: virtually a zero-chance of
liability for directors in duty-of-care cases.").

126. Thus, for example, management with surly shareholders ready to oppose the provisions
might wait until reincorporation when shareholders will be denied a straight up or down vote on
the provision.

127. As commentators have noted: "According to one treatise, in the year after enactment of

2009] OPTING ONLY IN 309

one, however, has studied the phenomenon systematically. ^^^

We have chosen as the initial universe for examination the Fortune 100 in the
United States. ^^^ Of that group, ninety-nine are incorporated under state law.
Freddie Mac, a federally incorporated entity, is the only exception. ^^^ Of the
remainder, sixty-five are incorporated in Delaware, five in New York,'^* four in
New Jersey, ^^^ Minnesota, ^^^ and Pennsylvania, ^^"^ three in Ohio,'^^ Washington, ^^^
and North Carolina, ^^^ two in Illinois, ^^^ and Massachusetts, ^^^ and one in

the section, 4,206 charter amendments or restated certificates of incorporation containing director
liability provisions were filed in Delaware. The 13,697 new certificates of incorporation were filed
with these provisions." Lubben & Darnell, supra note 67, at 600 n.74 (citing 1-6 Delaware Corp.
L. & Prac. § 6.02 n.58 (2004)); see also Lawrence A. Hamermesh, Why I Do Not Teach Von
Gorkom, 34 Ga. L. Rev. 477, 490 (2000) (finding that "[cjharter provision enabling statutes like
Delaware's section 102(b)(7), moreover, have been almost universally implemented by
corporations to which such laws apply"). , .

128. But see Bradley & Schipani, supra note 116, at 62 (stating that of a sample of 593
Delaware firms "it appears that 94% (559/593) of Delaware firms amended their articles of
incorporation in accordance with section 102(b)(7)").

1 29. Fortune 500: Our Annual Ranking of America 's Largest Corporations, FORTUNE, Apr.
30, 2007, available at http://money.cnn.com/magazines/fortune/fortune500/2007/full_list/. For a
list of the companies and the status of their waiver of liability provisions, see Appendix, supra note
12.

130. As of 2007, Freddie Mac was number 50 in the Fortune 100. The articles of
incorporation for Freddie Mac are in the statute. See generally Federal Home Loan Mortgage
Corporation Act, http://www.freddiemac.com/govemance/pdf/charter.pdf (last visited Mar. 9,
2009).

131. N. Y. Bus Corp. Law § 402 (McKinney 2003).

132. N.J. Stat. Ann. § 14A:2-7 (West 2003).

133. Minn. Stat. Ann. § 302A.25 1 (West 2004 & Supp. 2008).

134. 15 Pa. Cons. Stat. Ann. § 513 (West 1995). Pennsylvania allows the provision to be
included in the bylaws.

135. See OfflOREV. Code Ann. § 1701 .59(D) (West 1994 & Supp. 2008) (requiring clear and
convincing proof "that the director's action or failure to act involved an act or omission undertaken
with deliberate intent to cause injury to the corporation or undertaken with reckless disregard for
the best interests of the corporation."). The provision does allow a corporation to opt out. Id.
("This division does not apply if, and only to the extent that, at the time of a director's act or
omission that is the subject of complaint, the articles or the regulations of the corporation state by
specific reference to this division that the provisions of this division do not apply to the
corporation.").

136. Wash. Rev. Code Ann. § 23B.08.320 (West 1994).

137. N.C. Gen. Stat. Ann. § 55-2-02 (West 2000 & Supp. 2008).

138. 805 III. Comp. Stat. Ann. 5/2.10 (West 2004).

139. Mass. Gen. Laws Ann. ch. 156B, § 13 (West 2005).

310 INDIANA LAW REVIEW [Vol. 42:285

Virginia/"^^ Maryland, ^"^^ California, ^"^^ and Wisconsin. ^"^^

Some of these states do not require charter provisions to "opt-in" to the
liabihty waiver. In such states, the corporate code raises the level of culpability
necessary for the imposition of damages, with companies allowed to "opt-out."
This is true in Ohio and Wisconsin.*"^ Virginia imposes a cap but also allows
elimination of liability in the articles. ^"^^ The rest (other than Freddie Mac) mimic
the Delaware model, with some variations in language. ^"^

Among the non-federally incorporated, non-mutual companies, ^"^^ only one,
Pepsi Co., did not have a waiver of liability provision. ^"^^ Pepsi was incorporated
in Delaware in 1919 and re-incorporated in North Carolina in 1986.^"^^ The
bylaws do provide for indemnification rights "to the full extent permitted by
law."^^^

Our study of the articles of these companies shows that all waive liability to
the maximum extent permitted by law. Several companies^^* have a bare bones
version of the clause containing the following language: "A director of the
Corporation shall have no personal liability to the Corporation or its stockholders
for monetary damages for breach of his fiduciary duty as a director to the full
extent permitted by the Delaware General Corporation Law as it may be amended
from time to time."^^^ The others generally repeat the language in the statute,
providing that directors shall not be liable for monetary damages with some listed
exceptions. Some specifically reference recklessness, while others prohibit

140. Va. Code Ann. § 13.1-870.1 (2006 & Supp. 2008)

141. Md. Code Ann., Corps. &Ass'NS§ 2-405.2 (West 2002).

142. Cal. Corp. Code § 204 (West 1990).

143. Wis. Stat. Ann. § 180.0828 (West 2002 «fe Supp. 2008). Like Ohio, Wisconsin permits
a company to opt out of this provision.

144. See OfflO Rev. Code Ann. § 1701 .59(D) (West 1994 & Supp. 2008); Wis. Stat. Ann.
§ 180.0828 (West 2002 & Supp. 2008).

145. See Va. Code Ann. § 13.1-870.1 (2006 & Supp. 2008).

146. We have assembled the statutory provisions governing waiver of liability from all fifty
states. See Appendix, supra note 12.

147. Four of the companies in the top 100 are mutual companies: Liberty Mutual Insurance
Group, State Farm, Mass Mutual, and New York Life. At least one, however, has a waiver of
liability provision in the bylaws. See Appendix, supra note 12.

148. Pepsico, Amended and Restated Articles of Incorporation, http://www.pepsico.com/
Investors/Corporate-Govemance/Amended-and-Restated-Articles-of-Incorporation.aspx (last
visited Mar. 9, 2009).

149. See Pepsico, Our History, 1986, http://www.pepsico.eom/Company/Our-History.aspx#
1986.page_3 (last visited Mar. 9, 2009).

150. Pepsico, By-Laws, Article III, § 3.7, http://www.pepsico.com/Investors/ Corporate-
Govemance/By-Laws.aspx (last visited Mar. 9, 2009).

151. These include Bank of America, Dow, Cisco, Exxon-Mobil, Boeing, Goldman Sachs,
Hewlett-Packard, Home Depot, JP Morgan Chase, Newscorp, Sears, Time Warner, and Disney.

152. Countrywide Financial Corp., Quarterly Report (Form 10-Q), at 4 (May 7, 2004).

2009] OPTING ONLY IN 311

repeal. ^^^ With respect to liability for directors, none of the Fortune 100 purport
to waive liability in some reduced fashion. '^"^

IV. Analysis

What explains this curious uniformity? The data shows that one categorical
rule has been replaced with another. While the old rule allowed for damages in
the case of a breach of the duty of care, the adoption of an "opt-in" approach to
monetary damages simply resulted in everyone opting in. The results show none
of the diversity that private ordering predicted. '^^

153. For example, Comcast's clause states:

No person who is or was a Director shall be personally liable, as such, for monetary
damages (other than under criminal statutes and under federal, state and local laws
imposing liability on directors for the payment of taxes) unless the person's conduct
constitutes self-dealing, willful misconduct or recklessness. No amendment or repeal
of this Article ELEVENTH. . . .
Comcast, Restated Articles of Incorporation of Comcast Corporation, http://www.cmcsk.com/
phoenix.zhtml?c=l 18591 &p=irol-gov Articles (last visited Mar. 9, 2009).

1 54. In fact Dell' s articles of incorporation contain indemnity provisions in addition to waiving
liability:

[The] corporation shall, to the fullest extent permitted by law, indemnify any and all
officers and directors of the corporation, and may, to the fullest extent permitted by law
or to such lesser extent as is determined in the discretion of the Board of Directors,
indemnify any and all other persons whom it shall have power to indemnify, from and
against all expenses, liabilities or other matters arising out of their status as such or their
acts, omissions or services rendered in such capacities. The corporation shall have the
power to purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the corporation would have the power to indemnify him
against such liability.
Dell Inc., supra note 61.

155. The data is in contrast with evidence from a study of the charter provisions of companies
listed on the Sydney Stock Exchange prior to the enactment of mandatory rules in 1936 conducted
by Professor Whincop. See Michael J. Whincop, An Empirical Analysis of the Standardisation of
Corporate Charter Terms: Opting Out of the Duty of Care, 23 Int'lRev. L. & ECON. 285, 285
(2003). He examined 150 charters and found that "[m]ost companies opt for a limited indemnity
which does not extend to damages for negligence and adds little to the director's 'default'
indemnity rights." Id. at 291. The evidence is markedly different from our results and shows that,
given the variance, it might be reflective of some bargaining:

Liability releases are often qualified, but in standardised ways. The principal
qualifications refer to "wilful default" or "dishonesty," 43.3% of the charters are
qualified by reference to wilful default; 39.3% refer to "dishonesty"; 6% refer to both
in the alternative. Only three liability releases were unqualified and none of these

312 INDIANA LAW REVIEW [Vol. 42:285

The data shows that companies do not opt-in in the waiver of liability
context. '^^ This is because of the difficulties imposed on shareholders who might
want to engage in some type of negotiations. Thus, realities on the ground make
change difficult despite the presence of activist shareholders. Many of these
difficulties are systemic.

First, only management has the authority to propose an amendment to the
articles of incorporation. Directors can pick the most propitious time to propose
a matter to shareholders. The authority goes much further, however, than the
power to propose. To the extent management perceives any prospect of losing
a vote, it has a variety of tactics that it can deploy to affect the outcome. One
example is Mercier v. Inter-Tel (Del), Inc.,^^^ where a special committee of the
board sought approval of a merger. ^^^ When, shortly before the meeting, it
became clear the proposal would fail, the committee authorized an
adjournment. ^^^ This occurred despite overwhelming opposition to adjournment
of the meeting from shareholders.

Second, waiver of liability provisions can be implemented without the benefit
of a direct shareholder vote. The provisions may be in the articles when the
company goes public. ^^^ In other cases, they may be inserted into the articles
when the company re-incorporates, leaving shareholders with approving the
entire transaction, not each individual provision in the articles. Waiver of liability
provisions may also be approved in companies with controlling shareholders,
making the opinions of the minority shareholders irrelevant.

Third, even when submitted for approval, shareholders confront the usual
bevy of collective action problems. ^^^ They lack information, often a

included the broadest form of release.
Id. at 292. The study did find, however, that "a minority of companies opt for a more expansive
indemnity, wide enough to include liability for negligence, . . . [except] that the indemnity is not
available where the liability arises from the director's 'wilful default.'" Id. at 291-92. Unlike the
U.S. evidence, Professor Whincop finds that the Australian evidence shows that "terms contracting
around the standard of care do not appear to be systematically unfair to stockholders. On the
contrary, they are specifically directed to the areas where the imposition of liability seems least
efficient (such as liability for business judgments and the defaults of other agents)." Id. at 307.

156. See data in Appendix, supra note 12 (showing uniformity).

157. 929 A.2d 786 (Del. Ch. 2007).

158. /J. at 798-99, 802-03.

159. /J. at 798-99.

160. Bebchuk & Hamdani, Optimal Defaults, supra note 52, at 499 ("At the IPO stage, the
provisions of the charter are chosen by the party, or parties, (the 'founder') that takes the company
public").

161. Bebchuk, The Debate on Contractual Freedom, supra note 1, at 1401 ("Although an
amendment requires majority approval by the shareholders, voting shareholders do not have
sufficient incentive to become informed. And although the amendment must be proposed by the
board, the directors' decision might be shaped not only by the desire to maximize corporate value
but also by the different interests of officers and dominant shareholders.").

2009] OPTING ONLY IN 313

consequence of rational apathy. ^^^ To oppose management they would need to
lobby other shareholders, which is both expensive and difficult due to the proxy
rules/"

Fourth, there are a number of reasons why shareholders are less likely to
oppose waiver of liability provisions. One is the NIMBY phenomenon. ^^
Another is path dependence. ^^^ Yet another is the ''me-too" phenomenon, which
occurs when one board has a waiver of liability provision to fall back on so every
other board clamors for the same. With the provisions universally in place,
shareholders would have to accept the consequences of denying the waiver to
their management while all other large companies, including competitors, have
the waiver in place.

Fifth, shareholders typically want to maintain positive relations with
management, preferring to "vote with their feet" when dissatisfied. Thus, they
will not oppose management on every proposal, even if they have reservations.
In other words, opposition comes with costs attached. Given the insignificance
of the duty of care under Delaware law, these costs likely outweigh the benefits
that could result from opposition. ^^^

Directors might be made nervous by a provision that differs from those of

162. Jeffrey N. Gordon, The Mandatory Structure of Corporate Law, 89 COLUM. L. Rev.
1549, 1574-75 (1989) ("A diffuse group of public shareholders must evaluate this claim against the
possibility that the amendment is merely 'wealth-neutral,' because all or almost all of the gain
inures to the insiders, or 'wealth-reducing,' because it will transfer cash flow or control from public
shareholders to insiders. In these circumstances, shareholder voting as a means of evaluating and
consenting to a proposed charter amendment is fraught with severe problems, in particular,
collective action problems in acquiring and disseminating information among shareholders, and
strategic behavior by insiders that amounts to economic coercion. Thus insiders can exploit their
advantages to obtain approval even for wealth-reducing amendments.") (footnote omitted).

163. Most of the provisions were adopted back in the 1980s and early 1990s, at a time when
investor activism was not as developed.

164. NIMBY or "Not In My Back Yard" occurs when directors oppose attempts to remove
waiver of liability provisions claiming that even if the idea is a good one, it is a reform that is not
needed in their company.

165. See Marcel Kahan & Michael Klausner, Path Dependence in Corporate Contracting:
Increasing Returns, Herd Behavior and Cognitive Biases, 74 WASH. U. L.Q. 347, 349 (1996).
Kahan and Klausner suggest that

corporate contract terms can frequently offer "increasing returns" as more firms employ

the same contract term. Value arises from the common use of a contract term [A]s

the use of a term increases, it becomes significantly more attractive (at least up to a
critical point), and its attraction becomes self-perpetuating.

Id. at 348 (footnote omitted). This results in standardization which is "a form of path dependence."

Id.

166. Shareholder opposition surfaces mostly in the context of matters that affect economic
interests. Shareholders will, therefore, be more likely to support changes that address issues of
entrenchment and mismanagement. Shareholder proposals that most often pass over the opposition
of directors typically address anti-takeover devices or majority vote systems.

314 INDIANA LAW REVIEW [Vol. 42:285

other companies. In such cases, our evidence might explain the persistence of
"suboptimal uniformity. "*^^ The suboptimal rule waiving liability to the fullest
extent allowed by the law has become uniform because learning or network
externalities are significant, especially because waiver of liability provisions are
drafted and proposed at the insistence of management. Given the agency cost,
lawyers on the management payroll are unlikely to draft provisions that are
against the interests of management, even if such provisions are in the
management interests of shareholders.

Conclusion

The nexus-of-contracts approach is a worthy theoretical framework for the
examination of issues relating to corporate governance. This is particularly true
in emphasizing the importance of private ordering in the regulatory process. The
usefulness, however, breaks down when the approach is used to explain the
relationship between shareholders and management. There is little evidence in
practice that the relationship between shareholders and managers can be
accurately characterized as a process of private ordering. Instead, when the law
defers to private ordering, the result is that management is allowed to impose on
shareholders a categorical rule that embodies its self-interest. In the context of
waiver of liability provisions, this approach has resulted in one categorical rule
being replaced by another — ^precisely the opposite of what contractarians desire.

Thus, it would seem that the contractarian approach does not offer an
adequate explanation for the situation with regard to waiver of liability
provisions. Based on our evidence, the managerial model might offer better
predictive power. Management would always want the reduced liability. Given
learning and network effects, over time, such provisions would become universal.
Management would also want protection to the fullest extent permitted. This
would yield provisions consistent with the evidence that we have presented.

The evidence is consistent with a race to the bottom. The waiver of liability
provisions were not designed to solve a corporate governance problem, but were
intended to benefit management. Because management controls the re-
incorporation process, they could move the company to Delaware to take
advantage of reduced liability. Other states quickly mimicked Delaware's
approach, not because it promoted good governance or efficient behavior, but
because it prevented corporate flight to Delaware.

To have anything approaching an effective system of bargaining, the
shareholder voting process must be meaningful. ^^^ Management must know that
shareholders have the ability to veto or overturn an opt-in or opt-out decision.
Therefore, there must be substantial reform of the shareholder voting process.

1 67. See Kahan & Klausner, supra note 1 65, at 352-53 (noting "it is possible for a suboptimal
term to become standardized from the start and remain so. [Or], a term may become standardized
and widely used even if it would be optimal for some firms to adopt an alternative term").

168. Thus, we disagree with Professor Bainbridge, see supra note 59, that the nexus of
contracts theory compels an approach to corporate governance that requires a weakening of
shareholder authority.

2009] OPTING ONLY IN 315

These reforms need to do several things. First, shareholders need authority
equal to that of management to initiate an opt-in or opt-out process or to change
a prior decision. To do this, all opt-in or opt-out provisions either need to be in
the bylaws (with shareholders receiving explicit authority to initiate, change, or
repeal the bylaws) or, in the articles of incorporation with the authority to initiate
an amendment to the articles. *^^

Second, shareholders need to be given far broader authority to propose
changes to the arrangements that constitute the nexus of contracts in any
particular company. There are substantial areas of governance that are off-limits
to shareholders. These typically arise in the context of proposals that could affect
the management of the company. The argument that shareholders should not be
allowed to micromanage the diurnal functioning of the company has been raised
as the bogey to limit shareholder empowerment in areas that, at best, involve de
minimis interference in the actual management of the company. Shareholders
might condition support for a management inspired opt-in or opt-out proposal on
management support for additional shareholder authority, such as an advisory
vote on executive compensation.

Third, steps need to be taken to solve some of the collective action problems
that impede the shareholder approval process. These issues generally relate to
organization and cost. Cost issues arise most clearly in the need to solicit proxies,
an expensive and time consuming process. Liberal access to the company's
proxy statement for shareholder proposals would be one way to reduce costs
associated with collective action.

169. At least one state in narrow circumstances has given this authority to shareholders. See
North Dakota Publicly Traded Corporations Act, N.D. CENT. CODE ANN. §§ 10-35-01 to -33 (Supp.
2007).

Indiana Law Review

Volume 42 2009 Number 2

PROGRAM ON LAW AND STATE

GOVERNMENT FELLOWSHIP

SYMPOSIUM

Education Reform and State Government: The Role of
Tests, Expectations, Funding, and Failure

What Do We Expect?: An Introduction to

THE Law, Money, and Results of

State Educational Systems

Cynthia A. Baker*

Since its inception, the Program on Law and State Government has been
dedicated to fostering the study and research of critical legal issues facing state
governments. It continues to be an honor for me, as the founding Director of the
Program, to be the custodian of this Fellowship experience at this school. This
year's event. Education Reform and State Government: The Role of Tests,
Expectations, Funding, and Failure, culminates the ideas, research, and work of
the 2008 Program on Law and State Government Fellows, Ms. Jonelle Redelman^
and Mr. Anderson Sanders.^ With this Introduction to the articles by Professor
Michael Heise, Courting Trouble: Litigation, High-Stakes Testing, and
Education Policy,^ emanating from the symposium and that by Joseph O.
Oluwole and Preston C. Green, HI, State Takeovers of School Districts: Race
and the Equal Protection Clause,^ I share some of my introductory remarks from
the symposium conducting a brief exploration of three aspects of our public
education system which contribute to its failures and its successes: law, money,
and results. Then, this Introduction provides an overview of the symposium: a
day filled with questions about what we get, what we expect, and what we test

* Clinical Associate Professor Law and Director, Program on Law and State Government,
Indiana University School of Law — Indianapolis. B.A., with distinction, 1998, Valparaiso
University; J.D., magna cum laude, 1991, Valparaiso University School of Law.

1. Program on Law and State Government Fellow, 2008. J.D. Candidate, 2009, Indiana
University School of Law — Indianapolis; B.A., Indiana University/Purdue University —
Indianapolis, 2002.

2. Program on Law and State Government Fellow, 2008. J.D. Candidate, 2009, Indiana
University School of Law — Indianapolis; B.A., Morehouse College, Atlanta, 2006.

3. Michael Heise, Courting Trouble: Litigation, High-Stakes Testing, and Education
Policy, 42 IND. L. REV. 327 (2009).

4. Joseph O. Oluwole & Preston C. Green, III, State Takeovers of School Districts: Race
and the Equal Protection Clause, 42 iND. L. REV. 343 (2009).

318 INDIANA LAW REVIEW [Vol. 42:317

from our political and fiscal investments in public education — ^both in our
schools and in our correctional facilities. The Introduction closes with a few
words of thanks to all of those who contributed to the symposium's success.

I. Law

Unlike the Federal Constitution, every state constitution includes an
education clause which speaks to the duty of the State to provide some sort of
education for its citizens.^ More than three decades ago, the U.S. Supreme Court
stressed that the Federal Constitution makes no mention of education as the Court
declined to recognize a fundamental right to education.^ Since then, state
governments and their respective local governments, from counties to cities to
special school districts have turned to state constitutional clauses, state legislative
funding formulae, and, more often than not, state courts, to calibrate how we
fund our schools, what is fair, and, more recently, what constitutes an adequate
education.^

Scholars suggest that "whether measured in terms of local budgets, the local
government workforce, the impact on local communities or the broader
implications for the economy and society, public elementary and secondary

5. Ala. Const, art. XIV, § 256; Alaska Const, art. VII, § 1; Ariz. Const, art. XIV, § 1;
Cal. Const, art. IX, § 5; Colo. Const, art. IX, § 2; Conn. Const, art. VIII, § 1 ; Del. Const, art.

X, § 1; Fla. Const, art. IX, § 1; Ga. Const, art. VIII, §1,^1; Haw. Const, art. X, § 1; Idaho
Const, art. IX, § 1; III. Const, art. X, § 1; Ind. Const, art. 8, § 1; Iowa Const, art. 9, 2d, § 3;
Kan. Const, art. VI, § 1; Ky. Const. § 183; La. Const, art. VIII, § 1; Me. Const, art. VIII, pt.
1, § 1; Md. Const, art. VIII, § 1; Mass. Const, pt. 2, ch. 5, § 2; Mich. Const, art. VIII, § 2;
Minn. Const, art. XIII, § 1; Miss. Const, art. VIII, § 201; Mo. Const, art. IX, § 1(a); Mont.
Const, art. X, § 1; Neb. Const, art. VII, § 1; Nev. Const, art. XI, § 2; N.H. Const, pt. 2, art.
LXXXIH; N. J. CONST, art. VIII, § 4, ^ 1 ; N.M. CONST, art. XII, § 1 ; N. Y. Const, art. XI, § 1 ; N.C.
Const, art. IX, § 2; N.D. Const, art. VIII, § 2; Ohio Const, art. VI, § 2; Okla. Const, art. XIII,
§ 1; Or. Const, art. VIII, § 3; Pa. Const, art. Ill, § 14; R.I. Const, art. XII, § 1; S.C. Const, art.

XI, § 3; S.D. Const, art. VIII, § 1; Tenn. Const, art. XI, § 12; Tex. Const, art. VII, § 1; Utah
Const, art. X, § 1; Vt. Const, ch. 2, § 68; Va. Const, art. VIII, § 1; Wash. Const, art. IX, § 2;
W. Va. Const, art. XII, § 1 ; Wis. Const, art. X, § 3; Wyo. Const, art. VII, ^Usee also Eli Savit,
Note, Can Courts Repair the Crumbling Foundation of Good Citizenship? An Examination of
Potential Legal Challenges to Social Studies Cutbacks in Public Schools, 107 MiCH. L. Rev. 1269,
1 29 1 -98 (2009) (listing the state constitutional provisions dealing with education and analyzing the
civic dimensions of such provisions).

6. San Antonio Indep. Sch. Dist. v. Rodriguez, 411 U.S. 1, 35 (1973) ("Education, of
course, is not among the rights afforded explicit [or implicit] protection under our Federal
Constitution.").

7. See, e.g, DuPree v. Alma Sch. Dist. No. 30, 65 1 S.W.2d 90 (Ark. 1983); Sheff v. O'Neill,
678 A.2d 1267 (Conn. 1996); Nagy v. Evansville-Vanderburgh Sch. Corp., 870 N.E.2d 12 (Ind.
2007); Rose v. Council for Better Educ, 790 S.W.2d 186 (Ky. 1989); Abbott v. Burke, 643 A.2d
575 (N.J. 1994); DeRolph v. State, 677 N.E.2d 733 (Ohio 1997); Tenn. Small Sch. Sys. v.
McWherter, 894 S.W.2d 734 (Tenn. 1995).

2009] WHAT DO WE EXPECT? 319

education is the most important service provided by local governments."^ Due
in large part to the tradition of public school funding levels being directly related
to local property values,^ state governments and state-wide taxpayer dollars enter
into the education funding formulae primarily as a way to equalize the funding,
and hopefully, the educational opportunities for the children of those states. As
a result, state governments are tugged in at least two directions with respect to
public education. The first tug springs from deference to the most local of local
governments, the school districts. As the Supreme Court noted in San Antonio
Independent School District v. Rodriguez,^^ "The persistence of attachment to
government at the lower level where education is concerned reflects the depth of
commitment of its supporters."*^ The second tug derives from states' respective
obligations to provide the requisite amount, whatever that may be, of education
to their children as accorded by their own constitutions.*^

What should the proper state/local balance be? A stark example of how the
balance of state/local contributions to public education can make dramatically
unfair what would, in a vacuum, be seen as a fair way to fund schools is set forth
in a string of cases out of Texas. *^ In Edgewood Independent School v. Kirby,^^
the Texas Supreme Court noted the "glaring disparities" stating that the
"wealthiest district has over $14,000,000 of property wealth per student, while
the poorest has approximately $20,000" of property wealth per student — a 700: 1
ratio. *^ More than forty state supreme courts in the last four decades, have been
called upon to address disparities in funding formula with more state tax dollars,

8 . Richard Briffault & Laurie Reynolds, Cases and Materials on State and Local
Government Law 486 (7th ed. 2009).

9. See id.

10. 411 U.S. 1(1973).

11. Mat 49.

12. See, e.g. , BRIFFAULT & REYNOLDS, supra note 8, at 487; see also sources cited supra note
5.

13. Neeley v. W. Orange Cove Consol. Indep. Sch. Dist., 176 S.W.3d 746, 794-98 (Tex.
2005) (holding Texas's school funding formula (upheld in Edgewood IV) unconstitutional under
state constitution's prohibition on state-level property tax); Edgewood Indep. Sch. Dist. v. Meno
(Edgewood rV), 917 S.W.2d 717,750 (Tex. 1995) (upholding Texas legislature's school fiinding
formula. The funding strticture included a recapture provision, requiring certain wealthy school
districts to consolidate with another district, detach portions of district to another (presumably less
wealthy) district, contribute additional funds to the state, to pay for education of non-resident
students, or to consolidate its tax base with another district); Carrollton-Farmers Branch Indep. Sch.
Dist. V. Edgewood Indep. Sch. Dist. (Edgewood III), 826 S.W.2d489, 513-14 (Tex. 1992) (holding
a subsequent legislative attempt to revamp school funding and school district structure to address
funding inequities unconstitutional); Edgewood Indep. Sch. Dist. v. Kirby (Edgewood 11), 804
S.W.2d 491, 494-99 (Tex. 1991) (holding that the Texas legislature's response to the 1989 case
(eliminating much of the inter-district inequality by raising taxes) was unconstitutional); Edgewood
Indep. Sch. Dist. v. Kirby (Edgewood I), 111 S.W.2d 391 (Tex. 1989).

14. 777 S.V^.2d 391 (Tex. 1989).

15. /^. at 392.

320 INDIANA LAW REVIEW [Vol. 42:3 17

different funding formulae, or both.^^ In over half of those cases, the plaintiffs
from poorer school districts won at the state supreme court level with the court
ordering some influx of state-wide, state funded education to offset the
disparities arising from the purely local property tax funding mechanisms.'^

The effect of these victories, although Pyrrhic in some respects due to the
lack of power for the state supreme courts to actually change the funding
formulae set out in legislation, has been to modestly reduce the local share, and
thereby, increase the state share of school funding.'^ Today, the proportional
breakdown of education spending among states and their respective local
governments varies widely. For example. New Mexico has funded as much as
88% of the cost of elementary/secondary education, with its specific school
districts contributing \2%}^ In contrast, Nevada currently funds its elementary
and secondary education costs at 38%, the lowest current statewide level, with
67% of its educational funding dollars coming from local school district property
taxes. ^^

A second result is that state courts have repeatedly had to analyze state
constitutional equal protection and education clauses, decide the role of the states
in addressing interlocal inequalities among school districts, and assess the
relationship between the state government and its local governments in financing
public education.^' State governments' increasing involvement in how we
educate our children certainly helped set the stage for the federal government to
become more involved than it ever has been, most recently and clearly, through
the federal No Child Left Behind Act of 2002 (NCLB).^^ So now, state
governments, the quintessential middlemen, find themselves between local
school districts who need state government help, those who do not want any
interference, and federal government mandates to achieve yearly annual
improvement on standardized tests.

16. See Richard Briffault & Laurie Reynolds, Cases and Materials on State and
Local Government Law 417-18 (6th ed. 2004) (noting that funding formulae have been
challenged in forty-plus states); see, e.g., DuPree v. Alma Sch. Dist. No. 30, 651 S.W.2d 90 (Ark.
1983); Comm. for Educ. Rights v. Edgar, 672 N.E.2d 1 178 (111. 1996); Rose v. Council for Better
Educ, 790 S.W.2d 186 (Ky. 1989); W. Orange-Cove Consol. LS.D. v. Alanis, 107 S.W.3d 558
(Tex. 2003); Edgewoodl, 111 S.W.2d 391.

17. Briffault & Reynolds, supra note 16, at 417.

18. Compare Wayne Riddle & Lione White, Expenditures in Public School Districts:
Estimates of Disparities and Analysis of Their Causes, in U.S. Dep't OFEduc, Ofhce OFEduc.
Research and Improvement, Nat'l Ctr. for Educ. Statistics, Developments in School
Finance, 1996, at 23-37, NCES 97-535, with U.S. Dep't of Educ, Inst, of Educ Scis., Nat'l
Ctr. for Educ Statistics, Digest of Education Statistics: 2007, fig. 9 (2007), available at
http://nces.ed.gov/programs/digest/d07/figures/fig-09.asp?referrer=figures.

19. See iNST. OF Educ Scis., supra note 18, at ch. 2.

20. Id.

21. See Briffault & Reynolds, supra note 8, at 487.

22. 20 U.S.C. §§ 6301-7941 (2006).

2009] WHAT DO WE EXPECT? 321

II. Money

Sir Claus Adolf Moser is credited with saying, "Education costs money, but
then so does ignorance."^^ But what amount of money might Sir Moser be
talking about with respect to the costs of our efforts? What does it or what
should it cost to provide an education to a child?

According to 2006 data, state and local governments together spent between
$5000 (Arizona and Utah) for one year of elementary/primary education and
almost $13,000 (New York and Connecticut) for one year. For that same
academic year, the District of Columbia spent over $15,000 per student, while
Indiana spent almost $9000 per student, with the national average at about
$8500.^"^ According to 2002 census data, the national total of state and local
government spending toward elementary and secondary education in that one
year was over $411 billion.^^ And how do we know what we are getting for that
investment? One measuring stick includes results of standardized test scores
developed from tests aimed toward measuring how much kids know. Ranging
in scope, purpose, and complexity, these tests are as diverse as the challenges
facing education in the first place. ^^

States strapped for money are contemplating scaling down or even
abandoning challenging, custom made state tests which combine essay questions
and problems that require students to explain their answers^^ in favor of cheaper
multiple choice tests. ^^ Even with the scaled back cheaper tests on the rise, the
U.S. General Accounting Office estimated that the cost of six years of
developing, scoring, and reporting the tests would cost about $6 billion.^^

23. Sir Claus Moser, Dad^yTel., Aug. 21, 1990, n.p. Moser is an academic statistician and
civil servant who was bom in Berlin, lived most of his life in England, and has served as the
chancellor of both Keele University and Israel's Open University. In 1999, Moser authored a far-
reaching investigation of England's literacy and numeracy. Nadene Ghouri, Last of the
Renaissance Men, TIMES Educ. Supp., Mar. 26, 1999, at 25.

24. Morgan QuiNTO Corp., State Rankings 2006: AStatisticalViewofthe50United
States 138 (Kathleen O'Leary Morgan & Scott Morgan eds., 2006) (citing Nat'lEduc. Assoc.
Rankings & Estimates (2005)). Estimates are for the 2004-05 school year and are based on
student membership. Id.

25. Id. at 135 (citing U.S. Bureau of the Census, Governments Division, State and
Local Government Finances: 2002 Census (2002), available at www.census.gov/govs/
www/estimate02.html). This data includes capital outlays. Id.

26. U.S. Gen. Accounting Office, Report to Congressional Requesters Title 1:
Characteristics ofTests Will Influence Expenses; Information Sharing May Help States
Realize Efhciencies, GAO-03-389, at 10-11 (May 2003).

27. See id. at 1 1 (noting that "some officials believe that open-ended questions, requiring
both short and long student responses, more effectively measure certain skills").

28. Id. at 15-17. GAO report estimates that costs of multiple choice tests are less than half
of the costs of a combination of multiple choice and open ended questions. Id. at 17, Table 5.

29. Id. at 20, Table 6. These estimates were made in 2003 and were projected from 2002-
2008. Id at 19.

322 INDIANA LAW REVIEW [Vol. 42:3 17

Adding in indirect costs — teacher time devoted to coordinating and giving tests
and preparing the students with ongoing "practice" tests — would likely drive
costs even higher.

While money can be tracked through budgets and accounting, other aspects
of the standardized testing culture are less easily measured. The private testing
companies operate with little to no public accountability. One educational
researcher noted recently that we have more oversight in '"the food we feed our
dogs than in the quality of tests our kids take.'"^^ Even more difficult to measure
is the impact of these standardized tests on the educational environments in our
schools. Scholars continue to study the pedagogical impacts of the tension
between "teaching to the test" and "educating" the child and the effects of test
distortion on the classroom and its students.^ ^ But in exchange for the money, the
teaching hours, the thousands upon thousands of little circles filled in correctly
or incorrectly, we do get a lot of one thing — test results.

in. Results

The chart included as Appendix A represents a sliver of insight from this
deluge of information of how well one set of kids did on one standardized test
administered in Indiana in the fall of 2007. The chart shows passage rates for
different groups of students, grades 3 through 10, on the Indiana Statewide
Testing for Educational Progress (ISTEP). The chart indicates that depending
on a group's race or socio-economic status (indicated by whether the student
qualifies for the federal free or reduced price lunch program) or educational
program (general education or special education) or English language proficiency
(limited or proficient), the passage rate differs wildly.^^ The last bar on the chart
illustrates the sobering, but not surprising statistic, that if a child is black,
requires special education and qualifies for a free lunch, that child falls into a
group with a mere 17% passage rate. Is that a failure or a success? How should
states respond to those scores, those kids? How should we?

In 2005, 71.5% of the senior high school student class of this country
graduated — an almost 30% failure rate. Currently, over 85% of U.S. citizens
over the age of twenty-five have high school degrees, thus 15% do not. How far
will the latter statistic fall if current trends continue? These statistics are aptly
captured in an editorial cartoon by John Darkow appearing in the Columbia
Tribune; the artist depicts three kids walking along with their jeans around their
hips. One kid says to the others, "Can you believe that thirty percent of us will
drop out [of high school]?" One responds, "Dude, that's like half!"^^

30. Barbara Miner, Keeping Public Schools Public: Testing Companies Mine for Gold,
Rethinking Sch., Winter 2004-05, at 1 (quoting Walt Haney, Professor of Education at Boston
College).

31. See generally Phyujs Taub Greenleaf, I'd RATHER BE LEARNING: HOW
Standardized Testing Leaves Learning Behind and What We Can Do (2006).

32. SeeApp.A.

33. John Darkow, Editorial Cartoon, COLUM. Trib., Apr. 2, 2008, n.p., available at

2009] WHAT DO WE EXPECT? 323

All joking aside, the Program on Law and State Government Fellowship
Symposium of 2008 examined questions about what the law, the money, and the
results mean in terms of America's citizenry, democracy, and future. The first
half of the day focused on the effects of high-stakes testing on student success.
Jonelle Redelman presented her paper, Kids Who Fail: State Governments'
Response to Failure. Ms. Redelman' s introduction of some of the legal and
educational issues surrounding State mandated standardized tests was
complemented by contributions from three experts in the field, hailing from a law
school, a department of sociology, and a state department of education.

An accomplished lawyer, scholar and teacher, Professor Michael Heise^"^
shared his thoughts on litigation impacting states' high-stakes testing mandates.
Professor John Robert Warren^^ presented his recent empirical research exploring
the meaning and use of high school exit examination results in the labor market.
Kevin McDowelP^ related Indiana's experience with high school exit
examinations detailing one state's path toward increasing the stakes of its
standardized tests.

The symposium's afternoon focused on education and testing in the juvenile
justice system beginning with Anderson Sanders' Fellowship presentation
entitled. Educating Incarcerated Kids: Lowering Double Digit Recidivism.
Angel Marks^^ further explored the realities and constraints of measuring
educational success in a paper based on her experiences and findings as a public
defender and a special education advocate. A panel composed of the Honorable
Greg Porter,^^ Laurie Elliott,^^ Susan Lockwood,'^^ Joann Helfereich,"^^ and Angel
Marks rounded out the symposium discussing perspectives on challenges and
opportunities states face as they work toward creating a better system for
educating incarcerated youth.

http://archive.columbiatribune.com/2008/apr/20080402Comm05 1 .asp.

34. Professor of Law, Cornell Law School. Ph.D., Northwestern University, 1990; J.D.,
University of Chicago, 1987; A.B., Stanford University, 1983. Professor Heise served as Senior
Legal Counsel to the Assistant Secretary for Civil Rights in the U.S. Department of Education and
later as Deputy Chief of Staff to the U.S. Secretary of Education between 1990 and 1992.

35. Associate Professor and the Director of Undergraduate Studies at the University of
Minnesota. Ph.D., University of Wisconsin — Madison, 1998; M.S. in Sociology, University of
Wisconsin — Madison, 1993; B.A., Carleton College, Northfield, Minnesota, 1991.

36. General Counsel, Indiana Department of Education.

37. J.D., Indiana University School of Law — Indianapolis, 2003.

38. Member, Indiana House of Representatives, 96th District; B.A., Earlham College, 1978.
Representative Porter also graduated from Harvard University's John F. Kennedy School of
Government's Executive Program in 2001.

39. Executive Director of the Youth Law T.E.A.M. of Indiana. J.D., Indiana University
School of Law — Indianapolis, 1986; B.A., Valparaiso University, 1983.

40. Juvenile Education Coordinator for the Indiana Department of Correction. Ed.D.,
Oakland City University, 2008.

41. Director, Aftercare for Indiana through Mentoring (AIM). J.D., Indiana University
School of Law — Indianapolis, 1999.

324 INDIANA LAW REVIEW [Vol. 42:317

The questions, problems, and statistics posed during the symposium highlight
some of the challenges in the work ahead as we address the conundrum posed by
Sir Moser's assertion that education does cost money, but so does ignorance.'*^
The Program on Law and State Government thanks the Indiana Law Review for
continuing the dialog of the symposium with its inclusion of pieces on that topic
in this issue. The Program also thanks all of those who made scholarly
contributions to the 2008 Fellowship Symposium, especially Professor Michael
Heise, whose work is published in these pages. Finally, the Program
acknowledges the efforts of the 2008 Fellows, Jonelle Redelman and Anderson
Sanders. My sincere hope is that the ideas emanating from their Fellowship year
continue to inform us all as we address how our laws direct our money toward
a better educated citizenry.

42. Moser, supra note 23.

2009]

WHAT DO WE EXPECT?

325

% Passing (STEP (2007-08)
Language Arts/Math: Grades 3-10

(unweighted averages)

General Educalloh

Special Education

79%

81%

7t%

S8%

80%

90%

100%

Race/Ethnicity
Educational Program

English Language

Family income

White Hispanic Black Multiracial

General education program
Special education program

Proficient
Limited

Paid: not eligible for federal free or reduced price lunch program
F/R Lunch: eligible for federal free or reduced price lunch program

Graph, Courtesy of:

Dan Clark, Deputy Executive Director,

Indiana State Teachers Association

Courting Trouble: Litigation, High-Stakes
Testing, and Education Policy

Michael Heise*

Introduction

Unanticipated consequences invariably flow from court decisions that
venture too deeply into legislative and executive policy terrain. Many public
policies embody a careful and somewhat delicate calibration of various political
interests and compromises. Litigation, by contrast, is adversarial by design and,
in general, is limited in scope and reach to the litigating parties' interests.
Litigation — and sometimes the mere threat of litigation — frequently influences
public policies. The blunt force trauma often inflicted by litigation onto public
policies is rarely pretty and often discourages many, especially those impacted
by the affected public policies.

Untidy fallout from the interaction between litigation and public policy is
conunon in many policy sectors, especially education. With education policy in
particular, this untidiness results partly from the inherent complexity of
numerous education policies as well as from the importance of the stakes
involved. Some examples of unanticipated consequences incident to legal
decisions involving education polices are obvious and easily identified;' others
are more subtle and nuanced.^

Although recent scholarship expresses confidence in the courts' ability to
drive education policy and reform,^ such confidence rests uneasily on optimistic

* Professor, Cornell Law School. I am grateful to Dawn M, Chutkow, Matthew Heise, and
Michelle Yetter for their input on earlier versions of this Article as well as participants in Indiana
University School of Law — Indianapolis Program on Law and State Government Symposium:
Education Reform and State Government, "The Role of Tests, Expectations, Funding and Failure."
The reference librarians at Cornell Law School also provided excellent research assistance.

1 . For example, California' s experience in the school finance context is particularly notable.
Ironically, successful and path-breaking school finance litigation in California contributed to
policies that resulted in a decrease in California's national ranking for per-pupil spending. The
precise causal relation between the Serrano v. Priest, 487 P.2d 1241 (Cal. 1971), decision and
California's Proposition 13, Cal. Const, of 1879 art. XIIIA, §§ 1-6, remains in dispute. For a
discussion, see, for example, William A. Fischel, Did John Serrano Vote for Proposition 13? A
Reply to Stark and Zaslojf's "Tiebout and Tax Revolts: Did Serrano Really Cause Proposition 13, "
5 1 UCLA L. Rev. 887, 890 (2004); Issac Martin, Does School Finance Litigation Cause Taxpayer
Revolt? Serrano and Proposition 13, 40 LAW & Soc'Y Rev. 525, 526-28 (2006); Kirk Stark &
Jonathan Zasloff, Tiebout and Tax Revolts: Did Serrano Really Cause Proposition 13?, 50 UCLA
L. Rev. 801,807(2003).

2. The "empiricization of the equal educational opportunity" doctrine is an often-overlooked
consequence of the Brown v. Board of Education opinion. See, e.g., Michael Heise, Equal
Educational Opportunity by the Numbers: The Warren Court's Empirical Legacy, 59 WASH. &
Lee L. Rev. 1309, 1310-11 (2002).

3. See, e.g., BENJAMIN MICHAEL Superfine, The Courts and Standards-Based

328 INDIANA LAW REVIEW [Vol. 42:327

assessments of the courts' comparative ability to minimize consequences set in
motion by legal decisions that unsettle education policies. The empirical
evidence on the efficacy of court-driven education reforms over the past decades
in this regard, however, is mixed."^

Even those persuaded by litigation's advantages and contributions to
education reforms recognize that the likelihood of legal challenges successfully
revolutionizing high-stakes testing policy is increasingly dim.^ Moreover, even
if litigants were poised to deliver positive contributions to high-stakes testing
policy in the past, the prospects of legal challenges hoping to disrupt high-stakes
tests have diminished over time. Policymakers' recent changes to high-stakes
tests make the tests less exposed to legal challenges and, thus, less vulnerable to
disruption from litigation and adverse court decisions. Although a complete
explanation for why lawsuits challenging high-stakes tests are currently less
likely to succeed needs to account for numerous variables and their complicated
interactions, this Article focuses on one such variable. Specifically, this Article
argues that increased judicial sensitivity to adverse policy consequences from
court decisions contributes to the diminishing prospects of lawsuits seeking to
upset high-stakes tests.

High-stakes testing policies did not emerge in an education policy vacuum.
Part I of this Article includes a brief description of the major high-stakes tests
and their policy rationales. Part II surveys recent litigation challenging one
distinct genre of high-stakes testing — high school exit exams. ^ Two cases
illustrate courts' current posture toward legal challenges of exit exams. Part HI
reviews evidence of courts' increased sensitivity to the policy consequences
attributable to court decisions that interfere with the implementation of exit
exams. Part IV concludes and notes the important normative questions raised by
judges' concerns with policy consequences flowing from their decisions.

I. High-Stakes Tests and Policy Rationales

High-stakes testing's position on the education policy landscape greatly
increased in prominence when minimum competency tests (MCTs) emerged in

Education Reform 14 (2008) (noting the potential for courts to "have a significant and positive
influence on the standards-based reform movement"); Jay P. Heubert, Six Law-Driven School
Reforms: Developments, Lessons, and Prospects, in LAW & SCHOOL REFORM: SEX STRATEGffiS FOR
Promoting Educational Equity 1, 3 (Jay P. Heubert ed., 1999) (concluding that law-based
reform efforts "hold great potential for improving the educational opportunities of disadvantaged
children").

4. See, e.g., Michael Heise, Litigated Learning and the Limits of Law, 57 Vand. L. Rev.
2417, 2446-50 (2004) (summarizing the uneven empirical findings about litigation-initiated
education reforms that seek to enhance equal educational opportunity).

5. Superfine, supra note 3, at 14, 86.

6. See GI Forum Image DeTejas v. Tex. Educ. Agency, 87 F. Supp. 2d 667 (W.D. Tex.
2000); Valenzuela v. O'Connell, No. CPF-06-506050 (San Francisco County Ct. Mar. 23, 2006),
vacated sub nom. O'Connell v. Superior Court, 47 Cal. Rptr. 3d 147 (Ct. App. 2006).

2009] COURTING TROUBLE 329

the 1970s. MCTs were largely subsumed during the next decade by States'
growing policy commitments to the educational standards and assessment
movement. Presently, the federal No Child Left Behind Act (NCLB)^ —
particularly its adequate yearly progress requirements^ — is the public face of
high-stakes testing for K- 1 2 education. NCLB also dramatically altered the high-
stakes test setting and increased (and redirected) the consequences for schools
and school districts.

A. Examples of High- Stakes Tests

In an effort to blunt fears that social promotion policies, unfocused curricula,
and diluted academic standards combine to devalue the high school diploma,^
States began to implement MCTs. In general, students who fail to achieve a
certain mastery of core academic subjects, measured by MCTs, are either not
promoted or not graduated (or both).^° If students who fail to achieve an
acceptable score on MCTs are nonetheless still entitled to graduate, such students
typically receive a ^'certificate of attendance" rather than a full academic
diploma. ^^ Introduced in Oregon in 1973, MCTs quickly gained popularity and
spread to other states. ^^ By 1980, thirty-six states enacted some form of
minimum competency testing program, ^^ with fifteen states requiring satisfactory
performance as a condition for graduation. ^"^

Most states found it far easier to enact MCT legislation than to implement
the tests. ^^ Resistance to MCTs quickly emerged due to the legal and political
fallout incident to students' failing MCTs and, in particular, not graduating. ^^ As
various States began to implement MCTs, initial failure rates (of eighth or ninth
grade students) sometimes exceeded 30%.*^ Because non- white students and

7. Pub. L. No. 107-110, 115 Stat. 1425 (2002) (codified at 20 U.S.C. §§ 6301-6578
(2006)).

8. 20U.S.C.§ 6311(b)(3).

9. See Thomas S. Dee, Learning to Earn, Educ. NEXT, Summer 2003, at 65, 65.

10. See id. at 66.

11. See, e.g., TENfN. CODE Ann. § 49-6-6001 (West 2006 & Supp. 2008).

12. See Jeri J. Goldman, Political and Legal Issues in Minimum Competency Testing, 48
Educ. Forum 207, 208 (1984).

13. Id.

14. However, many states that made successful passage of MCT a condition for full high
school graduation delayed the implementation of the graduation requirement to reduce legal
exposure. See Thomas S. Dee, The "First Wave" of Accountability, in No CHILD LEFT BEHIND?:
The Politics and Practice of School Accountability 215, 217 (Paul E. Peterson & Martin
R. West eds., 2003).

1 5 . Frederick M. Hess, Refining or Retreating ? High-Stakes Accountability in the States, in
No Child Left Behind? The Politics AND Practice ofSchool Accountability 55, 55-56 (Paul
E. Peterson & Martin R. West eds., 2003).

16. Mat 56.

17. Mat 70.

330 INDIANA LAW REVIEW [Vol. 42:327

students from low-income households failed MCTs at rates that exceeded their
white counterparts,*^ legal pressure against the tests mounted. Many states
sought relief from such pressure by simply reducing the MCT failure rate to
below five percent (and frequently below one percent) by the time the initial
cohort of students was poised to graduate from high school.*^

Most observers assumed that lawsuits would quickly follow in states where
standards and assessments triggered palpable consequences for students and
schools. Although fears of litigation from disappointed students were not
misplaced,^^ increasingly careful planning by policymakers, greater attention to
implementation details, focused deployment of additional resources, increased
student preparation and remediation options, and an almost unlimited supply of
second chances for students substantially reduced the prospects of lawsuits
challenging high-stakes exit exams. ^*

Unlike most minimum competency tests, NCLB focuses its attention on
schools rather than the students who attend them.^^ At its core, NCLB leverages
State-created standards and assessments, increases transparency by disseminating
data on progress, and imposes consequences on local schools and districts for
insufficient annual student progress. ^^ As commentators note, standardized tests
are the fuel that runs the NCLB engine.^"^ Annual test scores must be generated
and aggregated at the school level and then disaggregated for a number of student
subgroups that are traditionally underserved by public schools. ^^ All of these
student test scores are used to assess whether a school is achieving adequate
yearly progress (AYP). Although states currently enjoy significant latitude in
establishing yearly proficiency benchmarks, under NCLB almost all students
must achieve academic proficiency.^^

A sliding scale of consequences greets schools that do not achieve AYP.^^

18. See generally Darryl Paulson & Doris Ball, Back to Basics: Minimum Competency
Testing and Its Impact on Minorities, 19 URBAN Educ. 5 (1984).

19. See Hess, supra note 15, at 70.

20. See, e.g., Debra P. v. Turiington, 644 F.2d 397, 407 (5th Cir. Unit B May 1981) (striking
Florida's use of a minimum competency exam that was a requirement for a full academic diploma
due to the lingering legacy of school segregation).

21. But see Paul T. O'Neill, Special Education and High Stakes Testing for High School
Graduation: An Analysis of Current Law and Policy, 30 J.L. & Educ. 185, 195-216 (2001)
(detailing suits challenging high-stakes testing regimes).

22. James E. Ryan, The Perverse Incentives of the No Child Left Behind Act, 79 N.Y.U. L.
Rev. 932, 939 (2004) [hereinafter Ryan, Perverse Incentives].

23. /t/. at 939-42.

24. /fi?. at940.

25. 20 U.S.C. § 631 l(b)(2)(C)(v)(II) (2006).

26. Id. § 6311(b)(2)(F).

27. Id. § 6316(b)(5), (8). A stricter set of consequences befalls schools that receive Title I
funding and do not achieve AYP. Although Title I public schools are a subset of the entire
population of public schools, over one-half of all public K-12 schools receive Title I ftinds. See
Ryan, Perverse Incentives, supra note 22, at 942 (citing Dep'T OF EDUC, FACT SHEET ON TITLE I,

2009] COURTING TROUBLE 331

Federally-aided public schools that fail to achieve A YP are designated as needing
"school improvement."^^ Schools failing to achieve AYP for two consecutive
years must develop a school improvement plan after receiving technical
assistance from the U.S. Department of Education.^^ Also, students assigned to
such schools become eligible to select and attend a different public school within
their district.^^ Schools that fail to demonstrate AYP for three consecutive years
must provide, at district expense, individual tutoring services to students
attending these schools.^ ^ After four consecutive years, schools must undertake
one of several measures, ranging from replacing school staff to implementing a
more challenging curriculum.^^ A school that fails to achieve AYP for five
consecutive years runs the risk of having to engage in significant restructuring,
including surrendering to district control, dissolving, or reopening as a charter
school. ^^

Although the NCLB consequences for under-performance focus on schools,
the fallout extends beyond the schools. Increasingly, state and local politicians
believe they have vicarious political liability for struggling schools. As states
increasingly centralize education policy control, governors become more
interested in the fate of public schools. Moreover, homeowners remain
economically tethered to local public-school performance, especially in affluent
suburban neighborhoods where public school reputations (real or perceived)
influence home values.^"^ A desire to protect home equity exists independent of
whether the homeowner has school-age children.^^ Similarly, local economic and
businesses interests, especially those with critical skilled-labor requirements,
possess an important stake in the success of local public school systems.^^

B. Policy Rationales for High-Stakes Testing

High-stakes tests are one part of a larger standards and assessment
movement. As Professor James Ryan notes, "[s]tandards and testing currently
dominate the landscape of public education."^^ The current standards and
assessment policy push flows partly from a building desire to hold students.

Part A (2002), available at http://www.ed.gov/rschstat/eval/disadv/titlel-factsheet.doc).

28. 20 U.S.C.§ 6316(a)(1)(B).

29. Id. § 6316(b)(1)(A).

30. Id. §6316(b)(l)(E)(i).

31. Id. § 6316(b)(5)(B).

32. /^. §6316(b)(7)(C)(iv).

33. Id. § 6316(b)(8)(B).

34. See, e.g. , Sandra E. Black, Do Better Schools Matter? Parental Valuation of Elementary
Education, 1 14 Q.J. ECON. 577, 578 (1999) (noting a correlation between student test scores and
residential home values).

35. Id.

36. Mat 583.

37. James E. Ryan, Standards, Testing, and School Finance Litigation, 86 Tex. L. Rev. 1 223,
1226 (2008) [hereinafter Ryan, Standards, Testing, and Finance].

332 INDIANA LAW REVIEW [Vol. 42:327

schools, districts, and states more accountable for education results. Originally
launched at the state level, the federal government, through NCLB, now
functionally drives the standards and assessment policy.^^

The 1983 pubhcation of the Nation at Risk report,^^ along with other factors,
helped launch the modem standards and assessment movement in many states.
The report highlighted a curriculum that lacked focus, coherence, and rigor as
well as a culture of low expectations for too many students."^^ The report's
authors warned of an ominous "rising tide of mediocrity'"^^ that posed a
substantial threat to national economic security ."^^ Reaction to the Nation at Risk
report was both swift and substantial."^^ Proponents of heightened academic
standards cited the report as support for increased attention to core academic
subjects, high expectations and standards for all students, and greater
accountability for outcomes through tests designed to gauge students' and
schools' progress toward the academic standards."^

In response to Nation at Risk, many states began reviewing or, in some
instances, articulating for the first time, goals for student educational outcomes.
Writing in 1986 for the National Governor's Association report. Time for
Results,^^ then-governor of Tennessee Lamar Alexander underscored the
governors' collective commitment to meaningful standards and assessments."^^
Indeed, many governors boasted about their states' rigorous student performance
standards and tethered them to efforts to make their states more economically
competitive."^^ By 1992, nearly every state had increased course requirements for
high school graduation. "^^ The current education reform push continues to focus
on refining challenging standards for student performance.

The impulse to centralize the standards and assessments efforts, however, did

38. Mat 1224.

39. Nat'l Comm'n on Excellence in Educ, A Nation at Risk: The Imperative for
Educational Reform ( 1 983).

40. See Dee, supra note 14, at 217-18.

41 . Nat'l Comm'n on Excellence in Educ, supra note 39, at 5.

42. Id.

43. See, e.g., Karen MacPherson, A Nation Still at Risk; Two Decades Later Reports Still
Focusing on the Mediocrity of U.S. Education, PlTT. Post-Gazette, Aug. 31, 2003, at Al 1.

44. For a helpful summary of the social history of the standards and assessment movement,
see generally CHESTER E. Finn, Jr., We Must Take Charge: Our Schools and Our Future
(1991); Diane Ravitch, Left Back: A Century of Failed School Reforms (2000); Ryan,
Perverse Incentives, supra note 22, at 938.

45. National Governors' Ass'n, Time for Results: The Governors' 199 1 Report on
Education (1991).

46. Lamar Alexander, Chairman 's Summary to NATIONAL GOVERNORS' Ass'N, supra note
45, at 3.

47. See, e.g.,TonyFreemantlt, New Education Chief Hailed as "Visionary," Hovs.Chron.,
Dec. 22, 1992, at A6; George Uhlig, Alabama Needs Systemic Change, New Educational Vision,
Mobile Register (Ala.), Dec. 5, 1993, at C3.

48. See Dee, supra note 14, at 218.

2009] COURTING TROUBLE 333

not end with the governors. Seeking to leverage a movement already underway,
the federal government launched efforts to complement the largely state-initiated
standards and assessment movement. In his 1997 State of the Union Address,
President Clinton called for "a national crusade for education standards — not
Federal Government standards, but national standards representing what all of
our students must know to succeed in the knowledge economy of the 21st
century. '"^^ In the mid-1990s, Congress staked its own claim in the education
policy debate by passing the Improving America's Schools Act (lASA),^^ which
directed federal Title I funds towards state standards and assessment efforts.^^
States were required to develop challenging standards and assessments for all
students and all schools. Critically, these requirements did not apply solely to
Title I-eligible schools^^ as Congress sought to ensure that all states developed
challenging academic expectations for all schools, regardless of a school's
student composition.

Even more dramatic legislative action soon followed. Congress passed
NCLB in 2001 with significant bi-partisan support and fanfare.^^ The Act builds
on earlier federal statutes in several important ways. Now, states desiring federal
Title I funds must establish school accountability systems that include annual
student tests of math, reading, and science proficiency for grades three through
eight.^"^ States are also obligated to gather, report, and disseminate aggregate test
results for all students as well as for various student subgroups that contain a
minimum number of students. ^^ Although state standards must be
"challenging,"^^ NCLB essentially leaves it to the states to establish their own
standards and assessments, as well as proficiency thresholds.^^ However a state
defines proficiency, virtually every student must achieve it by 2014.^^

49. President Clinton 's Message to Congress on the State of the Union, N.Y. TIMES, Feb. 5,
1997, at A20.

50. Improving America's Schools Act of 1994, Pub. L. No. 103-382, 108 Stat. 35 18 (codified
as amended in scattered sections of 20 U.S.C.).

51. See, e.g., 20 U.S.C. § 631 1(b)(1) (current version at 20 U.S.C. § 631 1(b)(1) (2006)).

52. 20 U.S.C. § 631 1(b)(3) (2006).

53. See, e.g. , Elisabeth Bumiller, Focusing on Home Front, Bush Signs Education Bill, N.Y.
Times, Jan. 9, 2002, at A16; The State of the Union: President Bush' s State of the Union Address
to Congress and the Nation, N.Y. TIMES, Jan. 30, 2002, at A 16.

54. 20 U.S.C. § 63 ll(b)(3)(C)(v)(II) (providing for the addition of science testing beginning
in the 2007 school year).

55. Id. § 6311(h).

56. Id. § 6311(b)(1).

57. Id. § 63 1 1 (b)(2). Although NCLB does not require states to submit their standards to the
Secretary of Education for review, states must submit plans that demonstrate a commitment to
challenging academic standards. See id. § 6311(b)(1)(A).

58. Id. § 6311(b)(2)(F).

334 INDIANA LAW REVffiW [Vol. 42:327

n. Recent High-Stakes Testing Litigation

High-stakes testing is designed to impose consequences for many students,
schools, and districts. The imposition of consequences for under-performance
disrupts the education status quo along with individual and institutional interests.
Not surprisingly, high-stakes tests stimulate litigation efforts seeking to blunt the
consequences flowing from low test scores. Much of the litigation pursues one
of three broad legal claims (or a combination of two or more claims): due
process, equal protection, or statutory allegations (notably Title VI). A review
of two recent lawsuits highlights important themes.

A. GI Forum

In 1985, after a decade-long struggle over the direction of school reform in
Texas, state lawmakers implemented the Texas Educational Assessment of
Minimum Skills (subsequently replaced by the Texas Assessment of Academic
Skills (TAAS)) as one piece of a larger school reform initiative.^^ The Texas
Assessment of Knowledge and Skills (TAKS), introduced in 2003, replaced
TAAS.^^ Results from the TAKS not only implicate students, but also schools
and school districts that are assessed based on data generated by the exam.

TAAS and TAKS afforded students with remedial assistance and multiple
opportunities to pass the exit exam. Under TAAS, students were permitted eight
chances to pass before the completion of their senior year.^^ TAKS is even more
indulgent and gives students an unlimited number of chances to pass.^^
Moreover, students who leave high school without a full academic diploma can
continue taking TAKS and will receive a diploma retroactively upon passage.^^

Similar to the distributions in other states that impose exit exams, test failure
rates in Texas were distributed unevenly across various student subgroups.^"^
Notably, African-American and Hispanic students failed at disproportionate
rates. ^^ Representing minority students who failed the exit exam and were denied
high school diplomas, attorneys from the Mexican American Legal Defense Fund
(MALDEF) sued the State of Texas alleging that Texas's exit exam violated
students' equal protection, due process, and statutory rights.^^ Among the

59. For a discussion of the Texas Assessment of Academic Skills (TAAS) as well as its even
more rigorous successor, the Texas Assessment of Knowledge and Skills (TAKS), see Keith L.
Cruse & Jon S. Twing, The History of Statewide Achievement Testing in Texas, 13 APPLIED
Measurement in Educ. 327, 329-30 (2000); Paul T. O'Neill, High Stakes Testing Law and
Litigation, 2003 BYU EDUC. & L.J. 623, 649.

60. Tex. Educ. Code Ann. § 39.025 (Vernon 2006).

61. GI Forum Image De Tejas v. Tex. Educ. Agency, 87 F. Supp. 2d 667, 673 (W.D. Tex.

2000).

62.

Tex. Educ. Code Ann. § 39.025 (Vernon 2006)

63.

Id.

64.

GI Forum, 87 F. Supp. 2d at 675.

65.

Id.

66.

Id. at 668.

2009] COURTING TROUBLE 335

numerous legal claims asserted, only the students' statutory Title VI claim
proceeded to trial.^^

Within the Title VI context, the court dwelled on the stark disparity in pass
rates between white and non-white students. ^^ Expert witnesses helped frame the
focus on the pass rate disparity as both sides agreed that the initial administration
of the exit exam adversely impacted non-white students^^ and that statistically
significant, though lower, disparities existed in the cumulative exam pass rates.^^
On the basis of largely uncontested statistical evidence, the trial court in GI
Forum concluded that the plaintiffs successfully established a prima facie
discrimination claim against the state's exit exam7^

Despite the minority students' victory in establishing a prima facie
discrimination case, the State of Texas successfully defended its exit exam as a
legitimate exercise in educational policymaking authority notwithstanding the
exit exam's disparate impact on non- white students^^ The trial court concluded
that the exit exam was intended to advance education reform in Texas and that
the high-stakes graduation requirement was justified, in part, because it
"encouraged leaming."^^ The court also rejected the plaintiffs' assertion that
equally effective yet less disparate alternatives to the exit exam existedJ"^
Moreover, the court noted that the State provided adversely affected students
remedial classes expressly geared toward passing the exit exam7^ Consequently,
Judge Prado ruled against the students and declined to interfere with the Texas
exit exam's implementation.^^

B. O'Connell

In 1999, California joined a growing line of states that imposed the
successful completion of a state-wide exit exam as a condition for a student
receiving a full high school diploma.^^ State lawmakers implemented the
California High School Exit Exam (CAHSEE) in conjunction with a larger
statewide effort that endeavored to bolster academic standards and assessments.^^
Students begin taking CAHSEE while in tenth grade and are afforded multiple

67. Id.

68. Mat 676-82.

69. See Olatunde C.A. Johnson, Disparity Rules, 107 COLUM. L. Rev. 374, 398 n. 106 (2007).

70. /J. at 397-98.

71. G/ForMm, 87 F.Supp. 2d at 679.

72. /d at 671.

73. M. at 681.

74. Id. at 681-82 (citing Debra P. v. Turlington, 730 F.2d 1405, 1416 (1 1th Cir. 1989)).

75. Id at 676.

76. Mat 683-84.

77. See Cal. Educ. Code §§ 60850-60859 (West 2003 & Supp. 2008).

78. See Arturo J. Gonzalez & Johanna Hartwig, Diploma Denial Meets Remedy Denial in
California: Tackling the Issue of Remedies in Exit Exam Litigation After the Vacated Valenzuela
V. O'Connell Preliminary Injunction, 47 SANTA Clara L. REV. 71 1, 715-16 (2007).

336 INDIANA LAW REVIEW [Vol. 42:327

opportunities to re-take it7^

Testing began in 2001 for California's high school students (freshmen)
planning to graduate in 2004.^^ By the summer of 2002, however, less than one-
half of the class of 2004 had passed the exam.^^ Moreover, Latino, African-
American, and low-income students were far less likely to pass.^^ As a
consequence, the California State Board of Education voted to delay denying
diplomas to students until 2006.^^ The two-year implementation delay was
designed to provide students and schools with even more time to adjust to (and
pass) CAHSEE. However, as graduation for the class of 2006 approached, many
students still had not passed CAHSEE and, as a consequence, were ineligible to
graduate. ^"^ With the looming prospect of denying high school diplomas to
thousands of California high school students, a class action lawsuit was filed in
state court to enjoin the State from withholding diplomas from those students
who had not passed the exit exam.^^

In Valenzuela v. O'Connell,^^ the trial court judge enjoined CAHSEE' s
implementation for another year because the harm to the State in delaying
implementation was outweighed by the harm arising from denying otherwise
qualified students their high school diplomas. ^^ Harms to the students included
claims relating to equal protection and the right to an education.^^ Anxious to
appeal the injunction and obtain quick and definitive legal guidance from the
California Supreme Court, the State sought to bypass the court of appeals.^^ The
supreme court sent the matter to the state appellate court rather than deciding the
merits of the injunction.^^

After hearing from both parties at oral argument and numerous others in
amici curiae briefs, the three-judge appellate panel sided with the State and
vacated the trial court's preliminary injunction.^' While the appellate court
agreed with the trial court that the plaintiffs were likely to prevail on their equal
educational opportunity denial claims,^^ the appellate court nonetheless
concluded that upholding the trial court's injunctive relief would amount to an

79. /J. at 716.

80. /J. at 718.

81. Id.

82. Mat 719.

83. /6f. at718.

84. /^. at 725-26.

85. /J. at 728-29.

86. Valenzuela v. O'Connell, No. CPF-06-506050 (San Francisco County Ct. Mar. 23, 2006),
vacated sub nom. O'Connell v. Superior Court, 47 Cal. Rptr. 3d 147 (Ct. App. 2006).

87. Gonzalez & Hartwig, supra note 78, at 731 (discussing the motions and disposition of
Valenzuela).

88. Id. at 729.

89. Mat 731.

90. Id. (citing O'Connell v. Superior Court, No. JCCP-4468, slip op. (Cal. May 24, 2006)).

91. O'Connell, Al Cal. Rptr. 3d at 150.

92. Mat 157.

2009] COURTING TROUBLE 337

improper encroachment onto legislative terrain.^^ The appellate court ruling,
which supported California's high-stakes exit exam, prompted a settlement
among the litigating parties.^"^

Despite the plaintiffs' disappointment with the outcome in O'Connell, the
subsequent settlement culminated in new state legislation that established
important benefits and services for students who struggle with CAHSEE.^^
Under the new law, students are entitled to two additional years of instruction if
they have not passed the exam by the end of their senior year.^^ This
supplemental instruction focuses on preparing students for the exit exam. Also,
the law entitles students whose primary language is not English to two additional
years of language instruction to better prepare them to pass the exam.^^

in. An Emerging Judicial Awareness of Unanticipated
Policy Consequences

During the early 1980s, prior to the Texas and California exit exam litigation,
Florida courts struggled mightily with that state's exit exam, principally due to
discrimination claims. ^^ Unlike what Texas and California policymakers
experienced, however, in Florida, protracted litigation and numerous court
decisions contributed to a multi-year delay in the implementation of the Florida
exit exam. What explains the difference between the litigation experience in
Florida and the more recent litigation in Texas and California? After all, similar
to the Florida courts, the Texas^^ and California ^^° courts noted the exit exams'
disparate impact on non-white students. Indeed, in O'Connell, the appellate
court felt that the plaintiffs were likely to prevail in establishing their equal
educational opportunity denial claims. '^^ Notwithstanding the high-stakes
exams' deleterious impact on non- white students, however, the Texas '^^ and
Califomia^^^ courts declined to meaningfully interfere with the state exit exams.

Among the factors that influenced the outcomes in GI Forum and O 'Connell

93. Id. at 165.

94. For a discussion of the settlement, see Gonzalez & Hartwig, supra note 78, at 743-51.

95. Assemb. B. No. 347, 2007 Leg., 2007-08 Sess. (Cal. 2007) (amending Cal. Educ. Code
§§ 1240, 35186, 37254, 52378, and 52380), available at http://www.leginfo.ca.gov/pub/07-
08/bill/asm/ab_030 1 -0350/ab_347_bill_2007 1 0 1 2_chaptered.pdf.

96. Id.

97. Id.

98. See Debra P. v. Turlington {Debra P. I), 474 F. Supp. 244, 249 (M.D. Fla. 1979), aff'd
in part, vacated in part, 644 F.2d 397 (5th Cir. Unit B May 1981), remanded to 564 F. Supp. 177
(M.D. Fla. 1983), ajfd, 730 F.2d 1405 (1 1th Cir. 1984).

99. GI Forum Image DeTejas v. Tex. Educ. Agency, 87 F. Supp. 2d 667, 675-76 (W.D. Tex.
2000).

100. O'Connell v. Superior Court, 47 Cal. Rptr. 3d 147, 170 (Ct. App. 2006).

101. /^. at 157.

102. GI Forum, 87 F. Supp. 2d at 683-84.

103. O'Connell, Al Cal. Rptr. 3d at 171.

338 INDIANA LAW REVIEW [Vol. 42:327

were the states' and school districts' modifications to their high-stakes tests,
which made them less vulnerable to legal attack. Specifically, Texas and
California policymakers benefitted ft'om prior litigation in other states, notably
Florida, and adjusted their high-stakes testing policies in ways that made them
more sensitive to the important due process factors that exit exams implicate. In
particular, exit exams in Texas and California paid greater attention to procedural
and substantive concerns, including notice, multiple chances to take tests, greater
supplemental resources to needy students, and serious attention to the tests'
content validity. ^^"^

In addition to states crafting more litigation-sensitive exit exams, the more
recent court decisions also suggest that courts became increasingly sensitive to
the unanticipated consequences that flow from court decisions that disrupt high-
stakes testing policies. These consequences include various financial costs
triggered by high-stakes testing litigation. Other policy consequences, including
those that the GI Forum and O'Connell decisions specifically reference, involve
efforts to shore up the currency of the high school diploma and to improve
student and school performance. ^^^

A. Secondary and Tertiary Policy Consequences Flowing from
High-Stakes Testing Litigation

Litigation challenging high-stakes tests imposes important financial and
policy costs. Indeed, the mere specter of litigation, including lawsuits unlikely
to prevail, imposes such costs. Even though the trend suggests that legal
challenges to high-stakes tests are unlikely to succeed against tests that are
carefully planned and crafted, successfully defending against a lawsuit claims
financial resources. For cash-strapped states in particular, the potential for such
costs might be sufficient to prompt States to lower student proficiency thresholds
in an effort to reduce both legal exposure and political fallout.

Another financial implication, though derivative, involves costs associated
with school finance advocates who successfully leverage poor test results into
legal claims for increased education spending, principally through adequacy
lawsuits. ^^^ Although the school finance litigation and high-stakes testing
movements began independently of one another, the emergence of adequacy
theory in school finance litigation helped forge a link between the movements.

104. GI Forum, 87 F. Supp. 2d at 672-73; O'Connell, 47 Cal. Rptr. 3d at 156-57.

105. GI Forum, 87 F. Supp. 2d at 681-82; O'Connell, 47 Cal. Rptr. 3d at 160-61.

106. See, e.g., Michael Heise, Adequacy Litigation in an Era of Accountability, in SCHOOL
Money Trials: The LegalPursuit of Educational Adequacy 262-66 (Martin R. West & Paul
E. Peterson eds., 2007); Martin R. West & Paul E. Peterson, The Adequacy Lawsuit: A Critical
Appraisal, in SchoolMoney Trl\LS 1, 6 (Martin R. West & Paul E. Peterson eds., 2007); James
S. Liebman, Implementing Brown in the Nineties: Political Reconstruction, Liberal Recollection,
and Litigatively Enforced Legislative Reform, 76 Va.L.Rev. 349, 378 (1990); cf Ryan, Standards,
Testing, and Finance, supra note 37, at 1224 (noting, although disagreeing with, the conventional
wisdom); Marshall S. Smith, What's Next?, EDUCATION WEEK, Jan. 5, 2006, at 66.

2009] COURTING TROUBLE 339

By design, high-stakes exit exams generate data germane to student and school
performance. Results from high-stakes tests — in particular, poor results —
provide critical evidence for litigants seeking a declaration from courts that
schools or districts are "inadequate" as a matter of state constitutional law.^^^
Thus, litigation that interferes with high-stakes tests unsettles a link between
high-stakes testing and school finance litigation efforts.

Litigation challenging high-stakes exit exams imposes non-financial costs as
well. One such cost prompted by legal exposure from exit exams is pressure to
dilute academic standards, such as exit exam "cut-scores." In Texas, as the GI
Forum opinion notes, policymakers temporarily bowed to such pressures by
initially setting the exit exam cut-score at 60% and phasing-in the 70% cut-score
one year later. ^^^ The initial 60% cut-score was used even though policymakers
generally felt that a 70% score reflected sufficient "mastery" of essential
academic skills for purposes of awarding a high school diploma. ^^^ By reducing
the passing score in the exit exam' s initial year, however, Texas policymakers
substantially reduced the number of failing students and, in so doing, reduced
initial political (and legal) opposition to the exit exam.'^^

States' experiences with setting (or resetting) standards after NCLB also
illustrate how such perverse incentives operate. Prior to NCLB, many states,
notably Southern states, began a campaign to increase standards for their
students.^ ^^ Indeed, prior to the late 1990s, many states engaged in something
resembling a "race to the top" in terms of developing and implementing rigorous
student achievement goals. ^^^ Transforming high academic standards into a legal
sword against schools and districts, however, blunted a policy drive toward more
rigorous standards. Diluting standards and proficiency levels directly reduces the
number of potential plaintiffs with standing to legally challenge exit exam
policies.

It is important to note, however, that litigation challenging high-stakes testing
did not generate only dead- weight financial and policy costs. Early litigation
influenced the design of more recent high-stakes tests. For example, many states
and districts now provide greater supplemental services and remedial resources
to at-risk students to better prepare them for high-stakes tests. In addition, states
take greater pains to content validate their tests. ''^ Although such changes
undoubtedly add to the financial cost of implementing high-stakes tests, such

107. See, e.g., sources cited supra note 106.

108. G/Forwm, 87 F.Supp. 2d at 673.

109. Id.

110. See id.

111. See Michael Heise, The 2006 Winthrop and Frances Lane Lecture: The Unintended
Legal and Policy Consequences of the No Child Left Behind Act, 86 NEB. L. REV. 119, 128-31
(2007).

112. See Molly O' Brien, Free at Last? Charter Schools and the "Deregulated " Curriculum,
34 Akron L. Rev. 137, 159 (2000).

113. GI Forum, 87 F. Supp. 2d at 681-82; O'Connell v. Superior Court, 47 Cal. Rptr. 3d 147,
160-61 (Ct. App. 2006).

340 INDIANA LAW REVIEW [Vol. 42:327

changes also contribute to more accurate and equitable tests.

B. Evidence of Increased Judicial Awareness of Policy Consequences

The GI Forum and O'Connell opinions contain language that hints at
increased judicial awareness of the policy consequences that flow from court
decisions disrupting high-stakes testing policy. Of particular note to both courts
were consequences to the integrity of the high school diploma as well as broader
State efforts to improve student and school performance. ^^"^

To be sure, the GI Forum opinion conveys the Texas court's distinct unease
with the prospect of the judiciary having to take sides in these education policy
fights. The opinion notes that it would be improper for the court to assess the
policy wisdom of Texas' high-stakes exit exam.^^^ The Texas judge also
observed that the State's requirement that students pass an exit exam reflected
the State's "insistence on [educational] standards."*'^ Moreover, in discussing
the policymakers' decision about where to set proficiency levels, the opinion
makes clear that "the Court cannot pass on the State's determination of what, or
how much, knowledge must be acquired prior to high school graduation."^ ^^

Although portions of the GI Forum opinion convey the court's desire to
remain policy-neutral, other parts of the opinion illustrate how the court
expressly engaged with various components of high-stakes testing policy. In its
assessment of various testing policies, the court makes clear that it had "taken
into account the immediate impact of initial and subsequent in-school failure of
the exam."^^^ The opinion also notes with approval that through the exit exam,
Texas officials sought to "hold schools, students, and teachers accountable for
education" ^^^ and that the high-stakes test effectively achieves its objectives. ^^^
More specifically, the court concluded that the Texas exit exam "boosted student
motivation and encouraged learning."'^' In so doing, according to the court, the
Texas exit exam helps make high school diplomas in Texas "uniformly
meaningful. "^^^

California judges in the O'Connell opinion displayed a similar desire to
remain above the education policy fray yet not blind themselves to the
consequences of court interference with high-stakes testing. The O'Connell
opinion begins by dutifully noting the court's obligation to "'respect the separate
constitutional roles of the Executive and the Legislature. '"^^^ In the opinion's

1 14. GI Forum, 87 F. Supp. 2d at 681-82; O'Connell, 47 Cal. Rptr. 3d at 160-61.

115. GI Forum, 87 F. Supp. 2d at 670.

116. Id.

117. Id.

118. /6?. at 678.

119. Id. Sit 619.

120. Mat 679-80.

121. /J. at 681.

122. Id.

123. O'Connell v. Superior Court, 47 Cal. Rptr. 3d 147, 155-56 (Ct. App. 2006) (quoting Butt

2009] COURTING TROUBLE 341

very next sentence, however, the judges evidenced a certain level of policy
sensitivity when noting their obligation to '"strive for the least disruptive remedy
adequate to . . . [the judiciary's] legitimate task.'"^^"^ In even blunter language
elsewhere in the opinion, the California judges make clear their awareness of the
"fundamental issues of public policy implicated in the case now before" them.^^^
Similar to the GI Forum opinion, the O 'Connell opinion also pays homage
to the policy goal of trying to resurrect the integrity of the high school diploma.
The California court noted that if it was to strike down California's exit exam
and thereby permit students who have failed to master basic academic content to
graduate with full diploma privileges, the high school diploma would be
"debase[d]" and thus lose further meaning and currency. ^^^ The O'Connell
opinion also conveys the judges' desire to not interfere with the State's policy
goal of raising academic standards in California's public schools. *^^ Enjoining
the State's use of exit exams, the judges implicitly suggested, would impede this
policy goal. ^

Conclusion

For better or worse (or, more accurately, for better and worse), high-stakes
testing increasingly dominates the American K-12 education policy terrain.
Litigation seeking to disrupt high school exit exams implicates important
education policy interests. As both the GI Forum and O'Connell decisions
illustrate, however, courts today appear reluctant to interfere with the
implementation of well-crafted exit exams due to complexities inherent in such
judicial intervention.

There are many reasons for emerging judicial reluctance. One critical reason
is that today's exit exams have learned from the past and have evolved in ways
that reduce their legal exposure. Language in the GI Forum and O'Connell
decisions also suggest that courts have become increasingly mindful of the policy
consequences that flow from court decisions interfering with exit exams. ^^^
These policy consequences include financial repercussions, ranging from the
legal costs incident to litigation to the growing link between data from exit exams
and school finance litigation. Reflecting a consensus that has gained momentum
since the late- 1980s — that school reform is necessary — the GI Forum and
O'Connell opinions convey important deference to a state's desire to take
responsible steps designed to enhance the integrity of the high school diploma
and improve academic achievement, ^^^ even if it means that a disproportionate

V. State, 842 P.2d 1240, 1258 (Cal. 1992)).

124. Id. at 156 (quoting Butt, 842 P.2d at 1258).

125. /^. at 170.

126. Id. at 161.

127. Id.

128. See supra Part lll.B.

129. GI Forum Image DeTejas v. Tex. Educ. Agency, 87 F. Supp. 2d 667, 681-82 (W.D. Tex.
2000); O'Connell, 47 Cal. Rptr. 3d at 160-61.

342 INDIANA LAW REVIEW [Vol. 42:327

number of non- white students will not receive high school diplomas.

To the extent that the central point of this Article is correct — that court
decisions display a sensitivity to the education policy consequences from
disrupting exit exams — a normative question quickly arises: Should judges
concern themselves with the practical policy fallout from their decisions?
Although such a discussion extends far beyond the contours of this Article, a few
points help frame some of the question's salient aspects. On the one hand, the
traditional separation of powers doctrine suggests that judges should confine
themselves to legal arguments and leave policy arguments and concerns to their
legislative and executive counterparts. Moreover, by definition, arguments about
policy consequences triggered by decisions not yet rendered are, to some
unknown degree, speculative. On the other hand, as difficult separation of
powers cases make clear, the line between law and policy is frequently blurred.
In some instances policy consequences might necessarily follow from the
resolution of purely legal questions. While the policy consequences in any
individual case may be speculative in the formal sense, causation between a legal
decision and policy consequences might be robustly established by prior cases.

Regardless of whether judges should concern themselves with the policy
ramifications incident to litigation seeking to disrupt the implementation of exit
exams, as an empirical matter the GI Forum and O'Connell decisions suggest
that they are concerned. Whether legal scholars, lawmakers, policymakers, or
citizens should, in turn, be concerned about judges' policy concerns is a question
for another day.

State Takeovers of School Districts: Race
AND THE Equal Protection Clause

Joseph O. Gluwole*
Preston C. Green, m*

Introduction

State takeover of school districts is a form of education reform designed to
promote educational and financial stability in school districts. In 1989, New
Jersey became the first state in the country to take over a district.' Kentucky
followed the same year.^ By 1989, six states had enacted State takeover laws.^
By 2004, the number increased to twenty-nine states.'^ Most takeovers occurred
between 1995 and 1997.^ Before this peak, it is estimated that "60[%] of the
takeovers were for purely financial and/or management reasons, while only
27[%] were comprehensive takeovers that included academic goals. In the three
years after 1997, however, the percentage of comprehensive takeovers ha[d] risen
to67[%]."'

State statutes and administrative codes often set forth grounds for State
takeovers of districts.^ Forms of takeovers include: gubernatorial appointment

* Attomey-at-law and Assistant Professor of Education and Law, Montclair State
University. J.D., Ohio State University; Ph.D., Educational Leadership, Penn State University.

** Professor of Education and Law, The Pennsylvania State University Dickinson School
of Law. J.D., Columbia University; Ed.D., Columbia University, Teachers College.

1. Maria Chappelle-Nadal, School Reform Strategies 7 (2007), available at
http://pubdef.net/downloads/Nadal-Report-on-State-Takeovers.pdf; see also NationalCenterfor
Educational Accountability, Jersey City 4 (2006), available at http://www.broadprize.
org/asset/2006JerseyCityPublicSchoolsOverview.pdf.

2. Bruce C. Bowers, State-Enforced Accountability of Local School Districts, ERIC
Clearinghouse on Educational Management (1989), available at ERIC, http://www.
thememoryhole . org/edu/eric/ed3095 5 6 .html .

3 . See id. (identifying Kentucky, New Jersey, New Mexico, South Carolina, Texas, and West
Virginia as states with takeover legislation); see also N.J. First to Attempt Complete Takeover,
Educ. Wk., June. 1, 1988 (identifying all the abovementioned states except West Virginia).

4. Takeovers: State Takeovers and Reconstitutions 1, Educ. Comm'n of the
States (2004), available at http://www.ecs.org/clearinghouse/51/67/5167.htm [hereinafter
Takeovers].

5. Kenneth K. Wong & Francis X. Shen, City and State Takeover as a School Reform
Strategy, ERIC CLEARINGHOUSE ON URBAN Education 2 (2002), available at ERIC, http://
purl.access.gpo.gov/GPO/LPS43146.

6. Id. Wong & Shen use the term "comprehensive takeover" to refer to takeovers that
"include financial, managerial, and academic components." Id.

1. Takeovers, supra note 4, at 3; David R. Berman, Takeovers of Local Governments: An
Overview and Evaluation of State Policies, PUBLIUS, Summer 1995, at 55, 64-70 (1995); Aaron
Saiger, Note, Disestablishing Local School Districts as a Remedy for Educational Inadequacy, 99
COLUM. L. Rev. 1830, 1847-49 (1999) (discussing how states use statutes to integrate

344 INDIANA LAW REVIEW [Vol. 42:343

of an executive official or board to manage the district; state board of education
takeover; and mayoral appointment of an official and/or board to manage the
district.^ In some takeovers, the elected board is maintained as an advisory
board.^ According to policy analyst Todd Ziebarth, "[S]tate takeovers, for the
most part, have yet to produce dramatic and consistent increases in student
performance, as is necessary in many of the school districts that are taken over."^^

A key complaint about State takeovers arises when an elected school board
is partially or completely replaced with appointees. Critics contend such
takeovers disenfranchise voters, particularly in districts where minorities
constitute the majority of the electorate.' * In 2004, over 50% of students in 74%
of the districts taken over were minorities.'^ Additionally, 63% of the schools
taken over as of 2004 were "in central cities (large and midsize) or in the urban
fringe of a large city. All but three of these districts had high minority
populations, ranging from 51% to 96%."'^ Moreover, according to Katrina
Kelly, the director of urban school district advocacy at the National School
Boards Association, "'Black and Hispanic school board members feel they are
being targeted.'"'"^ This ostensibly racially disproportionate takeover of minority
school districts prompts our analysis in this Article.

The first Part reviews the No Child Left Behind Act of 2001 (NCLB)'^
provision for State takeovers of school districts and State takeover laws. The
second Part examines the racial physiognomy of various State takeovers around
the nation. The final Part explores state takeovers of minority school districts
under the Equal Protection Clause. The conclusion focuses on the various
implications of State takeovers.

accountability into their education policy).

8 . EDUC. COMM ' N OF THE STATES, ACCOUNTABIUTY — REWARDS AND SANCTIONS : STATE

Takeovers AND Reconstitutions 2 (2002), avaZ/aZ^/e^/ http://www.ecs.org/clearinghouse/13/59/
1359.htm [hereinafter Accountability].

9. See id.

10. Id. ; see also RICHARD C. SEDER, BALANCING ACCOUNTABIUTY AND LOCAL CONTROL:

State Intervention for Financial and Academic Stability 5-9 (2000), available at
http://www.reason.org/ps268.pdf.

11. See Reynolds v. Sims, 377 U.S. 533, 554-55 (1964) (stating that each citizen is entitled
to vote on an equal footing in elections as every other citizen, and this right to vote is ftindamental
and cannot be diluted, debased, or abridged); Beth Reinhard, Racial Issues Cloud State Takeovers,
Educ. Wk., Jan. 14, 1998, at 1 [hereinafter Reinhard, Racial Issues].

12. Patricia Cahape Hammer, Corrective Action: A Look at State Takeovers of
Urban and Rural Districts 3 (2005), available at http://www.edvantia.org/products/pdf/
PBStateTakeovers.pdf.

13. Id.

14. Reinhard, Racial Issues, supra note 1 1 .

15. Pub. L. No. 107-1 10, 1 15 Stat. 1425 (2002) (codified as amended in scattered sections
of20U.S.C.).

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 345

I. Takeovers Under THE NCLB AND State Laws

This Part provides an overview of the NCLB's accountabiUty system and
State takeover provisions. Additionally, this Part discusses several State takeover
laws.

A. Takeovers: NCLB Provisions

The NCLB was enacted to ensure educational accountability.^^ States
receiving Title I funds must implement an accountability system founded on
State achievement standards and assessments.^^ Under the NCLB's
accountability system, districts failing to make adequate yearly progress (AYP)
on state assessments^^ are subject to sanctions under the Act, including State
takeover of the district. ^^ States and school districts must disaggregate data on
the yearly progress of ''racial and ethnic groups ;"^^ the "economically
disadvantaged,"^* "students with disabilities;"^^ and "students with limited
English proficiency."^^ Each year, in grades 3 through 8^"^ and at a minimum
once during grades 10 through 12,^^ States must assess students in science in
mathematics, reading or language arts.^^ States must also assess students in
science at least once each during grades 3 through 5,^^ 6 through 9,^^ and 10
through 12.2^

NCLB requires that districts failing to make AYP for two consecutive years
be "identif[ied] for improvement"^^ and develop an improvement plan.^* Those
districts not making AYP for four consecutive years are identified for corrective

16. See 20 U.S.C. § 6301 (2006) (listing methods to improve equal access to high-quality
education).

17. /J. §§6311, 6316(c).

18. Id. § 6316(c).

19. See id. § 6316(c)(10)(C). The NCLB imposes various requirements and sanctions on
schools and states accepting Title I funds. Id. § 631 1; see also Joseph O. Oluwole & Preston C.
Green, III, No Child Left Behind Act, Race, and Parents Involved, 5 HASTINGS RACE & POVERTY
L.J. 271,274-76(2008).

20. 20 U.S.C. §§ 631 l(b)(2)(C)(v)(II)(bb), 6316(a), (c) (2006).

21. Id. §§ 6311(b)(2)(C)(v)(II)(aa), 6316(a), (c).

22. Id. §§ 6311(b)(2)(C)(v)(II)(cc), 6316(a), (c).

23. Id. §§ 631 l(b)(2)(C)(v)(II)(dd), 6316(a), (c).

24. Id. §6311(b)(3)(C)(vii).

25. /d§6311(b)(3)(C)(v)(I)(cc).

26. Id. §§ 631 l(b)(3)(C)(v)(I), 631 l(b)(2)(C)(vii).

27. M§6311(b)(3)(C)(v)(II)(aa).

28. M §6311(b)(3)(C)(v)(II)(bb).

29. M§6311(b)(3)(C)(v)(II)(cc).

30. Id. § 6316(c)(3).

31. Id. § 6316(c)(7).

346 INDIANA LAW REVIEW [Vol. 42:343

action.^^ The State must take at least one corrective action under the NCLB to
address the failure of the district to make AYP.^^ Three of the NCLB's
corrective actions could provide authority for State takeover of school districts:

(1) replacement of district personnel "relevant to the failure to make [AYP]";^"^

(2) appointment of a trustee or receiver through the state department of education
to manage the district's affairs;^^ and (3) restructure or dissolution of the school
district.^^ The district could subsequently emerge from State takeover or other
corrective action by making AYP for two consecutive years. ^^

B. Takeovers: State Laws

This section examines some state laws providing for State takeovers and
provides a brief overview of such laws. As indicated earlier, several states now
have State takeover laws.

1. Alabama, — As part of an accountability system in Alabama, the State
Board of Education must establish an assistance program for districts identified
as "in need of assistance."^^ The assistance program entails a review of the
district's low student achievement and efforts to improve the achievement
levels. ^^ If there is no progress in student achievement after three years relative
to the prior year, the state superintendent must take over the district.'^^ Alabama
also has a law providing for the takeover of fiscally-distressed districts through
the appointment of a "chief financial officer to manage the fiscal operation of a
local board of education.'"^' Alabama provides for election and appointment of
school board members. "^^

2. Alaska. — Alaska allows the State to take over districts not meeting AYP
on State assessments for at least four years in each of grades 3 through 5, 6

32. Id. §6316(c)(10)-(ll).

33. Id. §6316(c)(10)(C).

34. /^. §6316(c)(10)(C)(iii).

35. Id. §6316(c)(10)(C)(v).

36. Id. § 63 1 6(c)( 1 0)(C)( vi). The restructure of a district might entail changing its structure
from elective to appointive system of selection for board members.

37. Id. § 6316(c)(l 1); see also id. § 6316(c).

38. Ala. Code § 16-6B-3(c) (2001). A district in need of assistance refers to "any local
board of education which has a majority of its schools, or a majority of the students in a system, in
which the students are scoring one or more giade levels below the prescribed norm." Id.

39. Id. § 16-6B-3(c)(l).

40. Id. § 16-6B-3(c)(3).

41. Ala. Code § 16-6B-4 (2001 & Supp. 2008).

42. For example, statutory law requires the election of the state' s county boards of education.
Ala.Code § 16-8-1 (2001). These county boards have discretion to create five or seven "single
member election [local school] districts with one board member elected from each district." Id. §
16-8-l(b); see also id. § 16-11-2; ALA. CODE § 45-8A-21 (2005); Ala. Code § 45-13-100.20
(2007).

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 347

through 8, and 9 through 10."^^ As with the NCLB, those districts face corrective
actions, including: (I) replacement of district personnel relevant to the failure
to make AYP^ and (2) appointment of a trustee or receiver to run the district.'*^
The state requires election of board members."^^

3. Arizona. — Arizona permits takeovers of districts that have "systemic
educational mismanagement.""^^ The district must have six or more schools in the
district and at least 50% of the district's schools must either underperform or fail
to satisfy the state's academic standards."^^ The State may also take over districts
that are insolvent or grossly mismanaged."^^ The law is forceful that takeovers not
impede the election of board members.^^ The receiver running the district after
the takeover has authority to supersede decisions made by the elected board or
superintendent.^^ The state provides for election of board members. ^^

43. Alaska Admem. Code tit. 4, § 06.840 (2008); see also id §§ 06.835(b), .840(k). These
provisions apply to districts receiving federal funds under Part A of Title I of the NCLB. See 20
U.S.C. §§ 6301-6339 (2006).

44. Alaska Admin. Code tit. 4 §06.840(k)(3) (2008).

45. Id. § 06.840(k)(6).

46. 5^^ Alaska Stat. §§ 14.08.041, 14.08.045, 14.08.051, 14.08.071, 14.08.081, 14.12.030,
14.12.040, 14.12.050, 14.12.070, 14.12.080, 14.12.110, 14.14.070, 14.14.120,29.20.300(2008);
Alaska Admin. Code tit. 6, § 27.010 (2008). In various states, vacancies on the boards can be
filled by appointment until the next election. See ALASKA Stat. § 14.12.070 (2008); ARK. Code
Ann. § 6-13-61 1 (West 2004); Cal. Educ. Code § 5091 (West 2002 & Supp. 2009); Fla. Stat
Ann. § 1001.38 (West 2004); Idaho Code § 33-504 (West 2006); Minn. Stat. Ann. § 123B.09
subdiv. 5 (West 2008); S.D. CoDiFED Laws § 13-8-25 (2004); Vt. Stat. Ann. tit. 16, § 424(a)
(West 2007 & Supp. 2008).

47. Ariz. Rev. Stat. § 15-108 (Supp. 2008). Systemic educational mismanagement exists
when it is determined "that the school district failed to ensure that a school or schools in the school
district properly implemented their school improvement plan or plans." Id. § 15-108(M)(2); see
also H.B. 271 1, 48th Leg., 2d Reg. Sess. (Ariz. 2008).

48. Ariz. Rev. Stat. Ann. § 15- 108(A) (Supp. 2008). However, such a district must have
at the very minimum, one school failing (not merely underperforming) to satisfy the state academic
standards. Id. § 15-108(A)(2).

49. Id. § 15-103. A district is deemed insolvent when it "is unable to pay debts," employee
salaries or tuition due to other school districts' or has defaulted on bond or interest payments for
60 calendar days, "contracted for any loan not authorized by law, . . . operated with a deficit equal
to five per cent or more of the school district's revenue control limit for any fiscal year within the
past two fiscal years," or failed to honor warrants for payment. Id. § 15- 103(B); see also H.B.
271 1, 48th Leg., 2d Reg. Sess. (Ariz. 2008). The state will find gross mismanagement when the
"school district's officers or employees committed or engaged in gross incompetence or systemic
and egregious mismanagement of the school district's finances or financial records." ARIZ. Rev.
Stat. Ann. § 15-103(V)(1) (Supp. 2008).

50. Ariz. Rev. Stat. Ann. § 15-103(Q); see also H.B. 271 1, 48th Leg., 2d Reg. Sess. (Ariz.
2008).

51. Ariz. Rev. Stat. Ann. § 15-103(F)(1) (Supp. 2008); see also H.B. 271 1, 48th Leg., 2d

348 INDIANA LAW REVIEW [Vol. 42:343

4. Arkansas. — Like the NCLB, Arkansas law dictates that districts not
making AYP could face State takeovers.^^ The state law also authorizes takeover
of districts in financial distress. ^"^ Arkansas requires election of school board
members.^^

5. California. — California also has a NCLB-like provision.^^ The same three
corrective actions under the NCLB could provide the avenue for takeover of
school districts in this state.^^ California may also take over districts in fiscal
distress.^^ In the event of a takeover, the district's board remains in an advisory
role.^^ California requires election of board members.^^

6. Delaware. — In Delaware districts are evaluated on the basis of their
academic performances using a five-point scale: "Superior Performance,
Commendable Performance, Academic Review, Academic Progress and
Academic Watch."^^ Those districts rated as Academic Review, Academic
Progress or Academic Watch, are sanctioned pursuant to the NCLB.^^ Qualified
voters elect board members in Delaware.^^

Reg. Sess. (Ariz. 2008). '

52. See ARIZ. REV. Stat. Ann. §§ 15-403, -421, -424 (2002 & Supp. 2008); Ariz. Rev.
Stat. Ann. §§ 15-425, -426, -429, -431 (2002); see also id. §§ 15-428,-451.

53. Ark. Code Ann. §§ 6-15-426(a)-(c) (West 2004 & Supp. 2009); see also id. §§ 6-15-
403(l)-(2), -419,-428,-429.

54. Id. § 6-20-1909; see also ARK. CODE ANN. §§ 6-20-1901 to -1902 (West 2004); ARK.
Code Ann. §§ 6-20-1903 to -1906 (West 2004 & Supp. 2009); Ark. Code Ann. § 6-20-1907
(West 2004); ARK. CODE ANN. §§ 6-20-1908 to -1910 (West 2004 & Supp. 2009); ARK. CODE
Ann. § 6-20-191 1 (West 2004).

55. See ARK. CODE ANN. §§ 6-13-604, -606 (West 2004 & Supp. 2009); Ark. Code Ann.
§ 6-13-611 (West 2004); Ark. Code Ann. §§ 6-13-615, 6-13-616(a), 6-13-631, 6-14-102, 6-14-
121 (West 2004 & Supp. 2009).

56. Cal. Educ. Code § 52055.57(c) (West 2006 & Supp. 2009). This California education
code section was enacted to implement the requirements of the NCLB. Id. § 52055.57(a)(1).
California also has a law that allows takeover of a school district where its schools fail to meet the
Academic Performance Index (API) growth targets. Id. § 52055.5(f). For more on the API, see
section 52052, section 52052.1, section 52052.2, and section 52055.55 of the California Code.

57. Compare 20 U.S.C. § 6316(c)(l)(C)(iii), (v), (vi) (2006), with Cal. Educ. Code §
52055.57(c)(1)(A), (C), (D) (West 2006 & Supp. 2009).

58. Cal. Educ. Code §§ 41320, 41326 (West 1993 «fe Supp. 2009).

59. Id. § 41326(c)(1); see also id. § 41326(e)-(g) (listing specific conditions required for
districts to emerge from the takeover).

60. See Cal. Educ. CODE §§ 1007, 5000, 5016 (West 2002); Cal. Educ. Code § 5017 (West
2002 & Supp. 2009); Cal. Educ. Code § 5090 (West 2002); Cal. Educ. Code § 5091 (West 2002
& Supp. 2009); Cal. Educ. Code §§ 5092-5095, 5222 (West 2002) Cal. Educ. Code § 35012
(West 1993 & Supp. 2009); Cal. Educ Code § 35103 (West 1993).

61. Del. Code Ann. tit. 14, § 155(a) (West 2006) (internal quotation marks omitted).

62. Id. § 155(d); see also 14-100-103 DEL. CODE REGS. § 7.0 (Weil 2009).

63. See DEL. CODE Ann. tit. 14, § 105 1 (West 2006); Del. Code Ann. tit. 14, § 1052 (West

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 349

7. Florida. — In Florida, State takeovers might occur pursuant to the
following provision: "notwithstanding any other statutory provisions to the
contrary, the State Board of Education shall intervene in the operation of a
district school system when one or more schools in the school district have failed
to make adequate progress [toward state standards] for [two] school years in a
[four]-year period."^"^ Indeed, it is not even required that all schools in the
district fail to make adequate progress in the two- or four-year period.^^ Florida
law also provides for the election of school board members.^^

8. Georgia. — While Georgia law does not explicitly provide for takeovers,
the State might still be able to take over districts pursuant to the following
provision: "The State Board of Education shall approve a single accountability
system for local schools and school systems that incorporates federal law, rules,
and regulations relating to accountability."^^ These federal laws include the
NCLB and, with it, the NCLB's takeover sanction.^^ With respect to the election
of board members, the Georgia Constitution provides that "[e]ach school system
shall be under the management and control of a board of education, the members
of which shall be elected as provided by law."^^

9. Idaho. — Idaho also has a NCLB-like provision7° The state's
administrative code dictates that the Idaho Department of Education take
"mandatory corrective actions [for] local educational agencies as required under
federal law"^^ where those districts fail to meet the AYP requirements of the
NCLB 7^ Idaho's statutory law provides for election of board members^^

2006 &Supp. 2008); Del. Code Ann. tit. 14, § 1053 (West 2006); Del. Code Ann. tit. 14, § 1054
(West 2006 & Supp. 2008). In the case of consolidated districts, the state provides for initial
appointment ofboard members but subsequently board members are elected. Id. § 1065(b). In this
Article, the more pertinent and more interesting are the existing school boards, as takeovers of a
newly consolidated district would be rare.

64. Fla. Stat Ann. § 1008.33(1) (West 2004 & Supp. 2009) (emphasis added).

65. Id.

66. See FLA. STAT. ANN. §§ 105.031, .035, .061 (West 2008); Fla. Stat. Ann. §§ 1001.34,
.35, .361, .362, .363 (West 2004).

67. Ga. Code Ann. § 20-14-26(a)(l) (West 2007); see also Ga. Comp. R. &Regs. 160-7-1-
.01 to .04 (2008); Ga. Dept. of Educ, App. F: Table of LEA Consequences, available at
http://public.doe.kl 2. ga.us/DMGetDocument.aspx/FAQs%20-%20Consequences%
20for%20NI%20Systems.pdf?p=6CC6799F8C1371F6A6272905BFB660C0817CDCAFA736D
0E6F0E89008FE2FF5C3&Type=D.

68. Ga. Comp. R. & Regs. 160-7-l-.04(3)(d)(2) (2008).

69. Ga. Const, art. 8, § 5, ^ 11; accord Ga. Code Ann. § 20-2-50 (West 2007).

70. iDAHOADMiN.CoDEr. 08.02.03. 112 (2008); /J. r. 08.02.03.114.02.

71. Mr. 08.02.03.114.02.

72. See id. r. 08.02.03.1 12; id. r. 08.02.03.1 14.

73. See IDAHO Code Ann. § 33-501 (West 2006 & Supp. 2008); Idaho Code Ann. §§ 33-
502, -502A-502D, -503, -504 (West 2006); Idaho Code Ann. § 33-505 (West 2006 & Supp.
2008); IdahoCode Ann. §§ 33-506 to -507 (West 2006); IdahoCode Ann. § 33-402 (West 2006

350 INDIANA LAW REVIEW [Vol. 42:343

10. Illinois. — Illinois has an NCLB-based law that provides authority for
takeovers^"^ The State also permits takeovers of districts failing to emerge from
academic watch status after three years 7^ Districts in fiscal distress can be taken
over with the appointment of an oversight panel for the district^^ Ostensibly, the
elected board is not replaced^^ The district must remain under State control for
a minimum of three and maximum of ten years 7^ This provision for fiscal
takeovers only applies to districts with less than 500,000 inhabitants/^ Local
boards may petition for the State to take them over.^^ Financial control of the
district can subsequently be moved from the oversight panel to a School Finance
Authority to enable the district's financial and educational recovery.^ ^

Illinois also has a takeover provision that applies to cities with over 500,000
inhabitants.^^ The reality, however, is that this provision only applies to the
Chicago Public Schools because it is the sole district that meets the population
requirement.^^ The provision is designed to improve the graduation rates,
academic performance and student attendance rates in the district.^"^ Pursuant to
this provision, the State dissolved the Chicago Board of Education and
transferred power to the mayor to appoint a board of trustees.^^ The mayor does
not even have to seek the city council's approval in making the appointment.^^
Illinois provides for election of board members.^^

11. Iowa. — Iowa's school district accreditation provision also authorizes
takeovers.^^ The accreditation committee's recommendations must "specify

& Supp. 2008); Idaho Code Ann. §§ 33-408, -419, -428 (West 2006).

74. 105 III. Comp. Stat. 5/2-3.25n(a) (West 2006); see also id. 5/2-3.25f(c) ("All federal
requirements apply to schools and school districts utilizing federal funds under Title I, Part A of
the [NCLB].").

75. Id. 5/2-3.25f(b)(l); see also id. 5/3-14.28.

76. See id. 5/lB.

77. Id. 5/1B-6, 5/1B-7, 5/1B-9. However, the panel might be able to remove the board as the
state law gives the panel power "to do any and all things necessary or convenient to carry out its
purposes and exercise the powers given to the [p]anel." Id. 5/lB-6(s); see also E. St. Louis Fed'n
of Teachers v. E. St. Louis Sch. Dist. No. 189 Fin. Oversight Panel, 687 N.E.2d 1050, 1058 (111.
1997) (upholding statute and providing an example of the statute's operation).

78. 105 III. COMP. Stat. Ann. 5/1B-5 (West 2006).

79. Id. 5/lB-2(a)(3); see also id. 5/lB-3(e).

80. /d5/lB-4.

81. Seeid.5l\E-5.

82. Id. 5/34-1, 5/34-1.01, 5/34-1.02, 5/34-1.1.

83. See statutes cited supra note 82; see also infra notes 623-24 and accompanying text.

84. 105 III. Comp. Stat. Ann. 5/34-1.01 to -1.02 (West 2006).

85. 7^.5/34-3,5/34-3.3.

86. M 5/34-3(2).

87. See, e.g., id. 5/5-2, 5/6-3, 5/7-13; 105 ILL. CoMP. STAT. 5/9-10 (West 2006 & Supp.
2008); 105 III. Comp. Stat. 5/10-1, 5/10-4, 5/10-10, 5/34-3.3 (West 2006).

88. Iowa Code Ann.§ 256.1 1(10)-(12) (West 2003 & Supp. 2008).

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 35 1

whether the school district or school shall remain accredited or under what
conditions the district may remain accredited. "^^ One of those conditions confers
the authority for State takeover of districts:

The conditions may include, but are not limited to, providing temporary
oversight authority, operational authority, or both oversight and
operational authority to the director and the state board for some or all
aspects of the school district operation, in order to bring the school
district into compliance with minimum [accreditation] standards. ^^

If the district does not address its accreditation problems, the district can be
placed in "receivership for the remainder of the school year."^' The state
provides for election of board members.^^

12. Kansas. — Kansas' takeover provision, like Iowa's, is located within the
State's accreditation laws. Districts with an unaccredited or a conditionally
accredited school could face restructuring.^^ The state provides for election of
school board members. ^"^

13. Kentucky. — In Kentucky, before a takeover can occur, the state board of
education must "believe[] that [there is] a critical lack of efficiency or
effectiveness in the governance or administration of a local school district."^^ A
hearing is then held to verify this belief .^^ If verified, "the state board shall
assume sufficient supervision of the district to ensure that appropriate corrective
action occurs."^^ If a hearing confirms 2i pattern of critical lack of efficiency or
effectiveness to be addressed, the state board must "declare the district a 'state
assisted district' or a 'state managed district'" and take over the district.^^ The
state provides for election of board members. ^^

89. /J. § 256.11(12) (emphasis added).

90. Id.

91. Id.

92. See id. §§ 277.1 to .34, 275.12, 275.35, 275.41. It is important to point out that these
statutory sections as well as section 256. 1 1 are undergoing legislative action and Westlaw notes that
the section's "[t]ext [is] subject to final changes by the Iowa Code Editor for Code 2009."

93. Kan. Admin. Regs. §91-31 -40(d) (2008). This restructure could provide the avenue for
the State takeover of the district. See id. However, the Kansas Board of Education's
recommendation of a restructure must be approved by the state legislature. Id. The district can
appeal the recommendation within fifteen days after receiving the recommendation. Id. 91-31-
37(c).

94. See Kan. Stat. Ann. §§ 72-7902, -8009, -7901 to -7905 (2002).

95. Ky. Rev. Stat. Ann. § 158.780(l)(b) (West 2006).

96. Id.

97. Id.

98. Id. § \5%.im{\){c)',seealsoid. § 158.785; 703 Ky.Admin.Regs. 3:205 (2008). As with
the other states herein, districts can emerge out of takeover once the deficiencies that led to the
takeover are corrected. Ky. Rev. Stat. Ann. § 158.785 (West 2006).

99. See Ky Const. §§ 152, 155; Ky. Rev. Stat. Ann. §§ 116.200, 160.042, 160.044,

352 INDIANA LAW REVIEW [Vol. 42:343

14. Louisiana. — Under Louisiana's accountability system, the State could
take over academically deficient districts failing to implement an improvement
plan, new curriculum, replacement of school staff or other sanctions against the
district. ^^° Louisiana requires election of board members. ^°^

15. Maryland. — Mary land has a NCLB -like provision. ^^^ The state may take
over districts after a judicial hearing in which a trustee or receiver is appointed
to manage the di strict '^^ The state generally requires appointment of board
members except in a few districts where election is required. '^"^

16. Massachusetts. — Massachusetts 's law permits the State to take over
chronically underperforming districts by appointing a receiver for the district. ^°^
Although the state provides for the election of school board members, districts
have the choice of appointing regional school district members "by locally
elected officials such as school board members." ^^^

17. Michigan. — In Michigan the State may assume control of districts in
fiscal crisis. ^^^ Michigan law provides for election and appointment of regional

160.190, 160.200, 160.210, 160.220, 160.240 (West 2006).

100. La. Admin Code. tit. 28, §§ 1503, 1601, 1603,4310,4901,4909,4911 {2m%)\ see also
id. §§ 1609, 1901.

101. 5^^ La. Const, art. VIII, § 9(A); La. Rev. Stat. Ann. §§ 17:52, :52.1, :52.2(2001);La.
Rev. Stat. Ann. § 17:121 (2001 & Supp. 2009); cf. La. Rev. Stat. Ann. § 17:72.1 (2001)
(providing for appointment of interim school board members in two parishes, which appointments,
if at all, had to occur before 1999 and 2003).

102. Md. Code Regs. 13A.01.04.08 (2008); see also id. 13A.01.04.09.

103. Id. 13A.01.04.08(B)(3)(f).

104. See Md. Code Ann., Educ. § 3- 108(a) (West 2002 & Supp. 2008); see also id. § 3-108. 1
(relating to Baltimore City Public Schools System); id. § 3-109 (relating to Baltimore County); id.
§ 3-1 10 (relating to Ann Arundel County). Election is required in the following counties: "(1)
Allegany; (2) Calvert; (3) Carroll; (4) Cecil; (5) Charles; (6) Dorchester; (7) Frederick; (8) Garrett;
(9) Howard; (10) Kent; (11) Prince George's; (12) Montgomery; (13) Queen Anne's; (14) St.
Mary's; (15) Somerset; (16) Talbot; (17) Washington; and (18) Worcester." Id. § 3-1 14; see also
id. §§ 3-201 to -1401 (outlining election requirements for various counties).

105. Mass. Gen. Laws Ann. ch. 69, § IK (West 1996); 603 Mass. Code Regs. 2.04 (2008).
A chronically underperforming district is "a school district [that] has consistently failed to improve
the performance of students attending school in the district." MASS. Gen. Laws Ann. ch. 69, § IK
(West 1996); 603 Mass. Code Regs. 2.04(5) (2008); see also Mass. Gen. Laws Ann. ch. 69, §
IB (West 1996 & Supp. 2008); Mass. Gen. Laws Ann. ch. 69, § 1 J (West 1996); 603 Mass. Code
Regs. 2.01-2.03 (2008).

106. Mass. Gen. Laws Ann. eh. 71, § 14E (West 1996) (emphasis added); see also Mass.
Gen. Laws Ann. ch. 41, § 1 (West 2004); id. ch. 41, § IB; id. ch. 41, § 9; Mass. Gen. Laws Ann.
ch. 43, § 31 (West 1994); id. ch. 43, § 36; id. ch. 43, § 102; id. ch. 43, § 109; Mass. Gen. Laws
Ann. ch. 54, § 162 (West 2007); Mass. Gen. Laws Ann. ch. 71, § 16A (West 1996 & Supp. 2008);
Chelsea School Comm., Rules and Regulations, available at http://www.chelseaschools.
com/school_committee/RULES A~ 1 .PDF.

107. Mich. CoMP. Laws Ann. §§ 141.1231 to. 1291 (West 2005); jee a/^o Mich. Comp. Laws

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 353

school district committee members. ^^^

18. Minnesota. — Minnesota's law implementing the NCLB potentially
authorizes State takeover of districts. ^^^ Similar to the NCLB, Minnesota's law
does not contain any precise provision for State takeover; however, the following
language might provide the necessary authority: 'The [Minnesota] Department
of Education shall continue to implement the federal [NCLB] . . . without
interruption."^ ^^ This language suggests that the State has the power to wholly
implement the NCLB and therefore has the power to take over those districts
failing to meet AYP. ^ ' ^ The state law also provides for election and appointment
of board members. ^ ^^

19. Mississippi. — Mississippi's accreditation law gives the State authority
to take over districts. ^'^ The process starts with the governor's declaration of a
state of emergency. ^^"^ Following such a declaration, the State Board of
Education may appoint an interim conservator. ^^^ Alternatively, the State Board
could itself manage the district. ^^^ State law provides for both election and

Ann. § 388.994 (West 2004).

108. See MiCH. COMP. LAWS Ann. § 168.301 to .3 16 (West 2008); Mich. Comp. Laws Ann.
§§ 380. 1 la(7)-(10) (West 2005 & Supp. 2008); MiCH. CoMP. Laws Ann. 380.61 1 (West 2005);
id. § 380.703(7); DETROIT Bd. OF Educ, FAQs About the Detroit Board of Education,
available at http://www.detroit.kl2.mi.us/board/documents/FAQsDBOE.pdf. In the case of
consolidated districts, the state provides for initial appointment of board members but subsequently
board members are to be elected. MiCH. COMP. Laws Ann. § 380.861 (West 2005).

109. Minn. Stat. Ann. § 127A.095 (West 2008).

110. /^. subdiv. 1.

111. See id. The same law requires the department to ask the federal government for various
waivers from the NCLB. Id. subdiv. 2(b) (listing the waivers). In fact, the law adds that if the
department is not able to obtain the waivers listed in the statute, then the department should advise
"whether the state should opt out of the No Child Left Behind Act." Id. subdiv. 2(a). Corrective
action or state takeover is not one of the waivers the department is expressly ordered to seek. See
id. subdiv. 2(b). Instead, the statute allows corrective action and a state takeover to be imposed
pursuant to the NCLB. See generally id. § 127A.095.

112. See Minn. Stat. Ann. §§ 123A.48, 123A.58, 123A.68, 123B.09 (West 2008); Minn.
Stat. Ann. §§ 205A.01 to . 1 1 (West 1992 & Supp. 2009); see also Minn. Stat. Ann. §§ 120A.05,
123A.55, 123B.50, 123B.94, 128.01, 128.02, 128D.08 (West 2008); Minn. Stat. Ann. §205 A.03
(West 1992 &L Supp. 2009); Minn. Stat. Ann. § 383B.041 (West 2004). For a provision for the
appointment of joint boards for Intermediate School District Number 287, Hennepin and Wright
Counties, see sections 136D.22 and 136D.24 of the Minnesota Code. See also MiNN. STAT. Ann.
§ 136D.01 (West 2008) (defining an intermediate school district); id. §§ 136D.71, .76, .82, .84.

113. Miss. Code Ann. § 37-17-6 (West 1999 & Supp. 2008).

114. /6?. §37-17-6(11).

115. Id. § 37- 17-6(ll)(c)(iii);5^e§ 37- 17-6(1 1)-( 15) (allowing for appointment of an interim
conservator if a majority of the membership of a school board of any district resigns).

116. Id. §37-17-6(ll)(c)(ii).

354 DsfDIANA LAW REVIEW [Vol. 42:343

appointment of school boards . * ' ^

20. Missouri. — Missouri law provides for the corporate organization of a
district to lapse if the district fails to have the minimum academic term required
under state law or the district remains unaccredrited for two consecutive years. ^ '^
Once the district lapses, the State may appoint an administrative board to manage
the district. ^^^ Missouri's law also specifically provides authorization for the
appointment of an administrative board to run *'a metropolitan school district or
an urban school district containing most or all of a city with a population greater
than [350,000] inhabitants and in any other school district if the local board of
education does not anticipate a return to accredited status."^^° The statute
provides for election of board members. ^^^

21. Nevada. — Nevadahas aNCLB-like provision for takeovers. ^^^ The State
also allows corrective action, including the takeovers provided in the NCLB,
"against a school district that is designated as demonstrating need for
improvement, including, without limitation, a school district that is not a Title I
school district." ^^^ Nevada provides for election of board members. '^"^

22. New Jersey.— Nqw Jersey evaluates districts using "the New Jersey
Quality Single Accountability Continuum." ^^^ hi addition to considering
thoroughness and efficiency, the evaluation continuum also considers "district
capacity" in "five key components of school district effectiveness."^^^ The five
components are: (1) governance; (2) personnel; (3) financial management; (4)
operations; and (5) instruction and programing. *^^ The state commissioner of

117. See Miss. Code Ann. § 37-5-1 (West 1999 & Supp. 2008); Miss. Code Ann. §§ 37-5-3
to -9 (West 1999); MiSS. CODE Ann. § 37-5-18 (West 1999 & Supp. 2008); MiSS. CODE ANN. §§
35-5-19, 37-6-7 (West 1999); MiSS. CODE Ann. § 37-18-7(5) (West Supp. 2008). Pursuant to the
governor' s declaration of a state of emergency and through the same avenues for takeover as
described above, the State could take over a district with "a school [that] continues to be designated
a School At-Risk after three (3) years of implementing a school improvement plan, or in the event
that more than fifty percent (50%) of the schools within the school district are designated as
Schools At-Risk in any one (1) year." Id. § 37-18-7(6).

118. Mo. Ann. Stat. § 162.081(1) (West 2000 & Supp. 2008).

119. /J. § 162.081(4).

120. Id. § 162.081(3).

121. See Mo. ANN. STAT. § 1 15.125 (West 1997 & Supp. 2009); Mo. ANN. Stat. § 162.21 1
(West 2000 & Supp. 2008); Mo. ANN. STAT. § 162.241 (West 2000); Mo. Ann. Stat. §§ 162.261,
.301, .459, .471 (West 2000 & Supp. 2008); Mo. Ann. Stat. §§ 162.491, .581 (West 2000); Mo.
Ann. Stat. § 162.601 (West 2000 & Supp. 2008).

122. Nev. Rev. Stat. Ann. §§ 385.3772(4), .3773 (West 2006); see also 20 U.S.C. §
6316(c)(10)(C) (2006); Nev. Rev. Stat. § 385.3774 (West 2006).

123. Nev. Rev. Stat. Ann. Ann. § 385.3772(3) (West 2006).

124. See id. §§ 386.120, .160, .165, .180, .190, .200, .205, .215, .225, .240, .260, .270, .300.

125. N.J. Stat. Ann. § 18A:7A-10 (West 1999 & Supp. 2008).

126. Id.

127. Id. The law requires that effectiveness and capacity be assessed by:

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 355

education must conduct a study of district performance and capacity for those
districts meeting 'less than 50[%] of the quaUty performance indicators in four
or fewer of the five key components of school district effectiveness." ^^^ Based
on this evaluation, such districts must create an improvement plan to address
their insufficiencies on the quality performance indicators. *^^ The State may
assume partial control of those districts that fail to satisfy at least 50% of the
performance indicators in four or fewer key components. ^^^ Districts meeting
"less than 50[%] of the quality performance indicators in each of the five key
components of school district effectiveness"^^* could face total State takeover. *^^
The state provides for appointment and election of board members. *^^

23. New Mexico. — New Mexico authorizes takeovers of "district[s] that
[have] failed to meet requirements of law or [state public education] department
rules or standards. "^^"^ District noncompliance with state financial requirements
could also catalyze a State takeover. *^^ New Mexico provides for the election

[QJuality performance indicators comprised of standards for each of the five key
components of school district effectiveness. The quahty performance indicators shall
take into consideration a school district's performance over time, to the extent feasible.
Based on a district's compliance with the indicators, the [state] commissioner [of
education] shall assess district capacity and effectiveness and place the district on a
performance continuum.

Id. The commissioner must create a way for parents and community members to provide input in

assessing the district. Id. § 18A:7A- 14(a).

128. Id. § 18A:7A- 14(c)(1); see also § 18A:7A- 14(e)(1) (requiring the same evaluation for
district meeting "less than 50[%] of the quality performance indicators in each of the five key
components of school district effectiveness") (emphasis added).

129. M§ 18A:7A-14(c)(l), -14(e)(1).

130. Id. § 18A:7A-14(c)(3); see also id. § 18A:7A-14(e)(l).

131. M § 18A:7A-14(e)(l) (emphasis added).

132. Id. ("Nothing in this paragraph shall be construed to prohibit the State board [of
education] from directing the district to enter full State intervention prior to the expiration of the
two-year period.").

133. 5^^ N.J. Stat. Ann. §§18A:8-18,:9-10,:12-l,:12-7,:12-ll,:12-15,:13-8 (West 1999);
N.J. Stat. Ann. § 19:60-7 (West 1999 & Supp. 2008); N.J. Stat. Ann. § 52:27BBB-63 (West
Supp. 2008).

134. N.M. Stat. Ann. § 22-2-2(C) (West Supp. 2008).

135. N.M. Stat. Ann. § 22-2-14(A)-(F) (West 2003 & Supp. 2008). Specifically, the law
requires that "[m]oney budgeted by a school district shall be spent first to attain and maintain the
requirements for a school district as prescribed by law and by standards and rules as prescribed by
the [state] department [of education]." Id. § 22-2-14(A); see N.M. CODER. §§ 6.30.6.1 to .13
(Weil 2009). Districts failing to meet these requirements must be so notified. N.M. Sat. Ann. §
22-2-14(A) (West 2003 & Supp. 2008); N.M. CODER. § 6.30.6.9(A) (Weil 2009). "Instructional
units or administrative functions [within such districts] may be disapproved for such deficiencies."
N.M. Stat. Ann. § 22-2-14(A) (West 2003 & Supp. 2008).

356 INDIANA LAW REVIEW [Vol. 42:343

and appointment of board members. ^^^

24. New York. — New York State law authorizes the New York City School
Chancellor' ^^ to "[i]ntervene in any districts or school which is persistently
failing to achieve educational results and standards approved by the city board
[of education]. "'^^ State law also empowers the Chancellor to intervene in
districts that have "failed to improve [their] educational results and student
achievement in accordance with such standards or state or city board
requirements, or in any school or district in which there exists, in the chancellor' s
judgment, a state of uncontrolled or unaddressed violence." *^^ Failure of the
district to implement an improvement plan could lead the Chancellor to "assume
joint or direct control of the operation of the . . . district to implement the
corrective action plan."''^^ The state also has a NCLB-like provision that would
allow State takeovers.'"^' The state provides for the election and appointment of
board members. '"^^

25. North Carolina. — In North Carolina if over 50% of schools in a district
are low-performing,'"^^ the State could appoint an interim superintendent in place

136. See, e.g., N.M. CONST, art. XII, § 15; N.M. Stat. Ann. § 1-22-3 (West 2003); N.M.
Stat. Ann. § 1-22-4 (West 2003 & Supp. 2008); N.M. Stat. Ann. §§ 1-22-5 to -19, 22-4-13, 22-
4-14, 22-5-1, 22-5-1.1. In the case of consolidated districts, the state provides for initial
appointment of board members but the subsequent election of board members. Id. § 22-4-10 to - 1 2.

137. See N.Y. Educ. Law § 2590-h (McKinney 2007 & Supp. 2009) (describing the powers
and duties of the New York City School Chancellor). Until June 30, 2009, the City School
Chancellor is appointed by the mayor of New York City. Id. ("Such chancellor shall serve at the
pleasure of and be employed by the mayor of the city of New York by contract. The length of such
contract shall not exceed by more than two years the term of office of the mayor authorizing such
contract."). Effective June 30, 2009, the Chancellor shall be appointed "by the city board by
contract for a term not to exceed by more than one year the term of office of the city board
authorizing such contract, subject to removal for cause." Id.

138. Id. §2590-h(31).

139. Id.

140. Id. Effective June 30, 2009, the chancellor takes over the power of the community district
education councils, the community district education councils are referred to as community boards
in the state law. See N.Y. Educ. Law § 2590-c (McKinney 2007); N.Y. Educ. LAW § 2590-h(9),
(1 1), (13) (McKinney 2007 & Supp. 2009); see also id. §§ 2554(2), 2590-h(17).

141. N.Y. COMP. Codes R. & Regs. tit. 8, §§ 100.2(p), 120.2 (2008).

142. See N.Y. EDUC. LAW §§ 2553, 2590-c (McKinney 2007) (providing for elections and
appointments until June 30, 2009); 56^ «/5<7fV/. §§ 1607, 1702; N.Y. EDUC. LAW §§ 1709(17), 1804
(McKinney 2007 & Supp. 2009); N.Y.Educ.Law §§ 1901, 1914, 2018-a, 21 13, 2502, 2510, 2552,
2564 (McKinney 2007).

143. N.C. Gen. Stat. Ann. § 1 15C-105.37(a) (West 2000 & Supp. 2008) ("Low-performing
schools are those in which there is a failure to meet the minimum growth standards, as defined by
the State Board, and a majority of students are performing below grade level."); see also N.C. Gen.
Stat. Ann. § 1 15C-105.37A (West Supp. 2008) (defining "continually low-performing" schools).

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 357

of the incumbent superintendent.^"^ If the State finds that the board is not
cooperating with the interim superintendent or has hampered student
achievement, then the State Board of Education may suspend the powers of the
local school board. ^"^^ Beyond such a suspension, if the State determines that it
is necessary to change the district's governance to improve student achievement,
then the State Board of Education could present such a governance change to the
State Legislature for consideration."^^ The state provides for appointment and
election of school board members. ^"^^

26. Ohio. — Ohio has a NCLB-like provision^"^^ requiring at least one
corrective action in districts "identified for improvement for three consecutive
school years."^"^^ The sole corrective action authorizing a takeover, however, is
the appointment of a trustee to run the district. ^^^ The state provides for
appointment and election of school board members. ^^'

27. Oklahoma. — Oklahoma law requires the State Board of Education to
create an accountability system under the NCLB.^^^ While the law does not
specifically provide for State takeovers, ^^^ the broad authority the statute confers
on the State to implement the NCLB ostensibly necessarily includes such a
power. ^^'^ The state provides for election and appointment of board members. ^^^

144. N.C. Gen. Stat. Ann. § 115C-105.39(c)(l)(West2000);5^^^^«^ra//};N.C.GEN.STAT.
Ann. § 1 15C-12 (West 2000 & Supp. 2008) (outlining the power of the North Carolina Board of
Education).

145. N.C. Gen. Stat. Ann. § 1 15C-105.39(d) (West 2000).

146. Id. § 1 15C-105. 39(e). Presumably, this is the same procedure the state must follow in
order to replace an elective governance structure with an appointive one.

147. See, e.g., id. §§ 115C-35 to -37.1.

148. OfflO Rev. Code Ann. § 3302.04(F) (West 2005); see also id. §§ 3302.01 to .02; OfflO
Rev. Code Ann. §§ 3302.21 to .03 (West 2005 & Supp. 2008); Offlo Rev. Code Ann. § 3302.031
(West 2005); OfflO Rev. Code Ann. § 3302.032 (West Supp. 2008); Offlo Rev. Code Ann. §§
3302.04 to .09 (West 2005); OfflO Rev. Code Ann. § 3302. 10 (West 2005 & Supp. 2008).

149. OfflO Rev. Code Ann. § 3302.04(F)(3) (West 2005). Recall, the NCLB requires that
districts failing to make AYP for two consecutive years be identified for improvement. 20 U.S.C.
§ 63 16(c)(3) (2006). The other corrective actions under the Ohio law are: establishing (i) alternate
governance for individual schools in the district, OfflO Rev. Code Ann. § 3302.04(F)(3)(d) (West
2005); (ii) implementation of a new curriculum, id. § 3302.04(F)(3)(c); (iii) withholding part of
district' s Title I funds, id. § 3302.04(F)(3)(a); and (iv) ordering the district to replace key personnel,
id. § 3302.04(F)(3)(b). Ordering the district to replace the personnel is less suggestive of a
takeover. Cf. 20 U.S.C. § 6316(c)(10)(C)(iii).

150. OfflO Rev. Code Ann. § 3302.04(F)(3)(e) (West 2005).

151. 5ee«W.§§ 331 1.71, 3313.01 to. 13; OfflO Rev. Code Ann. §§3313.12 to. 13 (West 2005
& Supp. 2008); OfflO Rev. Code Ann. § 3313.47 (West 2005); OfflO Rev. Code Ann. § 3513.254
(West 2007); see also OfflO CONST, art. VI, § 3.

152. Okla. Stat. Ann. tit. 70, § 1210.541(B) (West 2005).

153. See id.- see also Okla. Admin. Code § 210:10-13-18 (2008).

154. Oklahoma also potentially allows takeover through what the law describes as "full state

358 INDIANA LAW REVIEW [Vol. 42:343

28. Pennsylvania. — Pennsylvania law authorizes the State to take over
fiscally distressed districts. ^^^ Prior to the takeover, the State must petition a
court to appoint two people to serve on a "special board of control" along with
the State Secretary of Education or her designee. ^^^ The State can also take over
districts placed on an education empowerment list by the Secretary. ^^^ If, after
a tenure of three years on the list, the district does not meet the goals set forth in
the district improvement plan and the district remains academically deficient, the
State appoints a board of control to manage the district. ^^^ The state provides for
appointment and election of board members. '^°

intervention" in elementary school districts that do not "meet financial requirements for school
districts or accreditation standards which negatively affects education or could result in the
elementary school district not being able to operate for the remainder of the year." Okla. Stat.
Ann. tit. 70, § 1210.543(A) (West Supp. 2009). In such cases, the state board has the option of
"issu[ing] an administrative order placing the elementary school district under full state
intervention." Id. Elementary districts are those that have "grades kindergarten through eight and
. . . have not met the minimum standards for, and have not been designated as, independent school
districts by the State Board of Education." Okla Stat. Ann. tit. 70, § 5-103 (West 2005). A
further examination of the Oklahoma provision allowing full intervention reveals a list of
interventions, only one of which is a takeover. OKLA. Stat. Ann. tit. 70, § 1210.543(B) (West
Supp. 2009).

155. See OKLA. STAT. ANN. tit. 26, §§ 13A-101 to -111 (West 1997 & Supp. 2009); OKLA.
Stat. Ann. tit. 70, §§ 5-107A to -107B (West 2005); Okla. Stat. Ann. tit. 70, §§ 5-110 to -.1
(West 2005 & Supp. 2009); Okla STAT. Ann. tit. 70 §§ 14-110, 4419 (West 2005); Okla. Admin.
Code 780:15-3-3 (2008); id. 780:15-3-5. In the case of consolidated districts, the state provides
for initial appointment of board members but subsequently board members are to be elected. Okla.
Stat. Ann. tit. 70, § 7-101(C)(5)-(6) (West 2005); /^.§ 7-105.

156. 24 Pa. Cons. Stat. Ann. § 6-692 (West 1992 & Supp. 2008); 24 Pa. Cons. Stat. Ann.
§ 6-693 (West 1992). The State Secretary of Education could declare a district financially-
distressed for various enumerated reasons, such as the district's non-payment of teacher or other
employee salaries for ninety days. Pa. Cons. Stat. Ann. § 6-69 1(a)(1) (West 1992 & Supp. 2008);
nonpayment of tuition owed another district, id. § 6-69 1(a)(2); default on bonds for ninety days,
id. § 6-69 1(a)(4); and contracting for loans unauthorized by law, id. § 6-69 1(a)(5).

157. Id. § 6-692.

158. 24Pa.Cons.Stat.Ann.§§ 17-1703-B,-1714.1-B (West Supp. 2008). Districts having
academic problems tend to be the ones placed on the list. Districts on the empowerment list or
those certified as empowerment districts can emerge out of State takeover when the history of low
test performance stops and improvement plan goals are satisfied. Id. § 17-1710-B; see also id. §
17-1714.1-B. The Education Empowerment Act will expire June 30, 2010. Id. § 17-1716-B.

159. Id. §§ 17-1703-B to -1707-B.

160. See 24 Pa. Cons. Stat. Ann. §§ 3-301 to -323 (West 1992); 24 Pa. Cons. Stat. Ann.
3-24 (West 1992 & Supp. 2008); 24 Pa. Cons. Stat. Ann. §§ 3-325 to -327 (West 1992); 24 Pa.
Cons. Stat. Ann. § 6-692 (West 1992 «fe Supp. 2008); 24 Pa. Cons. Stat. Ann. § 6-692.1 (West
1992); 24 Pa. Cons. Stat. Ann. § 6-696 (West 1992 «fe Supp. 2008); 24 Pa. Cons. Stat. Ann.
§17-1707-B (West Supp. 2008).

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 359

29. Rhode Island. — For districts that are academically deficient following
three years of state assistance, Rhode Island law provides the State with
"progressive levels of control" ^^^ over the "district budget, program, and/or
personnel. This control by the department of elementary and secondary
education may be exercised in collaboration with the school district and the
municipality." ^^^ This apparent partial State takeover does not necessarily
replace the elected board. ^^^ However, the language suggests that the State could
exercise the control without collaboration with the district, in which case the
local board might become essentially a lame-duck board. *^ Rhode Island
provides for election of board members. ^^^

SO. South Carolina. — For at-risk districts in South Carolina where student
performance fails to improve or where the district fails to implement adequately
the State Board of Education's recommendations in the prescribed time, the State
Superintendent, with the State Board's approval, may "declare a state of
emergency in the school district and assume management of the school
district."^^^ The local school board is not replaced in such takeovers. ^^^ Instead,
the law provides that the district school board changes the composition of the
board. ^^^ Importantly, though, the district may only appoint new members
included on a list of candidates provided by the State. ^^^ Moreover, the appointed
members are nonvoting members. '^^ South Carolina law provides for election
and appointment of board members. ^^^

31. South Dakota. — South Dakota's takeover provision is similar to the
NCLB's.^^^ The state provides for election of board members. ^^^

161. R.I. Gen. Laws Ann. § 16-7.1-5(a) (West 2006 & Supp. 2008).

162. Id. (emphasis added).

163. See id. (note the permissive language).

164. See id. Even after State takeover, the school board still seems to have control over some
aspects of school funding. Rhode Island also allows a school board in financial difficulties, due to
inadequate taxable property and an insufficient apportionment from the general treasury to support
high quality schools, to request the State takeover the district's schools. R.I. Gen. Laws Ann. §
16-l-10(a) (West 2006); R.I. Gen. Laws Ann. § 16-60-4 (West 2006 & Supp. 2008).

165. See R.I. Gen. Laws Ann. §§ 16-2-5, 17-19-7.1 (West 2006).

166. S.C. Code Ann. § 59- 18- 1570(B)(4) (West 2004 & Supp. 2008), as amended by H.B.
4662, 2008 Leg., 1 17th Sess. (S.C. 2008).

167. S.C. Code Ann. § 59-18-1570(0 (West 2004 & Supp. 2008).

168. Id.

169. Id.

170. Id.

171. In South Carolina, state law largely provides for appointment of the board members. See
S.C. Code Ann. § 59-15-10 (West 2004); S.C. Code Ann. § 59-18-1570(C) (West 2004 & Supp.
2008); S.C. Code Ann. §§ 59-19-20, -30, -40, -45, -50, -60 (West 2004).

172. See S.D. ADMIN. R. 24:42:03:20 (2008); see also S.D. CODIFIED LAWS § 13-3-67 (2004);
S.D. Admin. R. 24:42:03:01, :28 (2008); see generally id. R. 24:42:02:01, :21. The state's statute
gives the state board of education authority to create a system of accountability that includes

360 INDIANA LAW REVIEW [Vol. 42:343

32. Tennessee. — In Tennessee, takeovers might occur under the appellation
"LEA [local educational agency] Restructuring 1"'^"^ or the appellation "LEA
Restructuring 2."^^^ "If the LEA does not meet the performance standards of the
state board by the end of the third year of improvement status, it may be placed
in the fourth year of improvement status (LEA Restructuring 1)."^^^ There are
arguably two provisions in this LEA Restructuring 1 phase that might give the
State the authority to take over a school district: (1) "[r]eplace[ment] [of] the
LEA personnel who are relevant to the failure to make [AYP]"*^^; or (2)
"[r]eorganiz[ation] of the internal management structure." ^^^

In LEA Restructuring 2, during the fifth year of a district in improvement
status, two other provisions might give the State authority to take over a
district. ^^^ The law states that "[i]f the LEA does not meet the performance
standards of the state board by the end of the fourth year in improvement status,
it may be placed in the fifth year of improvement status (LEA Restructuring
2 — Alternative Governance)." ^^° In this phase, the State Commissioner of
Education could either "[a]ssume any or all powers of governance for the
LEA"^^^ or "[r]ecommend to the state board that some or all of the local board
of education members be replaced." ^^^ Tennessee provides for election of board
members. ^^^

sanctions for school districts, S.D. CodmedLaws §§ 13-3-67, -69(8) (2004), and to promulgate
any other rule to help implement the NCLB, id. § 13-3-69(13). See also id. §§ 13-3-62, -68.
Pursuant to this authority, the state administrative rules created this accountability system which
is an implementation of the NCLB. S.D. Admin. R. 24:42:03:01 to :28 (2008). Before a district
is identified for corrective action, the district is entitled to examine the data used for the
identification. Id. R. 24:42:03:04 to :06.

173. See S.D. CodmedLaws §§ 13-5-2, 13-6-13.1, 13-6-62 to -64 (2004); S.D. Codihed
Laws§§ 13-7-6 to -6.1 (2004 &Supp. 2008); S.D. Codified Laws §§ 13-7-7 to -10.2 (2004); S.D.
CodmedLaws §§ 13-7-10.3 to -10.4 (2004 & Supp. 2008); S.D. Codified Laws §§ 13-7-11 to
-12 (2004); S.D. CodmedLaws § 13-7-13 (2004 & Supp. 2008); S.D. CodmedLaws §§ 13-7-14
to-27 (2004); S.D. CoDMED LAWS § 13-8-7.1 (2004&Supp. 2008); S.D. CodmedLaws §§ 13-8-
24 to -25 (2004); S.D. ADMIN. R. 5:02:04:15, 5:02:06:15, 5:02:06:16, 5:02:08:11, 5:02: 15: 10 to
-:1 1(2008).

174. Tenn. Code Ann. § 49-l-602(k) (West 2006 & Supp. 2009). LEA is a reference to the
school district. Tenn. Code Ann. § 49-1-103(2) (West 2006).

175. Tenn. Code Ann. § 49-1-602(1) (West 2006 & Supp. 2009).

176. Id § 49-l-602(k).

177. Id §49-l-602(k)(2)(A).

178. M §49-l-602(k)(2)(D).

179. 5^^/^. §49-1-602(0.

180. Id.

181. Id. § 49- 1-602(0(1 )( A).

182. /^. §49- 1-602(0(1 )(C).

1 83. See TENN. CODE ANN. § 6-53-1 10 (West 2002 & Supp. 2009); Tenn. Code Ann. § 7-1-
112 (West 2007); Tenn. Code Ann. §§ 49-1-602(0(3), 49-2-201 (West 2006 & Supp. 2009);

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 36 1

33. Texas. — In Texas,^^"^ the State could, among other sanctions,^^^ take over
districts that fail to meet the state standards for academic performance, ^^^
accreditation,^^'' or financial accountability. ^^^ The key provisions in the Texas
law that might provide the means for a takeover give the State Commissioner of
Education authority to do any of the following: (1) "appoint a conservator to
oversee the operations of the district"*^^; (2) "appoint a management team to
direct the operations of the district in areas of unacceptable performance"*^^; and
(3) "if a district has a current accreditation status of accredited-warned or
accredited-probation, is rated academically unacceptable, or fails to satisfy
financial accountability standards as determined by commissioner rule, appoint
a board of managers to exercise the powers and duties of the board of trustees."*^*
The first two provisions are suggestive of partial takeovers *^^ and a district might
not be able to complete a total takeover under those provisions. *^^ Indeed, the
first suggests more of an oversight/supervisory role,'^"^ whereas the second
indicates a takeover limited to "areas of unacceptable performance."*^^ The third

Tenn. Code Ann. § 49-2-201 (West 2006 & Supp. 2008); Tenn. Code Ann. §§ 49-2-202, -1205,
-1254(c)(8) (West 2006).

1 84. See TEX. Educ. Code Ann. §39.131 ( Vemon 2006 & Supp. 2008) (spelling out Texas' s
takeover requirements); see also TEX. Educ. Code Ann. §39.133 (Vemon 2006); 1 9 Tex. Admin.
Code §§ 97.1035, .1051 to .1073 (2008).

1 85. For the other sanctions in the law, see TEX. EDUC. CODE ANN. §39.131 (a) (Vemon 2006
& Supp. 2008).

1 86. See id. § 39.072 (setting forth the academic performance standards); see also id. §39.131.

1 87. See id. § 39.07 1 (setting forth Texas' s accreditation requirements); see also id. §39.131.

1 88. The financial accountability standards are set by the state commissioner of education. Id.
§ 39.131(a).

189. M§ 39.131(a)(7).

190. Id. § 39.131(a)(8).

191. Id. § 39. 131 (a)(9y, see also § 39. 136{sl). Further, "[i]fthe commissioner appoints a board
of managers to govem a district, the powers of the board of tmstees of the district are suspended
for the period of the appointment." TEX. EDUC. CODE ANN. § 39. 136(b) (Vemon 2006).

192. See id. § 39.135(c)(3)-(6). Also in Texas, "[i]f the commissioner appoints a board of
managers to govem a campus, the powers of the board of tmstees of the district in relation to the
campus are suspended for the period of the appointment." Id. § 39.136(c) (emphasis added).

193. For example, the state law in defining powers of the conservator or management team
points out that neither the conservator nor the management team can, inter alia, "take any action
conceming a district election, including ordering or canceling an election or altering the date of or
the polling places for an election," id. § 39.135(c)(3), or "change the number of or method of
selecting the board of tmstees." Id. § 39.135(c)(4).

194. See id. § 39.131(a)(7). This shows that the powers of the conservator and management
team are limited. At the same time, the law gives the conservator and management team power to
direct as well as approve or disapprove actions of the school board. Id. § 39.135(c)(l)-(2).

195. See id. § 39.131(a)(8).

362 INDIANA LAW REVIEW [Vol. 42:343

provision is the most pellucid on State takeover. ^^^ The state provides for
appointment and election of board members. *^^

34. West Virginia. — West Virginia's accountability system for districts*^^
requires that the board of education rate districts annually based on performance
audits using four different levels: nonapproval, conditional approval, temporary
approval, or full approval. '^^ The pertinent rating for State takeovers is the
nonapproval rating.^^ The law provides that

[n]onapproval status shall be given to a county board which fails to
submit and gain approval for its electronic county strategic improvement
plan or revised electronic county strategic improvement plan within a
reasonable time period as defined by the state board or which fails to
meet the objectives and time line of its revised electronic county
strategic improvement plan or fails to achieve full approval by the date
specified in the revised plan.^^^

When the state board assigns a district nonapproval status, the board must
"declare a state of emergency. "^^^ The district then has six months to address the

1 96. See id. §39.131 (a)(9). This is evident in the fact that in another subsection, the law states
that irrespective of a district' s compliance with accreditation standards, "[i]f for a period of one year
or more a district has had a conservator or management team assigned, the commissioner may
appoint a board of managers, a majority of whom must be residents of the district, to exercise the
powers and duties of the board of trustees," Id. § 39.131(b).

197. Id. §§ 11.052, 11.057; id. § 11.351 (describing special-purpose districts); id. § 11.352
(appointments for special-purpose districts); id. § 39.136(e); Tex. Elec. Code Ann. § 41.001
(Vernon 2003 & Supp. 2008); Tex. Elec. Code Ann. §§ 41.0011 to .005 (Vernon 2003); Tex.
Elec. Code Ann. §§ 41 .005 1 to -.0052 (Vernon 2003 & Supp. 2008); Tex. Elec. Code Ann. §§
41.0053 to .006 (Vernon 2003); Tex. Elec. Code Ann. § 41.007 (Vernon 2003 & Supp. 2008);
Tex. Elec. Code Ann. § 41.008 to .031 (Vernon 2003); Tex. Rev. Civ. Stat. Ann. art. 2688k §§
1-2 (Vernon 1965 & Supp. 2008).

198. W. Va. Coder. §§ 126-13-1 to -19 (2008); j^e^/^oW.VA. Code Ann. §§ 18-1-4,-18-
2E-5(p) (West 2002 & Supp. 2008). The state law suggests that this accountability system is an
attempt to implement the NCLB. See W. Va. Code R. § 1 26- 1 3- 1 .2 (2008) (identifying the NCLB
as authority for the state law). However, this state law has no real semblance to the NCLB
provisions, including the NCLB 's corrective actions. See generally W. VA. CODE Ann. § 18-2E-5
(West 2002 & Supp. 2008); W. Va. CodeR. §§ 126-13-1 to -19 (2008).

199. W.Va.CodeAnn.§ 18-2E-5(p)(West2002&Supp.2008);W.VA.CODER.§ 126-13-
14.1 (2008); see also W. Va. Code ANN. § 18-2E-5 (West 2002 & Supp. 2008).

200. See W. Va. Code Ann. § 1 8-2E-5(p)(4)(C) (West 2002 & Supp. 2008); W. Va. Code R.
§ 126-13-15 (2008).

201. W.Va.Code§ 18-2E-5(p)(4) (West 2002 & Supp. 2008); W.Va. Coder. §§ 126-13-
14.5, -15. 1 to -15.4 (2008). The state board defined "reasonable time period" as "30 days following
written notification of the temporary approval status." Id. § 126-13-15.2.

202. W. Va. Code Ann. § 18-2E-5(p)(4)(C) (West 2002 & Supp. 2008); W. Va. Code R. §
126-13-15.6.1 (2008).

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 363

emergency or face at least a partial takeover.^^^ The State is not required to give
the district the full six-month period before it intervenes.^^"^ The state provides
for election of board members.^^^

35. Wyoming. — Wyoming has a NCLB-like pro vision. ^^^ The state provides
for appointment and election of school board member s.^^^

With this panorama of State takeover provisions, we examine diverse
takeovers to highlight implementation of takeovers across the nation.

n. The Racial Physiognomy of State Takeovers

Having surveyed the takeover provisions in thirty-five states, it is necessary
to turn to application of those provisions. This section thus provides a review of
a number of States' use of State takeover. In completing this review, we keep an
eye on the racial composition of various districts affected by a takeover. Since
some contend that a disproportionate number of high-minority (defined here as
a more than 50% non-white population) districts are affected,^^^ this section
provides the relevant statistics and analysis to evaluate such claims.

A. Alabama

The Alabama State Board of Education took financial control of the Barbour
County School District in 1999.^^^ This partial takeover ended in 2006.^^^ Over
90% of the students in this district are minorities.^^ ^ Similarly, the Alabama State

203. W. Va. Code Ann. § 18-2E-5(p)(4)(C) (West 2002 & Supp. 2008); W. Va. Code R. §
126-13-15.6.2(2008).

204. W. Va. Code Ann. § 18-2E-5(q) (West 2002 & Supp. 2008); W. Va. CodeR. § 126- IS-
IS.6.4 (2008). Once the conditions necessary for an intervention are present, the state could
immediately intervene if "delaying intervention for any period of time would not be in the best
interests of the students of the county school system," W. Va. Code Ann. § 18-2E-5(q)(l) (West
2002 & Supp. 2008); W. Va. Code R. § 126-13-15.6.4(1) (2008), or "the state board had
previously intervened in the operation of the same school system and had concluded that
intervention within the preceding five years." W. Va. Code Ann. § 18-2E-5(q)(2) (West 2002 &
Supp. 2008); W. Va. CodeR. § 126-13-15.6.4(2) (2008).

205 . See W. Va. Const, art. XII, § 6; W. Va. Code Ann. §18-5-1 (West 2002); W. Va. Code
Ann. § 18-5-la (West 2002 & Supp. 2008); see also W. Va. CONST, art. XII, § 10.

206. 005-000-0006 Wyo. CodeR. §§ 10 (b)(ii)(D) (Weil 2008); see also id. § 4-21.

207. See Wyo. Stat. Ann. §§ 21-3-105, 21-3-108, 21-3-1 11 (b)-(c), 21-6-216 (2007).

208. See supra notes 1 1-14.

209. See Ala. State Bd. of Educ, Resolution Removing the Barbour County School System
from State Financial Intervention (Feb. 9, 2006), available at http://www.alsde.edu/html/boe_
resolutions2.asp?id=l 144.

210. Id.

211. See New Am. Found., Fed. Educ. Budget Project, Barbour County School District
Demographics, http://febp.newamerica.net/kl2/al/100300 (last visited Aug. 6, 2009) (reporting on
the district's demographics).

364 INDIANA LAW REVIEW [Vol. 42:343

Board of Education partially took over the Macon County School District in
1996, when the board financially intervened in the district.^^^ In 2001, the State
released the district from the partial takeover.^^^ More than 97% of the students
in this district are minorities.^^'^ From 1996 to 2000, in a partial takeover, the
State took financial control of the Wilcox County School District.^^^ Nearly all
of that district's students are minorities.^*^ In 2000, the State also took over the
Bessemer City School District, which was in financial distress.^^^ The State
released the district from the State takeover in 2004.^^^ More than 97% of the
district's students are minorities.^ ^^ Likewise from 2002 to 2005 the State took
over the Greene County School District due to its financial problems. ^^° The
district's student body is comprised of a 100% minority population. ^^^

While the State has taken over a number of high-minority districts, it has also
taken over low-minority school districts. For example, the State financially
intervened in the Jefferson County School District in 2000 due to the district's
mounting financial distress.^^^ The district emerged from State control in

212. See Ala. State Bd. of Educ, Resolution Removing the Macon County School System
from State Financial Intervention (Dec. 13, 2001), available at http://www.alsde.edu/html/
boe_resolutions2.asp?id=383&.

213. Id.

214. See New Am. Found., Fed. Educ. Budget Project, Macon County School District
Demographics, http://www.febp.newamerica.net/kl2/al/102190 (last visited Aug. 6, 2009)
(reporting on the district's demographics).

215. See Ala. State Bd. of Educ, Resolution Removing the Wilcox County School System
from State Financial Intervention (Dec. 14, 2000), available at http://www.alsde.edu/html/
boe_resolutions2.asp?id=195.

216. See New Am. Found., Fed. Educ. Budget Project, Wilcox County School District
Demographics, http://www.febp.newamerica.net/kl2/al/103510 (last visited Aug. 6, 2009).

217. John Archibald & Charles J. Dean, Lax Rules, Oversight Let Millions Disappear,
Birmingham News (Ala.), Dec. 3, 2000, at 1, available at 2000 WLNR 8957346.

218. Ala. State Bd. of Educ, Resolution Removing the Bessemer City School System from
State Financial Intervention (Mar. 11, 2004), available at http://www.alsde.edu/html/boe_
resolutions2.asp?id=9 14&.

219. See New Am. Found., Fed. Educ. Budget Project, Bessemer City School District
Demographics, http://www.febp.newamerica.net/kl2/al/100330 (last visited Aug. 6, 2009).

220. See Ala. State Bd. of Educ, Resolution Removing the Greene County School District
from State Financial Intervention (Aug. 11, 2005), available at http://www.alsde.edu/
html/boe_resolutions2.asp?id=1072&; see also Charles J. Dean, State to Run Schools in Greene
County System Plummets $1.2 Million in Red, BIRMINGHAM NEWS (Ala.), Oct. 11, 2002, at 1,
available at 2002 WLNR 13153610; Editorial, Turning Greene: State Takeover Is Positive Step
for Rebuilding Schools, BIRMINGHAM NEWS (Ala.), Oct. 13, 2002, at 2, available at 2002 WLNR

13158329.

221. See New Am. Found., Fed. Educ. Budget Project, Greene County School District
Demographics, http://www.febp.newamerica.net/kl2/al/101680 (last visited Aug. 6, 2009).

222. See Archibald & Dean, supra note 217; Rebecca Catalanello, Jefferson County Looking

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 365

2003.^^^ A mere 39% of the students in the district are minorities. ^^"^ Likewise,
the State took over the Dale County School District for financial reasons from
2001 to 2005.^^^ Just 20% of the Dale County School District students are
minorities. ^^^ Fiscal mismanagement contributed to the takeovers in all of these
districts.^^^ On the other hand, the Marshall County School District, while
threatened with State takeover in the midst of its financial crisis, was never
actually taken over.^^^ Less than 10% of that district's students are minorities. ^^^

B. Arizona

Arizona took over the Colorado City Unified School District in 2005 because
of declining enrollment and what the State Superintendent of Instruction
characterized as "'a pattern and practice of systemic and egregious
mismanagement of district property, materials, supplies, funds, and facilities. '"^^^
The students in the district are mostly from the Fundamentalist Church of Jesus

at Dodge, MOBILE REGISTER (Ala.), Mar. 1, 2003, at Al, available at 2003 WLNR 15769646; see
also Steve French, State-Controlled Schools Need Local Involvement, BIRMINGHAM NEWS (Ala.),
Apr. 23, 2001, at 7, available at 2001 WLNR 1 1236582.

223. Vicki McClure, Jejfco Schools Declared Stable: Richardson Ends Three Years of State
Supervision, BIRMINGHAM NEWS (Ala.), June 27, 2003, at 1, available at 2003 WLNR 15948655;
see also Marie Leech, Jejfco School System Audit Rates Another Perfect Score Clean Slate 2nd
Year in Row Follows Earlier State Takeover, BIRMINGHAM NEWS (Ala.), Mar. 29, 2008, at 2,
available at 2008 WLNR 6199044.

224. See New Am. Found., Fed. Educ. Budget Project, Jefferson County School District
Demographics, http://www.febp.newamerica.net/kl2/al/101920 (last visited Aug. 6, 2009).

225. See Ala. State Bd. of Educ, Resolution Removing the Dale County School System from
State Financial Intervention (Mar. 10, 2005), available at http://www.alsde.edu/html/boe_
resolutions2.asp?id=1027&.

226. See New Am. Found., Fed. Educ. Budget Project, Dale County School District
Demographics, http://www.febp.newamerica.net/kl2/al/101050 (last visited Aug. 6, 2009).

227. See Archibald & Dean, supra note 217; McClure, supra note 223.

228. See Briefs, Marshall County Teachers Imperiled, BIRMINGHAM NEWS (Ala.), Sept. 18,
2005, at 20, available at 2005 WLNR 24080544 (discussing the Marshall County financial troubles
and the potential for State takeover).

229. See New Am. Found., Fed. Educ. Budget Project, Marshall County School District
Demographics, http://www.febp.newamerica.net/kl2/al/100006 (last visited Aug. 6, 2009).

230. Mary Ann Zehr, Ariz. Schools Chief Seeks Takeover of Troubled District, EDUC. Wk.,
Aug. 31, 2005, at 4; Ariz. State Bd. of Educ, Meeting Minutes (Dec. 5, 2005), available at
http://www.azed.gov/stateboard/minutes/12-05-05.pdf; see also Catherine Gewertz, Pupil Loss
Hits District in Arizona, EDUC. Wk., Nov. 17, 2004, at 10 [hereinafter Gewertz, Pupil Loss Hits
District]; Catherine Gewertz, Student Exodus Hits Schools in 2 Towns, EDUC. Wk., Sept. 13,
2000, at 1 [hereinafter Gewertz, Student Exodus Hits Schools]', Nancy Perkins, Appointee
Labors on Colorado City School Finances: State Receiver Trims Airplane, Cell Phones, Cars
from Budget, Deseret MORNING NEWS, Jan. 25, 2006, at B5, available at 2006 WLNR

1332430.

366 INDIANA LAW REVIEW [Vol. 42:343

Christ of Latter-day Saints^^^ which urges its members to home-school their
children, accounting for a steep decline in enrollment in the district.^^^ The
district remains under State control,^^^ but there is some indication that it might
soon emerge from State control.^^"^ One hundred percent of the district' s students
are white.^^^ The State also took over the Saddle Mountain Unified School
District #90 in 2007 due to financial problems in the district.^^^ The district has
also not yet emerged from State control.^^^ About 41% of the district's student
body are minorities. ^^^ Arizona also took over the Union Elementary School
District in 2007 because of that district's fiscal troubles. ^^^ Like Saddle
Mountain, Union Elementary School District was still under State control as of
2008.^"^^ The district's student body is approximately 88% minority.^"^^ Financial
crisis in the Peach Springs Unified School District #8 led to its takeover in

23 1 . Zehr, supra note 230.

232. Gewertz, Pupil Loss Hits District, supra note 230; Gewertz, Student Exodus Hits Schools,
supra note 230.

233. See H.B. 2569, 48th Leg., 2d Reg. Sess. (Ariz. 2008).

234. Ariz. State Bd. of Educ, Meeting Minutes (Jan. 22, 2007), at 3, available at
http://www.azed.gov/stateboard/minutes/2007/01-22-07.pdf (discussing potential acceleration of
the termination of the takeover); Ariz. State Bd. of Educ, Meeting Minutes (June 25, 2007), at 3,
available at http://www.azed.gov/stateboard/minutes/2007/06-25-07.pdf (noting that if the district
maintained its compliance with financial standards then the board "may propose termination" of
the takeover).

235. See New Am. Found. Fed. Educ. Budget Project, Colorado City Unified District
Demographics, http://www.febp.newamerica.net/kl2/az/400021 (last visited Aug. 6, 2009).

236. Ariz. State Bd. of Educ, Meeting Minutes (June 25, 2007), supra note 234, at 9-10.

237. See H.B. 2469, 48th Leg., 2d Reg. Sess. (Ariz. 2008); Notice of Public Meeting fi-om the
Ariz. State Bd. of Educ. (Mar. 14, 2008), available at http://www.azed.gov/stateboard/
agendas/2008/03- 1 4-08.pdf; Veriti Consulting LLC, Receiver' s Fifth Quarterly Progress
Report for Saddle Mountain Unified School District #90, at 1 (2009), available at
http://www.veriticonsulting.com/educationconsulting.html.

238. See U.S. Dep't of Educ, Inst, of Educ Sci., Nat'l Ctr. for Educ Statistics, District Detail
for Saddle Mountain Unified School District, http://nces.ed.gov/ccd/districtsearch/district_detail.
asp?Search=l&InstName=Saddle&State=04&DistrictType=l&DistrictType=2&DistrictType=3
&DistrictType=4&DistrictType=5&DistrictType=6&DistrictType=7&NumOfStudentsRange=m
ore&NumOfSchoolsRange=more&ID2=0407170&details=5 (last visited May 7, 2009).

239. Ariz. State Bd. of Educ, Meeting Minutes (June 25, 2007), supra note 234, at 1 1-13.

240. See H.B. 2469, 48th Leg., 2d Reg. Sess. (Ariz. 2008).

241. See New Am. Found., Fed. Educ. Budget Project, Union Elementary District
Demographics, http://www.febp.newamerica.net/kl2/az/408820 (last visited Aug. 6, 2009).

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 367

2007.^"^^ The State retains control of the district.^"^^ Fifty-three percent of the
district's students are minorities. ^"^

C Arkansas

On Monday July 14, 2008, Arkansas took over the Greenland School District
No. 95 of Washington County due to the district's financial problems.^"^^ The
State intends to continue the takeover for at least a year, after which the State
will determine whether to annex the district or give control back to the local
school board.^'*^ Approximately 11% of the district's students are minorities. ^"^^
In 2007, the State also took over the Bald Knob School District No. 1 in White
County and removed the school board because of the district' s financial crisis.^"^^
This district's student body is about 6% minority. ^"^^ Arkansas also took over the
Helena- West Helena School District for fiscal mismanagement;^^^ the State

242. Vertti Consulting LLC, Receiver's 120-Day Report and Financial Improvement
Plan for Peach Springs Unified School District #8, at 1-2 (2009), available at
http://www,veriticonsultingxom/educationconsulting.html [hereinafter Vertti ConsultingLLC,
Recetver's 120-Day Report],

243. See H.B. 2469, 48th Leg., 2d Reg. Sess. (Ariz. 2008); Ariz. State Bd. of Educ, Meeting
Minutes (May 19, 2008), at 2-3, ava//aNe a/ http://www.azed.gov/stateboard/Minutes/2008/05- 19-
08.pdf; Vertti Consulting LLC, Recetver's 120-Day Report, supra note 242, at 1-2.

244. See New Am. Found. Fed. Educ. Budget Project, Peach Springs Unified District
Demographics, http://www.febp.newamerica.net/kl2/az/406120 (last visited Aug. 6, 2009).

245 . Jim Watts, Arkansas Takes Over School District, Rejects Recovery Plan, BOND BUYER,
July 16, 2008, at 4, available at 2008 WLNR 13243445.

246. Id.

247. See U.S. Dep't of Educ, Inst, of Educ. Sci., Nat'l Ctr. for Educ. Statistics, District Detail
for Greenland School District, available at http://nces.ed.gov/ccd/districtsearch/district_
detail.asp?Search= 1 &InstName=Greenland+&State=05&DistrictType= 1 &DistrictType=2&Dist
rictType=3&DistrictType=4&DistrictType=5&DistrictType=6&DistrictType=7&NumOfStuden
tsRange=more&NumOfSchoolsRange=more&ID2=0506930&details=5 (last visited Apr. 14, 2009).

248. Jim Watts, Arkansas: Bald Knob Gets More Time, BOND BUYER, Oct. 2, 2007, at 9; see
also News Release, Ark. Dep't of Educ, ADE Recommends Annexation for Bald Knob (Aug. 22,
2007),ava//a^/earhttp://www.arkansased.org/communications/pdf^ald_knob_release_082207.pdf
[hereinafter News Release, ADE Recommends Annexation].

249. See New Am. Found., Fed. Educ. Budget Project, Bald Knob School District
Demographics, http://www.febp.newamerica.net/kl2/ar/502700 (last visited Aug. 6, 2009).

250. News Post, State's Takeover of Helena-West Helena School District Discussed, ARK.
News Bureau, Oct. 14, 2005, available at http://www.arkansasnews.com/archive/2005/10/14/
states-takeover-of-helena-west-helena-school-district-discussed/. For a recent legislative financial
audit of the district, see Ark. Legislattve Joint Audtting Comm. , Helena- West Helena School
District No. 2: Regulatory Basis Financial Statements and Other Reports (June 30,
2007), available at http://www.legaudit.state.ar.us/AuditReports/PublicSchools/2007/Helena
WestHelenaSD2007.pdf.

368 INDIANA LAW REVIEW [Vol. 42:343

removed the school board.^^^ Over 90% of the district's student body are
minonty.

In 2006, Arkansas took over the Eudora School District and removed its
board for failing to submit an acceptable plan for emerging from fiscal distress
after the State afforded the district time to do so.^^^ Nearly all the district's
students are minorities. ^^"^ A state senator suggested that race might be a factor
in the State' s takeover decisions.^^^ That senator later apologized.^^^ There is no
direct evidence that racism motivated the takeovers in the State.^^^ The State
board took over the Midland School District in 2006 for fiscal problems, and the
State replaced the local school board.^^^ Less than 3% of the district's student
body is minority.^^^ In May 2007, the State Board of Education informed the
Helena- West Helena and Midland school districts that control would be
"incrementally restored" to the local school boards beginning in 2007.^^° On July
14, 2008, the state board voted to approve the State Superintendent's
recommendation that the State remove the Greenland School District.^^^ It

25 1 . See News Release, Ark. Dep't of Educ, State Removes Eudora School Board from Office
(Jan. 13, 2006), available ar http://www.arkansased.org/communications/pdf/eudorafirst01 13.pdf
[hereinafter News Release, State Removes Eudora School Board].

252. See New Am. Found., Fed. Educ. Budget Project, Helena- West Helena School District
Demographics, http://www.febp.newamerica.net/kl2/ar/507680 (last visited Aug. 6, 2009).

253. See News Release, State Removes Eudora School Board, supra note 251. The Eudora
School District eventually "was annexed into the Lakeside (Chicot County) school district at of the
beginning of the 2006-2007 school year." News Release, ADE Recommends Annexation, supra
note 248.

254. See New Am. Found., Fed. Educ. Budget Project, Eudora Public School District
Demographics, http://www.febp.newamerica.net/kl2/ar/500007 (last visited Aug. 6, 2009).

255. See News Post, State 's Takeover of Helena-West Helena, supra note 250.

256. See id.

257. See id. In fact, with respect to the Helena- West Helena takeover, the senator stated that
"he did not mean to suggest racism was the reason for the state's takeover of Helena- West Helena."
Id.

258. See Ark. State Bd. of Educ, Meeting Minutes (Feb. 13, 2006), at 3-4, available at
http://www.arkansased.org/sbe/pdf/sbe_minutes_021306.pdf; see generally News Release, Ark.
Dep't of Educ, State Takes Administrative Control over Midland School District (Jan. 13, 2006),
available at http://www.arkansased.org/communications/pdf/midland01 13.pdf.

259. See New Am. Found., Fed. Educ Budget Project, Midland School District Demographics,
http://www.febp.newamerica.net/kl2/ar/50020 (last visited Aug. 6, 2009).

260. See News Release, Ark. Dep't of Educ, Helena- West Helena, Midland Districts to Regain
Some Control (May 7, 2007), at 1, available at http://www.arkansased.org/communications/pdf/
districts_regain„release_050707.pdf. A separate press release also stated that the Midland School
District would "eventually regain control of its school district after the September school board
elections, in which all school board positions are open and subsequent training." See News
Release, ADE Recommends Annexation, supra note 248, at 2.

261. See Ark. State Bd. of Educ, Meeting Minutes (July 14, 2008), at 2-3, available at

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 369

appears that the board members were subsequently removed. ^^^

The State board also effectuated the takeover of the Decatur School District
for financial mismanagement.^^^ About 33% of the district's student body are
minority.^^"^

D. California

In 2003, California took over the West Fresno Elementary School District
because of fiscal instability.^^^ It is important to note that in California, when
takeovers occur, local school boards usually lose voting power.^^^ This loss of
power led to citizen outcry and allegations of racial animus in the West Fresno
District.^^^ However, residents' cries about denial of their right to vote and
racism in the decision to take over the West Fresno District were to no avail, and
no one presented any evidence of any such racial animus.^^^ A state-appointed
administrator was given total control of the district in 2005.^^^ As of September
2008, the administrator retains control over academics and finances and the
power to overrule the decisions of the local school board.^^^ As reported by the

http://www.arkansased.org/sbe/pdf/sbe_minutes_071408.pdf.

262. See Associated Vrcs^, Arkansas to Take Over Troubled School District, AP ALERT (Ark.),
July 14, 2008; News Release, Ark. Dep't of Educ, Greenland (July 24, 2008), available at
http://arkansased.org/conimunications/pdf/greenland_release_072408.pdf (announcing a new
superintendent for the district and noting the removal of the previous board).

263. See News Release, Ark., Dep't of Educ, Decatur (Aug. 7, 2008), available ar http://www.
arkansased.org/communications/pdf/decatur_release_080708.pdf; Leadership Support Serv., Ark.
Dep't of Educ, State Takes Control of Two Districts, ARK. EDUC. MATTERS, Sept. 2008, at 5,
available at http://www.arkansased.org/communications/pdf/ed_matters_v 1 n l_0908.pdf.

264. See New Am. Found., Fed. Educ Budget Project, Decatur School District Demographics,
http://www.febp.newamerica.net/kl2/ar/504980 (last visited Aug. 6, 2009).

265. Anne Dudley Ellis, West Fresno Board Is Back: School District Moves Toward Local
Control, Fresno Bee (Cal.), Sept. 1, 2008, at Al, available at 2008 WLNR 16606653; Progress
in West Fresno: School District Gets Partial Measure of Control Back from the State, Five Years
After Painful Takeover, FRESNO Bee (Cal.), Sept. 3, 2008, at C4, available at 2008 WLNR
16683885 [hereinafter Progre55 m We5? Fresno].

266. Meredith May, Panel OKs Oakland Loan $100 Million to Bail Out Schools, S.F. Chron.,
Apr. 10, 2003, at A27.

267. See Lesli A. Maxwell, Appeals Fail to Halt Takeover Bill Senate Committee Hears
Residents' Allegations of Racism Against Pete Mehas, FRESNO BEE (Cal.), Feb. 20, 2003, at Al,
available at 2003 WLNR 2840353 (noting several comments by citizens regarding racial
animus).

268. See id. (noting that despite the outcry, the financial numbers led the Senate Committee
to vote for the takeover).

269. See Ellis, supra note 265.

270. Id. The board now has some management and operational control, such as power over
district facilities and staff. Id. However, the administrator retains the power to override board
decisions. Id.

370 D^DIANA LAW REVIEW [Vol. 42:343

Fresno Bee, in 2008 the "district' s five-member board cast its first real vote since
the state took control of district affairs in 2003,"^^^ as the district finally regained
a level of control.^^^ If the district continues improving, then the district may
regain full control in 2009.^^^ Approximately 96% of the district's students are
minorities. ^^"^

California took over the Oakland Unified School District in 2003 as a result
of the district's burgeoning financial crisis.^^^ By 2008, the State had restored
some control to the local board such as power over facilities, community,
relations, and personnel, "including the authority to hire a leader who would
report directly to the locally elected officials for the first time since the 2003
fiscal crisis and [S]tate takeover."^^^ The State retains control over the budget
and academic policy.^^^ This district has a 94% minority student body.^^^

The State took over the Coachella Valley Unified School District in 1 992 due
to a district financial crisis. ^^^ Eventually, the State restored control to the local
board,^^^ but the district is still under great threat of takeover for failing to make
AYP pursuant to the NCLB.^^^ Approximately 99% of the district's students are

27 1 . Progress in West Fresno, supra note 265.

272. Ellis, supra note 265 (noting that the local board has management and operational control
but that finances are still in the control of the State administrator).

273. Id.

274. See New Am. Found., Fed. Educ. Budget Project, West Fresno Elementary
Demographics, http://www.febp.newamerica.net/kl2/ca/6145808 (last visited Aug. 6, 2009).

275. See Katy Murphy, Board Names Interim Superintendent: Appointment of Top Official
Is First under Local Control Since 2003, OAKLAND Trib., Apr. 10, 2008, n.p., available at 2008
WLNR 6710507 thereinafter Murphy, Board Names Interim Superintendent]; Katy Murphy,
Oakland Schools Get Interim Superintendent, OAKLAND Trib., Apr. 9, 2008, n.p., available at 200S
WLNR 6688380; Katy Murphy, School Board Regains Some Autonomy: Two Departments, Ability
to Hire Superintendent Return to Local Control, OAKLAND TRIB., Apr. 9, 2008, n.p., available at
2008 WLNR 6640179 (all noting that the takeover occurred in 2003).

276. Murphy, Board Names Interim Superintendent, supra note 275.

277. Id.

278. See New Am. Found., Fed. Educ. Budget Project, Oakland Unified Demographics,
http://www.febp.newamerica.net/kl2/ca/628050 (last visited Aug. 6, 2009).

279. See J. Douglas Allen-Taylor, School Takeover Oversight Committee to Hold Hearings
Early Next Year, BERKELEY DAILY PLANET, Oct. 23, 2007, available at http://www.
berkeleydailyplanet.com/issue/2007-10-23/article/28289 (last visited Apr. 15, 2009); Katy Murphy,
State Senators Hear Advice on School Debt and Takeovers, OAKLAND TRIB., Dec. 4, 2007, n.p.,
available at 2007 WLNR 23987941.

280. Shirin Parsavand, Coachella Schools: District Warned of State Takeover, Press-
Enterprise (Riverside, Cal.), Dec. 19, 2007, at Al.

28 1 . See Kimberly Cheng, Coachella Valley Unified Faces Severe State Action, CBS 2 NEWS,
Mar. 3, 2008, http://www.kpsplocal2.com/Global/story. asp?S=7936689 (last visited Apr. 15, 2009);
Parsavand, supra note 280 ("The district increased its chances of a state takeover by accepting a
$2 million grant in 2005. As a condition of the grant, Coachella Valley officials promised to meet

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 37 1

• • • 989

minonties.

In 2004, the State took over the Vallejo City Unified School District after the
school board voted to turn over the district to the State due to its fiscal crisis. ^^^
The district regained partial control in 2007, with the State retaining authority to
override those decisions that could harm the district financially.^^"^ The district
has about an 87% minority student body.^^^

Academic and financial problems in the Compton Unified School District led
to the district's takeover in 1993.^^^ The district returned to local control in
2003.^^^ Almost all the district's students are minorities. ^^^

Because of fiscal mismanagement, California took over the Emery Unified
School District in 2001.^^^ The State restored control to the local school board
in 2004.^^^ Approximately 98% of the district's students are minorities. ^^^

the law by this year or be subject to harsher sanctions under the law."); Associated Press, State
Takeover Possible Because of Coachella Schools Test Scores, AP ALERT (Cal.), Dec. 19,
2007.

282. See New Am. Found., Fed. Educ. Budget Project, Coachella Valley Unified
Demographics, http://www.febp.newamerica.net/kl2/ca/609070 (last visited Aug. 6, 2009).

283. Simone Sebastian, Vallejo School Board Hands Control to State $20 Million Debt Too
Deep for Locals to Dig out of Alone, S.F. Chron., Apr. 1, 2004, at Bl.

284. Rich Saskal, California: Vallejo USD Regains Control, BOND BUYER, July 20, 2007, at
9, available at 2007 WLNR 13817548.

285. See New Am. Found., Fed. Educ. Budget Project, Vallejo City Unified Demographics,
http://www.febp.newamerica.net/kl2/ca/640740 (last visited Aug. 6, 2009).

286. See Alex Katz, Schools ' Boss Vows Tight Ship: State Administrator Ward Starts Today,
Already Has Cracked Down on Student Absenteeism, ALAMEDA Times-Star (Cal.), June 16, 2003,
n.p., available at 2003 WLNR 16018290.

287. See id. It appears that at least partial control was restored in 2001. 5^e Ian Hanigan,
Compton Reclaims Its Schools; Education: Locals Take Control After Eight Years of Intervention
from State, LONG BEACH Press-Telegram, Dec. 13, 2001, at Al, available at 2001 WLNR

1291333. Full control was restored in 2003. 5^^ Katz, s'Mpra note 286.

288. See New Am. Found., Fed. Educ. Budget Project, Compton Unified Demographics,
http://www.febp.newamerica.net/kl2/ca/609620 (last visited Aug. 6, 2009).

289. See State to Control Emery Unified School District, W. COUNTY TIMES (Cal.), Dec. 24,
2000, at A28, available at 2000 WLNR 5371 199; Dan Walters, Misconduct Jeopardizes School
Funds, Fresno Bee (Cal.), Aug. 13, 2001, at A9, available at 2001 WLNR 1649525 [hereinafter
Walters, Misconduct]; Dan Walters, Why School Districts Collapse, LONG BEACH Press-
Telegram, Aug. 14, 2001, at A7, available at 2001 WLNR 1288282.

290. See Simone Sebastian, Emeryville Schools Hailed as Model for Recovery Community
Support Leads to Improved Test Scores, Finances, S.F. Chron., Oct. 4, 2005, at B 1 ; see also Alex
Katz, 2 Years Later, School District is On Track: State Overseer Who Helped Rein in Budget is
Moving on to New Job, ALAMEDA Times-Star, Nov. 19, 2003, n.p., available at 2003 WLNR
16002722 [hereinafter Katz, 2 Years Later] (discussing how in 2003 the district regained its
financial footing which led to the district eventually regaining control).

291. See New Am. Found., Fed. Educ. Budget Project, Emery Unified Demographics,

372 INDIANA LAW REVIEW [Vol. 42:343

While the State has taken over many minority districts, there appears to be
no evidence that the takeovers were a result of racial animus.^^^ Indeed, many of
these districts were laden with corruption, and the State was left with no choice
but to take them over.^^^ Further, in a number of districts, frustrated residents
themselves petitioned to recall the elected board.^^"^

E. Illinois

In 1994, Illinois took over the East St. Louis School District due to the
district's financial troubles.^^^ The State appointed a panel to oversee the
finances of the district but retained the board;^^^ the state-appointed panel,
however, maintained the power to veto the decisions of the board.^^^ In 2004,
before restoring full control to the district, the State, in an agreement with the

http://www.febp.newamerica.net/kl2/ca/612630 (last visited Aug. 6, 2009).

292. See supra notes 265-91 and accompanying text.

293. See, e.g., Katz, 2 Years Later, supra note 290 (noting that bankruptcy led to the Emery
Unified School District takeover); Alex Katz, Oakland Schools Face Investigation, OaklantdTrib.,
Feb. 11, 2004, n.p., available at 2004 WLNR 1709673 (noting fraud investigations into the
Oakland school district); Erin Kennedy, W. Fresno Schools Get New Official Kern County
Educator Selected to Replace Retiring Administrator, FRESNO BEE (Cal.), May 13, 2005, at Bl,
available at 2005 WLNR 24051577 (noting that after the takeover several board members faced
embezzlement and theft charges); Meredith May, School District's Back in the Black Emeryville
Emerges from Bankruptcy in 2-Year Turnaround, S.F. Chron., Nov. 14, 2003, at A19 (noting that
the initial takeover was initiated in response to "a spendthrift superintendent"); Progress in West
Fresno, supra note 265 (noting that the initial takeover was sparked in part by criminal charges
which were brought against school board officials); Walters, Misconduct, supra note 289 (noting
"near-bankrupt finances" and a "useless" accounting system as reasons for the State takeover of the
Emery Unified School District).

294. See Kennedy, supra note 293 (noting recall fights in West Fresno); Meredith May, Recall
Threat for Emeryville School Board $1.8 Million Debt Made Parents Angry, S.F. Chron., Jan. 10,
2001, at A13; Progress in West Fresno, supra note 265 (noting recall fights in West Fresno);
Rochelle Williams, California Board Recall, BOND BUYER, Jan. 12, 2001, at 33, available at 2001
WLNR 8373 1 1 (noting a call for board recall in Emeryville).

295. Peter Schmidt, ///. Board Moves to Take Over Troubled East St. Louis Schools, Educ.
Wk. Oct. 26, 1994, n.p.; see also Aisha Sultan, Panel Opposes Giving Money Control to East St.
Louis Board: School Board Members Act from Personal, Political Interest, Report Says, St.Louis
POST-DISPATCH, Feb. 22, 2001, at Al, available at 2001 WLNR 1 1360687.

296. Sultan, supra note 295. For a sample report from the oversight panel, see Financial
Oversight Panel for East St. Louis School District No. 1 89, Annual Report to the State
Superintendent (2000), available at http://www.isbe.state.il.us/board/meetings/feb01meeting/
ESLannual.pdf

297. Sultan, supra note 295; see generally E. St. Louis Fed'n of Teachers v. E. St. Louis Sch.
Dist. No. 189 Fin. Oversight Panel, 687 N.E.2d 1050 (111. 1997); E. St. Louis Fed'n of Teachers
V. E. St. Louis Sch. Dist. No. 189 Fin. Oversight Panel, 725 N.E.2d 797 (111. App. Ct. 2000) (both
showing the extended powers the oversight board has over the local board's decisions).

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 373

local board, dissolved the panel and replaced it with a transition committee. ^^^
Nearly all of the district's students are minorities. ^^^ The Venice Community
Unit School District #3 voted to petition the State to take over the district.^°°
Subsequently, in 2003 the State did take over the district because of its financial
problems.^^^ The district remains under the financial takeover.^^^ The district's
student body is 95% minority. ^^^

Round Lake Area Schools District 116 also experienced a financial takeover
in 2000 when an oversight panel was appointed for the district.^^ Continuing
financial and educational problems in the district resulted in the State's
appointment of a School Finance Authority to replace the panel in 2002.^^^ The
district remains under the control of the School Finance Authority. ^^^ Over 70%
of the district's students are minorities.^^^ Dire insolvency in the Hazel Crest
School District 152.5 led to its financial takeover in 2002.^^^ In December 2002,

298. See Press Release, 111. State Bd. of Educ, East St. Louis Board of Education and ISBE
Join Together: Agreement Ensures Continued Financial Stability (June 9, 2004), available at
http://www.isbe.net/news/2004/june9_04.htm; Press Release, 111. State Bd. of Educ, Schiller
Announces East St. Louis Interim CEO (June 24, 2004), available at http://www.isbe.net/news/
2004/june24_04.htm.

299. See New Am. Found., Fed. Educ. Budget Project, East St. Louis School District 189
Demographics, http://www.febp.newamerica.net/kl2/il/1713320 (last visited Aug. 6, 2009).

300. 111. State Bd. of Educ, Motion to Grant Petition for Emergency Financial Assistance and
the Establishment of a Financial Oversight Panel for Venice Community Unit School District 3
(2003), available at http://www.isbe.net/news/2003/venice_petition_motion.htm [hereinafter 111.
State Bd. of Educ, Motion to Grant Petition].

301 . Id. ; Press Release, 111. State Bd. of Educ, State Superintendent Appoints Three-Member
Oversight Panel for Venice School District (July 3, 2003), available at http://www.isbe.net/
news/2003/jul3-03.htm.

302. For more information on the state-appointed oversight panel, see School Fin., 111. State
Bd. of Educ, Venice Community Unit School District #3 Financial Oversight Panel,
http://www.isbe.net/finance/v/default.htm (last visited Apr. 16, 2009).

303. See New Am. Found., Fed. Educ. Budget Project, Venice Community Unit School
District Demographics, http://www.febp.newamerica.net/kl 2/11/1740200 (last visited Aug. 6, 2009).

304. See Press Release, School Fin., 111. State Bd. of Educ, State Board Authorizes School
Finance Authority for Round Lake School District 116: State Superintendent Names Members,
Aug. 21, 2002, available at http://www.isbe.net/fmance/RL/pr082102.htm.

305. Id.

306. Id. For more information on the state-appointed School Finance Authority, see School
Fin., 111. State Bd. of Educ, Round Lake Area Schools District # 1 16: School Finance Authority,
available at http://www.isbe.net/finance/RL/default.htm.

307. See New Am. Found., Fed. Educ. Budget Project, Round Lake Area Schools District
Demographics, http://www.febp.newamerica.net/kl2/il/1734990 (last visited Aug. 6, 2009).

308. See Press Release, 111. State Bd. of Educ, State Board of Education Approves
Continuation of Hazel Crest School District for FY05, Board Cites District's Dramatic Turnaround
Under School Finance Authority (Jan. 22, 2004), available at http://www.isbe.net/news/

374 INDIANA LAW REVIEW [Vol. 42:343

a School Finance Authority replaced the oversight panel that the State appointed
after the takeover.^^^ In fact, the local school board members voted to dissolve
the district prior to the School Finance Authority takeover, but the State chose
not to dissolve it.^^^ The district remains under the control of the School Finance
Authority.^' ^ More than 96% of the district's student body are minority. ^^^
Financial crisis also spurred the financial takeover of the Cairo Unit School
District 1 in 2003 through the appointment of an oversight panel.^^^ This
takeover, which occurred after a petition by the local board for the district,
continues.^^"^ Approximately 91% of the district's students are minorities.^ *^

The State took over the Chicago Public School District in 1979 to address the
grim financial condition of the district.^'^ In 1995, to address continuing
financial and academic problems, the State transferred control to the mayor of
Chicago^^^ where it remains today.^^^ The mayor appoints the members of the

2004/jan22-04.htm [hereinafter Press Release, 111. State Bd. of Educ, Continuation of Hazel Crest
Schools].

309. Press Release, 111. State Bd. of Educ, Continuation of Hazel Crest Schools, supra note
308; Press Release, School Fin., 111. State Bd. of Educ, State Board of Education Established
School Finance Authority for Hazel Crest Schools (Dec. 9, 2002), available at
http://www.isbe.net/finance/HC/prl20902.htm [hereinafter Press Release, 111. State Bd. of Educ,
Finance Authority for Hazel Crest Schools]; Press Release, School Fin., 111. State Bd. of Educ,
State Superintendent Appoints School Finance Authority Members for Hazel Crest Schools:
Reassures Conmiunity That Schools Will Complete Year (Dec. 23, 2002), available at
http://www.isbe. net/finance/HC/pr 122302.htm.

310. Press Release, 111. State Bd. of Educ, Continuation of Hazel Crest Schools, supra note
308; Press Release, 111. State Bd. of Educ, Finance Authority for Hazel Crest Schools, supra note
309.

311. For more on the state-appointed School Finance Authority, see School Fin., 111. State Bd.
of Educ, Hazel Crest School District 152-5 School Finance Authority, http://www.isbe.
net/fmance/HC/default.htm (last visited Apr. 16, 2009).

312. See New Am. Found., Fed. Educ. Budget Project, Hazel Crest School District 152-5
Demographics, http://www.febp.newamerica.net/kl2/il/1718600 (last visited Aug. 6, 2009).

313. 111. State Bd. of Educ, Meeting Minutes (Feb. 6, 2003), at 2-5, available at
http://www.isbe.net/board/meetings/feb03special.pdf.

314. See id. at 4-5 (noting that the district petitioned for the takeover); Press Release, 111. State
Bd. of Educ, State Board Approves Oversight Panel for Cairo School District (Feb. 6, 2003),
available at http://www.isbe.net/news/2003/feb6-03.htm [hereinafter Press Release, 111. State Bd.
of Educ, Cairo School District]; 111. State Bd. of Educ. For more on the State-appointed School
Finance Authority, see Sch. Fin., 111. State Bd. of Educ, Cairo Unit School District 1 Financial
Oversight Panel, available at http://www.isbe.net/fmance/C/default.htm.

315. See New Am. Found., Fed. Educ. Budget Project, Cairo Community Unit School District
Demographics, http://www.febp.newamerica.net/kl2/il/1708070 (last visited Aug. 6, 2009).

316. See Yvette Shields, Chicago School Reformer Stepping Down After Six Years at Helm,
Bond Buyer, June 8, 2001, at 3, available at 2001 WLNR 835351.

317. Paul G. Vallas, Making the Grade: Chicago Schools CEO Tells How He Rescued a

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 375

school board.^^^ Nearly 92% of the students in the Chicago Public Schools are
minorities. ^^^ While it appears that the State has taken over mostly minority
districts, there is no indication that racial animus was involved in the takeover
decisions.^^^ Indeed, as noted earlier, some local boards actually petitioned for
the State takeover. ^^^ Moreover, there is no question that the districts that the
State did take over were in financial crisis.^^^

F. Kentucky

Financial and academic problems in the Whitley County School District
triggered Kentucky's takeover of the district in 1989.^^"^ A year later the State
restored control to the district.^^^ Ninety-three percent of the district's students
are white.^^^ Also in 1989, the State took over the Floyd County School
District.^^^ In 1990, the school district regained control.^^^ Eight years later,
however, the State reassumed control because of continuing financial troubles
and poor management in the district.^^^ The district regained control in 2005.^^^
Approximately 94% of Floyd County School District's students are white.^^^ The
State took over the Letcher County District in 1994 to address mismanagement
of the district and its financial crisis.^^^ The State returned control to the district

Failing System, DENVER POST, Apr. 18, 1999, at HOI; see also 105 ILL. COMP. STAT. ANN. 5/34-3
(West 2006) (establishing the new Chicago Board of Education).

318. 5^^ Shields, 5M/7ra note 316.

319. See Chicago Public Schools, http://cps.edu/About_CPS/The_Board_of_Education/Pages/
TheChicagoBoardofEducation.aspx (last visited Apr. 16, 2009).

320. See New Am. Found., Fed. Educ. Budget Project, City of Chicago School District
Demographics, http://www.febp.newamerica.net/kl2/il/1709930 (last visited Aug. 6, 2009).

321. See supra notes 295-320 and accompanying text.

322. See, e.g. , 111. State Bd. of Educ, Motion to Grant Petition, supra note 300; Press Release,
111. State Bd. of Educ, Cairo School District, supra note 314,

323. See supra notes 294-319 and accompanying text.

324. Reagan Walker, 2 Kentucky Districts Deemed 'Deficient, ' Face State Takeover, EDUC.
Wk., Jan. 18, 1989, n.p.; District News Roundup, EDUC. Wk., May 23, 1990, n.p..

325. See District News Roundup, supra note 324.

326. See New Am. Found., Fed. Educ. Budget Project, Whitley County School District
Demographics, http://www.febp.newamerica.net/kl2/ky/2105880 (last visited Aug. 6, 2009).

327. Walker, supra note 324.

328. District News Roundup, supra note 324.

329. Raviya H. Ismail & Linda J. Johnson, Kentucky Schools Struggle with Federal Mandate,
Lexington Herald-Leader, Aug. 6, 2008, available at http://www.kentucky.com/news/state/
story/48 12 16.html; Kerry A. White, Ky. Chief Says State Should Take Over District, EDUC. WK.,
Nov. 19, 1997, n.p.

330. Ismail & Johnson, supra note 329.

331. See New Am. Found., Fed. Educ. Budget Project, Floyd County School District
Demographics, http://www.febp.newamerica.net/kl2/ky/2101950 (last visited Aug. 6, 2009).

332. White, supra note 329; Lonnie Harp, Audit Spurs Board to Eye Takeover ofKy. District,

376 INDIANA LAW REVIEW [Vol. 42:343

in 1997.^^^ About 93% of the students in the district are white.^^"^ The districts
taken over in Kentucky have been heavily non-minority districts.^^^ Ostensibly,
there is no racial animus here, as districts taken over had major financial or other
problems. ^^^

G. Maryland

Maryland took over Prince George' s County Public Schools in 2002 because
of a history of poor management and infighting on the school board.^^^ The
State appointed a new board to replace the elected board.^^^ In 2006, the State
restored control to an elected school board.^^^ However, the district remains
under threat of takeover for failure to make AYP.^"^^ The district's student body
is close to 94% minority. ^"^^ In 1997, the State partially took over the Baltimore
City Public Schools in a State partnership agreement with the City, due to
financial, academic, and other troubles in the district.^"^^ Pursuant to this
partnership, the mayor and the governor jointly appoint the district's board
members. ^"^^ Approximately 92% of the district's students are minorities. ^"^
While both districts are disproportionately minority, there was no apparent racial
animus in the takeovers as burgeoning financial and academic problems dictated

Educ. Wk., May 25, 1994, n.p.

333. See White, supra note 329.

334. See New Am. Found., Fed. Educ. Budget Project, Letcher County School District
Demographics, http://www.febp.newamerica.net/kl2/ky/2103360 (last visited Aug. 6, 2009).

335. See supra notes 324-34 and accompanying text.

336. See supra notes 324-34 and accompanying text.

337. David J. Hoff, Maryland: Maryland Generates Record School Aid, EDUC. Wk., May 29,
2002, at 20. This takeover was made possible by House Bill 949. H.B. 949, Reg. Sess. (Md. 2002).

338. See Hoff, supra note 337.

339. See Steve Giegerich, The Jury Is Still Out, St. Louis Post-Dispatch, Feb. 14, 2007, at
Al, available at 2007 WLNR 11976107 (noting that the district regained control in November
2006).

340. See Guy Leonard, Next Two Years Critical for County Schools System, Gazette.Net,
Nov. 9, 2006, http://www.gazette.net/stories/l 10906/princou 1941 1 8_3 1944.shtml (noting that the
district was placed on a state watch list for failure to meet national standards).

34 1 . See New Am. Found., Fed. Educ. Budget Project, Prince Georges County Public Schools
Demographics, http://www.febp.newamerica.net/kl2/md/2400510 (last visited Aug. 6, 2009).

342. David J. Hoff, Baltimore Bailout in Doubt; State Takeover on the Table, EDUC. Wk.,
Mar. 3, 2004, at 6; Hoff, supra note 337. This takeover was made possible by Senate Bill 795.
S.B. 795, Reg. Sess. (Md. 1997).

343. See Balt. City Bd. of Sch. Comm'rs, School Board Rules, Article 1 : Board of
School Commissioners, available at http://www.baltimorecityschools.org/School_Board/PDF/
Article_l.pdf; see also Hoff, supra note 337; Jessica L. Sandham, Despite Takeover Laws, States
Moving Cautiously on Interventions, EDUC Wk., Apr. 14, 1999, at 21.

344. See New Am. Found., Fed. Educ. Budget Project, Baltimore City Public School System
Demographics, http://www.febp.newamerica.net/kl2/md/2400090 (last visited Aug. 6, 2009).

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 377

the State decisions to intervene in the districts. ^"^^

H. Massachusetts

A multitude of problems — including academic, financial, and managerial — in
the Chelsea Public Schools led to its takeover in 1989.^"^^ The State authorized
Boston University, in an agreement with the Chelsea School Committee, to take
over management and implement reforms in the district.^"^^ The State allowed the
City of Chelsea to transfer powers traditionally given to an elected school
committee to the university.^"^^ Known as the Boston University/Chelsea
Partnership, the takeover was originally intended to last for ten years.^"^^
However, the university and the school committee mutually agreed to extend the
agreement until 2003 and then later extended it until June 30, 2008.^^° Since the
district was predominately a minority district, several minorities protested the
takeover.^^^ They expressed concerns that the State did not respect the voices of
minorities that were against the takeover, and the minorities even tried to use the
judicial system to stop the agreement.^^^ Such efforts were to no avail.^^^ During
the partnership, the University agreed to keep the Chelsea School Committee in
place.^^"^ The University created a Boston University Management Team to
manage the district, and this team was accountable to the school committee.^^^
About 89% of the district's students are minorities.^^^

345. See supra notes 2>2>1-AA and accompanying text.

346. John Gehring, Boston University-Chelsea Match Endures, Educ. Wk., Nov. 23, 2004,
at 1; Robert Rothman, Governor Creates Panel to Monitor Chelsea Accord, Educ. Wk., June 21,
1989, n.p.; see also Boston Univ. Sch. of Educ, The Boston University/Chelsea Partnership,
http://web.bu.edu/sed/outreachProjects/chelsea (last visited Apr. 17, 2009).

347. Rothman, 5Mpra note 346. The state legislature made the partnership by enacting Chapter
133 of the Acts of 1989. Legis. Acts 1989, Chap. 133 (Mass. 1989), available at http://
archives.lib.state.ma.us/actsResolves/1989/1989actsl0133.pdf; see also Gehring, supra note 346;
Silberand Chelsea: A Lasting Legacy?, EDUC. Wk., Nov. 5, 1997, n.p.; Silber Enters Governor's
Race, Educ. Wk., Jan. 24, 1990, n.p. (all outlining the 1989 State takeover).

348. Legis. Acts 1989, Chap. 133, § 2 (Mass. 1989), available af http://archives.lib.state.ma.
us/actsResolves/1989/1989acts0133.pdf.

349. See Rothman, supra note 346.

350. Chelsea Public Schools, Boston University/Chelsea Partnership, http://www.
chelseaschools.com/management_team/ (last visited Apr. 17, 2009); see also Gehring, supra note
346.

35 1 . See Gehring, supra note 346; Rothman, supra note 346.

352. Gehring, supra note 346.

353. Id.

354. See Boston Univ. Sch. of Educ, supra note 346.

355. Gehring, supra note 346. For more on the Boston University/Chelsea Partnership, see
generally Boston Univ. Sch. of Educ, supra note 346; Chelsea Public Schools, supra note 350.

356. See New Am. Found., Fed. Educ. Budget Project, Chelsea Demographics, available at
http://www.febp.newamerica.net/kl2/ma/2503540 (last visited Aug. 6, 2009).

378 INDIANA LAW REVIEW [Vol. 42:343

Massachusetts partially intervened in the Lawrence Public Schools beginning
in 1998 pursuant to a memorandum of agreement with the City of Lawrence. ^^^
That agreement authorized the State, in consultation with the mayor, to appoint
a state representative for the district.^^^ Various problems in the district,
including mismanagement and fiscal instability, catalyzed the partial "friendly"
takeover that gave the State new authority over the district.^^^ The State opened
an office in the district "to oversee daily operations and provide technical
assistance to school administrators."^^^ The State also appointed a representative
in 2000 "to guide the management and governance of [the district]. "^^' This
included the district "budget, personnel, contracts, collective bargaining, major
policy issues and all improvement plans for the district."^^^ The local election of
board members continued. ^^^ The district and the State decided to extend the
memorandum of agreement which permitted the State intervention, until 2005.^^"^
The district has about a 92% minority student body.^^^

The State took over the Boston Public Schools in 1991 because of various
troubles in the school district.^^^ A mayorally appointed board replaced the
elected board.^^^ In 1996, by a referendum, the voters chose to maintain the
mayoral-appointment system for the school board, and this arrangement

357. Robert C. Johnston, Lawrence, Mass., Reaches Deal With State, Educ. Wk., Feb. 4,
1998, n.p.; Press Release, Massachusetts Dep't of Elementary & Secondary Educ, Commissioner
of Education Appoints Representative to Guide Lawrence Public Schools (Jan. 3 1 , 2000) available
at http://www.doe.mass.edu/news/news.asp ?id=691 [hereinafter Press Release, Commissioner of
Education Appoints Representative].

358. Johnston, supra note 357; Press Release, Commissioner of Education Appoints
Representative, supra note 357.

359. See Association Expected to Yank Accreditation of District's Only High School, EDUC.
Wk., Feb. 12, 1997, n.p.; Caroline Hendrie, Mass. Board Moves to Take Over Lawrence Schools,
Educ. Wk., June 25, 1997, n.p.; Johnston, supra note 357; Commissioner's Update from Robert
V. Antonucci, Mass. Comm'r of Educ, to Mass. Local Sch. Districts (Jan. 21, 1998), available at
http://www.doe.mass.edu/mailings/1998/cm012198.pdf Some characterize the friendly takeover
as a partnership. See, e.g., MASSACHUSETTS DEP'T OF ELEMENTARY & Secondary Educ,
Lawrence Public Schools Partnership: Proposal to Update Agreement, in BOARD IN BRffiF (Mar.
25, 2003), available at http://www.doe.mass.edu/boe/bib/03/0325.html.

360. Johnston, supra note 357.

361 . Press Release, Commissioner of Education Appoints Representative, supra note 357.

362. Id.

363. See Johnston, supra note 357.

364. See, ^.^., MASSACHUSETTS Dep'TOFElementary& SECONDARY EDUC, supra note 359.

365. See New Am. Found., Fed. Educ. Budget Project, Lawrence Demographics,
http://www.febp.newamerica.net/kl2/ma/2506660 (last visited Aug. 6, 2009).

366. The legislature enabled this takeover by special legislation. Legis. Acts 1 99 1 , Chap. 133
(Mass. 1989); see also Boston Public Schools, http://www,bostonpublicschools.org/node/285 (last
visited Apr. 19, 2009) (discussing the 1991 legislation and the steps leading up to such legislation).

367. A History of Intervention, EDUC Wk., Jan. 9, 2002, at 14.

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 379

continues to date.^^^ Approximately 86% of the district's students are
minorities. ^^^ Despite the demographics of the takeovers, there is no actual
evidence of racial animus in the State's takeovers.^^^ As noted earlier, the
residents of Boston voted for a mayorally-appointed board for the Boston Public
Schools,^^^ and in the case of the Chelsea Public Schools, it was a Boston
University/Chelsea Partnership.^^^

/. Michigan

Michigan took over the Detroit Public Schools in 1999 because of
management, corruption, financial, and academic problems in the district.^^^ The
elected school board was replaced with an appointed board, selected by the
mayor and the govemor.^^"^ Over 97% of the district's students are minorities. ^^^
Some people accused the State of racism in the takeover; however, no one
presented actual evidence of such racial animus.^ ''^ In 2005, however, by
referendum, the State reinstated the election of board members.^^^

368. Id.; see also Boston Public Schools, supra note 366.

369. See New Am. Found., Fed. Educ. Budget Project, Boston Demographics,
http://www.febp.newamerica.net/kl2/ma/2502790 (last visited Aug. 6, 2009).

370. See supra notes 346-69 and accompanying text.

371. Boston Public Schools, j'M/jra note 366.

372. See Gehring, supra note 346; Boston Univ. Sch. of Educ, supra note 346.

373. See A History of Intervention, supra note 367; Assoc. Press, Michigan Governor's Plan
to Reform Detroit Schools Divides City Residents; Ditching Elected Board Looks Like Racist Power
Grab, Some Are Charging, ST. LOUIS POST-DISPATCH, Feb. 21, 1999, at A3, available at 1999
WLNR 949902 [hereinafter Assoc. Press, Michigan Governor's Plan].

374. A History of Intervention, supra note 367.

375. See New Am. Found., Fed. Educ. Budget Project, Detroit City School District
Demographics, http://www.febp.newamerica.net/kl2/mi/2612000 (last visited Aug. 6, 2009).

376. See, e.g., Assoc. Press, Michigan Governor's Plan, supra note 373. In fact, the court
upheld the appointed board. See Chastity Pratt, Schools Case Rejected by High Court; Detroiters
Challenged Takeover by the State, DETROIT FREE PRESS, Feb. 25, 2003, n.p..

377. See Wilbur C. Rich, Who 's Afraid of a Mayoral Takeover of Detroit Public Schools ?, in
When Mayors Take Charge: School Governance in the City 148, 1 59-60 (Joseph P. Viteritti
ed., 2009); see generally CRC Memorandum, Proposal E: Form of Governance for the Detroit
Public Schools, CITIZENS RES. COUNCIL, Sept. 2004, available at http://www.crcmich.org/
PUBLICAT/2000s/2004/memo 1077.pdf. Many problems persist in the district, however. See, e.g.,
Diane Bukowski, Eliminate Debt to State, Not Teachers: DPS Announces $45 Million Deficit,
Michigan Citizen, http://michigancitizen.com/default.asp?sourceid=&smenu= 1 &twindow=
&mad=&sdetail=6066&wpage=l&skeyword=&sidate=&ccat=&ccatm=&restate=&restatus=&r
eoption=&retype=&repmin=&repmax=&rebed=&rebath=&subname=&pform=&sc=1070&hn=
michigancitizen&he=.com (last visited Apr. 27, 2009); Diane Bukowski, Where Did the First
Billion Go?': DPS Wants Another $2.5 Billion Bond, Community Wants DPS Audit, MICHIGAN
Citizen, 2007 (discussing a $45 million deficit in the district); Jennifer Mrozowski, DPS Board
Seeks Answers to Money Woes: District Officials Say Accounting Irregularities Have Existed for

380 INDIANA LAW REVIEW [Vol. 42:343

J. Mississippi

Mississippi took over the North Panola School District in 1996 due to
financial crisis in the district.^^^ In 1997, the State returned control to the district,
with an elected board assuming office in 1998.^^^ Then, in 2008, the State
proceeded to take over the district again because of continuing academic
problems.^^^ More than 97% of the district's students are minorities. ^^*
Mississippi also took over the Hazlehurst City School District in 2008 due to
chronic academic and financial problems in the district.^^^ Over 98% of the
district's students are minorities.^^^ Additionally, the State took over the
Jefferson Davis County School District in 2007 due to financial and academic
problems in the district.^^"^ The district has about an 88% minority student

Years for Unbudgeted Teachers, DETROIT NEWS, June 6, 2008, n.p. (discussing accounting
problems that persist in the district).

378. Meg Sommerfeld, Mississippi Poised to Take over Cash-Short District, Educ. Wk., Jan.
17, 1996, n.p. (discussing the State's initial action in 1996 to begin the takeover process); Meg
Sommerfeld, Takeover of Financially Strapped District in Miss. 5oMg/i?,EDUC.WK.,Feb. 28, 1996,
n.p. (noting that the North Panola district was financially troubled and that the State was moving
to solve the financial troubles); Shelly Hansen, Gov. Barbour Okays State Take Over of North
Panola Schools, http://www.wreg.com/Global/story.asp?S=8206588&nav=3HvDMIOu (last visited
Apr. 19, 2009) (noting the initial financial troubles in the district and the governor's final action
to initiate the takeover).

379. See At North Panola, The State Moves in . . . and We've Been Here Before, The
Panolian, Apr. 25, 2008, at A6; News in Brief: A National Roundup: Ex-Schools Chief Denied
Job, Educ. Wk., Dec. 10, 1997, n.p.

380. See, e.g. Hank M. Bounds, State Takeover Necessary to Improve Learning Outcomes for
Students, DAILY TIMES LEADER, Sept. 11, 2008, available at http://www.dailytimesleader.
com/content/view/8238 1/130/; Hansen, supra note 378.

381. See New Am. Found., Fed. Educ. Budget Project, North Panola School District
Demographics, http://www.febp.newamerica.net/kl2/ms/2803210 (last visited Aug. 6, 2009).

382. See Assoc. Press, State May Run School System: Hazlehurst District on Track for $1M
Deficit; Layoffs Possible, COM. APPEAL (Tenn.), May 17, 2008, at 5, available at 2008 WLNR
945629 1 ; Marquita Brown, State Planning Major Hazlehurst School Overhaul, Clarion-Ledger
(Jackson, Miss.), Sept. 18, 2008, at lA; State Moving to Take Over Hazlehurst Schools: District
Facing Academic, Financial Problems, WAPT CHANNEL 16 (Jackson, Miss.), May 16, 2008,
http://www.wapt.com/news/16293583/detail.html.

383. See North Am. Found., Fed. Educ. Budget Project, Hazlehurst City School District
Demographics, http://www.newamerica.net/education_budget_project/districts/hazlehurst_city_.
school_district#districtform-2 (last visited Apr. 19, 2009).

384. See Bounds, supra note 380; see also Assoc. Press, Board of Education Expected to
Suspend Ratings System, NATCHEZ DEMOCRAT (Miss.), Apr. 18, 2008, available at
http://natchezdemocrat.com/news/2008/apr/18/board-education-expected-suspend-ratings-system/
(noting that the Jefferson Davis County School District was taken over in 2007).

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 381

body.^^^ Tunica County School District succumbed to State take over because
of its academic problems. ^^^ The district regained control after a couple of
years.^^^ However, the district could face another takeover if academic
deficiencies persist.^^^ Ninety-eight percent of the district's students are
minorities. ^^^ Academic problems in the Oktibbeha County School District led
to Mississippi's takeover of the district in 1997.^^° Within a few years, the State
declared the takeover a success, returning control to the district.^^^
Approximately 91% of the district's student population is minority.^^^ In 2005,
the State took over the North Bolivar School District because of its financial and
academic problems.^^^ In 2006, the local board regained control of the district.^^"^
Almost all the district's students are minorities.^^^ The State took over the
Holmes County School District in 2006 due to the district's critical
noncompliance with accreditation requirements, federal and state laws, and

385. See New Am. Found., Fed. Educ. Budget Project, Jefferson Davis County School District
Demographics, http://www.febp.newamerica.net/kl2/ms/2802250 (last visited Aug. 6, 2009).

386. See, e.g., Stephanie Scuriock, Mississippi Threatens Take Over if Tunica Schools Don't
Improve, WREG-TV CHANNfEL 3 (Memphis, Tenn.), Nov. 30, 2007, http://www.wreg.com/
global/story.asp?s=7434283 (last visited Apr. 19, 2009).

387. Id. (noting that the State took the district over and then "ran it" for a "couple of years").

388. See id. (noting the State Superintendent's comments that "if [the district does not]
improve the [SJtate will take [it] over").

389. See New Am. Found., Fed. Educ. Budget Project, Tunica County School District
Demographics, http://www.febp.newamerica.net/kl2/ms/2804290 (last visited Aug. 6, 2009).

390. See STATE OF MiSS. JOINT COMM. ON PERFORMANCE EVALUATION AND EXPENDITURE

Review (PEER), Report to the Mississippi Legislature: A Review ofTumica County School
District's Administrative and Instructional Spending, No. 360, at 3 (1997), available at
http://www.peer.state.ms.us/reports/rpt360.pdf.

39 1 . See Assoc. Press, State Calls Oktibbeha Takeover a Success, COM. APPEAL (Tenn.), Aug.
20, 1999, at A18, available at 1999 WLNR 4505627.

392. See New Am. Found., Fed. Educ. Budget Project, Oktibbeha County School District
Demographics, http://www.febp.newamerica.net/kl2/ms/2803420 (last visited Aug. 6, 2009).

393. See Alan Richard, Mississippi Takes Control of North Bolivar District, EDUC. Wk., Jan.
4, 2006, at 4; Press Release, Miss. Dep't of Educ, Mississippi Board of Education Meets in
Cleveland After Touring North Bolivar Schools (Apr. 18, 2006), available at http://www.mde.
kl2.ms.us/Extrel/news/06AprilBoard.html (noting the board of education's review of the North
Bolivar district facilities after the State's November 2005 takeover of the district); Press Release,
Miss. Dep't of Educ, North Bolivar Schools Taken Over by State Receive Exemplary Rating: State
Takeover of School Succeeds — A Rarity Nationwide (July 27, 2006), available at http://www.
mde.kl2.ms.us/extrel/news/06NBolivarExemplary.html.

394. See Assoc. Press, Shelby Schools Focus on Improving Student Achievement, PICAYUNE
Item (Miss.), Oct. 2, 2007, available at http://www.picayuneitem.com/local/local_story_
275135740.html.

395. See New Am. Found., Fed. Educ Budget Project, North Bolivar School District
Demographics, http://www.febp.newamerica.net/kl2/ms/2800720 (last visited Aug. 6, 2009).

382 INDIANA LAW REVIEW [Vol. 42:343

safety, academic, and discipline problems in the district.^^^ A year later, the State
returned control to the local board.^^^ Virtually the entire student body is
compromised of minorities. ^^^ Ostensibly, financial, academic, and safety
problems in these districts, rather than any apparent racial animus, seem to have
driven the takeover decisions.^^^

K. New Jersey

Corruption, political interference, nepotism, mismanagement, and fiscal
problems were some of the issues that instigated the New Jersey takeover of the
Jersey City Public Schools in 1989."^°° After the takeover, the elected board took
on "an advisory role.'"^^^ In 1999, the State began the process of steadily
transferring control to the district."^^^ In 2007, the State Commissioner of
Education recommended that control over the budget be restored to the local
board and that the board be permitted to have more responsibilities."^^^ Academic
instruction remains under State control."^^"^ The district has about a 91% minority
student body.'^^^ New Jersey took over the Newark Public Schools in 1995
because of inveterate academic problems, mismanagement, and political
patronage."^^^ As part of the takeover, the school board was removed."^^^ In 2007,
as part of the process of returning the district to local control, the State
Commissioner of Education recommended that the district regain "control over

396. See Conservator Named for Holmes County Schools, Ap ALERT, Mar. 17, 2006; Weekly
Column of Hank Bounds, Miss. State Superintendent of Education, Holmes County Takeover
Necessary to Meet the Needs of Students (Mar. 20, 2006), available at http://www.mde.
kl2.ms.us/extrel/news/W_Mar_20_06.html (noting misconduct issues including a student setting
a carpet on fire, a fight breaking out during assembly, and a state staffer being shot at with a pellet
rifle all contributing to the eventual State takeover).

397. See Around the Region, COM. APPEAL (Tenn.), Jan, 21, 2007, at 5.

398. See New Am. Found., Fed. Educ. Budget Project, Holmes County School District
Demographics, http://www.febp.newamerica.net/kl2/ms/2801980 (last visited Aug. 6, 2009).

399. See supra notes 378-97 and accompanying text.

400. See Lisa Jennings, New Jersey Judge 's Ruling Clears Path for State to Take over School
District, EDUC. Wk., Aug. 2, 1989, n.p..

40 1 . See Winnie Hu, 2 New Jersey School Districts Regain Some Local Control, N. Y. TIMES,
July 25, 2007, at B3.

402. A History of Intervention, supra note 367; Kerry A. White, N.J. Plans to End Takeover
in Jersey City, Educ. Wk., May 26, 1999, at 1.

403. See Hu, supra note 401.

404. See id.

405. See New Am. Found., Fed. Educ. Budget Project, Jersey City Demographics,
http://www.febp.newamerica.net/kl2/nj/3407830 (last visited Aug. 6, 2009).

406. See Hu, supra note 401; A History of Intervention, supra note 367; White, supra note
402.

407. See Newark Public Schools, Chronological History of the Newark Schools,
http://www.nps.kl2.nj.us/history.html (last visited Apr. 19, 2009).

; {

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 383

such day-to-day operations as maintaining its buildings and addressing student
conduct, health and safety issues, areas in which it showed the most
improvement.'"^^^ The current elected board serves in an advisory capacity /^^
Like Jersey City Public Schools, academic instruction remains under State
control."^'^ This district has about a 92% minority student body/* ^ The State took
over the Paterson Public Schools in 1991 because of endemic academic problems
and mismanagement in the district."^ *^ State officials removed the local board and
replaced it with a state-appointed board;'** ^ an elected board is now in place but
serves only in an advisory role."**^ The district, however, remains under State
control as the State evaluates the district."**^ Nearly 95% of the district's students
are minorities."^*^

The State took steps to take over the Camden Public Schools in 2002."**^
Academic and other problems in Camden fueled the State effort to take over the
district."^*^ A state judge ruled that the portion of the Camden Rehabilitation and

408. Hu, supra note 401 .

409. See Newark Public Schools, District Information, http://www.nps.kl2.nj.us/districtinfo.
html (last visited Apr. 19, 2009) (listing the members of the elected board as "Advisory Board
Members"); The Newark Public Schools, Advisory Board Members 2008-2009, http://www.
nps.kl2.nj.us/members.html (last visited Apr. 19, 2009) (naming the elected members as an
"Advisory Board").

410. See Hu, supra note 40 1 .

411. See New Am. Found., Fed. Educ. Budget Project, Newark City Demographics,
http://www.febp.newamerica.net/kl2/nj/3411340 (last visited Aug. 6, 2009).

412. See Jonathan Weisman, Citing 'Inept ' Management, NJ. ChiefTargets Paterson Schools
for Takeover, Educ. Wk., Apr. 24, 1991, n.p.; see also A History of Intervention, supra note 367;
Bess Keller, Red Ink in Newark Mars State Takeover, EDUC. Wk., Feb. 2, 2000, at 1 ; White, supra
note 402.

413. See Jonathan Weisman, New Jersey Officials Seize Control of 'Bankrupt' Paterson
Schools, Educ. Wk., Sept. 4, 1991, n.p.

414. See Paterson Public Schools, http://www.paterson.kl2.nj.us/boardofeducation.html (last
visited Apr. 19, 2009) (listing the names of the board members); Winnie Hu, Still Lagging,
Paterson Schools Stay Under New Jersey Control, N.Y. TIMES, Aug. 1, 2007, at B3.

415. See Hu, supra note 414; Danielle Shapiro, North Jersey.com: State Keeps Control of
Paterson District, Feb. 24, 2008, http://www.northjersey.com/education/15915687.html.

416. See New Am. Found., Fed. Educ. Budget Project, Paterson City Demographics,
http://www.febp.newamerica.net/kl2/nj/3412690 (last visited Aug. 6, 2009).

417. See Catherine Gewertz, News in Brief: Across the Nation: Camden, N.J., School Board
Sues to Block Governance Changes, EDUC. Wk., Aug. 7, 2002, at 4 [hereinafter Gewertz, Camden,
N J., School Board Sues].

418. See Catherine Gewertz, News in Brief: Across the Nation: NJ. Judge Blocks Takeover
of Camden School Board, EDUC. WK., Sept. 4, 2002, at 4 [hereinafter Gewertz, NJ. Judge Blocks
Takeover] ; Melanie Bumey & Frank Kummer, Cheating 's Roots Deep in Camden: Citing Pressure
from Above, Teachers Said It Was a Culture that Went Back at Least to the 1980s, PHIL. INQUIRER,
Dec. 17, 2006, ava/Za^/^^r http://www.philly.com/inquirer/education/camden_schools/camscores

384 INDIANA LAW REVIEW [Vol. 42:343

Economic Recovery Act designed to give the State control of the local board was
unconstitutional under the state constitutional prohibition of special legislation
directed at particular districts or schools/'^ 'The invalidated portion of the law
would have gradually replaced the nine-member elected school board with three
elected members, three chosen by the mayor, and three chosen by the governor.
It also would have given the governor, a Democrat, veto power over board
decisions.'"^^^ The district has a 99% minority student population. "^^^ Chronic
academic and financial mismanagement problems in the districts, rather than
racial animus, seem to have driven these takeovers."^^^

L. New York

Academic problems and fiscal mismanagement in the Roosevelt Union Free
School District provided the impetus for New York's takeover of the district in
1996."^^^ The State removed the elected local board, but a few months later the
State allowed election of a new board, with insignificant authority.'^^'^
Nevertheless, the State retained control over the district."^^^ Six years later,
assiduous academic and fiscal problems led the State to remove the elected board
again, and this time the State appointed a board to run the district."^^^ The State
agreed to allow election beginning in 2007,'*^^ but the State retains control over
the district until 2011,"^^^ especially the power "to hire and fire the district's
superintendent, veto appointments of other top administrators and principals, and
sign off on district budget matters.'"^^^ In this district, which has a virtually all-

1 7.html; see also The Camden Rehabilitation and Economic Recovery Act, S. 428, 2 10th Leg., Reg.
Sess. §§ 2-3 (NJ. 2002).

419. See Gewertz, N.J. Judge Blocks Takeover, supra note 418.

420. ld.\ see also Gewertz, Camden, N.J., School Board Sues, supra note 417. The State did
take over the city of Camden itself, however, due to problems in the city. Assoc. Press, State
Takeover of Camden Extended, N.J. Rec, Sept. 17, 2007, at A03.

421. See New Am. Found., Fed. Educ. Budget Project, Camden City Demographics,
http://www.febp.newamerica.net/kl2/nj/3402540 (last visited Aug. 6, 2009).

422. See supra notes 400-421 and accompanying text.

423 . Drew Lindsay, N. Y. Regents Oust Local Board, Take Over District, EDUC. Wk. , Jan. 1 0,
1996, at A3; see also Bess Keller, News in Brief: A State Capitals Roundup: N.Y. State Eyes
District Takeover, Educ. Wk., Mar. 28, 2001, at 20.

424. See Under State Control, EDUC. WK., Jun 12, 1996, n.p.

425. See id.

426. See John Gehring, News in Brief: State-Appointed Board Takes Over N. Y. District,
Educ. Wk., June 5, 2002, at 17. This takeover was enabled by Senate Bill 6617 (2002). S. 6617,
Reg. Sess. (N.Y. 2002).

427. See e.g., John Gehring, N.Y. District Braces for State Takeover, EDUC. Wk., May 15,
2002; see also Roosevelt Sch. Dist., The Bd. of Educ, http://www.rooseveltufsd.com/rufsd/boe_
information.php (last visited Apr. 20, 2009) (discussing the composition of the board).

428. See Gehring, supra note 427.

429. Id.

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 385

minority student body/^° residents criticized the takeover as "an ominous blow
to local control, [which] has come to symbolize the historical neglect of
predominantly black districts.'"^^^ There is no question, however, that the district
had "a host of problems, such as low test scores, high dropout rates, crumbling
school facilities, and the fact that few students leave school with a state regents'
diploma. New York's premier high school credential. '"^^^ Also, all members of
the current board (four state-appointed and one elected by residents) are
minorities. "^^^

Corruption and rampant academic problems prompted the State takeover of
the New York City Public Schools in 2002, vesting control in the mayor."^^"^ The
mayor appoints eight of the thirteen-member board chaired by the city
chancellor."^^^ The city chancellor is appointed by the mayor, but beginning in
June 2009, the city board will appoint the city chancellor."^^^ The city's five
borough presidents each select one of the other five members on the board."^^^ In
the takeover the State abolished the city's thirty-two elected community school
boards."^^^ Close to 86% of the district's students are minorities. "^^^

M. Ohio

Ohio took over the Cleveland Public Schools in 1995 because of several
significant problems in the district."^"^^ This was after a federal judge declared that
the district was in a "state of crisis" and gave control of the district to the State."^"^^
The judge "ruled that internal dissension, management problems, and a crippling
budget deficit had undermined the district's ability to carry out its educational

430. See New Am. Found., Fed. Educ. Budget Project, Roosevelt Union Free School District
Demographics, http://www.febp.newamerica.net/kl2/ny/3624990 (last visited Aug. 6, 2009).

431. Gehring, supra note 427. Indeed, the president of the local school board at the time of

the takeover declared, "It [the takeover] was racially motivated They are saying the democratic

process when it comes to black school districts takes a back seat to what the white man wants." Id.

432. Id.

433. See Roosevelt Sch. Dist., The Bd. of Educ. — Members, http://www.rooseveltufsd.com/
rufsd/boe_members.php (last visited Apr. 20, 2009).

434. See Catherine Gewertz, N. Y. C. Mayor Gains Control over Schools, EDUC. Wk. , June 1 9,
2002, at 1.

435. Id.

436. N.Y. Educ. Law § 2590-h (McKinney 2007 & Supp. 2009).

437. See Gewertz, supra note 434.

438. Id.

439. See New Am. Found., Fed. Educ. Budget Project, New York City Public Schools
Demographics, http://www.febp.newamerica.net/kl2/ny/3620580 (last visited Aug. 6, 2009).

440. See Ann Bradley, 'Crisis ' Spurs State Takeover of Cleveland, EDUC. Wk., Mar. 15, 1995,
at 1 (noting that a federal judge turned control of the school over to the State of Ohio).

441. Id.

386 INDIANA LAW REVIEW [Vol. 42:343

program.'"^^ In 1997, the State transferred control of the district to the mayor ."^^
The State gave the mayor the power to appoint the school board members/"^"^ The
mayor took control in 1998."^^ The National Association for the Advancement
of Colored People (NAACP) expressed concern that the takeover bill "was
sponsored by two white, suburban lawmakers. '"^^ The political liaison for the
Cleveland Teachers' Union called the takeover "white colonialism.'"^^ There is
no disputing that the district, which is over 80% minority ,'^^ was in a major crisis
at the time of the takeover."^^ In 2002, Clevelanders voted to permanently keep
mayoral appointment of the school board.^^^ For a few years Ohio took over the
financial operations of the Youngstown City Schools after the district was in
fiscal emergency status due to chronic financial problems in the district."^^' The
State of Ohio did not replace the local board."^^^ About 78% of the district's
students are minorities. "^^^

442. Id.

443 . See Beth Reinhard, Bill to Give Cleveland Mayor School Control Advances, Educ. Wk. ,
May 21, 1997, at 12 [hereinafter Reinhard, Bill Advances]. This control was subsequently made
possible by House Bill 269. H.B. 269, 122d Legis., Reg. Sess. (Ohio 1998); see also Caroline
Hendrie, Plan Gives Mayor Control Over Cleveland Schools, EDUC. Wk., Oct. 9, 1996, at 3; Beth
Reinhard, Mayor to Get School Control in Cleveland, Educ. Wk., July 9, 1997, at 1; Kerry A.
White, Mayor to Control Cleveland Schools After Judge Ends State Intervention, Educ. Wk., Aug.
5, 1998, at 4.

444. White, supra note 443.

445. Id.

446. Reinhard, Bill Advances, supra note 443; see also Beth Reinhard, Lawsuits Oppose
Mayor 's Role in Cleveland Schools, Educ. Wk. , Sept. 1 7, 1 997, at 3 (noting race-based challenges
to the bill).

447 . Reinhard, Bill Advances, supra note 443 . According to a former candidate for the school
board, "When you've got black people in charge and a majority-black district, people think they
don't know what they're doing .... It's really insulting." See Reinhard, Racial Issues, supra note
11.

448. See New Am. Found., Fed. Educ. Budget Project, Cleveland Municipal School District
Demographics, http://www.febp.newamerica.net/kl2/oh/3904378 (last visited Aug. 6, 2009).

449. See supra notes 440-48 and accompanying text.

450. See Martha T. Moore, More Mayors Move to Take Over Schools, USA TODAY, Mar. 20,
2007, available at http://www.usatoday.com/news/education/2007-03-20-cover-mayors-schools_
N.htm; see also Catherine Gewertz, Clevelanders to Weigh in on Mayoral Control of Schools,
Educ. Wk., Oct. 30, 2002, at 8 [hereinafter Gewertz, Clevelanders to Weigh in\ (noting the then
upcoming ballot decision of whether to retain mayoral control).

45 1 . See Caroline Hendrie, State Declares Fiscal Emergency in Cleveland Schools, EDUC.
Wk., Nov. 6, 1996, at 3.

452. See id; see generally Youngstown City Schools, http://www.ycsd.kl2.oh.us/ (last visited
Apr. 19, 2009).

453. See New Am. Found., Fed. Educ. Budget Project, Youngstown City School District
Demographics, http://www.febp.newamerica.net/kl2/oh/3904516 (last visited Aug. 6, 2009).

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 387

A^. Pennsylvania

Pennsylvania took over the Chester-Upland School District in 1994 after
declaring the district financially distressed.'^^'^ In 2000, the State also declared the
district educationally distressed due to its mounting academic problems and
appointed a three-member panel to run the district."^^^ In 2007, based on financial
improvements in the district, the State removed the district from fiscal distress
status."^^^ However, given the district's persisting academic problems, the State
appointed an empowerment board to control the district's academics. '^^^ This
district's student body is approximately 98% minority ."^^^

The State took over the School District of Philadelphia in 2001 because of
financial and academic problems in the district/^^ The State then contracted with
various groups, including Edison Schools Incorporated and Temple University,
to run several of the district's schools.'^^^ The district, however, is run by a state-
appointed panel known as the School Reform Commission."^^^ Three of the

454. See Catherine Gewertz, It's Official: State Takes Over Philadelphia Schools, Educ. Wk.,
Jan. 9, 2002, at 1 [hereinafter Gerwetz, It's Official]; Caroline Hendrie, Panel Proposes Breaking
up Phila. District, Educ. Wk., Jan. 19, 1998, at 1; Robert C. Johnston, Edison to Study Woes of
Philadelphia Schools, EDUC. Wk., Aug. 8, 200 1 , at 3 [hereinafter Johnston, Edison to Study Woes] ;
Robert C. Johnston, Pa. Targets 11 Districts for Takeover, EDUC. Wk., May 17, 2000, at 1 ; see also
A History of Intervention, supra note 367.

455. See sources cited supra note 454.

456. See Press Release, Pa. Dep't of Educ, Secretary of Education Removes Chester Upland
School District from Fiscal Distress, Appoints Empowerment Board (Mar. 8, 2007), available at
http://www.pdenewsroom.state.pa.us/newsrooms/cwp/view.asp?a=3&q= 125660.

457. Id.

458. See New Am. Found., Fed. Educ. Budget Project, Chester-Upland School District
Demographics, http://www.febp.newamerica.net/kl2/pa/4205860 (last visited Aug. 6, 2009).

459. See Gewertz, It 's Official, supra note 454; Catherine Gewertz, State Review Panel Weighs
in on Progress of Phila. Schools, EDUC. Wk., Apr. 6, 2005, n.p.

460. See Rick Ahl, Edison Schools and the Philadelphia School District, BrownPol' Y REV.,
Fall 2006, n.p.; What Helped Philadelphia ?: Study Prompts Debate on Role of Outside Groups in
Schools, Educ. Wk., Feb. 12, 2007, at 5; Gewertz, It's Official, supra note 454; Catherine Gewertz,
Phila. to Keep Outside School Managers One More Year, EDUC. Wk., June 28, 2007, n.p.;
Catherine Gewertz, Phila. Lines up Outside Groups to Run Schools, EDUC. Wk., Aug. 7, 2002, at
1 ; Karla Scoon Reid, Groups Named to Lead Dozens of Ailing Phila. Schools, EDUC. Wk., Apr. 24,
2002, at 10; Katrina Trinko, Report: EMO School Students Improved at Faster Rate than School
District Students, THE BULLETIN, July 11, 2008, n.p.; Press Release, Edison Schools, Edison
Schools Disputes Flawed Findings in Philadelphia Report: Facts Show Multiple Provider Model
Has Dramatically Improved Philadelphia Schools (Feb. 1, 2007), available at http://www.
edisonschools.com/edison-schools/edison-news/edison-schools-disputes-flawed-fmdings-in-
philadelphia-report; see also Nat'l Council of Educ. Providers, Edison School, Inc., http://
www.educationproviders.org/members/ edison/htm (last visited Apr. 20, 2009).

461. See School Reform Commission — The School District of Philadelphia, http://www.

388 INDIANA LAW REVIEW [Vol. 42:343

commission members are appointed by the governor with the mayor appointing
the other two."^^^ Over 86% of the district's students are minorities. "^^^

Sundry problems in the district, including misappropriation of funds, missing
district properties, incompetence, declining enrollment, patronage, and ostensibly
criminal activities prompted the State's takeover of the Harrisburg School
District in 2000."^^"^ The board of control, appointed by the mayor, runs the
district under the direction of the mayor."^^^ However, there is also a local elected
board whose members meet once a year to approve tax plans. "^^^ Just under 95%
of the district's student population are minorities. "^^^ Declining enrollment and
fiscal crisis led to the State's appointment of a board of control for the Duquesne
City School District in 2000."^^^ The district's only high school was closed in
2007 as persisting fiscal challenges made continued operation of the high school
infeasible."^^^ Students now attend high school in the West Mifflin Area and East
Allegheny school districts. "^^^ More than 93% of the district's students are
minorities. "^^^

phila.kl2.pa.us/src/ (last visited Apr. 20, 2009).

462. See 24 Pa. Cons. Stat. § 6-696 (West 1992 & Supp. 2008); Brown University,
Annenberg Inst. Philadelphia 1, available at http://www.annenberginstitute.org/pdf/EKF06_
Philadelphia.pdf (last visited Apr. 20, 2009); see also School Reform Commission, supra note 461 .

463. See New Am. Found., Fed. Educ, Budget Project, Philadelphia City School District
Demographics, http://www.febp.newamerica.net/kl2/pa/4218990 (last visited Aug. 6, 2009).

464. See Jessica L. Sandham, Mayoral Takeover of Schools off to Tumultuous Start in Pa.
Capital, Educ. Wk., Jan. 10, 2001 , at 5.

465. See id. ("[T]he mayor appointed a new five-member board of control, which quickly
moved into administrative offices equipped with different locks and new computer-access codes.");
see also Brian Baker, Stephen Reed: Mayor of Harrisburg, U.S. CiTY MAYORS, July 13, 2006,
available at http://www.citymayors.com/mayors/harrisburg_mayor.html; Harrisburg School
District, Board Members, http://www.hbgsd.kl 2.pa.us/20439063229 1 2/site/default.asp (hsting the
members of the board of control).

466. See J.D. LaRock, Harrisburg: A Mayor Making Strides in Public Education, U.S. MAYOR
Newspaper, July 14, 2003, available at http://www.usmayors.org/uscm/us_mayor_newspaper/
documents/07_14_03/harrisburg.asp; Harrisburg School District, supra note 465 (listing members
of the board of directors).

467. See New Am. Found., Fed. Educ. Budget Project, Harrisburg City School District
Demographics, http://www.febp.newamerica.net/kl2/pa/421 1580 (last visited Aug. 6, 2009).

468. See Press Release, Pa. Dept. of Educ, Distinguished Educator Audrey Utley Named to
Lead Duquesne Board of Control (Mar. 17, 2008), available at http://www.pdenewsroom.
state.pa.us/newsroom/cwp/view.asp?Q=139184&A=3.

469. Celanie Polanick, When the State Steps in: Boards of Control, VALLEY NEWS DISPATCH
(Pa.), Mar. 30, 2008, available at http://www.pittsburghlive.eom/x/pittsburghtrib/news/
print_559802.html.

470. Id.

471. See New Am. Found., Fed. Educ. Budget Project, Duquesne City School District
Demographics, http://www.febp.newamerica.net/kl2/pa/4208010 (last visited Aug. 6, 2009).

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 389

Due to financial problems, the State has control of the Clairton City School
District a few times, with the first ending in 1988"^^^ and another for six years
ending in 1999.'^^^ The district is now under local control. "^^"^ Approximately
67% of the students in the district are minorities. "^^^ The State also placed the
Sto-Rox School District under a board of control in 1992 due to financial
troubles in the district."^^^ Pennsylvania returned this district to local control in
1999 477 ^ history of academic problems led to State control of the district again
in 2000."^^^ About 41% of Sto-Rox School District's students are minorities. ^^^
The districts taken over in Pennsylvania all had apparent academic and or
financial problems and it would be difficult for anyone to make a valid case that
racial animus motivated the decisions. "^^^

O. Rhode Island

Rhode Island took over the Central Falls School District in 1991 because of
growing fiscal problems in the district."^^^ In fact, this district asked that the State
take over, becoming the first district to do so in the nation."^^^ A tentative
agreement giving the State control was signed in 1991, with the State assuming

472. See Karen Diegmueller, Hard Times, Educ. Wk., Nov. 24, 1993, at 1 ; Press Release, Pa.
Assoc, of Rural and Small Schs., Equity Suit Updates from the Courtroom: Day 2 (Jan. 7, 1997),
available at http://www.parss.org/_trial/day02.asp.

473 . See Eleanor Chute, A Chance for Change: Rebuilding a School District Means Changing
the 'Duquesne Way,' PlTT. Post-Gazette, Feb. 19, 2001 available at http://www.post-
gazette.com/regionstate/20010219duquesnedaytworeg2.asp; Diegmueller, supra note 472; Rona
Kobell, Clairton, Sto-Rox School Districts Are Taken ojf the 'Distressed' List, PiTT. POST-
Gazette, Feb. 19, 1999, available at http://www.post-gazette.com/regionstate/19990219
distressed7.asp; Duquesne City: Special Board Named to Deal with Distressed School District,
Troubled Co. Reporter, Oct. 16, 2000, available at http://bankrupt.com/TCR_Public/
001016.MBX.

474. See Brian David, State Official Calls for Financial Incentives to Merge School Districts,
Pitt. Post-Gazette, Mar. 8, 2007, available at http://www.post-gazette.com/pg/07067/767653-
54.stm; see generally Clairton City School District, http://www.clairton.kl 2.pa.us (last visited Apr.
20,2009).

475. See New Am. Found., Fed. Educ, Budget Project, Clairton City School District
Demographics, http://www.febp.newamerica.net/kl2/pa/4206030 (last visited Aug. 6, 2009).

476. See Kobell, supra note 473.

477. Id.

478. See Brian David, Troubled District Still Can Offer Excellence, Superintendent Says, PlTT.
Post-Gazette, Sept. 6, 2007, ava//«/?/e a/ http://www.post-gazette.com/pg/07249/814877-57.stm.

479. See New Am. Found., Fed. Educ. Budget Project, Sto-Rox School District Demographics,
http://www.febp.newamerica.net/kl2/pa/4222830 (last visited Aug. 6, 2009).

480. See supra notes 454-79 and accompanying text.

48 1 . See Karen Diegmueller, Troubled R. I. District Becomes First to Request State Takeover,
Educ. Wk., Apr. 3, 1991, n.p.

482. Id.

390 INDIANA LAW REVIEW [Vol. 42:343

full control a year later."^^^ The district remains under state control."^^"^ Over 80%
of the district's students are minorities. "^^^

P. South Carolina

Academic problems in the Allendale County School District led to the 1999
South Carolina takeover of the district.'*^^ At first a few people in the district
opposed the takeover, with one person referring to the State Superintendent as
"Hitler.'"^^^ However, at a community meeting on the takeover, most of those
present did not question the takeover."^^^ Additionally, a detailed report revealing
that this district had so many Byzantine problems, including chronically low test
scores and ineffective leadership, was difficult to dispute."^^^ In 2007, the State
returned the district to local control."^^^ Over 96% of the district's students are
minorities. "^^^

Q. Texas

Texas intervened in the Somerset Independent School District in 1995 as a
result of the State fearing that mismanagement on the part of the district's
superintendent would lead to turmoil and violence."^^^ In the same year, the State
returned the district to local control."^^^ Some believe that protests and

483. Id.

484. See William R. Holland, Letter to the Editor, Central Falls Schools Still Need Help,
Providence J., Apr. 29, 2007, available at http://www.projo.com/opinion/letters/content/
CT_holland29_04-29-07_3F593H9. 168bba3.html (letter from interim superintendent outlining the
continuing issues and the continuing State control); see generally Central Falls School District,
www.cfschools.net (last visited Apr. 20, 2009).

485. See New Am. Found., Fed. Educ. Budget Project, Central Falls School District
Demographics, http://www.febp.newamerica.net/k:12/ri/4400120 (last visited Aug. 6, 2009).

486. See Alan Richard, Starting from Scratch, Educ. Wk., Oct. 13, 1999, at 30.

487. Id.

488. See id.

489. Id.

490. See Diette Courrege, Allendale Gets Its Schools Back, CHARLESTON POST & COURIER,
July 27, 2007, avaz7a^/^af http://www.charleston.net/news/2007/jul/22/allendale_gets_its_schools_
backl 1 178/?print; see also State Won 't Take Over Allendale Schools Again, AP ALERT, July 10,
2008. Problems persist in the district but in July 2008 the state superintendent opted not to
takeover the district again, though he did leave open the possibility. Id. He did add, however, that
takeover of districts would be a last resort. Id.

491. See New Am. Found., Fed. Educ. Budget Project, Allendale County School District
Demographics, http://www.febp.newamerica.net/kl2/sc/4500750 (last visited Aug. 6, 2009).

492. See Cindy Ramos, TEA Takes Over Somerset — Fearing Violence, Agency Steps in to
Monitor Troubled District, S AN ANTONIO Express-News, Feb. 22, 1995, at lA, available at 1995
WLNR 5430810.

493. See Cindy Ramos, TEA Bows out at Somerset — Control of Embattled School District to

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 39 1

challenges, fueled by the State taking away control from the elected board,
sparked the brevity of the State takeover."^^"^ However, the State explained the
brevity as a response to quick improvements made in the few months of the
takeover."^^^ The district has about an 84% minority student body."^^^

The State also took over Wilmer-Hutchins Independent School District in
1996 because of cronyism, mismanagement, and academic and fiscal problems.'*^^
The State appointed a management team for the district/^^ The district regained
control in 1998."^^^ However, problems persisted in the district, including sexual
harassment allegations forcing a superintendent to resign,^^ State investigations
of inaccurate data on dropouts,^^* low academic achievement,^^^ and abysmal
financial crisis,^^^ leading the state comptroller to implore the district to ask for
a State takeover.^^"^ The Federal Bureau of Investigation (FBI), the district's
police department, Dallas County's district attorney, and the Texas Rangers
commenced investigations into the district's spending and fiscal
mismanagement^^^ and document tampering in a criminal investigation, even
leading to grand jury indictments. ^^^

Be Passed to New Board, San Antonio Express-News, May 6, 1995, at IC, available at 1995
WLNR 5432087.

494. See id. (noting among other issues, three lawsuits filed against the Texas Education
Agency).

495. Id.

496. See New Am. Found., Fed. Educ. Budget Project, Somerset Independent School District
Demographics, http://www.febp.newamerica.net/kl2/tx/4840740 (last visited Aug. 6, 2009).

497. See Caroline Hendrie, /// Will Comes with Territory in Takeovers, Educ. Wk., June 12,
1996, at 1 (discussing the problems that led to the eventual takeover); Jen Sansbury, DeKalb's
Finalist for Superintendent in Alabama, Brown Wins Over Detractors, Atl. J. -CONST., Mar. 4,
2002, at Bl, available at 2002 WLNR 4647379 (mentioning the 1996 Texas Education Agency's
takeover of Wilmer-Hutchins).

498. See Sansbury, supra note 497.

499. See Not Measuring up: A Look at Wilmer-Hutchins ISD, DALLAS MORNING NEWS,
http://www.dallasnews.com/sharedcontent/dws/img/08-04/0822wh.pdf (last visited Apr. 20, 2009)
[hereinafter Not Measuring up\, Jim Watts, Texas: School Takeover Seen, BOND BUYER, Nov. 9,
2004, at 31 [hereinafter Watts, Texas: School Takeover].

500. Not Measuring up, supra note 499.

501. Id.

502. See Jim Watts, Texas Officials Close Wilmer-Hutchins ISD, BondBuyer, June 29, 2005,
at 4 [hereinafter Watts, Texas Officials Close] (noting low test scores and allegations of teacher's
assisting students in cheating on exams).

503. See Texas News Briefs: State Paving Way for Possible Takeover of Troubled District,
Ap Alert, Aug. 31, 2004; Watts, Texas Officials Close, supra note 502.

504. See Not Measuring up, supra note 499.

505. See Jim Watts, School District Bond Election Scheduled Despite Investigation, BOND
Buyer, Sept. 13, 2004, at 43.

506. See Watts, Texas: School Takeover, supra note 499.

392 INDIANA LAW REVffiW [Vol. 42:343

Due to enduring problems in the district, the State again appointed a
management team to oversee the district in 2004.^^^ However, the management
team and the elected board, which was retained, were unable to work together. ^^^
This, coupled with revelations of teacher-assisted student cheating on the state
test, culminated in the State's 2005 appointment of a board of managers to
replace the elected school board.^^^ In the same year, in closing the district, the
State-appointed board maintained that it would only reopen if voters approved
huge property tax hikes and a bond proposal for rebuilding schools in the
district.^ *° The voters overwhelmingly defeated these measures, prompting the
State Commissioner of Education to call for the annexation of the district to the
Dallas Independent School District^* ^ which is about 95% minority.^^^ The
annexation, characterized by The Dallas Morning News as "the district's state-
induced euthanasia"^ ^^ occurred in 2006.^'"^ Approximately 96% of the Wilmer-
Hutchins district's student body was minority.^*^

R. West Virginia

Low attendance, poor academic performance, and administrative
mismanagement were among the factors that sparked West Virginia's takeover
of the Logan County Schools in 1992.^^^ The State retained the elected local
board but with diminished responsibilities.^^^ For example, the board had power

507. See Press Release, Tex. Educ. Agency, Board of Managers and New Superintendent to
be Installed in Wilmer-Hutchins ISD (May 12, 2005), available at http://www.tea.state.tx.
us/press/whmanagers.html [hereinafter Press Release, Board of Managers].

508. Id. For twenty years, the State had appointed management teams over the district several
times but the elected board was essentially retained. Id.

509. See Watts, Texas Officials Close, supra note 502; Press Release, Board of Managers,
supra note 507.

510. Watts, Texas Officials Close, supra note 502.

511. See Press Release, Tex. Educ. Agency, Commissioner Orders Annexation of Wilmer-
Hutchins to Dallas ISD, Effective July 2006 (Sept. 2, 2005), available at http://www.tea.state.
tx.us/press/wilmerhutchinsannex.html.

512. See New Am. Found., Fed. Educ. Budget Project, Dallas Independent School District
Demographics, http://www.febp.newamerica.net/kl2/tx/4816230 (last visited Aug. 6, 2009).

513. Joshua Benton, A Call for Wilmer-Hutchins ' Reopening: Group Seeks to Revive Fallen
District, Says Area Deserves Its Own Schools, DALLAS MORNING NEWS, July 2, 2007, available
af http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/070207dnmetwilmeryear.
377659b.html.

514. Id.

515. See Not Measuring up, supra note 499.

516. See Sally K. Gifford, W. Va. Board Assumes Control of District for 1st Time, EDUC. Wk.,
Sept. 9, 1992, n.p.; David J. Hoff, W. Va. Leaves District Better Than It Found It,EDVC.WK., Sept.
18, 1996, at 17.

517. Hoff, supra note 516.

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 393

over maintenance and transportation,^ ^^ while the State was responsible for
''personnel, curriculum budget, and school calendar."^ ^^ Keeping the elected
board in place helped minimize local opposition to the takeover.^^^ In 1995, the
local board regained control over the school calendar and the budget.^^^ Finally,
in 1996, the State restored full control of the district to the local board.^^^ Over
96% of the district's students are white.^^^

In 2000, West Virginia took over the Lincoln County School District after
the State found fiscal, academic, and personnel problems in the district.^^"^ The
State retained the local board but the significant responsibilities for the district
were vested in the State.^^^ Nearly 100% of the district's students are white.^^^
The State took over the Mingo County Schools in 1998;^^^ a review found "a total
of 172 deficiencies in Mingo County school operations,"^^^ including ''budget
deficits, low student achievement and a lack of leadership."^^^ The State restored
control to the elected board in December 2002.^^° However, in 2005, the State
took over the district once again, this time because of its failure to agree with the
school consolidation program put forth by the State.^^^ Approximately 3% of the
district is minority.^^^ Fiscal and personnel problems, as well as mismanagement.

518. Id.

519. Id.

520. See id.

521. Id.

522. Id.

523. See New Am. Found., Fed. Educ. Budget Project, Logan County School District
Demographics, http://www.febp.newamerica.net/kl2/wv/5400690 (last visited Aug. 6, 2009).

524. See Bess Keller, West Virginia Seizes Control of Its Third School District, EDUC. Wk.,
June 21, 2000, at 22.

525. Id.

526. See New Am. Found., Fed. Educ. Budget Project, Lincoln County School District
Demographics, http://www.febp.newamerica.net/kl2/wv/5400660 (last visited Aug. 6, 2009).

527. See Dianne Weaver, ED-WATCH: State Takes Over Hampshire Schools, HUR HERALD
(W. Va.), Jan. 25, 2006, ava//a!7/^a?http://www.hurherald.com/cgi-bin/db_scripts/articles?Action=
user_view&db=hurheral_articles&id=17808; Press Release, W. Va. Dep't of Educ, Mingo County
Regains Control of School System (Dec. 11, 2002), available cir http://wvde.state.wv.us/news/539
[hereinafter Press Release, Mingo County Regains Control].

528. Weaver, supra note 527.

529. See Press Release, Mingo County Regains Control, supra note 527.

530. See Jim Lees, The Mingo County School Takeover, THE LEG.: W. Va. Sch. Bds. ASSOC,
Nov. 30, 2005, at 20; Press Release, Mingo County Regains Control, supra note 527.

53 1 . Weaver, supra note 527; see also Alan Richard, West Virginia Governor Cool to School
Consolidation, EDUC. Wk., April 13, 2005, at 28; Press Release, W. Va. Dep't of Educ, Supreme
Court Upholds State Intervention in Mingo County (Oct. 10, 2006), available at
http://wvde.state.wv.us/news/1294.

532. See New Am. Found., Fed. Educ Budget Project, Mingo County School District
Demographics, http://www.febp.newamerica.net/kl2/wv/5400900 (last visited Aug. 6, 2009).

394 INDIANA LAW REVIEW [Vol. 42:343

led to West Virginia's takeover of the Hampshire County Schools in 2006.^^^ A
year later, the State returned control of the district to the elected board.^^"^
Approximately 2% of the district's students are minorities. ^^^

A request for a State takeover by district leadership as well as a 144-page
report from state auditors prompted West Virginia to take over the McDowell
County Schools in 2001.^^^ Among other things, the report revealed unsafe
conditions presenting danger to students and staff as well as a lack of quality
education in the district.^^^ According to the report, '"extraordinary
circumstances exist[ed] in the county that constitute [d] major impediments to the
provision of education programs and services. '"^^^ In fact, district leadership
declared that they were no longer able to run the district.^^^ The minority student
body of the district is 12%.^'*°

m. State Takeovers of Minority Districts and
THE Equal Protection Clause

In Part H, we explained that the majority of district takeovers across the
country are minority districts. In some cases, minority groups have alleged that
the takeovers were racially motivated. In many cases, there was evidence of
financial mismanagement and incompetence on the part of the minority districts.
Furthermore, many of the takeovers were fraught with tension and ill-will. These
negative feelings could easily lead to future litigation. Thus, this Part analyzes
the viability of Equal Protection Clause challenges to minority districts under the
Federal Constitution.

533. See Press Release, W. Va. Dep't of Educ, Hampshire County Schools to Return to Local
Control (May 10, 2007), available at http://wvcie.state.wv.us/news/1427/.

534. Id. (quoting the auditor's report).

535. See New Am. Found., Fed. Educ. Budget Project, Hampshire County School District
Demographics, http://www.febp.newamerica.net/kl2/wv/5400420 (last visited Aug. 6, 2009).

536. See Lisa Fine, Troubled West Virginia District Invites State to Take Over, EDUC. Wk.,
Nov. 21, 2001, at 9.

537. See Press Release, W. Va. Dep't of Educ, State Board of Education Takes Control of
McDowell County School System (Nov. 8, 2001), available at http://wvde.state.wv.us/news/383/.

538. Id. (quoting the auditor's report).

539. See Fine, supra note 536.

540. See New Am. Found., Fed. Educ. Budget Project, McDowell County School District
Demographics, http://www.febp.newamerica.net/kl2/wv/5400810(last visited Aug. 6, 2009). The
Lincoln, McDowell, and Mingo County Schools appear to remain under State control as of this
writing. See W. Va. Dep't of Educ, Meeting Minutes (Apr. 10, 2008), available at http://wvde.
state.wv.us/boe-minutes/2008/wvbeminutes04 1008.html (noting the State Superintendent's Report
on the three districts under State control); W. Va. Dep't of Educ, Meeting Minutes (May 15, 2008),
available at http://www.wv.us/2008/wvbeminutes05 1508.html (noting the State Superintendent's
Report of continued evaluation of the three districts); W. Va. Dep't of Educ, Meeting Minutes
(Aug. 14, 2008), ava//«We or http://wvde.state.wv.us/wvbeminutes081408.html.

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 395

A. The Equal Protection Clause Generally

The Equal Protection Clause of the Fourteenth Amendment states in
pertinent part: "No State shall . . . deny to any person within its jurisdiction the
equal protection of the laws."^"^^ A review of cases alleging violation of the
Equal Protection Clause could be subject to one of three standards of review:
strict scrutiny, intermediate scrutiny, ^"^^ and rational basis. ^"^^ The strict scrutiny
standard of review is only applied when government action results in a
classification that "interferes with a 'fundamental right' or discriminates against
a 'suspect class. '"^"^"^ To withstand muster under the strict scrutiny standard of
review, the burden is on the government to show that the classification is
narrowly tailored to achieve a compelling state interest.^"^^ The United States
Supreme Court has recognized race as a suspect class^"^^ and the right to vote as
a fundamental right.^"^^ The rational basis standard of review is the most lenient
standard of review. Under this standard of review, the Equal Protection Clause
is violated only if the classification is not rationally related to a legitimate state
interest.^"^^ Rational basis review is applied when a classification is neither based

541. U.S. Const, amend. XIV, § 1 cl. 4.

542. The intermediate scrutiny standard of review is less stringent than the strict scrutiny
standard of review but more stringent than the rational basis review standard. Under this standard
of review, the government has to show that its classification promotes a substantial State interest.
This level of scrutiny is applied to quasi-suspect classifications based on gender and illegitimacy.
See Clark v. Jeter, 486 U.S. 456, 461-63 (1988) (applying strict scrutiny in a case involving
illegitimacy); Plyler v. Doe, 457 U.S. 202, 218 n.l6, 224 (1982) ("[T]he discrimination [against
children of illegal aliens in the state statute] can hardly be considered rational unless it furthers
some substantial goal of the State."); Craig v. Boren, 429 U.S. 190, 197 (1976) ("To withstand
constitutional challenge, . . . classifications by gender must serve important governmental objectives
and must be substantially related to achievement of those objectives."). Since neither gender or
illegitimacy are involved here, we do not focus on this tier of review.

543. Kadrmas v. Dickinson Pub. Sch., 487 U.S. 450, 457-59 (1988) (discussing and outlining
the tests for strict scrutiny and rational basis review).

544. Id. at 457.

545. See Roe v. Wade, 410 U.S. 113, 155 (1973).

546. In Korematsu v. United States, 323 U.S. 214 (1944), the Court declared that "all legal
restrictions which curtail the civil rights of a single racial group are immediately suspect. That is
not to say that all such restrictions are unconstitutional. It is to say that courts must subject them
to the most rigid scrutiny." Id. at 216 (emphasis added). The reference to "most rigid scrutiny" is
a reference to "strict scrutiny." See Natasha L. Carroll-Ferrary, Note, Incarcerated Men and
Women, the Equal Protection Clause, and the Requirement of "Similarly Situated, " 5 1 N. Y.L. SCH.
L. Rev. 595, 601 (2006-2007).

547. Harper v. Va. State Bd. of Elections, 383 U.S. 663, 670 (1966) ("[T]he right to vote is
too precious, ioo fundamental to be so burdened or conditioned."); Yick Wo v. Hopkins, 1 18 U.S.
356, 370 (1886) (dicta).

548. FCC V. Beach Commc'ns, Inc., 508 U.S. 307, 313 (1993) ("In areas of social and
economic policy, a statutory classification that neither proceeds along suspect lines nor infringes

396 INDIANA LAW REVIEW [Vol. 42:343

on fundamental rights nor suspect classes; the classification will be upheld "if
there is any reasonably conceivable state of facts that could provide a rational
basis for the classification."^"^^

B. Equal Protection and State Takeovers

Critics of the appointive system of selecting school board members that often
accompanies takeovers of districts claim the system violates the Equal Protection
Clause and is subject to the strict scrutiny standard of review for racial
classification and infringement of the fundamental right to vote.^^° The United
States Supreme Court has stated, however, that territorial uniformity is not a
constitutional requirement under the Equal Protection Clause.^^^ Specifically, the
Court declared that "[t]he Fourteenth Amendment does not prohibit legislation
merely because it is special, or limited in its application to a particular
geographical or political subdivision of the state."^^^ Consequently, the Equal
Protection Clause is not violated merely because residents of minority school
districts cannot vote for school boards due to an otherwise legitimate State
takeover of the district, while white majority school districts in the same state
retain the right to vote for their school board members.^^^ As far back as 1961,
Chief Justice Warren stated, "[W]e have held that the Equal Protection Clause
relates to equality between persons as such, rather than between areas and that
territorial uniformity is not a constitutional prerequisite. "^^'^

The United States District Court for the District of Maryland held similarly
in Welch v. Board of Education. ^^^ In that case residents of eight county school
districts challenged a Maryland statute that provided for an appointed school
board in Baltimore County, while elected school boards were allowed in eight of
the twenty-three counties in Maryland.^^^ The federal district court found that the
classification was not suspect and did not interfere with a fundamental right.^^^
Thereupon, the court ruled that strict scrutiny was inapplicable, and instead it
applied the rational basis standard of review in upholding the classification.^^^
The Welch court relied on the United States Supreme Court's holding in Sailors

fundamental constitutional rights must be upheld against equal protection challenge if there is any
reasonably conceivable state of facts that could provide a rational basis for the classification.").

549. Id.

550. See Alicia Sikkenga, Note, Detroit School Reform: A Necessary Means to Improve the
Schools and End the Cycle of Mismanagement, 77 U. Det. Mercy L. Rev. 321, 325 (2000).

551. Fort Smith Light & Traction Co. v. Bd. of Improvement, 274 U.S. 387, 391 (1927).

552. Id.

553. See id.

554. McGowan v. Maryland, 366 U.S. 420, 427 (1961).

555. 477 F. Supp. 959 (D. Md. 1979).

556. /^. at 964.

557. Id.

558. Id. at 964-65.

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 397

V. Board of Education {Sailors Ilf^^ to determine whether there is a fundamental
right to vote for school board members. ^^^

In Sailors v. Board of Education (Sailors 7),^^^ the plaintiffs brought suit
challenging the statutory system of selecting the members of the Kent County
Board of Education as violating the Equal Protection Clause.^^^ The plaintiffs
also alleged that the statute violated the one person, one vote principle^^^ by
giving one vote to each school district despite the wide variations in the
populations of the school districts. ^^"^ At the time, Michigan Code provided that
each school district within the county had one vote in the selection of members
of the county boards of education, irrespective of population. ^^^ While the
residents of each school district could vote for the district's school board, they
could not vote for the county school board.^^^ Instead, a delegate chosen from
among the elected members of each district's school board voted for the county
school board members.^^^ The members of the county school board did not have
to be members of any of the school districts' school boards.^^^ The county boards
had ample powers, including power to levy property taxes, gather data on
delinquent taxes, prepare an annual budget, transfer territory from one school
district to another, and direct the special education programs.^^^

On appeal, the United States Supreme Court declared that "'[p]olitical
subdivisions of States — counties, cities or whatever — never were and never have
been considered as sovereign entities. Rather, they have been traditionally
regarded as subordinate governmental instrumentalities created by the State to
assist in the carrying out of state governmental function. "'^^° The Court went on
to note that counties, local boards, and other political subdivisions of the state
exist at the pleasure of the State.

"[T]hese governmental units 'are created as convenient agencies for
exercising such of the governmental powers of the state, as may be
entrusted to them,' and the 'number, nature and duration of the powers
conferred upon (them) . . . and the territory over which they shall be
exercised rests in the absolute discretion of the state.'"^^^

559. 387 U.S. 105(1967).

560. W^/c/z, 477 F. Supp. at 964-65.

561. 254 F. Supp. 17 (W.D. Mich. 1966), ajfd, 387 U.S. 105 (1967).

562. Id. at 18.

563. See generally Reynolds v. Sims, 377 U.S. 533 (1964) (establishing the one person, one
vote principle as a matter of constitutional law).

564. Sailors I, 254 F. Supp. at 18.

565. See id. (citing Mich. Comp. Laws §§ 340.29 l-340.330x (repealed 1977)).

566. Id.

567. Id. at 18-19; Sailors v. Bd. of Educ. (Sailors 11), 387 U.S. 105, 106-07 (1967).

568. See id.

569. Sailors I, 254 F. Supp. at 19.

570. Sailors II, 387 U.S. at 107-08 (quoting Reynolds v. Sims, 377 U.S. 533, 575 (1964)).

571. Id. at 108 (quoting Reynolds, 377 U.S. at 575).

398 INDIANA LAW REVIEW [Vol. 42:343

Courts examining Equal Protection Clause challenges similar to those in
Welch and Sailors II would conclude that appointive systems do not violate the
Equal Protection Clause.^^^ In reaching this holding, courts would likely rely on
the following holding from Sailors II: "We find no constitutional reason why
state or local officers of the nonlegislative character involved here may not be
chosen by the governor, by the legislature, or by some other appointive means
rather than by an election."^^^ In essence, the Court ruled that there was no
fundamental right to vote for school board members. ^^"^ The Court held that the
functions of the county boards were administrative in nature and declined to rule
on whether it would find an Equal Protection Clause violation if a local
legislative body (as opposed to an administrative body) is selected through an
appointive instead of an elective system.^^^ It is likely, however, that the more
similar the functions of a local school board are to those of the county board in
Sailors /, the more likely courts are to find the board to be of a nonlegislative
nature and, thus, apply the Sailors II holding.^^^

Building on the above reasoning, the Supreme Court held that there is no
fundamental right to vote for local school boards. ^^^ The Court applied rational
basis review, rather than strict scrutiny.^^^ Surprisingly, the Court applied this
more lenient standard in spite of the fact that in precedent the Court had declared
the right to vote a fundamental right preservative of all other rights.^^^ It must be
noted that in precedent, the Court ruled that the Federal Constitution protects the
right to vote in federal and state elections.^^^ However, a key distinction arises
from the fact that the right to vote in local elections is the State's prerogative,^^ ^

572. See, e.g., Moore v. Detroit Sch. Reform Bd., 2002 FED App. 0204P, 293 F.3d 352, 368-
72 (6th Cir.); Mixon v. Ohio, 1999 FED App. 0347P, 193 F.3d 389, 402-06 (6th Cir.); see also
Mark Walsh, High Court Declines Challenge to Appointed Detroit Board, Educ. Wk., Mar. 5,
2003, at 29 (noting that the U.S. Supreme Court refused to hear Moore on certiorari, suggesting a
potential agreement with the Welch and Sailors II reasoning as applied to takeovers).

573. Sailors II, 387 U.S. at 108.

574. See id. at 1 10-1 1 (stating that "[s]ince the choice of members of the county school board
did not involve an election and since none was required for these nonlegislative offices, the
principle of 'one man, one vote' has no relevancy"); see also Mixon, 193 F.3d at 403 ("Although
Plaintiffs have a fundamental right to vote in elections before them, there is no fundamental right
to elect an administrative body such as a school board, even if other cities in the state may do so.").

575. Sailors II, 387 U.S. at 1 1 1 .

576. See Van Zanen v. Keydel, 280 N.W.2d 535, 537-39 (Mich. Ct. App. 1979) (declining to
limit Sailors II to solely administrative functions, and Sailors //'s holding applying to a
metropolitan authority).

577. See Sailors II, 387 U.S. at 1 1 1.

578. Id.

579. See, e.g., Reynolds v. Sims, 377 U.S. 533, 560-62 (1964); Yick Wo v. Hopkins, 1 18 U.S.
356,369-71(1886).

580. Reynolds, 377 U.S. at 554-77.

581. See id. Indeed in Reynolds, the Court specifically referred to the fundamental right to

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 399

as local governmental entities, "[p]olitical subdivisions of States — counties,
cities or whatever — never were and never have been considered as sovereign
entities."^^^ They are merely " 'created as convenient agencies for exercising such
of the governmental powers of the state as may be entrusted to them,' and the
'number, nature and duration of the powers conferred upon (them) . . . and the
territory over which they shall be exercised rests in the absolute discretion of the
state. '''^^^ Nevertheless, where there is an election in place, during the existence
of such an elective system, "a citizen has a constitutionally protected right to
participate in elections on an equal basis with other citizens in the
jurisdiction ''^^"^ As explained further by the Court, "once the franchise is granted
to the electorate, lines may not be drawn which are inconsistent with the Equal
Protection Clause of the Fourteenth Amendment."^^^ In other words, if the
jurisdiction or electorate is the school district, every citizen in that district has a
right to participate equally in the elections while an elective system exists in that
district.^^^ Essentially, there is a fundamental right to equal access to
participation in elections. ^^^

Under rational basis review the Supreme Court in Sailors II upheld the

vote with respect to state and federal elections. Id. With respect to local elections, the Court added

in Sailors II, that

[i]f we assume arguendo that where a State provides for an election of a local official
or agency — whether administrative, legislative, or judicial — the requirements of Gray
V. Sanders and Reynolds v. Sims must be met, no question of that character is presented.
For while there was an election here for the local school board, no constitutional
complaint is raised respecting that election. Since the choice of members of the county
school board did not involve an election and since none was required for these
nonlegislative offices, the principle of "one man, one vote" has no relevancy.

Sailors II, 3S1 U.S. at in.

582. Reynolds, 377 U.S. at 575.

583. Id. (quoting Hunter v. City of Pittsburgh, 207 U.S. 161, 178 (1907)) (emphasis added).

584. Dunn v. Blumstein, 405 U.S. 330, 336 (1972) (emphasis added); see also Avery v.
Midland County, 390 U.S. 474, 480 (1968) ("[Wjhen the State delegates lawmaking power to local
government and provides for the election of local officials from districts specified by statute,
ordinance, or local charter, it must insure that those qualified to vote have the right to an equally
effective voice in the election process.").

585. Harper v. Va. State Bd. of Elections, 383 U.S. 663, 665 (1966).

586. See Dunn, 405 U.S. at 336; Harper, 383 U.S. at 665.

587. See Dunn, 405 U.S. at 336; Harper, 383 U.S. at 665; see also Mixon v. Ohio, 1999 FED
App. 0347P, 193 F.3d 389, 402 (6th Cir.) ("Although the right to vote, per se, is not a
'constitutionally protected right,' the Supreme Court has found, 'implicit in our constitutional
system, [a right] to participate in state elections on an equal basis with other qualified voters
whenever the State has adopted an elective process for determining who will represent any segment
of the State's population.'") (quoting San Antonio Sch. Dist. v. Rodriguez, 411 U.S. 1, 35 n.78
(1973)) (emphasis added).

400 INDIANA LAW REVIEW [Vol. 42:343

State's legitimate interest in managing its schools through appointive boards.^^^
The Court applied this reasoning in Welch and many other cases since Sailors II,
which goes thus: "Viable local governments may need many innovations,
numerous combinations of old and new devices, great flexibility in municipal
arrangements to meet changing urban conditions. We see nothing in the
Constitution to prevent experimentation. ''^^^ In essence, the Court affords wide
latitude to the State in the management of school districts, which exist at the
pleasure of the State, in order to meet challenges and changing conditions in the
district. Such challenges and changes include academic and financial
mismanagement and other turmoil in the districts.

As the federal district court explained in Welch, 'The need for freedom of
state legislatures to experiment with different techniques and schemes is one of

the rational bases for [imposition of an appointive system] In Sailors [//], the

need to experiment seemingly was the only basis relied upon to satisfy the test
of rational nexus."^^^ The district court acknowledged that there is no
fundamental right to vote for school board members.^^^ Further, because there
is no fundamental right to education under the U.S. Constitution, the education
issues in these cases do not bolster the argument that there is a fundamental right
to vote for school board members. ^^^

In addition, the Supreme Court held in Sailors II that the one person, one
vote principle is only relevant to elective systems, not appointive systems.^^^ In
ruling on the constitutionality of a New York law that permitted City of New
York board members to be appointed, while suburban school boards were
elected, the United States District Court for the Southern District of New York
relied on Sailors II and Hadley v. Junior College District of Metropolitan Kansas
City^^"^ in its declaration that the one person, one vote doctrine is of no relevance
whatsoever to appointive boards. ^^^ In essence, the State can choose to replace
an elective system for school board members with an appointive system. ^^^

588. Sailors v. Bd. of Educ. (Sailors II), 387 U.S. 105, 1 10-1 1 (1967).

589. Id. (emphasis added); see also Irby v. Va. State Bd. of Elections, 889 F.2d 1 352, 1 355-56
(4th Cir.1989) (recognizing several legitimate reasons for appointed school boards rather than
elected school boards).

590. Welch v. Bd. of Educ, 477 F. Supp. 959, 965 (D. Md. 1979).

591. Mat 964-65.

592. Id.

593. Sailors II, 387 U.S. at 1 1 1.

594. 397 U.S. 50(1970).

595. Sovak v. Bd. of Educ, No. 97 CIV. 7407(HB), 1998 WL 470507, at *1 n.4 (S.D.N. Y.
Aug. 1 1, 1998), aff'd. No. 98-9287, 1999 WL 335380 (2d Cir. May 20, 1999); see also Fumarolo
V. Chicago Bd. of Educ, 566 N.E.2d 1283, 1292-93, 1302-03 (111. 1990) (discussing //aJ/^};, 397
U.S. 50, and Sailors II, 387 U.S. 105, and concluding that the State may determine to appoint rather
than permit election of a local board).

596. Fumarolo, 566 N.E.2d at 1302-03; see also Pirincin v. Bd. of Elections, 368 F. Supp. 64,
69 (N.D. Ohio 1973).

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 401

Beyond this, the replacement of an elective system with an appointive system for
school boards in a takeover does not violate the one person, one vote principle.^^^
This principle is only violated if, while an elective system is the method of
selection, each citizen is not allowed to participate equally in the election.^^^
Indeed, the Supreme Court has also given states latitude to experiment with a
hybrid system — combining appointive and elective systems for local school
boards. ^^^

In Hadley, the Supreme Court seemed to abandon the rigid distinction
between administrative and legislative function from Sailors //, though not
overruling any of its holdings in Sailors 11.^^^ In fine, the Court declared that
government functions "'cannot easily be classified in . . . neat categories. '"^^^
Affirming its holding in Sailors II, the Court made it clear that an appointive
system in itself is not violative of the Equal Protection rights of residents of
school districts.^^^ In fact, the Court went on to note in Hadley that in cases
where an appointive system is used in selecting school boards or other local
government officials, each official does not have to represent the same number
of people as is typically required in elective systems under the one person, one
vote principle.^^^

In Van Zanen v. Keydel,^^ the Court of Appeals of Michigan followed the
Supreme Court's holding in Sailors II in a challenge to the appointive system
implemented in a political subdivision in Michigan. ^^^ The court held that
substituting an appointive system for an elective system is not a violation of the
Equal Protection Clause.^^^ The court stated that "a state or local government
may select some government officials by appointment. And where appointment
is permissible, the one person-one vote doctrine does not apply."^^^ Likewise,
ruling on the constitutionality of a 1963 Chicago Public Schools takeover statute
that gave the mayor the power to appoint the school board in place of the elected
board, the Illinois Supreme Court ruled in Latham v. Board of Education^^^ that
'*'no resident of a school district has an inherent right of franchise insofar as
school elections are concerned. His right to vote therein is purely a permissive
one bestowed by the legislative grace in furtherance of the policy of the

597. See Mixon v. Ohio, 1999 FED App. 0347P, 193 F.3d 389, 402-03 (6th Cir.)

598. Id.

599. Sailors II, 387 U.S. at 111 (noting that there is nothing unconstitutional with
'experimenting").

600. See Hadley v. Junior Coll. Dist. of Metro. Kansas City, 397 U.S. 50, 55-56 (1970).

601. Id. at 56 (quoting Avery v. Midland County, 390 U.S. 474, 482 (1968)).

602. Id. at 58-59.

603. Id. at 58.

604. 280 N.W. 2d 535 (Mich. Ct. App. 1979).

605. /J. at 536, 538-39.

606. Mat 539.

607. Id.

608. 201 N.E.2d 111(111. 1964).

402 INDIANA LAW REVIEW [Vol. 42:343

legislature. '"^^^

In fact, most state constitutions have no provision for local school districts
or local control of education ;^^^ constitutionally, the responsibility for education
lies with the State.^'^ The very small minority of states that do constitutionally
provide for local control of education do not provide for local school boards.^*^
Still, the tradition in America has been for States to delegate governance of
schools to local school boards.^^^ As Aaron Saiger cautiously notes:

Notwithstanding the policy of local delegation, however, school
district authority is contingent on a state grant of power. Therefore, a
district's authority to direct education in a locality can be made [by the
state] contingent on its performance. Just as a state should withdraw a
contract from an underperforming contractor, or freeze a grant not being
used to provide the services the grant was to support, it ought to act
similarly vis-a-vis a school district.^^"^

As our discussion above reveals, even when other school districts in the same
state retain the right to vote for their school boards, no Equal Protection Clause
violation is likely to be found when states take over school districts, albeit
minority districts.^^^ This result is especially likely because the Supreme Court
has upheld the substitution of an appointive system for an elective system as
rationally related to the legitimate end of experimenting with governance
techniques for greater effectiveness of government functions.^^^ However, if it
is proven that racial animus was involved in the decision about which district to
takeover, a case for an Equal Protection Clause violation is at least more
viable.^^'

Furthermore, the Supreme Court has ruled that "[wjhen racial classifications
are explicit [in a law], no inquiry into legislative purpose is necessary"^^^ and

609. Id. at 1 16 (quoting People v. Deatherage, 81 N.E.2d 581, 588 (111. 1945)).

610. See Saiger, supra note 7, at 1846-47.

611. Mat 1846.

612. Id.

613. Mat 1846-47.

614. Mat 1847.

615. See supra notes 551-609 and accompanying text.

616. See Hadley v. Junior Coll. Dist. of Metro. Kansas City, 397 U.S. 50, 58-59 (1970);
Sailors v. Bd. of Educ. {Sailors IT), 387 U.S. 105, 108 (1967). For an overview of Sailors II, see
supra notes 561-83 and accompanying text. For an overview of Hadley, see supra notes 600-03
and accompanying text.

617. See Hunt v. Cromartie, 526 U.S. 541, 546 (1999) (stating that "all laws that classify
citizens on the basis of race, . . . , are constitutionally suspect and must be strictly scrutinized");
Pers. Adm'r of Mass. v. Feeney, 442 U.S. 256, 279 (1979) (noting that it is constitutionally suspect
to pursue a legislative action "because of that action's "adverse effects upon an identifiable
group").

618. //Mnr, 526 U.S. at 546.

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 403

such laws must be strictly scrutinized.^^^ None of the State takeover laws
examined in Part I could be deemed to have explicit racial classifications,^^^
except, arguably, those state laws that allow takeovers in cities with large
populations.^^* For example, an Illinois provision applies to cities with over
500,000 inhabitants, ^^^ which means the law only affects Chicago, a high-
minority school district.^^^ Given the traditionally large number of minorities in
the district and the fact that Chicago was the only city with over 500,000
inhabitants at the time of the statute's enactment,^^"^ it is apodictic that, in passing
the law, the state legislature knew it would only apply to this predominantly
minority district. However, the legislation is careful to include no explicit racial
classification, instead expressly applying the provision to cities with over
500,000 inhabitants. ^^^ This shelters the provision from constitutional
vulnerability as it is a facial classification based on population rather than race.
In fact, in upholding the law, the Illinois Supreme Court reasoned that the
provision does not violate the Equal Protection Clause because "'[c]lassification
on the basis of population is not objectionable where there is a reasonable basis
therefor in view of the object and purposes to be accomplished by the

619. Id. As the Sixth Circuit has further noted,

In Village of Arlington Heights, the Supreme Court identified five factors that are
relevant for determining whether facially neutral state action was motivated by a racially
discriminatory purpose: ( 1 ) the impact of the official action on particular racial groups,
(2) the historical background of the challenged decision, especially if it reveals
numerous actions being taken for discriminatory purposes, (3) the sequence of events
that preceded the state action, (4) procedural or substantive departures from the
government's normal procedural process, and (5) the legislative or administrative
history.
Moore v. Detroit Sch. Reform Bd., 2002 FED App. 0204P, 293 F.3d 352, 369 (6th Cir.) (citing
Vill. of Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252, 266-68 (1977)).

620. This includes the NCLB takeover provisions which serve as the basis for the State
takeover provisions in various states as shown supra Part I.

621. Ohio's law is only applicable to municipal school districts in Cleveland. See H.B. 269,
122d Gen. Assem., Reg. Sess. (Ohio 1997). The Sixth Circuit upheld this law in Mixon v. Ohio,
1999 FED App. 0347P, 193 F.3d 389 (6th Cir.), and by referendum in 2002, Cleveland residents
decided to retain the mayoral-appointment of board members. See Gewertz, Clevelanders to Weigh
in, supra note 450, at 8; Moore, supra note 450. Missouri also seems to provide for a classification
based on population, providing for takeovers in districts with populations over 350,000 inhabitants.
Mo. ANr>f. Stat. § 162.081(3) (West 2000 & Supp. 2008). However, the same provision extends
the takeover to all districts. Id. Thus, the population classification in the statute seems
unnecessary. Id.

622. 105 III. Comp. Stat. Ann. 5/34-1 (West 2006).

623. See City Population, http://www.citypopulation.deAJSA-Illinois.html#Stadt_ gross (last
visitedMay 13, 2009).

624. Id.

625. 105 III. Comp. Stat. Ann. 5/34-1 .01 (West 2006).

404 INDIANA LAW REVIEW [Vol. 42:343

legislation. '"^^^ At bottom, facial classifications based on population are subject
to rational basis review. Indeed, the United States Supreme Court has also ruled
that "[a] facially neutral law, on the other hand, warrants strict scrutiny only if
it can be proved that the law was motivated by a racial purpose or object, or if it
is unexplainable on grounds other than race."^^^ It seems evident that all the
statutes we examined above, including Illinois' s, would pass muster under
rational basis review. Furthermore, as articulated by the Supreme Court of
Illinois, in "considering the validity of a legislative classification there is always
a presumption [by the courts] that the General Assembly acted conscientiously,
and this court will not interfere with its judgment except where the classification
is clearly unreasonable and palpably arbitrary. "^^^

In cases where there is a facially-neutral law, which in application has a
disproportionate racial impact, the United States Supreme Court declared in
Washington v. Davis^^'^ that "[its] cases have not embraced the proposition that
a law or other official act, without regard to whether it reflects a racially
discriminatory purpose, is unconstitutional Solely because it has a racially
disproportionate impact. "^^^ The Court also pointed out that it had

rejected allegations of racial discrimination based solely on the
statistically disproportionate racial impact of various provisions of the
Social Security Act because "[t]he acceptance of appellants'
constitutional theory would render suspect each difference in treatment
among the grant classes, however lacking in racial motivation and
however otherwise rational the treatment might be."^^*

Once a prima facie case of discriminatory purpose is established, "'the burden
of proof shifts to the State to rebut the presumption of unconstitutional action by
showing that permissible racially neutral selection criteria and procedures have
produced the monochromatic result. '"^^^

IV. Implications for State Takeovers of Minority Districts

States that adopt the NCLB ' s multiple-option approach for corrective actions
have a variety of approaches to experiment with before even considering
takeovers.^^^ If those options are ineffective, a court might be hard-pressed to

626. Latham v. Bd. of Educ, 201 N.E.2d 111,114 (111. 1964) (quoting Apex Motor Fuel Co.
V. Barrett, 169 N.E.2d 769, 775 (111. I960)).

627. Hunt v. Cromartie, 526 U.S. 541, 546 (1999) (internal quotation marks and citation
omitted).

628. Latham, 201 N.E.2d at 1 14.

629. 426 U.S. 229(1976).

630. /J. at 239.

631. Id. at 240-41 (quoting Jefferson v. Hackney, 406 U.S. 535, 548 (1972)).

632. Id. at 241 (quoting Alexander v. Louisiana, 405 U.S. 625, 632 (1972)).

633. It must also be noted that flexibility also exists for various jurisdictions pursuant to the
NCLB section providing for State takeovers, which states:

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 405

deny deference to the State in its decision to take over the district.^^"^ Likewise,
if the State conducts studies showing that the other options have been ineffective
in that district, it will strengthen its case. Indeed, the fact that the NCLB-
approach is an option rather than a mandate is certainly not a disadvantage.
States might also be well-advised to establish specific timelines for emergence
from takeovers, in statute or in practice when implemented, as opposed to
indefinite takeovers. It also might help to implement a partial takeover that does
not involve change of the elective system for the school board to an appointive
one, though as noted above, this change is not necessarily fatal to a takeover.^^^

Measured takeovers that retain the elected board but reduce its powers,
similar to some of those described above, might help.^^^ However, community
involvement, coupled with communication and education of the citizenry about
the takeover and the State's reasons and goals for the takeover, are critical. The
more support the takeover gets from the community, the less likely it is to face
a challenge in the first place. Even if the State retains an elected board but
renders the board effectively powerless as a mere ceremonial board, or one with
very limited powers, the community could still find it very objectionable due to
its implications for local control and trust of the minority residents.

As often happens, the citizens see the takeover as a state government's lack
of trust in the minorities to run their school district.^^^ Consequently, the
importance of communication (and development of trust that accompanies
communication) as well as relationship-building in the community to any
takeover cannot be overestimated. Communication and trust would certainly
help with the implementation of partnerships such as that of the Baltimore City
Public Schools in 1997 or the Boston University/Chelsea Partnership.^^^ Such
partnerships, if truly collaborative, might be less challenged and may survive
constitutional challenges tant mieux. These partnerships should certainly be

[n]othing in this section shall be construed to alter or otherwise affect the rights,
remedies, and procedures afforded school or school district employees under Federal,
State, or local laws (including applicable regulations or court orders) or under the terms
of collective bargaining agreements, memoranda of understanding, or other agreements
between such employees and their employers,
20 U.S.C.§ 6316(d) (2006).

634. This is even more pertinent in those states that have yet to adjudicate the constitutionality
of takeovers. However, there is no reason to suggest that they would not march in lockstep with
the various cases discussed in this Article.

635. See supra notes 572-76, 593-609 and accompanying text.

636. As a description of a former West Virginia State Superintendent's opinion revealed,
"Court battles might be avoided if takeovers preserved elected school boards .... 'Had we
attempted to remove the local board, we'd probably still be in litigation today.'" Reinhard, Racial
Issues, supra note 1 1 .

637. See, e.g., Hendrie, supra note 497.

638. For additional information on these partnerships, see supra notes 342-56 and
accompanying text.

406 INDIANA LAW REVIEW [Vol. 42:343

encouraged over hostile takeovers.

Within a reasonable time after a full takeover, residents could also be given
the opportunity by referendum to decide whether to retain an appointive system.
Given that school districts are subdivisions of the State, existing at the discretion
of the State,^^^ States could evidently take over a district. Nevertheless, without
legislative authority, state agencies, such as the education department, embarking
on their own to take over districts could face a challenge. This might even be so
in cases where a state has accepted Title I funds, which requires implementation
of the NCLB's mandates, yet lacks any statutory authority for takeovers. The
state legislature, however, could remedy the potential for ultra vires takeovers by
simply enacting legislation authorizing the takeover; after all, as previously
emphasized, districts are subdivisions of the state existing at its discretion. The
State could, a fortiori, choose to enact laws that provide for an appointive system
in a district rather than just authorizing a takeover. In any case, in addition to the
grant of authority for a general takeover, the legislature should be as explicit as
possible when granting state agencies the authority to replace an elected board
with an appointed board as part of a takeover.

In those districts where partial takeovers occur, the State must of course
ensure that it respects the electoral franchise, securing each citizen's equal right
to vote. Clearly, takeovers must not be driven by racial animus. It is important
to document, again and again, the reasons for the takeover, so that in a challenge
the State can present its legitimate reasons to the courts. While the racial
demographic physiognomy of takeovers in a state would not alone strike a fatal
blow to a contemplated or implemented takeover, the physiognomy should give
the State cause to pause in order to evaluate and address the reasons for the
racially disproportionate takeovers. Further, racial classifications should not be
included in laws or policies, as those would likely be subjected to strict
constitutional scrutiny.^"^^ Beyond avoiding racial animus in decisions about
takeovers, racial implementation of any and all aspects of the takeover must be
absolutely obviated.

District residents could clearly resort to the political process (elected state
legislative and executive officials) to prevent State takeovers. They could
petition their elected officials to oppose a takeover, or vote out those who favor
the takeover or those who refuse to act on their petitions to prevent the
takeover.^"^^ In cases where the executive officials who make such decisions are
appointed officials, political pressure could be put on the elected officials who
are ultimately responsible for selecting such appointed officials; the political
pressure could be applied either to prevent the takeover or encourage its
implementation in a way that the residents do not disfavor. Examples of political
pressure include phone calls to elected officials, demonstrations, and voter

639. See Sailors v. Bd. of Educ. {Sailors IT), 387 U.S. 105, 107-08 (1967).

640. 5^^ JM/7ra note 618-19 and accompanying text.

641. See, e.g., Mixon v. Ohio, 1999 FED App. 0347P, 193 F.3d 389, 406 (6th Cir.)
(suggesting that voicing opinion at national and state elections is a proper course of action).

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 407

registration drives targeting vulnerable officials. Residents could also organize
to seek a state constitutional amendment preventing State takeovers, or exert
pressure on their legislators to enact laws that would not allow takeovers or only
allow them as a last resort. Various forms of such amendments or laws could be
passed, including those which stop short of barring takeovers but preserve the
right to vote and avoid a mere ceremonial board. Of course, residents could look
to the judiciary. However, as discussed previously, courts have been reluctant
to halt implementation of an appointive system but less disinclined to intervene
in an elective system that infringes the right to equal participation in voting.^"^^
Provision for appointment of a replacement board by another elected official,
such as a mayor, could lessen objections to a State takeover of a school district.
A mayor is a municipal official, unless the State indicates otherwise.^^ As
discussed above, some takeovers do provide for a mayorally-appointed board.^"^
Fewer objections from a full takeover might come from the fact that the mayor
is elected by the residents and that the elected mayor appoints members of the
school board.^"^^ However, even this type of an arrangement has been challenged.
In Mixon v. Ohio,^"^^ the plaintiffs challenged the mayoral-appointment of board
members in Cleveland.^"^^ They claimed that the state law providing for the
mayoral appointment denied them equal protection of the laws because some of
the residents of the Cleveland Public School District were not eligible to vote in
the mayoral election. ^"^^ The court characterized the plaintiffs' challenge as
follows:

[0]ther cases, such as this one, address voter disenfranchisement when
a municipality has some control over non-residents who cannot vote in
municipal elections, [i.e.], cases of extraterritorial jurisdiction. Here,
one [p]laintiff is not a resident of the City of Cleveland and does not

642. See supra notes 572-87 and accompanying text.

643. Mixon, 193 F.3d at 399.

644. See, e.g., supra notes 569-74, 572-76 and accompanying text.

645. See Mixon, 193 F.3d at 399.

646. 1999 FED App. 0347P, 193 F.3d 389 (6th Cir.).

647. Id. at 393-94. Recall that in 2002 Clevelanders chose to permanently retain the mayoral
appointment of board members. For an overview of State involvement with the Cleveland Public
Schools, see supra Part II.M.

648. As the Court summarized.

In their final equal protection challenge, [p]laintiffs allege that H.B. 269
"unconstitutionally compounds the voting disenfranchisement for some residents in the
Cleveland Public School District living in the Village of Bratehahl, Linndale, Newburgh
Heights and part of Garfield Heights, because these residents do not vote in the
Cleveland mayoral elections." According to Plaintiffs, non-Cleveland residents who
reside in the same school district lose their elective opportunity to vote for the person
who appoints individuals to their school board, thus depriving them of equal protection
under the law.
/6f. at404.

408 INDIANA LAW REVIEW [Vol. 42:343

vote in the City's mayoral elections even though the mayor appoints a
school board that encompasses [p]laintiff within its jurisdiction.^^

In upholding the system of mayoral appointment, the United States Court of
Appeals for the Sixth Circuit ruled that "non-residents do not necessarily have
the right to vote in a city election simply because the city has some limited
authority over the non-residents."^^° In other words, the mere fact that the City
has authority over non-residents, in governing the school district in which those
non-residents reside, does not entitle those non-residents to vote in a city
election.^^^ In such cases, while reviewing equal protection challenges to
mayoral appointment, "courts employ rational basis review, granting the States
wide latitude to create political subdivisions and exercise state legislative
power."^^^ In Mixon, the State satisfied the low threshold of rational basis review
because it sought to address the problems in the failing district.^^^

The circuit court poignantly expressed the gravamen of the ruling:

[E]xtraterritorial voters in the outer Cleveland suburbs are not
"residents" of the City of Cleveland and surely do not deserve the right
to vote in Cleveland mayoral elections. Although [p]laintiffs are
residents of the municipal school district, no elections occur within that
jurisdiction from which [p]laintiffs are excluded. If the municipal school
boards were elected bodies and only the Cleveland residents could vote
in the school board election, then the relevant geopolitical entity would
be the municipal school district [and strict scrutiny would apply]. ^^"^

Conclusion

The moral is that in cases of extraterritorial jurisdiction, state provisions for
mayoral appointment are not necessarily violative under rational basis review.
If any form of election is allowed for the school board, however, all residents of
the district (even those not eligible to vote for the mayor) must be given equal
access to the right to vote. Still, if seeking to minimize objections, it might be
best to simply retain an elected board in cases of extraterritorial jurisdiction, with
the mayor having more of a supervisory rather than an appointive power over the
board. However, the key is to avoid infringement of equal access to the voting
franchise of the residents of the relevant school district. Let us all keep in mind
that while, ceteris paribus, reforms are good, sensitivity to the disparate
application of reform is prudent in order to minimize what could amount to

649. Id. at 404-05 (internal citation omitted).

650. Id. at 405 (citing Holt v. City of Tuscaloosa, 439 U.S. 60, 69 (1978)).

651. See id. at 404-06.

652. Id at 405 (citing Holt, 439 U.S. at 71).

653. Id. at 406 (the legislation at issue "relate[d] to the legitimate state interest of improving
public schools").

654. /£/. at 405-06.

2009] STATE TAKEOVERS OF SCHOOL DISTRICTS 409

protracted litigation over good faith efforts and broken trust in local
communities. Even in those cases where takeovers are legally justified, states
should strive to retain the elective system. As Justice Black once wrote: "No
right is more precious in a free country than that of having a voice in the election
of those who make the laws under which, as good citizens, we must live. Other
rights, even the most basic, are illusory if the right to vote is undermined."^^^

655. Wesberry v. Sanders, 376 U.S. 1, 17 (1964).

Indiana Law Review

Volume 42 2009 Number 2

NOTES

Overkill: An Exaggerated Response to
THE Sale of Murderabill\

Ellen Hurley'

Introduction

On May 24, 2007, U.S. Senator John Comyn of Texas introduced a bill that
would make it illegal for any prisoner who is incarcerated in a federal or state
prison to deposit any object for delivery or for mailing with the intent that the
object be placed in interstate or foreign commerce.^ Violation of the proposed
"Stop the Sale of Murderabilia to Protect the Dignity of Crime Victims Act of
2007" carries a sentence of at least three years and a maximum often years to run
consecutively to a prisoner's current sentence.^ Andy Kahan, the director of the
Houston Mayor's Crime Victims Office, lobbied the Senator to introduce the
bill.^ Kahan, a nationally known advocate for crime victims, learned about the
practice of buying and selling memorabilia associated with serial killers as early
as 1999. He "launched a crusade to wipe it out, state by state, as an affront to
crime victims.'"^ Kahn's passion stems from his concern for people like Harriett
Semander, whose daughter was murdered by Coral Eugene Watts, a confessed
killer of thirteen women.^ Semander learned that items associated with Watts,
"like letters and envelopes with his handwriting" were being sold on "Internet

* J.D. Candidate, 2009, Indiana University School of Law — ^Indianapolis; B.S., 2005,
Indiana University Purdue University Indianapolis. I would like to thank Professors Mary Harter
Mitchell, Gerard N. Magliocca, and R. George Wright who were my sounding boards as I began
to sort out the issues for this Note. I especially thank my family who supports me in every
endeavor — my husband Dave (who, when I mentioned I might want to go to law school,
immediately ran over to campus to pick up all the registration information), and my sons, Brian,
Michael, and Sean, who cheer me on and keep me entertained at the same time.

1 . Stop the Sale of Murderabilia to Protect the Dignity of Crime Victims Act of 2007, S.
1528, 1 10th Cong. § 2(a) (2007).

2. Id.

3. Day to Day: Texas Law Would Prevent Sale of 'Murderabilia ' (National Public Radio
broadcast July 30, 2007) [hereinafter Day to Day] (transcript on file with author).

4. Jeff Barnard, 'Murderabilia ': People Want to Get Closer to Killers, Telegraph-Herald
(Dubuque, Iowa), Oct. 8, 2000, at A4.

5. Day to Day, supra note 3.

412 INDIANA LAW REVIEW [Vol. 42:41 1

sites that specialize in merchandise from convicted felons."^

Senator Comyn seeks to prevent the sale of items associated with criminals
by blocking them at their source — the prison gates. This is a new approach to the
old problem of criminals profiting from their crimes. Many anti-prof iting laws
aimed at criminals, particularly the so-called "Son of Sam laws" which target
proceeds derived by criminals from the sale of the depiction of their crimes, are
constitutionally defective.^

This Note discusses whether the proposed "Stop the Sale of Murderabilia to
Protect the Dignity of Crime Victims Act of 2007"^ resolves the constitutional
problems of past anti-profiting legislation without creating new problems of its
own. Part I explains what "murderabilia" is and what policy reasons justify
banning its sale. Part 11 gives an overview of Son of Sam laws and other anti-
profiting legislation, and discusses the constitutional problems they have faced.
Part m analyzes Senator Comyn' s bill, and compares it to past legislation that
courts have found unconstitutional, to determine whether the bill, if passed,
would withstand constitutional challenge. Part IV discusses some possible
negative ramifications of the bill. Finally, Part V evaluates the approaches that
some states have taken, as well as approaches that others have suggested, to
accomplish the dual goals of compensating victims and preventing criminals
from profiting from their crimes without violating prisoners' constitutional rights.
Part V asserts that some combination of these other approaches is far superior to
Senator Comyn' s proposed bill.

I. What is Murderabilia, and Why Ban Its Sale?

The term "murderabilia," first coined by Andy Kahan, refers to items
associated with notorious criminals that have found a market on various Intemet
sites that cater to serious collectors and to those with a macabre fascination for
crime-related memorabilia.^ The term encompasses anything offered for sale that
was either created by or owned by a criminal, as well as any item related to a
notorious crime, over which the criminal may or may not have had any control
(and for which the prisoner may or may not receive any profit). ^° Those items

6. Id.

7. See, e.g., Simon & Schuster, Inc. v. Members of the N.Y. State Crime Victims Bd., 502
U.S. 105, 123 (1991); Keenan v. Superior Court of Los Angeles County, 40 P.3d 718, 735 (Cal.
2002); In re Opinion of the Justices to the Senate, 764 N.E.2d 343, 352 (Mass. 2002); Seres v.
Lemer, 102 P.3d. 91, 100 (Nev. 2004); see also Kathleen Howe, Comment, Is Free Speech Too
High a Price to Pay for Crime? Overcoming the Constitutional Inconsistencies in Son of Sam
Laws, 24 LOY. L.A. Ent. L. Rev 341, 342-43 (2004).

8. Stop the Sale of Murderabilia to Protect the Dignity of Crime Victims Act of 2007, S.
1528, 110th Cong. (2007).

9. Hilary Hylton, Cracking Down on "Murderabilia," TIME, June 5, 2007, available at
http://www.time.coni/time/nation/article/0,8599,l 629655, OO.html.

10. The public's interest in crime-related objects is not a recent phenomenon. For instance,
after a fire in 1908 revealed the remains of several victims of serial killer Belle Gunness in LaPorte,

2009] AN EXAGGERATED RESPONSE 413

include: "A form letter from Martha Stewart, written on her trademark Living

stationery and sent to supporters during her prison stay" (selling for $25) and

"[a]n envelope hand-addressed by jailed Panamanian General Manuel Noriega"

(priced at $350).^^ Those innocuous items pale in comparison to some of the

"macabre, shocking and soul-chilling prison collectibles" available for purchase

online — "magazine fashion ads defaced with satanic symbols and stained with

the bodily fluids of a campus shooter, a sketch of a headless victim drawn by a

Death Row murderer, even fingernail clippings and foot scrapings from a serial
killer."^2

Not all sites cater to notorious criminals, however. Prisonart.org^^ and
prisonerlifexom'"^ are websites that offer prisoners who create crafts and artwork
while incarcerated an online outlet for their works regardless of their own
notoriety. Why, then, is it so important to prevent prisoners from selling these
items?

A. Victims ' Interests

When Harriett Semander discovered that a letter penned by her daughter's
killer was being auctioned off on a website twenty-five years after the murder,
"all the feelings of grief [came] flooding back."^^ Protecting those who have
suffered at the hands of vicious criminals from public reminders of the violation
they have experienced is the impetus behind Senator Comyn's bill^^ and Andy
Kahan's lobbying efforts in support of the bill.^^ Regardless of society's
empathy for such victims, however, the United States Supreme Court stated in
Simon & Schuster, Inc. v. Members of the New York State Crime Victims Board,^^
that "'[t]he fact that society may find speech offensive is not a sufficient reason
for suppressing it. Indeed, if it is the speaker's opinion that gives offense, that
consequence is a reason for according it constitutional protection.'"*^ The Court

Indiana, "Ringling Brothers Circus purchased the pony and cart that Belle's children used to travel
back and forth to school." Dan McFeely, Belle Gunness, INDIANAPOLIS STAR, Dec. 30, 2007, at
A15. The cart "became an attraction at sideshows across America, wherever the circus went." Id.

1 1 . Hylton, supra note 9.

12. Id.

13. PrisonArt.org, http://www.prisonart.org/ (last visited Sept. 30, 2008) (listing for sale a
variety of prisoner-made arts and crafts, including acrylics, ceramics, cross stitch, ink art, jewelry,
music, oil paintings, textiles and water colors).

14. PrisonerLife.com, Prison Art, http://www.prisonerlife.com/prisonart/prisonart.cfm (last
visited Sept. 30, 2008).

15. Gigi Stone, 'Murderabilia ' Sales Distress Victims ' Families, ABC WORLD News, Apr. 15,
2007, http://abcnews.go.com/wnt/us/story ?id=2999398&page=l (last visited Sept. 30, 2008).

1 6. See Stop the Sale of Murderabilia to Protect the Dignity of Crime Victims Act of 2007,
S. 1528, 110th Cong. (2007).

17. Barnard, supra note 4.

18. 502 U.S. 105(1991).

19. Id. at 1 18 (quoting Hustler Magazine, Inc. v. Falwell, 485 U.S. 46, 55 (1988)).

414 INDIANA LAW REVIEW [Vol. 42:41 1

in Simon & Schuster further acknowledged that the New York State Crime
Victims Board (Board), who pursued the proceeds of mobster Henry Hill's
depiction of his exploits, was correct when it did not ^'assert any interest in
limiting whatever anguish . . . victims may suffer from reliving their
victimization."^^ Although protecting crime victims from this particular agony
is not a state interest powerful enough to overcome First Amendment concerns,
the Court in Simon & Schuster identified two compelling interests — preventing
prisoners from profiting from their crimes and compensating victims of
crime — which do justify relief for some victims.^^

B. Prisoners Profiting from Their Crimes

A state has "no compelling interest in shielding readers and victims from
negative emotional responses to a criminal's public retelling of his misdeeds."^^
It does "have compelling interests in 'ensuring that victims of crime are
compensated by those who harm them,' . . . 'preventing wrongdoers from
dissipating their assets before victims can recover,' . . . 'ensuring that criminals
do not profit from their crimes,' . . . and transferring the fruits of crime from the
criminals to their victims."^^ The original Son of Sam law set out to accomplish
those goals by providing that any entity contracting with a person accused or
convicted of a crime for the purchase of the rights to the story or depiction of his
crime must turn over any funds due the criminal to the Board. ^"^ The Board
would hold those funds in escrow

for the benefit of and payable to any victim . . . provided that such
victim, within five years of the date of the establishment of such escrow
account, brings a civil action in a court of competent jurisdiction and
recovers a money judgment for damages against such [accused or
convicted] person or his representatives.^^

Senator Comyn's bill provides for both criminal and civil forfeiture of any
funds acquired in violation of his proposed law, as well as civil remedies for
victims including injunction, compensatory and punitive damages, and the cost
of bringing the action.^^ Like the drafters of New York's Son of Sam law,^^
Senator Comyn has attempted to serve those two compelling state

20. Id.

21. Mat 118-19.

22. Keenan v. Superior Court of Los Angeles County, 40 P.3d 718, 727 (Cal. 2002) (citing
Simon & Schuster, 502 U.S. at 1 18).

23. Id. (quoting Simon & Schuster, 502 U.S. at 1 18-20).

24. Simon & Schuster, 502 U.S. at 109 (citing N.Y. EXEC. Law § 632-a(l) (McKinney
1982)).

25. Id. at 109 (quoting N.Y. EXEC. Law § 632-a(l) (McKinney 1982)).

26. Stop the Sale of Murderabilia to Protect the Dignity of Crime Victims Act of 2007, S.
1528, 110th Cong. §§ 3-5 (2007).

27. Simon & Schuster, 502 U.S. at 118.

2009] AN EXAGGERATED RESPONSE 415

interests — compensating victims and keeping criminals from profiting from their
crimes. The United States Supreme Court determined that the original Son of
Sam law was unconstitutional, however, in that it violated a prisoner's First
Amendment right to free speech.^^ Li order to determine whether Senator
Comyn' s proposed law, which takes an entirely different approach from past and
current anti-profiting legislation, would pass constitutional muster, it is necessary
to examine the flaws uncovered in the original Son of Sam law and in other state
laws modeled after it.

n. The Troubled History of Son of Sam Laws

A. Simon & Schuster v. Members of New York State Crime Victims Board

In the summer of 1977, postal worker David Berkowitz, the self-named "Son
of Sam," caused terror among the citizens of New York and profound grief
among his victims, their families, and loved ones.^^ His "murder spree . . .
claimed six lives, left seven injured and set off the most extensive manhunt in
New York City history."^^ Although the terror may have subsided upon
Berkowitz' s capture, the pain suffered by victims and their families lingered.
Rumor had it that Berkowitz stood to make a substantial profit from the
publishing rights to his story. ^' The New York legislature quickly enacted a law
to prevent him from profiting from his crimes. ^^

The statute's intent was "to 'ensure that monies received by the criminal
under such circumstances shall first be made available to recompense the victims
of that crime for their loss and suffering. '"^^ Ironically, the statute was never
enforced against Berkowitz for two reasons. First, he was found incompetent to
stand trial and the version of the statute in force at the time applied only to
convicted persons.^"^ Second, Berkowitz voluntarily donated the proceeds from
a book about himself to the victims of his crimes and their estates. ^^

Six years later. New York attempted to enforce the law against mobster
Henry Hill, an admitted perpetrator of a multitude of crimes, who, in exchange
for his testimony against fellow organized crime members, was granted immunity
and was admitted to the Federal Witness Protection Program.^^ When the Board
became aware that Hill had contracted with publisher Simon & Schuster for a
book about his life, it notified the publisher that, pursuant to the Son of Sam law,

28. Id. at 123.

29. Mat 108.

30. George Kodak, Son of Sam Is Arrested, A.B.A. J., Aug. 2007, at 72.

3 1 . See id.

32. Simon cfe Schuster, 502 U.S. at 108.

33. Id. (quoting Assembly Bill Memorandum Re: A 9019, July 22, 1977, reprinted in
Legislative Bill Jacket, 1977 N.Y. Laws, ch. 823).

34. Id. atUl.

35. Id.

36. Id. at 112.

416 INDIANA LAW REVIEW [Vol. 42:41 1

the publisher must turn over its contract with Hill, as well as any proceeds due
to him.^^ Simon & Schuster filed suit under 42 U.S.C. § 1983, claiming that the
law was a violation of the First Amendment and seeking injunction against its
enforcement.^^ The district court found the law constitutional^^ and a divided
Second Circuit agreed."^^ "Because the Federal Government and most of the
States [had] enacted statutes with similar objectives,'"^' and because the "issue
is significant and likely to recur,'"^^ the Supreme Court granted certiorari."^^

1. Content-Based Speech Regulation. — The Court first recognized that the
New York law, which targeted a criminal's proceeds earned from any depiction
of his crime, was a "content-based statute" in that "[i]t singles out income
derived from expressive activity for a burden the State places on no other
income, and it is directed only at works with a specified content.'"^"^ As the Court
had previously stated and reiterated in this case:

The constitutional right of free expression is . . . intended to remove
governmental restraints from the arena of public discussion, putting the
decision as to what views shall be voiced largely into the hands of each
of us ... in the belief that no other approach would comport with the
premise of individual dignity and choice upon which our political system
rests. "^^

The Court determined that the provision in the statute that "escrows all of the
speaker's speech-derived income for at least five years" operated as a
"disincentive [] to speak."^^ Applying strict scrutiny, the Court then proceeded
to determine whether the law was "narrowly tailored to advance" the State's
compelling interest in ensuring that crime victims are compensated."^^

2. Overinclusiveness. — The Court found the law "significantly
overinclusive" in two ways."^^ First, it targeted "works on any subject, provided

37. /J. at 114.

38. /J. at 114-15.

39. Simon & Schuster, Inc. v. Members of the N.Y. State Crime Victims Bd., 724 F. Supp.
170, 180 (S.D.N.Y. 1989), ajf'd sub nom., Simon & Schuster, Inc. v. Fischetti, 916 F.2d 977 (2d
Cir. 1990), rev'd, 502 U.S. 105 (1991).

40. See Simon & Schuster, 916 F.2d at 778, rev'd 502 U.S. 105 (1991).

41. Simon & Schuster, 502 U.S. at 1 15 (citing 18 U.S.C. § 3681 (1988)); Karen M. Ecker &
Margot J. O'Brien, Note, Simon & Schuster, Inc. v. Fischetti; Can New York's Son of Sam Law
Survive First Amendment Challenge?, 66 NotreDameL. Rev. 1075, 1075 n.6 (1991) (listing state
statutes).

42. Simon & Schuster, 502 U.S. at 1 15.

43. Simon & Schuster v. Members of the N.Y. State Crime Victims Bd., 498 U.S. 1081
(1991).

44. Simon & Schuster, 502 U.S. at 1 16.

45. Id. (quoting Leathers v. Medlock, 499 U.S. 439, 448-49 (1991)).

46. Mat 116-17.

47. See id. ^i 120-21.

48. Id. 2X121.

2009] AN EXAGGERATED RESPONSE 417

that they express the author's thoughts or recollections about his crime, however
tangentially or incidentally.'"^^ Second, the Court determined that the application
of the law was overbroad in that the state's definition of "person convicted of a
crime," included "any author who admits in his work to having committed a
crime, whether or not the author was ever actually accused or convicted."^^ The
Court expressed concern that these two provisions combined to "encompass a
potentially very large number of works" that would be subject to enforcement.^'
Consequently, the Court reversed, finding that the law was not narrowly tailored
to advance the compelling interest of compensating victims of crimes^^ and was,
hence, "too overinclusive to satisfy the requirements of the First Amendment."^^

B. Son of Sam Laws After Simon & Schuster

After the Supreme Court struck down New York's Son of Sam law in 1991,
many states attempted to amend their own Son of Sam laws^"^ to comply with the
Court's holding with limited success.^^ The states are in good company, though.
The federal Son of Sam law^^ contains provisions similar to the New York law
and, consequently, "the current guidance from the Justice Department to its line
prosecutors is that this law cannot be used because of constitutional problems. "^^
The evolution of the law in this area is slow-going — Son of Sam laws target
criminals who, in those relatively rare instances, have the potential to make
significant money from their notoriety. As the Court pointed out in Simon &
Schuster, the New York law was "invoked only a handful of times," in cases of
"highly publicized crimes. "^^ Since Simon & Schuster, only a few states have
faced challenges to their own anti-profiting laws that were amended or revised
in an attempt to comply with the Court's holding.^^ Maryland's law was one of

49. Id.

50. Id. (citing N.Y. ExEC. Law § 632-a(10)(b) (McKinney 1982)).

51. Id. Examples of works that would fall under the statute because they include some
admission by the author of the commission of past crimes include The Autobiography of Malcolm
X, Henry David Thoreau's Civil Disobedience, and The Confessions of Saint Augustine, among
others. See id.

52. /^. at 123.

53. /^. atl22n*.

54. See In re Opinion of the Justices to the Senate, 764 N.E.2d 343, 347 n.4 (Mass. 2002)
(citing state statutes modeled after New York's law).

55. See, e.g., Keenan v. Superior Court, 40 P.3d 7 1 8, 728 n. 13 (Cal. 2002) (noting that as of
2002, only one other state Son of Sam law had been invalidated since Simon & Schuster,
specifically, Rhode Island's law in Bouchard v. Price, 694 A.2d 670 (R.I. 1997)); Opinion of the
Justices, 764 N.E.2d at 343; Seres v. Lemer, 102 P.3d. 91 (Nev. 2004).

56. 5^el8U.S.C. §3681 (2006).

57. Paul G. Cassell, Crime Shouldn't Pay: A Proposal to Create an Effective and
Constitutional Federal Anti-Profiting Statute, 19 FED. Sent'G Rep. 119, 119 (2006).

58. Simon & Schuster, 502 U.S. at 11 1 .

59. See, e.g., Keenan, 40 P. 3d at 734 n.22 (holding that the provisions of California's Son

4 1 8 INDIANA LAW REVIEW [Vol. 42:4 11

the first challenged.^^

L Curran v. Price.^^ — Maryland amended its Son of Sam law in 1992 in
response to Simon & Schuster io make "its provisions content-neutral and remedy
the problem of overbreadth."^^ The law provided that any "'person' who enters
into a notoriety of crimes contract with a 'defendant' "^^ must submit that contract
to the attorney general for a determination of whether it is a notoriety of crimes
contract.^ If the defendant chooses to contest the determination, the attorney
general determines whether the "subject matter of the contract only tangentially
or incidentally relates to the crime"^^ (in which case, the contract would not be
affected by the Son of Sam law). Any monies due the defendant as a result of a
notoriety of crimes contract must be paid to the attorney general and held in
escrow for the compensation of crime victims. ^^

In 1993 the newly-amended law was challenged when former school teacher
Ronald Price was indicted for "sexual child abuse and unnatural and perverted
practices committed upon former students."^^ Price basked in the media attention
that resulted from his indictment.^^ When the assistant attorney general assigned

of Sam law were "invalid infringements on speech" under both the U.S. and California
constitutions); Seres, 102 P.3d. at 100 (finding that the Nevada law, like the New York law,
suffered from overinclusiveness).

60. See Curran v. Price, 638 A.2d 93 (Md. 1994).

61. 638 A.2d 93, 98 (Md. 1994).

62. Id. at 99.

63. Id. at 96 (citing Md. Ann. Code art. 27, § 764(a)(5) (1992 Repl. Vol. & Supp. 1993)
(repealed 2001)). The court quoted the statute, which indicated that a notoriety of crimes contract
is

a contract with respect to

"(i) The reenactment of a crime by way of a movie, book, magazine article, tape
recording, phonograph record, radio or television presentation, or live entertainment of
any kind;

(ii) The expression of the defendant's thoughts, feelings, opinions, or emotions
regarding a crime involving or causing personal injury, death, or property loss as a
direct result of the crime; or

(iii) The payment or exchange of any money or other consideration or the proceeds or
profits that directly or indirectly result from a crime, a sentence, or the notoriety of a
crime or sentence."
Id. (quoting MD. ANN. CODE art. 27, § 764(a)(5) (1992 & Supp. 1993) (repealed 2001)).

64. Id. (citing Md. Ann. Code art. 27, § 764(b) (1992 & Supp. 1993) (repealed 2001)).

65. Id. at 96 (cifing Md. Ann. Code art. 27, § 764(c)(3) (1992 & Supp. 1993) (repealed
2001)).

66. Id. (citing Md. Ann. Code art. 27, § 764(b) (1992 & Supp. 2003) (repealed 2001)).

67. Id. at 97.

68. Id. As a result of his indictment. Price "appeared on national television talk shows
acknowledging that he had engaged in sexual relationships with several of his female high school
students" and "granted interviews to various local and national news media." Id. In one interview,
he admitted that he had "entered into a contract to sell 'his story.'" Id.

2009] AN EXAGGERATED RESPONSE 419

to the case learned that Price had entered into a contract to relate the details of
his crime, he demanded a copy of the contract to determine whether it fit the Son
of Sam law' s definition of a notoriety of crimes contract.^^ Price claimed that the
statute was unconstitutional and refused to turn over the contract. The attorney
general filed a complaint for injunctive relief 7^

The trial court found the statute "unconstitutional and unenforceable."^^ It
determined that the law was a "content-based regulation of speech" because the
"notoriety of crimes contract was one respecting the expression of the
defendant's thoughts, feelings, opinions or emotions regarding a crime."^^ It
further found that the statute "swept so broadly as to reach forms of expression
which the State had no compelling interest to regulate. "^^

On appeal, the attorney general petitioned the higher court to determine the
statute' s constitutionality.^"^ The Maryland Court of Appeals, however, chose not
to make that determination.^^ The court instead focused on the language of the
statute and determined that the law's provision requiring a person entering into
a notoriety of crimes contract with a defendant to submit that contract to the
attorney general put no burden on the defendant to produce the contract.^^ The
court acknowledged that

it will be difficult for the Attorney General to obtain a contract where the
identity of the other contracting party is not known[,] [b]ut the other
party to the contract is required by the statute to produce it, and
assuming the constitutionality of§ 764, is subject to a severe penalty for
failure to do so.^^

Despite the court's reluctance to make a determination of the constitutionality of
the statute, the trial court's analysis, combined with the appeals court's
statement, indicates that the Maryland Son of Sam law would not pass
constitutional muster if challenged.^^

2. State V. Letoumeau.^^ — In 1997, Washington school teacher Mary K.
Letoumeau gained notoriety when she was charged with child rape after
admitting to a sexual relationship with one of her teenage students. ^^ At her

69. Id.

70. Id.

71. Id.

11. Id. (internal quotation marks omitted).

73. Id.

74. /J. at 97-98.

75. Id. at 104, 107.

76. /d at 106.

77. Id. at 107 (emphasis added). The court, having found that the suit against Price was not
authorized by statute, chastised the trial court for addressing the constitutionality of the Son of Sam
law. Id.

78. See generally Curran v. Price, 638 A.2d 93 (Md. 1994).

79. 997 P.2d 436 (Wash. Ct. App. 2000).

80. Mat 439-40.

420 INDIANA LAW REVIEW [Vol. 42:41 1

guilty plea hearing, the judge attached conditions to her suspended eighty-nine-
month sentence^' including that she have no contact with her victim and that she
"not receive any tangible or intangible property . . . that is a direct or indirect
result of her commission of the crimes — in other words, she was ordered not to
profit from publishing or otherwise commercializing the story of her crimes."^^
One professional who evaluated Letoumeau for the purpose of the alternative
sentencing recommended that she not be permitted any contact with the media
because "[b]eing the center of attention feeds into her narcissism and undermines
her treatment. If treatment is undermined, it increases the likelihood of
reoffense."^^ However, the trial court's order prohibited financial gain rather
than media contact.^"^ In fact, the court referenced Washington's Son of Sam
statute when discussing that particular probation condition.^^

After Letoumeau was discovered in the company of her victim, the trial court
revoked the suspension of her sentence, but ruled that the condition against her
profiting from her crime was still in effect.^^ Letoumeau then challenged the
constitutionality of Washington's Son of Sam statute as "violative of the First
Amendment."^^ The court of appeals found it unnecessary to mle on the
constitutionality of the Son of Sam law because it held that the trial court erred
in continuing the conditions of probation (including the financial gain
prohibition) once probation was revoked.^^ Therefore, the court granted
Letoumeau relief without directly addressing the Son of Sam law's
constitutionality.^^

The court did, nevertheless, offer a hint as to its opinion about the anti-
profiting law when it stated that "[t]o forbid convicted persons from acquiring
any such properties [acquired by reason of the convicted person's
commercialization of the crime] in the first place would fmstrate a means by
which the Legislature has chosen to fund compensation for victims of crime."^^
The court further pointed out that there was no "showing in this record that
Letoumeau committed second degree rape of a child in order to profit from
telling her story" or that "allowing her to profit from commercialization of the
story of her crimes increases the likelihood that she will commit the offense
again."^^ The court seemed to indicate its support for the Son of Sam law's

81. /fif. at 438. The Court granted Letoumeau 's request for a Special Sexual Offender
Sentencing Alternative and suspended her sentence provided certain conditions were met. See id.

82. Id.

83. Id. at 442 (internal quotation marks omitted).

84. Id.

85. Id. at 439.

86. /J. at 438-39.

87. Id. Sit 439.

88. Id

89. Id.

90. Id. at 443.

91. Id.

2009] AN EXAGGERATED RESPONSE 421

purpose, but remained silent as to its constitutional flaws.^^

3. In re Opinion of the Justices to the Senate.^^ — After Simon & Schuster,
Massachusetts repealed its existing Son of Sam law and drafted a new law,
ostensibly resolving the problems identified by the United States Supreme Court
in the New York law.^"^ The proposed amended law provided that

certain contracts with a person who committed a crime be submitted to
the division of victim compensation and assistance within the
Department of the Attorney General (division) for its determination
whether the proceeds under the contract are substantially related to a
crime. If so, the contracting entity must pay over to the division any
monies which would otherwise be owed to the person who committed
the crime. The funds are then to be deposited into an escrow account
and made available to the victims of the crime.^^

According to the court, the bill defined '"[p]roceeds related to a crime' as 'any
assets, material objects, monies, and property obtained through the use of unique
knowledge or notoriety acquired by means and in consequence of the commission
of a crime."^^

The state senate asked the Massachusetts Supreme Court for an opinion as
to whether the new bill violated the First Amendment.^^ The court found that
although the bill targeted proceeds from the sale of items that were not related
to speech, it still suffered from constitutional defects. ^^ A portion of the bill
required that the state make a determination and distinguish between proceeds
''substantially related to a crime" and those "relating only tangentially to, or
containing only passing references to, a crime."^^ As the court stated, "[b]y
definition, if the applicability of the bill's requirements can only be determined
by reviewing the contents of the proposed expression, the bill is a content-based
regulation of speech." ^^^ The bill had not successfully eliminated the content-
based problem that plagued the original Son of Sam law.^^'

4. Keenan v. Superior Court. ^^^ — Thirty-five years after his kidnapping.

92. See id.

93. 764 N.E.2d 343 (Mass. 2002).

94. See id. at 347 (noting that New York had also repealed its Son of Sam Law and replaced
it with a new law intended to remedy the flaws in the original law).

95. Mat 345.

96. Id.

97. /^. at 344-45.

98. /J. at 347.

99. Id. at 345.

100. /J. at 348.

101. It is worth noting that the court was concerned only with the limits on speech, and that
"portions of . . . [the bill] regulate nonexpressive activity, and those portions would not violate or
otherwise impinge on the right of freedom of speech." Id. at 347.

102. 40P.3d718(Cal. 2002).

422 INDIANA LAW REVIEW [Vol. 42:4 1 1

Frank Sinatra, Jr. sought enforcement of California's Son of Sam law.^^^ The
January 1998 issue of A^^w Times Los Angeles contained an article based on the
author's interviews with Sinatra's convicted kidnappers entitled Snatching
Sinatra}^ The profits from the story were to be split among the publisher, the
author, and the kidnappers. *^^ In addition, other publications reported that
Columbia pictures had purchased the rights to the kidnapping story for $1.5
million. ^°^ Sinatra insisted that the studio withhold payment to the kidnappers or
their representatives and, upon Columbia's refusal, he filed suit seeking
enforcement of California's Son of Sam law.'^^

Sinatra argued that the California law, unlike the New York law, was not
facially invalid. ^^^ The California law attempted to avoid the overinclusiveness
of the overturned New York law in two ways. First, it targeted proceeds "'based
on' the 'story' of a felony for which the felon was convicted, except where the
materials mention the felony only in 'passing . . . , as in a footnote or
bibliography. '" '^^ The court held that this exception was insufficient to eliminate
the content-based element of the statute.**^ It still "places a direct financial
disincentive on speech or expression about a particular subject."* ^^ Under strict
scrutiny, the law suffered from overinclusiveness similar to the New York law. * *^
Second, the law applied only to convicted felons which purported to eliminate
the Supreme Court's concern expressed in Simon & Schuster about enforcement
against those who have ''admitted crimes for which he or she had not been
convicted."**^ "Though section 2225(b)(1), unlike the New York law, applies
only to persons actually convicted of felonies, and states an exemption for mere
'passing mention of a felony, as in a footnote or bibliography,' these differences
[did] not cure the California statute's constitutional flaw."**"^

103. Mat 722-23.

104. /^. at 723.

105. Id.

106. Id.

107. Id. The portion of the statute that the Petitioner challenged was the part of section 2225
modeled largely after New York's law (section 2225(b)(1)). See id. at 721 n.4. What was not
addressed by this court, because it was not raised by the Petitioner, is the constitutionality of section
2225(b)(2), which "confiscates profits from memorabilia, property, things, or rights sold for values
enhanced by their felony-related notoriety value." See id.

108. Seeid.2iil23.

109. Id. at 721 (quoting Cal. CiV. CODE § 2225 (1986), reprinted in Cal. Civ. Code §
2224. l(a)(D)(7) (1985)).

110. Mat 728.

111. Id.

112. See id. at 731.

113. Id. at 722 (citing Simon & Schuster, Inc. v. Members of the N.Y. State Crime Victims
Bd., 502 U.S. 105, 121(1991)).

114. Id. (internal citations omitted). Additionally, although the court did not directly address
the issue, the ACLU suggested that the statute was overbroad in another way — it provided that
confiscated funds earned by the felon, if not claimed by the victim of the crime within a five year

2009] AN EXAGGEP^TED RESPONSE 423

5. Seres v. Lemer.^*^ — Convicted killer Jimmy Lemer wrote a book while
he was incarcerated in the Nevada State Prison, which recounted his life in prison
and "contained descriptions of the events surrounding the killing" of his
victim. ^^^ The victim's sister brought suit on behalf of their mother under
Nevada' s Son of Sam law. ^ ^^ The law allowed a victim to bring an action "which
arises from the commission of a felony, against the person who committed the
felony within [five] years after the time the [criminal] . . . becomes legally
entitled to receive proceeds for any contribution to any material that is based
upon or substantially related to the [crime] . . . against that victim." *^^

Although the state attorney general argued that the law was simply an
enlargement of the statute of limitations for tort actions brought by victims of
crime, the Nevada Supreme Court disagreed and applied Simon & Schuster }^^
The court stated that Nevada's Son of Sam law "allows recovery of proceeds
from works that include expression both related and unrelated to the crime,
imposing a disincentive to engage in public discourse and nonexploitative
discussion of it" and was, therefore, overinclusive under Simon & Schuster's
strict scrutiny analysis. ^^^

ni. Senator Cornyn's Approach

The proposed "Stop the Sale of Murderabilia to Protect the Dignity of Crime
Victims Act of 2007"'^^ was introduced in the United States Senate by Senator
John Comyn on May 24, 2007,'^^ and introduced in the United States House of
Representatives by co-sponsors, Congressmen Dave Reichert (R-Washington)
and Brad Ellsworth (D-Indiana), on September 25, 2007.^^^ The bill represents
a new approach for advancing those two compelling state interests identified in
Simon & Schuster — ensuring that criminals do not profit from their crimes and
compensating victims. ^^"^ The bill provides, in part, that

any person who, while incarcerated in a prison, knowingly deposits for
mailing or delivery, or knowingly causes to be delivered by mail, any

period, be turned over to the state's crime victims restitution fiind, forcing a convicted felon to
"give up speech-related income for the benefit of crime victims generally, even after his own
victims have been compensated." See id. at 731 n.l7.

115. 102P.3d.91(Nev. 2004).

116. /^. at92.

117. Id.

118. Nev. Rev. Stat. § 217.007 (1993), construed in Seres, 102 P.3d at 94.

1 19. See Seres, 102 P.3d at 99.

120. Mat 100.

121 . Stop the Sale of Murderabilia to Protect the Dignity of Crime Victims Act of 2007, S.
1528, 110th Cong. (2007).

122. See 153 CONG. Rec. S6,844-01 (daily ed. May 24, 2007).

123. See 153 CONG. Rec. H10,762-03, H10,763-02 (daily ed. Sept. 25, 2007).

124. See Simon & Schuster, Inc. v. Members of the N.Y. State Crime Victims Bd., 502 U.S.
105, 118-19(1991).

424 INDIANA LAW REVIEW [Vol. 42:41 1

property, article, or object, with intent that the property, article, or object
be placed in interstate or foreign commerce, shall be fined under this title
and imprisoned not less than 3 years and not more than 10 years. Any
sentence imposed under this subsection shall run consecutive to any
other sentence imposed. ^^^

Rather than target proceeds as they are earned, this bill attempts to prevent
prisoners fi*om earning any money in the first place. *^^

Senator Corny n made no remarks on the record when he introduced the bill
in the Senate, ^^^ but his co-sponsors, both of whom are former law enforcement
officers, spoke on behalf of the proposed law in the House of Representatives. ^^^
Their remarks reveal the bill's intended purpose. '^^ By no coincidence, the bill
was introduced in the House on the National Day for Remembrance for Murder
Victims. ^^^ Congressman Ellsworth spoke of his experience in law enforcement
where he "saw firsthand the devastation violent crimes bring to victims and their
families and to the communities where they occur."^^* He professed "the need
to defend victims rights in the aftermath of their unspeakable loss."*^^ He
declared that the proposed legislation would "prohibit America's most heinous
criminals and murderers'' from exploiting their crimes "by preventing criminals
from selling their wares in public auction." *^^

Congressman Reichert was no less passionate with his remarks. He also
recognized that day as a "National Day of Remembrance for Murder Victims"
and recounted the "pain on the faces of victims and victims['] families,
unexplainable, unimaginable pain that covers their faces and their families for the
rest of their [lives]."^^"^ He expressed both his concern over prisoners "using their
fame and notoriety to make a buck," and his disdain for the "industry coined as
'murderabilia,' where tangible goods owned and/or created by convicted
murderers are sold for their profit."^^^ He added that this proposed legislation
"aims to shut down this business. "^^^

Congressman Ellsworth's references to "America's most heinous
criminals"^^^ and "victims of violent crimes"^^^ reveal that he is primarily

125. S. 1528, § 2(a).

126. Id.

111. See 153 CONG. Rec. 86,844-01 (daily ed. May 24, 2007).

128. See 153 CONG. Rec. H10,762-03, H10,763-02 (daily ed. Sept. 25, 2007).

129. See id.

130. See id.

131. 153 Cong. Rec. H10,762-03 (daily ed. Sept. 25, 2007) (statement of Rep. Ellsworth).

132. Id.

133. Id. (emphasis added) .

134. 153 Cong. Rec. H10,763-02 (daily ed. Sept. 25, 2007) (statement of Rep. Reichert).

135. Id.

136. Id.

137. 153 Cong. Rec. H10,762-03 (daily ed. Sept. 25, 2007).

138. Id.

2009] AN EXAGGERATED RESPONSE 425

concerned about murderabilia sales related to violent criminals. Unfortunately,
the bill does not distinguish between violent and non-violent criminals, nor does
it make allowance for the fact that some crimes are victimless. ^^^ It seeks to
impose its restrictions on all prisoners, regardless of the crimes they
committed. ^"^^ Additionally, although this bill does not specifically target speech,
it necessarily restricts free speech through the sweeping language in its
provisions. An examination of the bill's constitutional implications is, therefore,
worthwhile.

A, The First Amendment

The Supreme Court held that the original Son of Sam law violated the First
Amendment right to free speech. ^"^^ Applying strict scrutiny, it also determined
that because the regulation was content-based it must be "narrowly tailored to
advance" a compelling state interest in order to survive a constitutional
challenge. '"^^ "[E]ven regulations aimed at proper governmental concerns can
restrict unduly the exercise of rights protected by the First Amendment." ^"^^
Whether the bill is deemed a content-based or content-neutral regulation
determines the level of scrutiny to which it would be subjected if it were adopted
and subsequently challenged.*'^

On its face. Senator Comyn's bill does not appear to be a prohibition against
free speech, but rather a prohibition against prisoners making money. ^"^^ By
preventing prisoners from delivering or mailing items for the purpose of sale
beyond the prison gates, ^"^^ the bill seeks to avoid the content-based element that

1 39. See Stop the Sale of Murderabilia to Protect the Dignity of Crime Victims Act of 2007,
S.1528, 110th Cong. (2007).

140. Id. § 2(a).

141. Simon & Schuster, Inc. v. Members of the N.Y. State Crime Victims Bd., 502 U.S. 105,
123(1991).

142. Mat 121.

143. Id. at 1 17 (quoting Minneapolis Star & Tribune Co. v. Minn. Comm'r of Revenue, 460
U.S. 575, 592(1983)).

144. See State ex rel. Napolitano v. Gravano, 60 P.3d 246, 253 (Ariz. Ct. App. 2002) (stating
that content-neutral regulations of speech are subject to an intermediate level of scrutiny, thus they
must further an important governmental interest that is unrelated to the suppression of free speech
and any incidental burden on free speech must not be greater than necessary to further that interest);
Seres v. Lemer, 102 P.3d. 91, 96 n.31 (Nev. 2004) (citing Renton v. Playtime Theatres, Inc., 475
U.S. 41, 47-48 (1986)).

145. See Stop the Sale of Murderabilia to Protect the Dignity of Crime Victims Act of 2007,
S.1528, 1 10th Cong. § 2(a) (2007).

146. Id. The bill does include exceptions, allowing the mailing or delivery of an item if the
purpose

is to satisfy debt that is — (A) imposed by law or a court order, including — (i) support
obligations; (ii) property taxes; (iii) income taxes; (iv) back taxes; (v) a legal judgment,
fine, or restitution; (vi) fees to cover the cost of incarceration, including fees for health

426 INDIANA LAW REVIEW [Vol. 42:4 11

existed in the original Son of Sam law and its progeny. ^"^^ In those laws, now
deemed unconstitutional, the target was expressive activity specifically related
to the crime committed by the speaker. ^"^^ This proposed law neither singles out
expressive activity, nor makes any reference to the content of the speech. ^"^^ Its
all-inclusiveness, however, necessarily regulates expressive activity.

The Supreme Court has stated that "the State may . . . enforce regulations of
the time, place, and manner of expression which are content-neutral, are narrowly
tailored to serve a significant government interest, and leave open ample
alternative channels of communication.'*'^^ "The principal inquiry in determining
content neutrality, in speech cases generally and in time, place, or manner cases
in particular, is whether the government has adopted a regulation of speech
because of disagreement with the message it conveys."*^' Further, a "time, place,
or manner regulation may [not] burden substantially more speech than is
necessary to further the government' s legitimate interests."'^^ "Government may
not regulate expression in such a manner that a substantial portion of the burden
on speech does not serve to advance its goals."'^^

1. Government Interests. — The government interest suggested by the title of
the bill is to stop the sale of murderabilia and protect the dignity of crime victims.
The provisions of the bill appear to be designed to advance the two compelling
interests identified by the Court — compensating crime victims '^"^ and preventing
criminals from profiting from their crimes. '^^ As Andy Kahan, the original
proponent of the bill, remarked:

If you [prisoners] want to draw, paint, doodle, sketch, or whatever, feel

care while incarcerated . . . ; and (vii) other financial obligations mandated by law or a
court order; or (B) incurred through a contract for — (i) legal services; (ii) a mortgage
on the primary residence of the immediate family of the prisoner; (iii) the education or
medical care of the prisoner or a member of the immediate family of the prisoner; or (iv)
life, health, home, or car insurance.
Id. § 2(d)(1).

147. See, e.g., Simon & Schuster, 502 U.S. at 1 16; Keenan v. Superior Court of Los Angeles
County, 40 P.3d 718, 729 (Cal. 2002); Seres, 102 P.3d. at 96.

148. See, e.g., Simon & Schuster, 502 U.S. at 1 16 (1991); Keenan, 40 P.3d at 729; Seres, 102
P.3d. at 96.

149. 5^eS.1528§2(a).

150. Frisby v. Schultz, 487 U.S. 474, 481 (1988) (quoting Perry Educ. Ass'n v. Perry Local
Educators' Ass'n, 460 U.S. 37, 45 (1983)).

151. Ward v. Rock Against Racism, 491 U.S. 781, 791 (1989) (citing Clark v. Cmty. for
Creative Non- Violence, 468 U.S. 288, 295 (1984)).

152. Id. at 799 (citing Frisby, 487 U.S. at 485).

153. Id.

154. See S. 1528 § 2(d)(1)(A). The bill makes an exceptions for a mailing or delivery for the
purpose of satisfying "a legal judgment, fine, or restitution." Id.

155. See Simon & Schuster, Inc. v. Members of the N.Y. State Crime Victims Bd., 502 U.S.
105, 118-19(1991).

2009] AN EXAGGERATED RESPONSE 427

free to do so. You're just not going to make any money off of it. And
if you're truly remorseful, then go ahead and ship your artwork out and
let all proceeds go back to the victim's [sic] families. You shouldn't
make one red cent.*^^

Kahan' s passionate concern for victims of violent crime, however admirable, and
his disdain for violent criminals, however understandable, do not change the fact
that the bill goes far beyond its intended goal of protecting victims from the
indignity of seeing crime-related items appear for sale on the Internet. The bill
targets all prisoners, regardless of the circumstances surrounding their
convictions*^^ and prohibits the sale of "any property, article, or object," *^^
regardless of whether the items are related to the prisoners' crimes.

2. Overinclusiveness. — It is questionable whether Senator Comyn's anti-
profiting bill is "narrowly tailored to serve a significant government interest" as
required by the Court in a content-neutral time, place, or manner regulation of
expression. *^^ Although sometimes a law that is broader is better able to
withstand constitutional challenge than one that targets a particular activity
(especially speech), '^° that may not be the case with the proposed bill. Some of
the activity banned by this bill has absolutely no relation to any government
interest.*^* The bill applies to all prisoners, regardless of whether their crimes
have an identifiable victim. *^^ If there is no victim then there may be no one
deserving of compensation. The co-sponsors of the bill, as well as its chief
proponent, Andy Kahan, all seem to be concerned about victims of violent
crimes, specifically murder, *^^ and yet their bill makes no distinction between a
"cold-blooded, diabolical killing machine" '^"^ and a person convicted of a
victimless crime. *^^ Additionally, the bill would affect prisoners who lack any

156. Day to Day, supra note 3.

157. S.1528§2(a).

158. Id.

159. Frisbyv.Schultz, 487 U.S. 474, 481-82 (1988).

160. For instance, in Barnes v. Glen Theatre, Inc., 501 U.S. 560, 565-66 (1991), owners of
a bar that featured nude dancing challenged Indiana's public nudity statute, claiming a violation of
free speech (because it restricted "expressive" dancing). The Court held the statute constitutional,
applying United States v. O'Brien, 391 U.S. 367 (1968), and suggesting that the significant
government interest was "protecting societal order and morality." See Barnes, 501 U.S. at 567-68.

161 . By way of example, suppose if a prisoner convicted of drug possession paints a landscape
while in prison and wishes to sell it. No identifiable government interest is stymied. The prisoner
has neither profited from his crime nor left any victim uncompensated.

162. S^^S.1528§2(a).

163. See 153 CONG. Rec. H10,762-03, H10,763-02 (daily ed. Sept. 25, 2007); Day to Day,
supra note 3. Kahan states: "[T]here's nothing more nauseating and disgusting than to find out
the person who murdered one of your loved ones now has items being hawked by third parties for
pure profit." Day to Day, supra note 3.

164. Day to Day, supra note 3.

165. In a victimless crime, presumably there would be no civil judgment or restitution order

428 INDIANA LAW REVIEW [Vol. 42:41 1

notoriety and whose personal items are not likely to appeal to the consummate
murderabilia collector.

Senator Comyn's bill may be a content-neutral regulation, but like its
content-based predecessors, it

penalizes . . . speech to an extent far beyond that necessary to transfer
the fruits of crime from criminals to their uncompensated victims. . . .
By this financial disincentive, . . . [it] discourages the creation and
dissemination of a wide range of ideas and expressive works which have
little or no relationship to the exploitation of one's criminal misdeeds. ^^^

It fails to meet the Court's requirement for a content-neutral, time, place, or
manner regulation in that it does not "leave open ample alternative channels of
communication." ^^^ As the Court stated: "By denying compensation for an
expressive work, a law may chill not only the free speech rights of the author or
creator, but also the reciprocal First Amendment right of the work's audience to
receive protected communications." ^^^ For many of the activities banned by this
bill, there is no significant government interest to justify the prohibition and the
"practical effect . . . [of the bill would be] to chill a wide range of expression." ^^^

B. Applying Turner v. Safley

170

A section of the proposed bill provides that "[t]he Director of the Bureau of
Prisons and the head of the department of corrections, or other similar agency,
for any State may promulgate uniform guidelines to restrict the privileges of any
person that violates this section." ^^^ Consequently, if the bill were adopted,
enforced, and challenged, a target of that challenge could be a prison
administrator who imposed sanctions on a prisoner. It is beneficial, therefore, to
analyze the constitutionality of the bill under the Supreme Court's holding in
Turner v. Safley, ^^^ where the Court held that prison regulations that impinge on

resulting from the crime, and hence no uncompensated victim.

166. Keenan v. Superior Court of Los Angeles County, 40 P.3d 718, 731 (Cal. 2002).

167. Frisby v. Schultz, 487 U.S. 474, 481 (1988). The only way for a prisoner to sell a
tangible item (other than a written work, which could be e-mailed if the prisoner had computer
access) is to deposit the item for mailing or delivery. Hence, there is no alternative channel of
communication left open by the proposed legislation.

168. A'^^/i<3/i,40P.3dat729n.l5 (citing Va. Pharmacy Bd. v. Va. Citizens Consumer Council,
425 U.S. 748,756(1976)).

169. In re Opinion of the Justices to the Senate, 764 N.E.2d 343, 349 (Mass. 2002).

170. 482 U.S. 78(1987).

171 . Stop the Sale of Murderabilia to Protect the Dignity of Crime Victims Act of 2007, S.
1528, 1 10th Cong. § 2(c) (2007).

172. Turner, 482 U.S. at 89. It must be noted that the Court might analyze a First Amendment
challenge to the bill just as it would any other First Amendment case. In Johnson v. California, 543
U.S. 499, 500 (2005), a prisoner rights case, Justice O'Connor rejected the use of a Turner analysis,
saying, "The right not to be discriminated against based on one's race is not susceptible to Turner's

2009] AN EXAGGERATED RESPONSE 429

the constitutional rights of prisoners must be * 'reasonably related to legitimate
penological interests." ^^^

In Turner, the Court stated that "[p]rison walls do not form a barrier
separating prison inmates from the protections of the Constitution," ^^"^ but it also
acknowledged the challenges facing prison administrators. ^^^ The Court
identified as its task: "[T]o formulate a standard of review for prisoners'
constitutional claims that is responsive both to the 'policy of judicial restraint
regarding prisoner complaints and [to] the need to protect constitutional
rights. '"^^^ The Court adopted a "lesser standard of scrutiny" than applied by the
Eighth Circuit, ^^^ and devised four factors relevant in deciding whether a prison
regulation affecting a constitutional right that survives incarceration ^^^ withstands
constitutional challenge:

whether the regulation has a "valid, rational connection" to a legitimate
governmental interest; whether alternative means are open to inmates to
exercise the asserted right; what impact an accommodation of the right
would have on guards and inmates and prison resources; and whether
there are "ready alternatives" to the regulation. '^^

An analysis of Senator Comyn's bill, using the lowered standard of scrutiny
set out in Turner reveals that the bill would probably not survive. There is a
valid rational connection between the provisions of the bill and the two
government interests identified by Simon & Schuster }^^ The bill prohibits
prisoners from mailing or otherwise delivering any item with the intent that the
item "be placed in interstate or foreign commerce,"' ^^ thereby preventing any

logic . . . ." See Trevor N. McFadden, Note, When to Turn to Turner? The Supreme Court's
Schizophrenic Prison Jurisprudence, 22 J.L. & POL. 135, 150 (2006) (asserting that Turner
signified a "judicial retreat from the protection of prisoners' rights" but notes that the Court has
refused to apply Turner to certain constitutional claims such as the equal protection claim in
Johnson). Id. at 135-36.

173. TM/Ti^r, 482 U.S. at 89.

174. /^. at84.

175. See id. at 85.

176. Id. (quoting Procunier v. Martinez, 416 U.S. 396, 406 (1974), overruled by Thomburgh
V. Abbott, 490 U.S. 401 (1989)).

177. Id. at 81. The Eighth Circuit Court of Appeals had applied a "strict scrutiny analysis."
Id

178. In Simon & Schuster, the Court struck down the New York's Son of Sam law because it
violated the First Amendment rights of prisoners. This seems to establish that those rights do
survive incarceration. See Simon & Schuster, Inc. v. Members of the N.Y. State Crime Victims
Bd., 502 U.S. 105(1991).

179. Overton v. Bazzetta, 539 U.S. 126, 132 (2003) (quoting Turner, 482 U.S. at 89-91).

180. See Simon tSc Schuster, 502 U.S. at 1 18-19 (identifying two compelling state interests:
( 1 ) "ensuring that criminals do not profit from their crimes"; and (2) "ensuring that victims of crime
are compensated by those who harm them").

181. See Stop the Sale of Murderabilia to Protect the Dignity of Crime Victims Act of 2007,

430 INDIANA LAW REVIEW [Vol. 42:4 1 1

profiting from their crimes. There is an exception to the prohibition when the
profit is used to pay restitution, fines, or civil judgments, which promotes the
compensation of victims. *^^ Where the bill runs into trouble is with the
remaining three factors. If a prisoner wishes to sell something outside the prison
walls, there is no alternative to "knowingly deposit[ing] [the object] for mailing
or delivery." ^^^ By contrast, in Overton v. Bazzetta,^^'^ when the Court considered
a challenged prison regulation that limited prisoners' visitors, it pointed out that
"inmates can communicate with those who may not visit by sending messages
through those who are allowed to visit" as well as "communicate ... by letter and
telephone."^^^

A consideration of the third Turner fdiCXox — the impact on prison staff, prison
resources, and other inmates of allowing the prisoner to exercise his or her
rights'^^ — reveals that this bill is unrelated to the operation of prisons. In
Overton, the Court found that removing the restriction on visitors "would cause
a significant reallocation of the prison system's financial resources and would
impair the ability of corrections officers to protect all who are inside a prison's
walls."^^^ If this new law were adopted, prison officials would likely have to play
a role in its enforcement. For example, additional monitoring of outgoing mail
and other deliveries. This notion, combined with the fact that the bill does not
address any security issues within prisons, demonstrates that prison
administrators are better off without it.

Finally, the last step in the Turner analysis is to determine whether the
regulation is reasonable because of the "absence of ready alternatives. "^^^ There
are reasonable alternatives to Senator Comyn's proposed bill that do not impinge
on prisoners' constitutional rights, but still provide for the compensation of
victims. ^^^ For instance, a law that targets any proceeds from a crime as opposed
to all income that a prisoner might earn during incarceration resolves the
constitutional problems of Simon & Schuster while making funds available for
victim compensation. ^^^

In Turner, the Court described a Missouri prison regulation restricting a
prisoner's right to marry as "an exaggerated response to . . . security objectives"
that "sweeps much more broadly than can be explained by petitioners'
penological objectives."'^^ Likewise, the proposed "Stop the Sale of

S. 1528, 1 10th Cong. § 2(a) (2007).

182. See id. § (2)(d)(l)(A).

183. See id. %2{2i).

184. Overton, 539 U.S. at 126.

185. Mat 135.

186. Turner v. Safley, 482 U.S. 78, 90 (1987).

187. Ovmow, 539 U.S. at 135.

188. TM/Tzer, 482 U.S. at 90.

189. See infra Pan W.

190. See, e.g.. State ex rel Napolitano v. Gravano, 60 P.3d 246, 257 (Ariz. Ct. App. 2002)
(holding law targeting the proceeds of racketeering constitutional).

191. Turner, 482 U.S. at 97-98 (emphasis added).

2009] AN EXAGGERATED RESPONSE 43 1

Murderabilia to Protect the Dignity of Crime Victims Act of 2007" can be
characterized as an exaggerated response to the sale of murderabiha. The bill's
primary purpose is to spare victims and their families from the pain of public
auction of memorabilia related to the crimes against them, and to avoid the pain
of the knowledge that the perpetrators of the crimes are making a profit. ^^^ In an
attempt to accomplish those goals, they have fashioned a law with serious
constitutional weaknesses. A First Amendment content-neutral speech regulation
analysis reveals that the bill is overinclusive in that it "burden[s] substantially
more speech than is necessary to further the government' s legitimate interests."'^^
When analyzed as a prison regulation under Turner, the bill again fails to pass
muster. In addition to the constitutional issues raised by this bill, there are some
potential, possibly unintended, ramifications that add weight to the argument that
it is an exaggerated response to the problem of murderabilia sales.

IV. Collateral Effects OF THE Bill

When Senator Comyn's co-sponsors introduced the bill on the floor of the
United States House of Representatives, they expressed concern about ''tangible
goods owned and/or created by convicted murderers [being] sold for their
profit," ^^"^ and stressed "the need to defend victim[s'] rights in the aftermath of
their unspeakable loss."^^^ In support of those victims, however, they propose a
bill whose provisions target all prisoners, regardless of whether they have been
convicted of a violent crime and whether there are victims to whom the prisoners
owe some form of compensation.'^^ The overinclusiveness of the bill, as well as
the sanctions it includes for violation of its provisions,'^^ necessarily lend
themselves to unintended consequences, including: difficulty for victims in
obtaining the compensation that is due them; a stifling of prison art programs;
and challenges in enforcing the provisions of the bill.

A. Restitution and Victim Compensation

Compensation for victims is a compelling state interest, whether it comes
from adherence to a restitution order or as a damages award brought by the
victim in a civil action against the perpetrator.'^^ The Supreme Court expressed
concern for victims when it acknowledged, in Simon & Schuster, the State's

192. See 153 Cong.Rec. H10,763-02 (daily ed. Sept. 25, 2007); 153 Cong.Rec. H10,762-03
(daily ed. Sept. 25, 2007).

193. Ward v. Rock Against Racism, 491 U.S. 781, 799 (1989).

194. 153 Cong. Rec. H10,763-02 (daily ed. Sept. 25, 2007) (statement of Rep. Reichert).

195. 153 Cong. Rec. H10,762-03 (daily ed. Sept. 25, 2007) (statement of Rep. Ellsworth).

1 96. See Stop the Sale of Murderabilia to Protect the Dignity of Crime Victims Act of 2007,
S. 1528, 1 10th Cong. § 2(a) (2007).

197. Id. § 3.

198. See Simon & Schuster, Inc. v. Members of the N.Y. State Crime Victims Bd., 502 U.S.
105, 118 (1991). Regarding the compelling interest of compensating victims, the Court notes that
"[e] very State has a body of tort law serving exactly this interest." Id.

432 INDIANA LAW REVIEW [Vol. 42:4 11

"interest in preventing wrongdoers from dissipating their assets before victims
can recover."^^^ Senator Comyn's proposed law provides exceptions to the
prohibition against prisoners selling items. Included in those exceptions are sales
for the purpose of satisfying a debt that is "a legal judgment, fine, or
restitution. "^^° The bill also provides that when a prisoner violates the law (i.e.,
the prisoner mails or delivers some item with intent that the item be placed in
interstate or foreign commerce),^^^ the victim may bring a civil suit to recover
damages. ^^^ The law does not, however, provide that the proceeds earned from
the sale be held in escrow to satisfy that civil award.^^^ It provides no mechanism
for ensuring that those profits are transferred to the victim. On the contrary, any
funds earned from violation of the law are to be forfeited to the United States.^^"^
So, if a crime victim is harmed by the sale of some item related to the perpetrator
of the crime against him or her, a civil remedy is available, but there is no
guarantee that funds will be available to satisfy any awarded damages.

B. Rehabilitation Interests

In 1983, Phyllis Kornfeld took a job teaching art to inmates in three
Oklahoma State penitentiaries and began a life-long career helping prisoners
express themselves through art.^^^ In an account of her experiences, she states,
"Personally, it is always an illuminating exciting event to see the prisoners
discover something very positive, and mysterious, coming from inside
themselves. The art is often miraculously fresh, and despite the context, there is
a lot of joy."^^^ She adds that "[s]o many of the prisoners are overtaken with
creative force as soon as they get their hands on the materials, . . . and all I have
to do is get out of the way."^^^ One website where prisoners can sell their art
describes itself as "an open and uncensored forum networking prisoners, prisons
and the world."^^^ On its Prison Art page, it highlights artists including:
"Kaliman" (described as "one of the most prolific artists to emerge out of today's
prison system [whose] . . . artwork reaches deep into the souls of incarcerated

199. Id. ; see Keenan v. Superior Court, 40 P.3d 7 1 8, 736 (Cal. 2002) (Brown, J., concurring)
(stating that "[t]he constitutionality of seizing a criminal's assets to compensate his victims is
beyond dispute").

200. S.1528§2(d)(l)(A)(v).

201. Id. §2(a).

202. Id. § 5.

203. See id.

204. Id. § 3.

205. CellblockVisions.com, Prison Art in America — About Phyllis Kornfeld, http://www.
cellblockvisions.com/about.html (last visited Oct. 16, 2008).

206. Id.

207. Id.

208. PrisonerLife.com, http://prisonerlife.com/prisonart/prisonart.cfm (last visited Oct. 16,
2008).

2009] AN EXAGGERATED RESPONSE 433

men and women") ;^^^ "Raymond Gray" (who "has spent more than [twenty-nine]
years in prison," "learned from life, and hard times, and even from love" and
whose "artwork reflects all of these");^^^ and "Iqbal Karimii" (who "developed
his skills while incarcerated, and . . . [who has] since created hundreds of
paintings specializing in landscapes, seascapes, portraits, and wild life" as "his
way of communicating").^^ ^

Ed Mead, the proprietor of prisonart.org,^^^ one of many websites where
prisoners can sell their arts and crafts (and which will become illegal if Senator
Comyn's bill is passed)^^^ said in an interview with National Public Radio:

One of the reasons that these guys are in there is because they have this
low self-esteem, this low opinion of themselves. And while they're in
their families are often on welfare or could use some assistance. Or
these guys could need to save money for their release and to help them
out and ease the burden. So you know, if you can help them out, what's
the downside 7^^"^

This seems like a legitimate question, particularly considering that Mead has
rules about what he will allow to be sold on his site — "nothing he considers
racist, sexist or homophobic."^'^

An increase in personal income does not appear to be the only factor
motivating prisoners who create art while in prison. Jimmy Lemer, while
incarcerated for committing manslaughter, wrote a book entitled You Got
Nothing Coming — Notes from a Prison Fish and included this comment in the
forward to the paperback edition: "Money was not a factor in writing the book.
I wrote to save my sanity, to save my life. For a long time I was just keeping a
diary, a journal. I finally wanted it published because I felt I had something
important to say."^^^

Another program that would be discontinued under the proposed law is Art
Behind Bars (ABB), which was started in Florida and is described on its website
as an "Art-Based Community Service Since 1994."^^^ Through its "skill-based
training and art education," ABB aims to "give inmates the opportunity to

209. Id.

210. Id.

211. Id.

212. PrisonArt.org, http://prisonart.org (last visited Oct. 16, 2008).

213. At least it would be illegal for a prisoner who sells artwork for a purpose other than to
satisfy one of the debts included in the bill's exceptions. See Stop the Sale of MurderabiUa to
Protect the Dignity of Crime Victims Act of 2007, S. 1528, 1 10th Cong. § 2(d)(1) (2007).

214. Day to Day, supra note 3.

215. Id.

216. Seres v. Lemer, 102 P.3d. 91, 100 n.52 (Nev. 2004) (quoting Foreword to JiMMY
Lerner, You Got Nothing Coming — Notes From a Prison Fish, at xv (Broadway Books 2003).
On the home page of the website for prisonart.org, there is quote from Pablo Picasso: "We artists
are indestructible; even in a prison." PrisonArt.org, supra note 212.

217. ArtBehindBars.org, http://www.artbehindbars.org/ (last visited Oct. 16, 2008).

434 INDIANA LAW REVIEW [Vol. 42:41 1

contribute to society through the donation of artwork to numerous non-profit
organizations. "^^^ Proceeds from the direct sale of prisoner-made artwork "go
back into the program to purchase art supplies," and the program boasts of having
raised more than $75,000 for various charities by the donation of art.^^^ A
prisoner donating an item to a charity, knowing that the item would be auctioned
off, would violate Senator Comyn's bill.^^° Such collateral effects were likely
not foreseen by the proponents of the bill. Moreover, there is insufficient
evidence to suggest that they would argue that these programs have no socially
redeeming value and should be discontinued. Society has nothing to lose and
everything to gain by allowing prisoners to receive training while incarcerated,
and in the process, contribute to charitable causes.

C Problems with Enforcement and Effectiveness

The proposed anti-profiting legislation forbids prisoners from mailing or
otherwise delivering any item with the intent that the item be placed in interstate
commerce.^^^ It allows exceptions for items that are sold to satisfy certain
(primarily government-imposed) debts.^^^ One question arises as to how this law
would be enforced. Are prison officials equipped to monitor outgoing mail to the
extent that they can discern whether a prisoner has the requisite intent that the
item he or she is mailing be placed in interstate commerce? Even if they can
determine that the intent exists, their job does not end there. The bill allows
inmates to sell items if the sales are used to pay off certain debts. ^^^ Who, then,
is going to monitor these sales to make sure that the proceeds are used lawfully?

Another question arises as to the effectiveness of this bill. Its proponents
have suggested that it will "shut down this business" of murderabilia sales on the
Intemet.^^"^ There are at least a couple of instances, however, where that would
not happen, even if the bill was enacted into law. First, because of the exceptions
provided in the bill,^^^ a truly violent, vicious criminal who is driven not by
financial incentive, but rather by a dark desire to further torment his victims and
their families, and to gain notoriety for himself, could put anything out there for
public consumption, no matter how distasteful, regardless of whether it is related

218. ArtBehindBars.org, Learn More, http://www.artbehindbars.org/inciex.php?option=com_
content&task=view&id=23&itemid=37 (last visited Oct. 16, 2008) [hereinafterArtBehindBars.org,
Learn More]. Organizations that have benefited from the ABB program include Habitat for
Humanity, Take Stock in Children, and AIDS Help. Id.

219. ArtBehindBars.org, Learn More, supra note 218.

220. See Stop the Sale of Murderabilia to Protect the Dignity of Crime Victims Act of 2007,
S. 1528, 110th Cong. § 2(a) (2007). An auction could conceivably place an item in interstate
commerce.

221. See id.

222. See id. § 2(d)(1).

223. See id.

224. 153 Cong. Rec. H10,763-02 (daily ed. Sept. 25, 2007) (statement of Rep. Reichert).

225. SeeS. 1528 § 2(d)(1).

2009] AN EXAGGERATED RESPONSE 435

to his crime or his victims. As long as the funds are used to satisfy a debt
identified in the exceptions to the bill,^^^ those murderabilia sales would be
beyond its reach.

Further, if an inmate mails or delivers an item to a family member or friend,
without any intent that the item be sold, and that family member or friend decides
to auction off the item on the Internet, again, the bill would have no reach — it
would be ineffective in stopping the sale of murderabilia.

V. Drafting an Effective and Constitutional Law

The United States Supreme Court in Simon & Schuster\Mt\di New York's Son
of Sam law unconstitutional because it regulated speech based on its content — a
violation of the First Amendment.^^^ In the years since then, some states have
attempted to amend their own Son of Sam laws to comply with Simon & Schuster
with little success.^^^ Senator Comyn's proposed bill, while it eliminates the
content-based speech problem of the New York law, may not be narrowly
tailored enough to withstand a constitutional challenge.^^^ It may not be possible
to draft a law that would prevent every prisoner from profiting from his or her
crime while providing compensation to every victim, but some states approach
that goal.^^^

A. One Approach — Targeting All Proceeds of a Crime

One of the issues the Supreme Court had with the New York Son of Sam law
was that it forfeited only profits earned from the depiction of a crime, which
made it a content-based speech regulation. ^^^ Texas attempted to resolve the
constitutional issue by targeting proceeds from items owned by a criminal whose
value is enhanced by the criminal's notoriety.^^^ A North Carolina law attempts
to reach the same result by targeting income "generated from the commission of
a crime."^^^ Finally, an Arizona law that targets all proceeds from a crime has

226. Id.

227. See Simon & Schuster, Inc. v. Members of the N.Y. State Crime Victims Bd., 502 U.S.
105,116(1991).

228. See supra Part II.B.

229. See supra Part III.A.2.

230. See, e.g.. In re Opinion of the Justices to the Senate, 764 N.E.2d 343, 347 (Mass. 2002).
The proposed bill targeted proceeds from a crime. The court noted that portions of the bill that
regulated non-expressive activity "would not violate or otherwise impinge on the right of freedom
of speech." Id.

231. Simon & Schuster, 502 U.S. at 116.

232. Tracey B. Cobb, Comment, Making a Killing: Evaluating the Constitutionality of the
Texas Son of Sam Law, 39 HOUS. L. Rev. 1483, 1505 (2003).

233. Melissa J. Malecki, Comment, Son of Sam: Has North Carolina Remedied the Past
Problems of Criminal Anti-Profit Legislation?, 89 Marq. L. Rev. 673, 687 (2006) (quoting N.C.
Gen. State. § 15B-31 (2005)).

436 INDIANA LAW REVIEW [Vol. 42:4 1 1

been upheld as constitutional by that state's court of appeals.^^"^

1. State V. Gravano.^^^ — Arizona successfully obtained the proceeds from
"Sammy the Bull" Gravano's book about his life in organized crime without
invoking its Son of Sam law.^^^ Gravano was convicted in New York on a
racketeering charge and was allowed to enter the federal Witness Protection
Program. He was subsequently arrested in Arizona for distributing ecstasy.^^^
Charged with racketeering in Arizona, Gravano was subject to civil forfeiture
under the Arizona Racketeering Act and the Arizona Forfeiture Reform Act.^^^
Those laws authorized the State to "seize any property that constituted the
proceeds of racketeering. "^^^

The state successfully seized money, guns, jewelry, cellular phones, and a
vehicle from Gravano.^'^^ The State then sought forfeiture of all of Gravano's
rights and benefits in connection with "the non-fiction work about Gravano' s life
that was written by Peter Maas, published by Harper Collins (UK), Inc., in 1997,
and entitled Underboss: Sammy the Bull Gravano's Story of Life in the Mafia
CUnderboss').''^"^^ Gravano's First Amendment challenge to the forfeiture of
profits from the book failed when the trial court determined that the ''Underboss
proceeds were traceable to racketeering because 'the proceeds would not exist
were it not for Mr. Gravano' s criminal activities in New York' and because those
activities would also violate Arizona's racketeering laws."^"^^ The appeals court
affirmed and determined that the statutes were content-neutral regulations that
"come into play based on the existence of a causal connection between
racketeering and property. "^"^^ The statutes serve the purpose of "removing the
economic incentive to engage in racketeering, reducing the financial ability of
racketeers to . . . engage in crime, . . . compensating victims of racketeering, and
reimbursing the State for the costs of prosecution."^"^

2. The Texas Murderabilia Amendment. — In 2001 , in an attempt to comply
with the holding in Simon & Schuster, Texas amended its Son of Sam law and
"expanded the scope of the law to cover the value of tangible goods owned by a
criminal that is increased due to the notoriety of the criminal. "^"^^ Unlike Son of
Sam laws that targeted only expressive activity related to the crime, this
amendment targets murderabilia and "focuses on the increased value an item

234. State ex rel Napolitano v. Gravano, 60 P.3d 246, 253 (Ariz. Ct. App. 2002).

235. Id.

236. See id. at249n.l.

237. See id. at 248.

238. See id. at 249 (discussing ARIZ. Rev. Stat. Ann. §§ 13-2301 to -2318 (2001 & Supp.
2002); Ariz. Rev. Stat. Ann. §§ 13-4301 to -4316 (2001 & Supp. 2002)).

239. Id.

240. Id.

241. Id.

242. Id.

243. /J. at 253.

244. Id.

245. Cobb, supra note 232, at 1505.

2009] AN EXAGGERATED RESPONSE 437

gains from the commission of a crime."^"^^ It "looks not at the item's relation to
a crime, but rather at how much more valuable the item becomes as a result of
someone committing a crime."^"^^ The amendment escapes the content-based
regulation problem by targeting "fruits of the crime'' regardless of the content.^"^^
However, it creates a new problem. Difficulties will likely arise when measuring
to what extent the value of an object was enhanced by the criminal's notoriety.
A similar "enhanced notoriety" provision existed in the California statute
overturned by Keenan, but because that particular provision was not at issue, the
court did not address it.^^^

3. More State Responses to Simon & Schuster. — North Carolina created a
new Son of Sam law that targets income "'generated from the commission of a
crime' including that gained 'from the sale of crime memorabilia or obtained
through the use of unique knowledge obtained during the commission' of a
crime."^^^ As Justice Brown opined in Keenan, "a limitation on the law's scope
to storytelling is the achilles' heel of a Son of Sam provision."^^^ In his
concurring opinion he pointed out that Virginia law

seizes "[a]ny proceeds or profits received ... by a defendant . . . from
any source, as a direct or indirect result of his crime or sentence, or the
notoriety which such crime or sentence has conferred upon him."
Regardless of whether a Virginia criminal profited by selling her account
of the crime, her autograph, or her furniture for an exorbitant price, she
could not enjoy such revenues under this law.^^^

By eliminating expressive activity as the sole target, these laws have a better
chance of surviving constitutional challenge. The courts and law enforcement
are still faced with the challenge of determining or measuring notoriety resulting
from the commission of a crime — a somewhat abstract quality that is not easily
gauged. Perhaps one solution to this dilemma is to focus not solely on the means
by which a criminal earns money and instead put more emphasis on the other
compelling state interest identified by the Court in Simon & Schuster —
compensatmg victims.

246. Id. at 1506.

247. Id. at 1506-07. As an example, if a prisoner were able to command a tidy sum from the
sale of a photo of himself or herself due to the prisoner's notoriety, the prisoner would be allowed
to keep only "the amount of money the photo would have fetched absent the notoriety gained by
the commission of the crime." Id. at 1507.

248. Id. at 1506, 1509.

249. See Keenan v. Superior Court of Los Angeles County, 40 P.3d 718, 721 (Cal. 2002).

250. Malecki, supra note 233, at 687 (quoting N.C. Gen. Stat. § 15b-31(9) 2005)).

251. Keenan, 40 P.3d at 738 (Brown, J., concurring).

252. Id. (citing Va. Code. Ann. § 19.2-368.20) (1992), reprinted in Va. Code Ann. § 19.2-
368.20 (2008)).

253. See Simon & Schuster, Inc. v. Members of the N.Y. State Crime Victims Bd., 502 U.S.
105, 118(1991).

438 mDIANA LAW REVIEW [Vol. 42:4 1 1

B. Compensating Victims — A Focus on Restitution and Satisfaction

of Civil Judgments

"[T]he State has a compelling interest in ensuring that victims of crime are
compensated by those who harm them."^^"^ The Simon & Schuster Court pointed
out that "[e]very State has a body of tort law serving exactly this interest," and
further, that "[t]he State's interest in preventing wrongdoers from dissipating
their assets before victims can recover explains the existence of . . . statutory
provisions for prejudgment remedies and orders of restitution."^^^ The
Massachusetts Supreme Court also suggested that there were "less cumbersome"
ways of "compensating victims and preventing notorious criminals from
obtaining a financial windfall from their notoriety."^^^ These methods include

[p]robation conditions, specifically designed to deal with a defendant's
future income and obligations . . . [and] writs of attachment against the
defendant's assets [brought by victims as part of a civil action] or writs
of trustee process of amounts owed to the defendant, including (but not
limited to) assets or earnings derived from expressive activity.^^^

Law professor and Federal District Judge Paul Cassell points out that
"nothing in the First Amendment forbids a judge from imposing as part of a
defendant's sentence the condition that the defendant shall not profit from his
crime."^^^ He recommends that Congress pass a new federal anti-profiting
statute — following the approach of Arizona's law — that "forbids profiting from
a federal crime in any way — not profiting solely through protected First
Amendment activities."^^^ Additionally, and perhaps more critical to advancing
the interest of victim compensation, he suggests that the federal restitution
statute, which is "restricted to situations where a defendant is incarcerated," be
expanded to include the following language:

If a person obligated to provide restitution, or pay a fine, receives
substantial resources from any source,^^^^^ including inheritance,
settlement, or other judgment, during a period of incarceration,
supervised release, or probation, such person shall be required to apply
the value of such resources to any restitution or fine still owed.^^^

Judge Cassell argues that an expansion of the period of time (to include
supervised release and probation) in which a convicted criminal is subject to the
federal restitution statute, would prevent criminals from profiting from their

254. Id.

255. Id.

256. In re Opinion of the Justices to the Senate, 764 N.E.2d 343, 350 (Mass. 2002).

257. Id.

258. Cassell, supra note 57, at 120.

259. Mat 122.

260. This would not limit the source of victim compensation only to proceeds from the crime.

261. Cassell, supra note 57, at 123.

2009] AN EXAGGERATED RESPONSE 439

262

crimes and increase the chances for victim compensation.

C Combining Approaches — A Possible Solution

The trend among the states of amending their anti-profiting laws so that they
target any proceeds that a criminal earns from the commission of his or her
crime^^^ is a positive step toward ensuring that criminals do not profit from their
crimes. Arizona has shown that such a law can withstand a First Amendment
challenge.^^"^ This type of law would also prevent prisoners from profiting from
murderabilia sales — a major concern of Senator Comyn and other proponents of
his bill. It would do so without restricting the First Amendment rights of
prisoners who are not attempting to exploit their crimes, but merely trying to
survive in prison and perhaps prepare themselves for the day they obtain release.

Additionally, the law should grant the state the authority to seize the assets
of any prisoner against whom a restitution order, fine or civil judgment^^^ is
entered and to transfer those funds to the appropriate entity. Much like the
provisions in the federal restitution statute,^^^ a state should be allowed to seize
funds in such cases regardless of how they were earned. A combination of these
approaches would address the two compelling interests identified in Simon &
Schuster }^^ First, a law modeled after Arizona's anti-racketeering statute^^^ that
allows the state to seize any profits resulting from the commission of a crime
ensures that prisoners do not profit from their crimes. Second, a restitution law
that allows any income seized under an outstanding restitution order, fine, or
civil judgment to be transferred to the victims provides a mechanism for victims
to receive the compensation owed them.

Conclusion

The proposed "Stop the Sale of Murderabilia to Protect the Dignity of Crime
Victims Act of 2007" is not a reasonable way to stop the sale of crime
memorabilia. Its overinclusiveness invites a constitutional challenge if the bill
is passed. Expanding state Son of Sam laws to include all proceeds from a crime.

262. Id.

263. See, e.g.. State ex rel. Napolitano v. Gravano, 60 P.3d 246 (Ariz. Ct. App. 2003); Cobb,
supra note 232, at 1509; Malecki, supra note 233, at 687.

264. See Gravano, 60 P.3d 246 at 248.

265. Civil judgment is not included in the federal statute, however, its addition would help
victims of violent crimes (or their families) collect on civil judgment awards before prisoners can
dissipate their earnings.

266. Se^l8U.S.C. §3664(n)(2006).

267. See Simon & Schuster, Inc. v. Members of the N.Y. State Crime Victims Bd., 502 U.S.
105,118(1991).

268. See ARIZ. REV. STAT. ANN. §§ 13-2301 to -23 18 (2001 & Supp. 2002); ARIZ. REV. STAT.
Ann. §§ 13-4301 to -4316 (2001 & Supp. 2002).

440 INDIANA LAW REVIEW [Vol. 42:4 1 1

combined with providing for seizure of prisoner assets to satisfy restitution
orders and civil judgments has a better chance of meeting those two compelling
interests identified by the Court — compensating victims and ensuring that
criminals do not profit from their crimes — without running afoul of the U.S.
Constitution.

The Effect of Indiana Code Section 22-9-1-16
ON Employee Civil Rights

Kathryn E. Olivier*

Introduction

Violations of employee civil rights are fundamentally unfair. To protect
employees and prevent discriminatory behavior, States have passed civil rights
laws which affect every working citizen in the jurisdiction. Indiana's default
procedure in civil rights cases is an administrative hearing conducted by the
Indiana Civil Rights Commission (ICRC) and presided over by an administrative
law judge (ALJ).^ In some situations, an alternative procedure allows an injured
party to avoid the administrative hearing and institute a civil suit.^ If the ICRC
has probable cause to believe that there was a civil rights violation,

[a] respondent or a complainant may elect to have the claims that are the
basis for a finding of probable cause decided in a civil action ....
However, both the respondent and the complainant must agree in writing
to have the claims decided in a court of law .... The election may not
be made if the commission has begun a hearing on the record under this
chapter with regard to a finding of probable cause.^

Deviation from the administrative process is uncommon because the Indiana
Code requires written consent from both parties before the civil suit commences.^
Nonetheless, in the unlikely event that a complainant obtains the respondent's
consent, another provision of the Indiana Code mandates that the case be tried by
a judge, not a jury. ^ Even if the employee wins the case, his damages are limited
to "wages, salary, or commissions."^ Furthermore, he cannot recover his
attorney's fees.^ Thus, the combined effect of these statutes unfairly biases state

* J.D. Candidate, 2009, Indiana University School of Law — Indianapolis; B.A., 2005,
DePauw University, Greencastle, Indiana. I would like to thank Professor Jennifer Drobac,
Executive Notes Editor Kate Shelby, and Note Development Editor Chris Eckhart for their guidance
and advice throughout the writing of this Note. Additionally, I would like to thank my family and
friends for their patience, support, and encouragement.

1. See M.C. Welding & Machining Co. v. Kotwa, 845 N.E.2d 188, 192 n.3 (Ind. Ct. App.
2006).

2. Ind. Code §22-9-1-16 (2007).

3. Id.

4. Id. § 22-9-1- 16(a).

5. Id. § 22-9-l-17(c).

6. Id. § 22-9-l-6(k)(A).

7. See Ind. Civil Rights Comm'n v. Adler, 689 N.E.2d 1274, 1279 n.3 (Ind. Ct. App. 1997),
overruled on other grounds by 714 N.E.2d 623 (Ind. 1999). In a strongly-worded footnote, the
court criticized the ICRC's "continued expenditure of public funds to . . . relitigate an established
rule of law." Id. The court emphasized that the ICRC should "present its request to the
legislature." Id.

442 INDIANA LAW REVIEW [Vol. 42:44 1

civil rights proceedings against complainants.

This Note discusses the procedural weaknesses of Indiana's civil rights law
and suggests modifications to Indiana's law based on the civil rights laws of
Ohio, Illinois, Kentucky, and Michigan. Part I of this Note explains the
employment-at-will doctrine and discusses how Indiana courts have limited its
breadth. Part II examines the Indiana Civil Rights Law, specifically the portions
that focus on employee's rights. Part IE explores Title VII of the Civil Rights
Act of 1964 (Title VII),^ the federal civil rights law, and identifies why Title Vn
does not provide protection in all employment settings. Part IV surveys the civil
rights laws of Ohio, Illinois, Kentucky, and Michigan to provide illustrations of
other civil rights laws. Finally, Part V advocates for a change in Indiana's civil
rights law to incorporate the strengths of the Illinois, Kentucky, Ohio, and
Michigan approaches.

I. Employment Law IN Indiana

Indiana adheres to the employment-at-will doctrine.^ Under this doctrine, if
an employment contract is not for a definite period then the employment is at will
and is terminable by either party at any time, with or without cause. ^° In other
words, the doctrine "permits both the employer and the employee to terminate the
employment at any time for a 'good reason, bad reason, or no reason at all.'""
Despite the harshness of the doctrine, Indiana courts have been generally
unwilling to adopt exceptions to mitigate its effect. ^^

However, if the employee was discharged because he exercised a statutorily-
conferred right, then his discharge is considered retaliatory and the courts
recognize an exception to the general rule.^^ Thus, the court permitted the
plaintiff in Frampton v. Central Indiana Gas Co}"^ to bring a civil suit against her
employer. ^^ The plaintiff in Frampton injured her arm while at work.^^ When
she filed a worker's compensation claim, her employer terminated her.^^ The
plaintiff filed suit and the Indiana Supreme Court stated: "Retaliatory discharge
... is a wrongful, unconscionable act and should be actionable in a court of

8. 42 U.S.C.§§2000e to -6-17(2006).

9. See Meyers v. Meyers, 861 N.E.2d 704, 706 (Ind. 2007); Wilson v. Chronicle Tribune,
No. 27A05-0703-CV-122, 2007 WL 4107293, at *2 (Ind. Ct. App. Nov. 20, 2007).

10. See 12 ELIZABETH Weuams, Indiana Law Encyclopedia Employment § 3 1 (2006).

1 1 . Montgomery v. Bd. of Trs. of Purdue Univ., 849 N.E.2d 1 1 20, 1 1 28 (Ind. 2006).

12. See, e.g., Meyers, 861 N.E.2d at 707 (declining to expand the retaliatory discharge
exception to the employment-at-will doctrine); Montgomery, 849 N.E.2d at 1128 (refusing to
broaden the exception to employment-at-will doctrine based solely on "public policy" concerns).

13. See Frampton v. Cent. Ind. Gas Co., 297 N.E.2d 425, 428 (Ind. 1973).

14. 297 N.E.2d 425 (Ind. 1973).

15. Mat 428.

16. /J. at 426.

17. Id.

2009] EMPLOYEE CIVIL RIGHTS 443

law."^^ Although the court acknowledged the absence of other cases holding that
retaliatory discharge was actionable, the court held,

an employee who alleges he or she was retaliatorily discharged for filing
a claim pursuant to the Indiana Workmen's Compensation Act . . . has
stated a claim upon which relief can be granted [and w]e further hold
that such a discharge would constitute an intentional, wrongful act on the
part of the employer for which the injured employee is entitled to be
fully compensated in damages.*^

The Frampton court then added that "when an employee is discharged solely for
exercising a statutorily conferred right an exception to the general [employment-
at-will] rule must be recognized."^^

Although the Frampton court's broad language implied a softening of the
employment-at-will doctrine, subsequent cases illustrate that Frampton provides
a very limited exception.^' For example, in Montgomery v. Board of Trustees of
Purdue University, ^^ the Indiana Supreme Court declined to recognize another
exception to the employment-at-will doctrine when a plaintiff was terminated
allegedly due to his age.^^ The court refused to draft an age exception to the
employment-at-will doctrine and emphasized that "[g]eneral expressions of
public policy do not support new exceptions to the employment-at-will doctrine.
Moreover, the legislative history . . . does not support Montgomery's
argument."^"^

Similarly, in Lawson v. Haven Hubbard Homes, Inc.^^ the Indiana Court of
Appeals declined to recognize an exception to the employment-at-will doctrine
when an employee was terminated for filing an unemployment compensation
claim.^^ The plaintiff in Lawson was injured when she fell down a flight of stairs
at work.^'' Although she attempted to return to work, physical restrictions from
her injury made it impossible.^^ She filed an unemployment compensation claim
and her employer terminated her.^^ Lawson analogized Frampton and claimed

18. /^. at 428.

19. Id.

20. Id.

21. See Meyers v. Meyers, 861 N.E.2d 704, 707 (Ind. 2007) (noting that "decisions during
the [last] thirty years have made it plain that [Frampton] is quite a limited exception").

22. 849 N.E.2d 1 120 (Ind. 2006).

23. Id. at 1 1 28-3 1 . The plaintiff in Montgomery was fired by Purdue University when he was
fifty-seven or fifty-eight years old after he worked for the university for approximately 29 years.
Id. at 1122. Montgomery did not have a statutorily conferred right to employment because the
ICRL does not prohibit age discrimination. Id. at 1 130.

24. Id. at 1 128 (internal citation omitted).

25. 551 N.E.2d 855 (Ind. Ct. App. 1990).

26. Id. at 860.

27. Mat 857.

28. Id.

29. Id

444 INDIANA LAW REVIEW [Vol. 42:44 1

that she was fired for exercising her statutory right to file for unemployment
benefits. ^° She urged the court to expand the Frampton exception and apply the
new version to her case.^^ However, the court distinguished Frampton and
McClanahan v. Remington Freight Lines^^ and held that "fear of being
discharged" would not have a "deleterious effect on the exercise of a statutory
right."^^ According to the court, the employer's actions did not violate public
policy.^"^ Therefore, the court refused to recognize an exception to the
employment-at-will doctrine.^^

Finally, in Morgan Drive Away, Inc. v. Brant,^^ the Indiana Supreme Court
declined to extend the Frampton doctrine when Brant was allegedly fired for
filing a small claims action against Morgan Drive Away.^^ The court claimed
that Frampton applied only to worker's compensation cases and subsequent
courts had refused to extend Frampton' s scope.^^ Because employment-at-will
was the state's policy, the court reasoned that any exceptions or revisions must
come from the legislature, not the courts.^^ Together, Frampton, Montgomery,
Lawson, and Brant indicate that in the absence of evidence of bad faith
termination, in Indiana, an employee has limited recourse against his or her
former employer.'^^

The only other exception to the employment-at-will doctrine that Indiana
courts recognize is a narrow provision that permits an employee to sue when that
employee is terminated for refusing to follow her employer's order to commit an
illegal act."^^ Thus, in McClanahan,^^ the Indiana Supreme Court permitted a
truck driver who refused to violate Illinois law by driving an overly heavy truck
on the state's highways to sue his former employ er."^^ The court reasoned that

30. /^. at 859.

31. Id.

32. 517 N.E.2d 390 (Ind. 1988).

33. Law^ow, 551N.E.2dat860.

34. Id.

35. Id.

36. 489 N.E.2d 933 (Ind. 1986).

37. Mat 933-34.

38. Id. at 934 (citing Martin v. Piatt, 386 N.E.2d 1026, 1028 (Ind. Ct. App. 1979) (denying
claim of retaliatory discharge when employees claimed they were fired for reporting that their
immediate superior had solicited and received illegal "kickbacks")); see also Campbell v. Eli Lilly
& Co., 413 N.E.2d 1054, 1061 (Ind. Ct. App. 1980) (upholding trial court's determination that
terminating an employee for charging his employer with violations of federal law did not fall under
the Frampton exception because no statutory right or duty was implicated).

39. Morgan Drive Away, Inc., 489 N.E.2d at 934.

40. See Meyers v. Meyers, 861 N.E.2d 704, 707 (Ind. 2007). The Meyers court emphasized
that "'[r]evision or rejection of the [employment-at-will] doctrine is better left to the legislature.'"
Id. (quoting Morgan Drive Away, Inc., 489 N.E.2d at 934).

41. See McClanahan v. Remington Freight Lines, 517 N.E.2d 390, 393 (Ind. 1988).

42. M. at 390.

43. Id. at 393.

2009] EMPLOYEE CIVIL RIGHTS 445

refusing to allow the truck driver "any legal recourse . . . would encourage
criminal conduct by both the employee and the employer. '"^"^ However, this
exception applies only when an employee is "terminated in retaliation for
refusing to violate a legal obligation that carrie[s] penal consequences.'"^^
Because McClanahan would have been personally liable for violating Illinois law
and subject to a fine, and because he would have been jointly and severally liable
for any damage caused by his overweight vehicle, the Indiana Supreme Court
permitted the suit."^^

n. The Indiana Civil Rights Law

Enacted in 1971, the Indiana Civil Rights Law"^^ (ICRL) makes equal
opportunity employment a civil right."^^ Therefore, denying equal opportunity
employment is an unlawful discriminatory practice.^^ Based on a statutory grant
of authority, the ICRL^^ has the authority to investigate and, if necessary,
adjudicate complaints of discriminatory behavior.^'

A. Discrimination and the Indiana Civil Rights Law
There are two types of discriminatory behavior — disparate treatment and

44. Id.

45. Meyers, 861 N.E.2d at 707. See, e.g., McGarrity v. Berlin Metals, Inc., 774 N.E.2d 71,
78-79 (Ind. Ct. App. 2002) (allowing a cause of action when an employee was allegedly terminated
for refusing to file a false tax return); Haas Carriage, Inc. v. Bema, 651 N.E.2d 284, 288-89 (Ind.
Ct. App. 1995) (stating that a claim of retaliatory discharge was cognizable when an employee was
fired after refusing to haul materials in what the police considered an unsafe manner); Call v. Scott
Brass, 553 N.E.2d 1225, 1229 (Ind. Ct. App. 1990) (permitting a claim of retaliatory discharge
when an employee was fired for missing work to comply with a jury summons).

46. McClanahan, 511 N.E.ld Sit 393.

47. Ind. Code §§ 22-9-1-1 to -18 (2007).

48. Indiana Code section 22-9-1 -2(a) states.

It is the public policy of the state to provide all of its citizens equal opportunity for
education, employment, access to public conveniences and accommodations . . . and to
eliminate segregation or separation based solely on race, religion, color, sex, disability,
national origin or ancestry, since such segregation is an impediment to equal
opportunity. Equal education and employment opportunities and equal access to and
use of public accommodations and equal opportunity for acquisition of real property are
hereby declared to be civil rights.
Id. §22-9-l-2(a).

49. See id. § 22-9-1 -2(b); see also id. § 22-9- 1-3(/) (defining "Discriminatory practice"); 5
Karl Oakes, Indiana Law Encyclopedia Civil Rights § 8 (2006). In the Indiana Law
Encyclopedia, Oakes notes that "every discriminatory practice relating to employment must be
considered unlawful, unless it is specifically exempted by the Indiana Civil Rights Law." Id.

50. Ind. Code §22-9-1-4 (2007).

51. /J. § 22-9-1 -6(e).

446 INDIANA LAW REVIEW [Vol. 42:441

disparate impact.^^ In an employment context, disparate treatment occurs when
an employer treats one individual or group of people less favorably. ^^ In contrast,
disparate impact occurs when a facially-neutral employment practice burdens one
group more harshly than another.^'* In Indiana, disparate impact claims are
actionable only if the employee is able to prove that the employer had a
discriminatory motive and committed a discriminatory act.^^ For example, in
Indiana Bell Telephone Co. v. Boyd, the court stated: "For such a claim to be
cognizable . . . the motivation to so discriminate on the part of the supervisor
must be shown."^^ Failure to show "intent to discriminate" renders the claim
non-litigious.^^ Because it is often difficult to prove employer intent, disparate
impact cases are somewhat more challenging to litigate and therefore are less
common than disparate treatment claims.^^

B. Overview of the Indiana Civil Rights Law

In M.C Welding & Machining Co. v. Kotwa^^ the court summarized the
procedure an individual must undertake to initiate and pursue a claim under the
ICRL.^° According to the court,

claims arising under the Indiana Civil Rights Law ... are presented by
filing a complaint with the Indiana Civil Rights Commission, which
investigates the complaint and determines if probable cause exists to

believe that an illegal act of discrimination has occurred If probable

cause exists, the case is heard by an administrative law judge . . . , who
issues proposed findings of fact and conclusions . . . which are submitted
to the ICRC .... The ICRC's final order is appealable to the Indiana

52. See Oakes, supra note 49, § 8.

53. See Ali v. Greater Ft. Wayne Chamber of Commerce, 505 N.E.2d 141 , 143 (Ind. Ct. App.
1987). In Ali, the court stated that disparate treatment "occurs when an employer simply treats
some people less favorably than others because of their race, color, religion, sex or national origin.
When this type of treatment is alleged, this Court has held that the motive behind it is highly
significant and dispositive." Id. (citing Ind. Civil Rights Comm'n v. City of Muncie, 459 N.E.2d
41 1,418 (Ind. Ct. App. 1984)).

54. See Ind. Bell Tel. Co. v. Boyd, 421 N.E.2d 660, 666 (Ind. Ct. App. 1981) (defining
disparate impact discrimination as facially neutral employment practices "that in fact fall more
harshly on one group than another and cannot be justified by business necessity").

55. See id. at 666-67.

56. Id. at 661.

57. Id.

58. See 14A C.J.S. Civil Rights § 239 (2006) (discussing the requirement that individuals
demonstrate more than the fact that the employer's practice has a negative effect on the plaintiff
because to prove adverse impact the plaintiff must show that the policy at issue was adopted
because of its adverse effect on an individual or group); Oakes, supra note 49, § 8 (noting that
proof of discriminatory motive is crucial).

59. 845 N.E.2d 188 (Ind. Ct. App. 2006).

60. Id. at 192 n.3.

2009] EMPLOYEE CIVIL RIGHTS 447

61

Court of Appeals.

Therefore, if an employee suffers discrimination through either disparate
treatment or disparate impact and chooses to file a complaint, the ICRC is
obligated to investigate.^^

In order to conduct its investigation, the ICRC is expressly authorized to hold
hearings, subpoena witnesses, and take testimony under oath.^^ If, after thorough
investigation and an administrative hearing, the ICRC is convinced that an
unlawful discriminatory practice occurred, the ICRC may order the violator to
cease and desist from the unlawful discriminatory practice.^"^ The ICRC may also
require further action:

(A) to restore [the employee's] losses incurred as a result of
discriminatory treatment . . . ; however, this specific provision when
applied to orders pertaining to employment shall include only wages,
salary, or commissions;

(B) to require the posting of notice setting forth the public policy of
Indiana concerning civil rights and respondent's compliance with the
policy in places of public accommodations;

(C) to require proof of compliance to be filed by respondent at periodic
intervals; and

(D) to require a person who has been found to be in violation of this
chapter and who is licensed by a state agency authorized to grant a
license to show cause to the licensing agency why his license should not
be revoked or suspended.^^

Thus, when an employee alleges discriminatory treatment, the default remedy is
an administrative proceeding conducted by the ICRC,^^ which means that the
employee can receive the types of relief listed in section 22-9-l-6(k) of the
Indiana Code.^^

However, a subsequent provision of the Indiana Code allows a civil action

61. Id.

62. IND. Code § 22-9-1 -6(e) (2007) ("The commission shall receive and investigate
complaints alleging discriminatory practices .... All investigations of complaints shall be
conducted by staff members of the civil rights commission or their agents." (emphasis added)).

63. Id, § 22-9-1-6(1).

64. /^, § 22-9-1 -6(k).

65. Id. § 22-9-l-6(k)(A)-(D).

66. Id. § 22-9- 1-1 8(a). The ICRL also provides an option for judicial review. Section 22-9-
1-6(0 states, "Judicial review of a cease and desist order or other affirmative action as referred to
in this chapter may be obtained." However, review must be sought within thirty days of the ICRC's
decision. Id. § 22-9-1-6(0. Furthermore, the ICRL permits consent decrees and when signed by
the parties and a majority of the commissioners, the consent decree has the same effect as a cease
and desist order. Id. § 22-9-l-6(p).

67. Id. § 22-9-l-6(k).

448 INDIANA LAW REVIEW [Vol. 42:441

instead of an administrative proceeding.^^ According to this provision, the case
can be decided by a civil action if both the complainant and the respondent
consent in writing.^^ But the ICRL explicitly states that the "election [of a civil
action] may not be made if the commission has begun a hearing on the record .
. . with regard to a finding of probable cause."^^ Therefore, individuals who are
unaware of the civil litigation option may begin pursing their administrative
remedy. They will be precluded from seeking judicial relief if they subsequently
change their minds and desire a civil trial.^^ Nevertheless, if both parties agree
to forgo the administrative proceeding and rely on civil adjudication, section 22-
9-1-17 governs and the complainant may file a civil action,^^ which will be tried
by the court, ''without benefit of a jury."^^ Thus, unless the complainant
convinces the defendant to consent to civil litigation, the case proceeds through
the administrative hearing process and is decided by an administrative law judge.

C. Shortcomings of Indiana 's Statutory Procedure

Indiana's default for administrative procedures in lieu of civil adjudication
is by no means exceptional.^"^ However, the state's procedure appears biased
against employees who want to litigate employment discrimination cases against
their employers.

1. Unpublished Decisions. — By making administrative proceedings the
default remedy, many employment discrimination decisions go unpublished. The
only readily available decisions are those on which the Indiana Court of Appeals
has ruled. This benefits employers because the administrative proceeding does
not involve a public judgment that "might more easily lend itself to being used
against the employer in future claims by other employees."^^

Furthermore, when employment discrimination decisions go unpublished, the
courts and the State miss an opportunity to develop Indiana's civil rights law.
One author emphasizes this point stating, "The development of civil rights law
depends in part on the public resolution of disputes."^^ Johnson claims that

68. Id. §22-9-1- 16(a).

69. Id.

70. Id. § 22-9-l-16(b).

7 1 . See id.

72. /d§22-9-l-16(a).

73. Id. §22-9-1 -17(c).

74. See, e.g., 775 III. Comp. Stat. Ann. 5/7A-102 (West 2001 & Supp. 2008); Ky. Rev.
Stat. Ann. § 344.210 (West 2006); Omo Rev. Code Ann. § 41 12.05(D) (West 2007 & Supp.
2008).

75. David B. Tukel, To Arbitrate or Not to Arbitrate Discrimination Claims: That is Now
the Question for Michigan Employers, 79 MiCH. B.J. 1206, 1207 (2000). Tukel also notes that
employers generally prefer proceedings that are "faster, less formal, and less costly," which explains
why arbitration has become so popular. Id.

76. Nicholas S. Johnson, Note, Arbitration of Employer Violations of the West Virginia
Human Rights Act: West Virginia Should Make Like Ants Marching and Continue Its Pursuit of

2009] EMPLOYEE CIVIL RIGHTS 449

published decisions serve two major functions in the development of the law:

First, public resolution will specifically deter the individual employer-
defendant because there is an incentive for an employer to maintain a
favorable reputation. Second, public knowledge of a civil rights
resolution will generally deter all employers from engaging in
discriminatory actions in order to avoid being in disputes in the future^^

Although Johnson discusses unpublished decisions in the context of arbitration
agreements, his reasoning and conclusion are also relevant in this context.

2. Unavailability of Jury Trial. — Although the ICRL provides individuals
an opportunity to obtain a civil hearing, section 22-9-l-17(c) makes it clear that
this hearing does not occur in front of a jury.^^ Instead, the statute provides for
a judicial bench trial.^^ This too benefits the employer because it provides a more
private forum for adjudication. Indeed, Tukel notes that many employers prefer
private proceedings, conducted by experts, to full-scale jury trials.^^ This
preference is based on the belief that avoiding a jury trial reduces damage
awards. ^^ However, an interesting article by David Benjamin Oppenheimer
challenges the basis of this belief.^^

Oppenheimer reviewed data from California employment law cases.^^ He
determined that although juries found for plaintiffs 53% of the time,^"^ when cases
were separated into common law discharge cases and statutory employment

Bliss, 108 W. Va. L. Rev. 205, 216 (2005).

77. Id. (footnotes omitted).

78. IND. Code § 22-9- 1-1 7(c) (2007) (stating that "[a] civil action filed under this section
must be tried by the court without benefit of a jury.").

79. Id.

80. See Tukel, supra note 75, at 1207. Tukel notes that

[a]nother potential advantage of arbitration is that an arbitrator, who generally has
experience in workplace disputes, will decide the issue rather than a jury that might be
more influenced by sympathies than by legal arguments or evidence. In addition,
arbitration offers a private setting, which may reduce concerns about pursuing, or
defending against, sensitive claims such as those involving sexual harassment.

8 1 . Jury trials allegedly yield higher settlements than either administrative proceedings or
alternative dispute resolutions. Development in the Law, Jury Determination of Punitive Damages,
1 10 Harv. L. Rev. 1513, 1517 (1987). This article asserts that the traditional reliance on the jury
has been eroded and critics of the current system often argue that jurors are biased against wealthy
or institutional defendants, possess an impulse to redistribute wealth, are incompetent or unable to
comprehend the complexities of fixing the amount of a damage award, and are susceptible to
influence so that they institute large damage awards. Id. at 1513-14.

82. See generally David Benjamin Oppenheimer, Verdicts Matter: An Empirical Study of
California Employment Discrimination and Wrongful Discharge Jury Verdicts Reveals Low
Success Rates for Women and Minorities, 2>1 U.C. DAVIS L. Rev. 5 1 1 (2003).

83. Mat 514.

84. /J. at 516.

450 INDIANA LAW REVIEW [Vol. 42:44 1

discrimination cases, the success rates varied.^^ Plaintiffs were less likely to
prevail in statutory employment discrimination cases than they were in common
law discharge cases.^^ When the statutory discrimination cases were further
examined, Oppenheimer found that plaintiffs won 42.6% of the time when the
case went before a jury. ^^ However, when the case was decided in a bench trial,
plaintiffs won only 22.2% of the time.^^ Another study cited by Oppenheimer
and performed by the U.S. Department of Justice reports similar figures.^^ From
a compilation of his most recent data, Oppenheimer concludes that there is a
significant difference between jury trial and bench trial outcomes.^^ "Plaintiffs
won 35% of the jury trials, but only 23% of the bench trials, with median awards
injury trials over twice the median awards in bench trials."^^ He claims that the
only logical conclusion is that bias plays a major role in employment
discrimination cases.^^ However, plaintiffs' low success rates before both judges
and juries indicate that contrary to popular belief, juries are not "'far more
sympathetic to plaintiffs than to defendants in employment discrimination
cases. '"^^ Therefore, altering Indiana's law^"^ to permit jury trials would not
necessarily adversely impact employers.

Furthermore, jury trials are beneficial because they help the plaintiff "fully
vindicate [his or] her rights and make strides in ensuring that . . . other employers
. . . will not repeat the offenses."^^ Thus, despite the fact that a jury trial may be
uncomfortable for the employee because his private affairs become public
knowledge, allowing him access to the courts ensures full adjudication and
vindication.^^

3. Damage Limitations. — Perhaps the most alarming effect of the ICRL is
that in employment discrimination cases, damages are limited to "wages, salary,
or commissions."^^ Even though the ICRL appears to permit damage awards

85. Id.

86. Id. Oppenheimer' s results indicate that plaintiffs succeed in 59% of common law
discharge cases but only 50% of employment discrimination cases. Id.

87. Id. at 522 (citing Theodore Eisenberg, Litigation Models and Trial Outcomes in Civil
Rights and Prisoner Cases, 11 GEO. L.J. 1567, 1582 (1989)).

88. Id. (citing Eisenberg, supra note 87, at 1582).

89. Id. at 523 (citing Civil Trials and Verdicts in Large Countries, 1996, Bureau of Justice
Statistics Special Report NCJ 173426 (1999), available at http://www.ojp.usdoj.gov/bjs/abstract/
ctcvlc96.htm).

90. Id.

91. Id.

92. Id. at 553 (quoting Charles F. Thompson, Jr., Juries Will Decide More Discrimination
Cases: An Examination of Ree\es v. Sanderson Plumbing Products, Inc., 26 Vt. L. Rev. 1,1-2
(2001)).

93. Id. (quoting Thompson, supra note 92, at 1-2).

94. ^eelND. Code §22-9-1-17 (2007).

95. Johnson, supra, note 76, at 218.

96. See id. at 230.

97. IND. Code § 22-9- l-6(k)(A) (2007).

2009] EMPLOYEE CIVIL RIGHTS 451

necessary to redress the plaintiffs "losses incurred as a result of discriminatory
treatment,"^^ this language is not as inclusive as it seems.

Although the ICRL provides other remedies such as posting notice of
Indiana's civil rights law, requiring proof of compliance with the law, and
requiring a state-licensed violator to show cause why his or her license should
not be revoked or suspended, none of these remedies directly compensate the
injured plaintiff.^^ Furthermore, the ICRL does not provide for damages due to
pain and suffering, mental anguish, or emotional distress, nor does it allow for
punitive damages or account for economic non-wage losses. *^^ The Indiana
Court of Appeals emphasized this point in Indiana Civil Rights Commission v.
Union Township Trustee, ^^^ when the court plainly stated that "'[c]ompensatory
and punitive damages are not available under the Indiana Civil Rights Act.'"^^^
As a result, the ICRL damage limitations benefit employer-defendants and
adversely impact employee-plaintiffs.

4. Attorney's Fees. — Finally, the ICRL does not allow the prevailing party
to recover his or her attorney's fees. ^°^ Indeed, in a strongly- worded footnote the

98. Id.

99. See id. § 22-9-l-6(k) (discussing the various types of relief available to compensate an
injured plaintiff). Section 22-9-l-6(k)(A) provides for damages, which in employment cases, are
limited to "wages, salary, or commissions." Id. § 22-9-l-6(k)(A). Section 22-9-l-6(k)(B) requires
"the posting of notice setting forth the public policy of Indiana concerning civil rights and
respondent's compliance with the policy in places of public accommodations." Id. § 22-9-1-
6(k)(B). Section 22-9- l-6(k)(C) requires that the defendant file periodic reports of compliance, and
section 22-9-l-6(k)(D) permits the ICRC to suspend or revoke the license of an entity licensed by
the State. Id. § 22-9-1 -6(k)(C)-(D).

100. See id. § 22-9- 1 -6(k)(B) (limiting the damages available in employment cases to "include
only wages, salary, or commissions" and making no provision for pain and suffering, mental
anguish, emotional distress, or punitive damages). Additionally, the statute makes no mention of
economic non-wage losses; however, the language of section 22-9-l-6(k) seems to expressly bar
compensation for such losses by limiting damages to "wages, salary, or commissions." Id. ; see also
Ind. Civil Rights Comm'n v. Adler, 689 N.E.2d 1274, 1279 (Ind. Ct. App. 1997) (holding that
emotional distress and punitive damages are not available under the ICRL), overruled on other
grounds by 714 N.E.2d 632 (Ind. 1999).

101. 590 N.E.2d 1 1 19 (Ind. Ct. App. 1992).

102. Id. at 1 121 (quoting Fields v. Cummins Employees' Fed. Credit Union, 540 N.E.2d 631,
640 (Ind. Ct. App. 1989) (emphasis added)); accordlnd. Civil Rights Comm'n v. Midwest Steel,
450 N.E.2d 130, 140 (Ind. Ct. App. 1983) ("The purpose of the limitation that 'orders pertaining
to employment shall include only wages, salary or commissions,' is to prohibit an award of
monetary damages for feelings of embarrassment or insult which may arise out of discriminatory
acts . . . .").

103. Interestingly, the ICRL at one point permitted an award of attorney's fees to the
prevailing party. Ind. Code § 22-9-1-14 (repealed 1995). However, this provision was short-lived
and existed in the Indiana Code only from July 1994 to December 1995. Id. ; see iNfD. CODE § 22-
9.5-7-2 (2007) (fee-shifting provision in housing discrimination cases has not been extended to
employment discrimination cases); Adler, 689 N.E.2d at 1279 (noting that the legislature has

452 INDIANA LAW REVffiW [Vol. 42:441

Adler court criticized the ICRC for its "continued expenditure of public funds to
. . . relitigate an established rule of law.''^^"^ The court emphasized that the ICRC
should lobby the legislature to change the law to avoid continued disregard of
legal precedent. ^^^ Furthermore, as the A J/^r court noted, a fee-shifting provision
has been proposed by the legislature but has never been adopted. '^^ The absence
of fee-shifting legislation may discourage litigation and detrimentally affect
injured plaintiffs. ^^^ By refusing to permit fee-shifting the ICRL may also have
the unintended consequence of inducing less-vigorous defenses as employers
may gamble that an employee's administrative award will be less costly than
defending the suit at trial. ^^^

m. Federal Law: Title vn of the Civil Rights Act of 1964

Based on the limitations of the ICRL, many individuals who have
experienced discriminatory treatment in the course of their employment invoke
Title Vn^^^ and elect to litigate in federal court. Unfortunately, Title Vn does not
provide an adequate remedy for many plaintiffs.

A. Background

Title VII makes it illegal for an employer to discriminate against an
individual based on "race, color, religion, sex, or national origin."' '° In 1991,
Congress found that "additional remedies under [f]ederal law are needed to deter
unlawful harassment and intentional discrimination in the workplace . . . and . .
. legislation is necessary to provide additional protections against unlawful
discrimination in employment," and amended Title VII.''* The purpose of this
legislation was to

proposed but has never enacted legislation awarding attorney's fees to individuals who allege
employment discrimination) (citations omitted).

104. Adler, 689 N.E.2d at 1279 n.3.

105. Id.

106. Id. at 1279 (noting that the legislature has proposed but has never enacted legislation
awarding attorney's fees to individuals who allege employment discrimination) (citations omitted).

107. See 1 ROBERT L. Rossi, ATTORNEYS' Fees Recovery of Attorneys' Fees by Plaintiff^
10:20 (3d ed. 2008) (noting that "it is well-settled that a plaintiff who prevails in a civil rights
action should ordinarily recover reasonable attorney's fees"). Rossi claims that attorneys' fee
awards are necessary because they encourage individuals to "act as private attorneys" and
vigorously litigate and defend their civil rights. Id. Thus, it would be reasonable to presume that
failing to award attorneys' fees would chill civil rights litigation.

108. See Tukel, supra note 75, at 1207 (emphasizing that arbitration, an out-of-court
proceeding, is favored by employers because it is faster, less expensive, and often produces smaller
awards than those in civil litigation). Tukel' s point as to arbitration versus civil litigation can be
generalized to the choice between administrative proceedings and civil litigation as well.

109. 42 U.S.C. § 2000e to -e-17 (2006).

110. Id. § 2000e-2(a)(l).

111. Civil Rights Act of 1991, S. 1745, 102d Cong. § 2, 105 Stat. 1071 (1991).

2009] EMPLOYEE CIVIL RIGHTS 453

(1) provide appropriate remedies for intentional discrimination and
unlawful harassment in the workplace; . . .

(3) to confirm statutory authority and provide statutory guidelines for the
adjudication of disparate impact suits under title Vn of the Civil Rights
Act of 1964 (42 U.S.C. § 2000e [to e-17]); and

(4) to respond to recent decisions of the Supreme Court by expanding the
scope of relevant civil rights statutes in order to provide adequate
protection to victims of discrimination.'^^

The amendments, codified in § 198 1 (a),' '^ purported to expand damage
provisions and increase the availability of jury trials.''"^ Thus, as amended. Title
vn allows either party to demand a jury trial whenever compensatory or punitive
damages are sought.''^ Unfortunately, although the impetus underlying the
amendment of Title Vn was benign, in practice and effect, the 199 1 amendments
limited employees' ability to receive full compensation for injuries suffered due
to intentional discrimination.

B. Damage Limitations

Although Title VII, as amended, permits plaintiffs to recover damages for
harm suffered due to employment discrimination, ^'^ Jarod Gonzales notes.

112. Id.

113. 42 U.S.C. § 1981a (2006).

1 14. See id. § 1981a(c). Specifically, the statute allows a party alleging unlawful intentional
discrimination against an employer, and who cannot recover under 42 U.S.C. § 1981, to recover
compensatory and punitive damages as provided by subsection (b) of the statute, as well as any
relief authorized by section 706(g) of the Civil Rights Act of 1964. Id. § 1981a(a)(l). Section (b)
of the statute provides that the

complaining party may recover punitive damages under this section against a respondent
(other than a government, government agency or political subdivision) if the
complaining party demonstrates that the respondent engaged in a discriminatory practice
or discriminatory practices with malice or with reckless indifference to the federally
protected rights of an aggrieved individual.
Id. § 1981a(b)(l). However, the damages awarded do not include "backpay, interest on backpay,
or any other type of relief authorized under section 706(g) of the Civil Rights Act of 1964." Id. §
1981a(b)(2). Part (b)(3) goes on to limit compensatory damages to "future pecuniary losses,
emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other non-
pecuniary losses" based on the size of the employer (i.e. the number of employees). Id. §
1981a(b)(3).

115. /^. § 1981a(c).

116. Id. ^ 1981a(a)(l); see also Jarod S. Gonzalez, State Antidiscrimination Statutes and
Implied Preemption of Common Law Torts: Valuing the Common Law, 59 S.C. L. Rev, 115, 116
(2007).

454 INDIANA LAW REVIEW [Vol. 42:441

Title Vn of the Civil Rights Act of 1964 (Title VH) . . . places a cap on
the amount of compensatory damages — emotional pain, suffering, and
mental anguish — and punitive damages recoverable against an employer,
under federal law, for any type of employment discrimination. At most,
the aggrieved employee may recover a total of $300,000 for
compensatory and punitive damages .... [However, e]ach individual
state can choose to make discrimination in employment, based on
whatever prohibited factors it so desires, a violation of state law and may
provide a greater or lesser remedy for such a violation than federal law
provides. ^^^

As a result, in states that provide less compensation for employment
discrimination than Title Vn, plaintiffs will attempt to recover under Title Vn.
Unfortunately, as noted by Gonzales,^ ^^ and emphasized by the U.S. Supreme
Court in Albemarle Paper Co. v. Moody, ^^^ although "the purpose of Title Vn [is]
to make persons whole for injuries suffered on account of unlawful employment
discrimination," ^^^ Title Vn has historically been interpreted as a prophylactic
statute aimed at preventing discrimination. ^^^ Thus, the statute's damage
provisions are limited and may not adequately compensate plaintiffs who have
suffered extreme or egregious discrimination.

C. Limiting the Scope of Title VII

Title vn defines an employer as "a person engaged in an industry affecting
commerce who has fifteen or more employees." '^^ However, Title Vn carves out
exceptions to the definition of employer that limit the statute's scope. According
to these exceptions, the ''term does not include (1) the United States ... or (2) a
bona fide private membership club (other than a labor organization) . . . [and]
persons having fewer than twenty-five employees (and their agents) shall not be
considered employers." ^^^ Through its limited definition of "employer," Title Vn
effectively exempts numerous groups, including the government. Accordingly,
employees of exempt organizations are unable to utilize Title Vn and must
instead rely on state statutory or common law to recover compensation for
discrimination.

IV. Civil Rights Cases in Other Jurisdictions

To gauge how different Indiana's civil right's law is from other jurisdictions
one must compare Indiana to surrounding states. This comparison also facilitates

117. Gonzalez, supra note 1 16, at 116 (emphasis added).

118. Id.

119. 422 U.S. 405 (1975).

120. Mat 418.

121. Id. at 417 (citing Griggs v. Duke Power Co., 401 U.S. 424, 429-30 (1971)).

122. 42 U.S.C. § 2000e(b) (2006).

123. Id.

2009] EMPLOYEE CrVIL RIGHTS 455

revision of the Indiana statute because it illuminates provisions from other areas
that have proven efficient and effective. In analyzing analogous statutes from
Ohio, Illinois, Kentucky, and Michigan, Indiana lawmakers may gain a clear idea
of where to begin when, or if, revision of the Indiana Code is undertaken.

A. Ohio

The Ohio Civil Rights Code sounds similar to the Indiana Code with respect
to employment discrimination. ^^"^ Ohio's default procedure is to resolve
employment discrimination cases through an administrative proceeding. '^^ After
receiving notice of the charges of discriminatory conduct, the Ohio Civil Rights
Commission (Commission) will attempt to resolve the issue through informal
proceedings. ^^^ If the issue cannot be resolved informally, then the Commission
"may initiate a preliminary investigation to determine whether it is probable that
an unlawful discriminatory practice has been or is being engaged in."^^^ After the
investigation, if the Commission believes that unlawful discrimination has
occurred, the Commission will again attempt to informally induce compliance. *^^
However, if the Commission is unable to eliminate the discrimination, then it
serves the offender with a complaint, which states the charges and provides
notice of the Commission hearing. ^^^ An administrative hearing is conducted and
if the Commission finds that the defendant engaged in discriminatory behavior,
then the defendant is ordered to cease and desist. *^° The Commission may also
pursue "any further affirmative or other action that will effectuate the purposes
of this chapter."^^^ Thus, Ohio's basic administrative procedure appears
analogous to Indiana's procedure.

However, there is a major difference between the Ohio and Indiana civil
rights statutes. Ohio Code section 4112.99'^^ states, "Whoever violates this
chapter is subject to a civil action for damages, injunctive relief, or any other

1 24. See OfflO REV. CODE ANN. § 4 1 1 2.02 (West 2007 & Supp. 2008) (noting what constitutes
prohibited discriminatory conduct in Ohio).

125. See id. § 41 12.05(A) ("The commission . . . shall prevent any person from engaging in
unlawful discriminatory practices, provided that, before instituting the formal hearing . . . [the
commission] shall attempt, by informal methods of conference, conciliation, and persuasion, to
induce compliance with this chapter.") (emphasis added).

126. Id. §41 12.05(A).

127. Id. § 4112.05(B)(2).

128. Id. §41 12.05(B)(4).

129. Id. §41 12.05(B)(5).

130. /^. §4112.05(0(1).

131. Id. Remedies listed in this portion of the statute include, but are not limited to, "hiring,
reinstatement, or upgrading of employees with or without back pay, or admission or restoration to
union membership, and requiring the respondent to report to the commission the manner of
compliance." Id.

132. Id. § 41 12.99 (West 2008).

456 INDIANA LAW REVIEW [Vol. 42:44 1

appropriate relief ^^^^ This portion of the Ohio Code expressly permits civil
litigation and also allows additional remedies, including front pay and punitive
damages. ^^"^ Quite significantly, unlike the Indiana statute, which contains a
caveat limiting civil suits and is silent regarding punitive damages, the Ohio
Code does not limit civil suits and expressly authorizes punitive damages. ^^^

The cases interpreting section 4112.99 indicate that Ohio courts have
faithfully applied the statute's mandate. For example, the court in Elek v.
Huntington National Bank^^^ recognized that a handicapped individual who was
discriminatorily discharged by his employer could demand a civil trial to
compensate for his injury. '^^ The Ohio Supreme Court rejected the defendant's
argument that section 41 12.99 grants a jury trial only in specific circumstances,
such as when a plaintiff suffers age, credit, or housing discrimination. ^^^ The
Elek court relied on the "clear and unambiguous language of the statute" ^^^ and
the fact that the statute "specifically states that the civil action is available to
remedy any violation of [the civil rights code]."^"^^ Thus, the court held that the
Ohio legislature did not intend to limit the availability of the civil action. ^"^^ "Had
the General Assembly meant to limit the availability of the civil action remedy
. . . [the legislature] would have identified the section to which [section 41 12.99]

applied "^"^^ Because the legislature left the statute unbounded, "its language

applies to any form of discrimination addressed [by the rest of the civil rights
code]."^"^^ Although the court acknowledged that interpreting section 41 12.99 to
permit civil litigation in all situations may be redundant in some situations, "such
a result is not fatal."^"^ Finally, the court emphasized that section 41 12.99 is a
remedial statute and should "be liberally construed to promote its object
(elimination of discrimination) and protect those to whom it is addressed (victims
of discrimination)."''^^

However, even post-Eleky section 4112.99 does not apply when the

133. Id. (emphasis added).

134. See Rice v. CertainTeed Corp., 704 N.E.2d 1217, 1221 (Ohio 1999) (allowing punitive
damages in cases brought under section 41 12.99 as long as actual malice was shown); Potocnik v.
Sifco Indus., Inc., 660 N.E.2d 510, 517 (Ohio Ct. App. 1995) (noting that front pay is permitted
in cases involving race, age, sex, and handicap discrimination).

135. Compare IND. CODE §§ 22-9-1-16 to -17 (2007); with OfflO REV. CODE Ann. § 41 12.99
(West 2008), and Rice, 704 N.E.2d at 1221 (permitting punitive damages).

136. 573 N.E.2d 1056 (Ohio 1991).

137. Id. at 1059.

138. /rf. at 1057-58.

139. Mat 1058.

140. Id.

141. Id.

142. Id.

143. Id.

144. Id.

145. Id.

2009] EMPLOYEE CIVIL RIGHTS 457

complainant first files suit with the Ohio Civil Rights Commission. ^"^^
Nevertheless, Ohio courts continue to give the statute broad effect and in Kramer
V. Windsor Park Nursing Home, Inc.,^'^^ the court held that section 4112.99
creates a private right of action distinct from the other remedies available under
the civil rights law.^"^^ Thus, the court extended the statute's breadth.

Section 4112.99 has also increased the types of remedies available to
plaintiffs suing under Ohio's civil rights law. The provision has been interpreted
to allow front pay as a remedy '"^^ and to permit punitive damage awards as long
as actual malice can be shown. ^^^ In Berge v. Columbus Community Cable
Access, ^^^ the court stated, "Punitive damages may be awarded in actions brought
pursuant to [section 41 12.99]"^^^ as long as actual malice is shown. ^^^ According
to the Ohio Supreme Court, actual malice is "'(1) that state of mind under which
a person's conduct is characterized by hatred, ill will or a spirit of revenge, or (2)
a conscious disregard for the rights and safety of other persons that has a great
probability of causing substantial harm.'"'^'^ Furthermore, in Sutherland v.
Nationwide General Insurance Co.,^^^ the court indicated that even though the
language of section 4112.99 does not expressly authorize a party to recover
attorneys' fees, they are available in some cases. ^^^ For example, when the
opposing party acted "in bad faith, vexatiously, wantonly, obdurately, or for
oppressive reasons,"^^^ or when punitive damages are warranted, then attorneys'
fees are recoverable "even in the absence of statutory authorization."'^^ Thus, in
cases brought under section 41 1 2.99 in which the court awards punitive damages,
attorneys' fees are also recoverable.

A subsequent case. Rice v. CertainTeed Corp.,^^^ reiterated Ohio's
commitment to providing punitive damages to victims of employment

146. See Kocak v. Cmty. Health Partners of Ohio, Inc., 400 F.3d 466, 472 (6th Cir. 2005)
(filing suit with the Ohio Civil Rights Commission "generally precludes a subsequent suit under
section 41 12.99").

147. 943 F. Supp. 844 (S.D. Ohio 1996).

148. Id. at 856 (citing Elek, 573 N.E.2d at 1057). In Elek, the court noted that "plain reading
of this section yields the unmistakable conclusion that a civil action is available to remedy any form
of discrimination identified in [the Ohio Civil Rights Code]." Elek, 573 N.E.2d at 1057.

149. Potocnik v. Sifco Indus., Inc., 660 N.E.2d 510, 517 (Ohio Ct. App. 1995) (permitting
front pay in cases involving race, age, sex, and handicap discrimination).

150. See Rice v. CertainTeed Corp., 704 N.E.2d 1217, 1221 (Ohio 1999); Berge v. Columbus
Cmty. Cable Access, 736 N.E.2d 517, 540-42 (Ohio Ct. App. 1999).

151. 736 N.E.2d 517 (Ohio Ct. App. 1999).

152. /^. at 540.

153. /J. at 542.

154. Id. (quoting Preston v. Murty, 512 N.E.2d 1 174, 1 176 (Ohio 1987)).

155. 657 N.E.2d 281 (Ohio Ct. App. 1995).

156. /^. at 283.

157. Id.

158. Id

159. 704 N.E.2d 1217 (Ohio 1999).

458 INDIANA LAW REVIEW [Vol. 42:44 1

discrimination. The Rice court emphasized that the Ohio civil rights statute
should be broadly construed. '^^ Therefore, it was reasonable to interpret the
statute as permitting punitive damage awards. '^^ The court went on to state that
interpreting the statute as "also possess [ing] a deterrent component . . . [will not]
render the statute penal in nature .... '[A] law is not penal merely because it
imposes an extraordinary liability on a wrongdoer in favor of a person wronged,
which is not limited to damages suffered by him.'"^^^ Thus, the court held that
"[h]aving a primary remedial purpose . . . does not constrain [the civil rights
code's] deterrent aim .... [C]onstruing the word 'damages' as including only
those damages that are compensatory would be inconsistent not only with the
definition of the word but also with the purpose and intent of [section
4112.99]."^^^ In contrast, Indiana does not permit punitive damages.^^"^ Thus,
section 4112.99, which permits civil suits and provides a broader variety of
remedies, makes Ohio's civil rights code seem less employer-centric than
Indiana' s.^^^

B. Illinois

As in other states, Illinois' s civil rights statute bans discriminatory conduct
in employment. *^^ The Illinois Code divides the procedural portion of its civil
rights statute into two sections. Article 7A addresses the majority of civil rights
violations *^^ and Article 7B is narrowly tailored to address housing
discrimination. ^^^ Under Article 7 A, after receiving a report from the employee
alleging employment discrimination, the Illinois Department of Human Rights
conducts an investigation.'^^ If the department is convinced that the Illinois Code
was violated, the department "notif[ies] the parties that the complainant
[employee] has the right to either commence a civil action ... or request that the
Department of Human Rights file a complaint with the Human Rights

160. Mat 1220.

161. Mat 1220-21.

162. Id. (quoting Cosgrove v. Williamsburg of Cincinnati Mgmt. Co., 638 N.E.2d 991, 997
(Ohio 1994) (Resnick, J., concurring)).

163. Id.

164. See Ind. Civil Rights Comm'n v. Union Twp. Tr., 590 N.E.2d 1 1 19, 1 121 (Ind. Ct. App.
1992) (quoting Fields v. Cummins Employees' Fed. Credit Union, 540 N.E.2d 631, 640 (Ind. Ct.
App. 1989) for the proposition that "[c]ompensatory and punitive damages are not available under
the Indiana Civil Rights Act").

165. See iND. CODE §§ 22-9-l-6(k), 22-9-1-16 (2007).

166. 775 III. Comp. Stat. Ann. 5/2-102(A) (West 2001 & Supp. 2008).

167. See 775 ILL. COMP. STAT. ANN. 5/7A-101 (West 2001) (indicating that the procedures of
article 7 A apply to discrimination in employment, education, public accommodations, and financial
transactions).

168. See id. 5/7B-101 (stating that Article 7B applies only to housing discrimination cases).

169. See 775 III. Comp. Stat. Ann. 5/7A- 102(C)(1) (West 2001 & Supp. 2008).

2009] EMPLOYEE CIVIL RIGHTS 459

Commission."^^^ The department also permits informal conciliation in lieu of an
administrative or civil hearing. ^^^ However, if the complainant elects to pursue
his administrative remedy then a formal administrative hearing is held before the
Illinois Human Rights Commission (IHRC).*^^ If the employee prevails before
the IHRC then he is entitled to a variety of remedies, ^^^ which are not
substantially different from the administrative remedies available in Indiana/^^
Additionally, the Illinois statute includes a remedy that is not available to an
Indiana employee who pursues an administrative remedy — payment of attorney' s
fees J ^^ Thus, unlike the Indiana civil rights statute, the Illinois statute explicitly
provides for attorney's fees.'^^

Illinois courts have upheld ALJ-awarded attorneys' fees in employment
discrimination cases. For example, in Raintree Health Care Center v. Illinois
Human Rights Commission {Raintree 7/),'^^ the court invoked the Illinois civil
rights act and stated that "upon a finding of a civil rights violation, an ALJ may
recommend and the [IHRC] may require that reasonable attorney fees be paid to
the complainant for the cost of maintaining the action."^^^ The court emphasized
the discretionary nature of attorney's fee awards under the statute and gave the
ALJ's determination a great deal of deference, stating, "As long as the ALJ is
able to determine what amount would be a reasonable award of attorney fees . .
. such a determination should not be disturbed on re vie w."^^^ Despite the
discretionary nature of the award, Illinois courts require that demands for
attorney's fees be reasonable. ^^^ But as long as the employee is able to prove that

170. M 5/7 A-102(D)(4) (West Supp. 2008).

171. /J. 5/7A-102(E).

172. 5£e/J. 5/8A-102(G).

173. 5eeiW. 5/8 A- 104 (West 2001). Remedies include: issuance of a cease and desist order,
payment of actual damages, reinstatement, reporting compliance, and posting notices of compliance.
Id.

174. See IND. CODE § 22-9-l-6(k) (2007) (listing available remedies).

175. See 775 ILL. COMP. STAT. ANN. 5/8A- 104(G) (West 2001) (expressly permitting that
payment "to the complainant all or a portion of the costs of maintaining the action, including
reasonable attorney fees and expert witness fees incurred in maintaining this action . . . and in any
judicial review and judicial enforcement proceedings").

176. Compare id. 5/8A-104, with iND. CODE § 22-9.5-7-2 (2007) (noting the fee-shifting
provision in housing discrimination cases that has not been extended to employment discrimination
cases), and Ind. Civil Rights Comm'n v. Adler, 689 N.E.2d 1274, 1279 (Ind. Ct. App. 1997)
(noting that the legislature has proposed but has never enacted legislation awarding attorney's fees
to individuals who allege employment discrimination), overruled on other grounds by 114 N.E.2d
632 (Ind. 1999).

177. 672N.E.2d 1136(111. 1996).

178. Mat 1147.

179. Mat 1148.

180. Raintree Health Care Ctr. v. 111. Human Rights Comm'n (Raintree /), 655 N.E.2d 944,
951 (111. App. Ct. 1995) ("[0]nly those attorney fees which are reasonable will be allowed, and the
party requesting fees bears the burden of presenting sufficient evidence from which the trier of fact

460 INDIANA LAW REVIEW [Vol. 42:441

she won a substantial portion of her case she is entitled to recover her attorney's
fees in order to encourage similarly-situated plaintiffs to litigate their interests. ^^^

A second difference between the Illinois Code and the Indiana Code is that
the Illinois Civil Rights Act contains broad language that allows an injured
plaintiff to recover more extensive damages ^^^ than are available in Indiana. *^^
This makes the Illinois Civil Rights Act appear more employee-friendly. For
example, in Charles A. Stevens & Co. v. Human Rights Commission, ^^^ the court
upheld the IHRC's front pay award. '^^

Furthermore, in ISS International Services Systems, Inc. v. Illinois Human
Rights Commission, ^^^ the court held that "[a]ctual damages include
compensation for emotional harm and mental suffering."^^^ Finally, in Page v.
City of Chicago, ^^^ the court broadened the scope of the Illinois statute when it
determined that the Illinois Human Rights Act does not prevent regulation of an
employer with fewer than fifteen employees. ^^^ With respect to punitive
damages, the Page court went on to note that the Act may be interpreted to allow
provision of punitive damages where it is "highly appropriate and necessary."'^^

Thus, Illinois' s civil rights law, which provides more extensive damage
awards and allows the prevailing party to recoup his or her attorney's fees, is
more similar to Kentucky's civil rights code than it is to Indiana' s.^^*

can render a decision as to their reasonableness.").

181. Brewington v. Dep't of Corr., 513 N.E.2d 1056, 1064-65 (111. App. Ct. 1987).

182. See ILL. COMP. STAT. ANN. 5/8A-104(J) (West 2001) (allowing "such action as may be
necessary to make the individual complainant whole, including, but not limited to, awards of
interest on the complainant's actual damages and backpay from the date of the civil rights
violation").

183. Compare /a?., w/?/zlND. Code § 22-9- l-6(k)(A) (2007).

184. 554 N.E.2d 976 (111. App. Ct. 1990).

185. Id. at 981 ("[T]he Illinois Human Rights Act provides . . . that the Commission may
provide for any relief to 'make the individual complainant whole.' Front pay is a remedy available

to compensate an individual who had been wronged by an employer's violation Front pay may

be appropriate, especially when the plaintiff has no reasonable prospect of obtaining comparable
employment.") (citations omitted).

186. 651 N.E.2d 592 (111. App. Ct. 1995).

187. Id. at 598 (citing Vill. of Bellwood Bd. of Fire & Police Comm'rs v. Human Rights
Comm'n, 541 N.E.2d 1248, 1258 (1989)).

188. 701 N.E.2d 218 (111. App. Ct. 1998).

189. /^. at 226.

190. Mat 228.

191. Compare 775 III. Comp. Stat. Ann. 5/8 A- 1 04 (West 200 1 ), and Ky. Rev. Stat. Ann.
§ 344.450 (West 2006), with IND. CODE § 22-9.5-7-2 (2007), and Ind. Civil Rights Comm'n v.
Adler, 689 N.E.2d 1274, 1279 (Ind. Ct. App. 1997) (noting that the legislature has proposed but
has never enacted legislation awarding attorney's fees to individuals who allege employment
discrimination), overruled on other grounds by 714 N.E.2d 632 (Ind. 1999).

2009] EMPLOYEE CIVIL RIGHTS 461

C. Kentucky

Much of Kentucky's civil rights statute is similar to Indiana's. Indeed, like
Indiana, the Kentucky Code even contains a provision that prevents
discrimination based on use of tobacco products. ^^^ As is common in civil rights
statutes, Kentucky ' s default procedure is an administrative hearing conducted by
the Kentucky Commission on Human Rights (KCHR).^^^ As in other
jurisdictions, ^^"^ prior to conducting a formal administrative hearing, the KCHR
usually attempts to resolve the discriminatory practice through mediation or
conciliation.'^^ However, conciliation is neither mandatory nor guaranteed and
informal resolution can halt at any time.'^^

If conciliation is unsuccessful the case moves through administrative
proceedings.'^^ If the KCHR determines that discrimination has occurred, it is
entitled to '*take affirmative action [to remedy the discrimination]."'^^ The
Kentucky statute lists the available remedies, '^^ and they are not significantly
different from the administrative remedies available in Indiana.^^

However, unlike Indiana, the Kentucky Code indicates that administrative
damages may include "compensation for humiliation and embarrassment, and .
. . for other costs actually incurred by the complainant as a direct result of an
unlawful practice. "^^' This portion of the Kentucky Code withstood

192. Compare IND. CODE § 22-5-4-1 (2007), with Ky. Rev. Stat. Ann. § 344.040(1) (West
2006). The comparable Indiana Code provision is codified in section 22-5-4-1 and states that an
employer may not

(1) require, as a condition of employment, an employee or prospective employee to
refrain from using; or

(2) discriminate against an employee with respect to:

(A) the employee's compensation and benefits; or

(B) terms and conditions of employment;
based on the employee's use of;

tobacco products outside the course of the employee's or prospective employee's

employment.
iND. Code § 22-5-4- 1(a) (2007). However, secfion 22-5-4- 1(b) does permit employers to provide
financial incentives "intended to reduce tobacco use." Id. § 22-5-4- 1(b). Indiana employers who
violate section 22-5-4-1 are amenable to civil litigation. Id. § 22-5-4-2.

193. Ky. Rev. Stat. Ann. § 344.210(4) (West 2006).

194. See, e.g., OfflO Rev. Code Ann. § 41 12.05(B)(4) (West 2007 & Supp. 2008).

195. Ky. Rev. Stat. Ann. § 344.200(4) (West 2006).

196. See id. § 344.200(4)-(6).

197. Id. § 344.210(1).

198. Id. § 344.230(2).

199. See id. § 344.230(3) (listing the available remedies which include reinstatement, posting
notices, reporting compliance to the Commission, and paying the plaintiff damages resulting fi"om
the unlawful practice).

200. See iND. CODE § 22-9-l-6(k) (2007).

201 . Ky. Rev. Stat. Ann. § 344.230(3)(h) (West 2006). Contra Ind. Code § 22-9-l-6(k)(A)

462 INDIANA LAW REVIEW [Vol. 42:441

constitutional challenge in Kentucky Commission on Human Rights v. Fraser}^^
In Eraser, the court held that there was "nothing unconstitutional in the
administrative award of damages under [section 344.230(3)] where due process
procedural rights have been protected, where prohibited conduct has been well
defined by the governing statute, and where judicial review is available."^^^ The
court went on to state that "no specific monetary ceiling for the award of
damages for humiliation and embarrassment is constitutionally required"^^'^
because "[h]umiliation and embarrassment are . . . not easily quantified"^^^ and
imposing a "specific limit could itself be arbitrary."^^^ Furthermore, the court
noted, "Humiliation and embarrassment lie at the core of the evil which the
Kentucky Civil Rights Act was designed to eradicate. If victims are to be fairly
compensated for these injuries, the factfinder must be free to assess reasonable
damages."^^^ Thus, Kentucky's Code is distinguishable from Indiana's because
Indiana does not permit damages for emotional distress. ^^^

Another difference between the Kentucky and Indiana Codes is that
Kentucky permits the KCHR to publicize its orders by notifying the parties, as
well as "any other public officers and persons that the commission deems
proper."^^^ Thus, the KCHR has discretion to inform other individuals of the
respondent's discriminatory behavior.

Although these differences are interesting, perhaps the most significant
difference between the Kentucky and Indiana civil rights statutes is that
Kentucky permits civil litigation and awards attorney's fees that result from the
litigation.^^^ Section 344.450 of the Kentucky Code states:

Any person injured by any act in violation of the provisions of this
chapter shall have a civil cause of action in Circuit Court to enjoin
further violations, and to recover the actual damages sustained, together

(2007) (limiting the damages available in employment cases to "include only wages, salary, or
commissions" and making no provision for pain and suffering, mental anguish, emotional distress,
or punitive damages).

202. 625 S.W.2d 852 (Ky. 1981).

203. Mat 855.

204. Id.

205. Id.

206. Id.

207. Id.

208. See IND. CODE § 22-9-l-6(k)(A) (2007) (limiting the damages available in employment
cases to "include only wages, salary, or commissions" and making no provision for pain and
suffering, mental anguish, emotional distress, or punitive damages).

209. Ky. Rev. Stat. Ann. § 344.230(2) (West 2006).

210. Compare id. § 344.450, with iND. CODE §§ 22-9-l-6(k)(A), 22-9.5-7-2 (2007), and Ind.
Civil Rights Comm'n v. Adler, 689 N.E.2d 1274, 1279 (Ind. Ct. App. 1997) (noting that the
legislature has proposed but has never enacted legislation awarding attorney's fees to individuals
who allege employment discrimination), overruled on other grounds by 714 N.E.2d 632 (Ind.
1999).

2009] EMPLOYEE CIVIL RIGHTS 463

with the costs of the law suit. The court's order or judgment shall
include a reasonable fee for the plaintiffs attorney of record and any
other remedies contained in this chapter.^^^

Thus, this provision makes Kentucky's statute more like the Michigan and
Illinois Codes than the Indiana Code.^^^ Kentucky's procedure provides
"alternative sources of relief, one administrative and one judicial. "^^^ The dual
procedures benefit plaintiffs because they provide more extensive procedural
protection.^^"^

For example, the court in Meyers v. Chapman Printing Co}^^ held that "[t]he
Kentucky Civil Rights Act creates a jural right as well as a right to redress by
administrative procedure. To the extent it creates a jural right both plaintiff and
defendant are entitled to a trial by jury."^^^ The court justified its holding by
noting that the purpose of the Kentucky statute was to give individuals who do
not wish to proceed before the KCHR "'an opportunity in circuit court to have
the fullest range of remedies allowable.' This, of course, includes trial by
jury."^*^ In a subsequent case. Palmer v. International Ass'n of Machinists &
Aerospace Workers^^^ the court confirmed the existence of dual procedures and
held that section 344.450 provided a civil cause of action "in addition to any
other remedies contained in the chapter. "^'^

However, section 344.450 has not been expanded to the point that all
employment discrimination issues are tried by a jury.^^^ Kentucky courts have
determined that some issues, including whether reinstatement and front pay are
available remedies under section 344.450, are not appropriate for the jury and
should be decided by the court.^^^ Thus, in Brooks v. Lexington-Fayette Urban
County Housing Authority^^^ the court indicated that reinstatement "appears to
fall within the trial court's power to 'enjoin further violations' under [section]

211. Ky. Rev. Stat. Ann. § 344.450 (West 2006).

212. Compare 775 ILL. COMP. STAT. ANN. 5/8A-104(G) (West 2001), and Ky. Rev. Stat.
Ann. § 344.450 (West 2006), and MiCH. COMP. Laws Ann. § 37.2802 (West 2001), with IND.
Code § 22-9.5-7-2 (2007), andAdler, 689 N.E.2d at 1279 (noting that the legislature has proposed
but has never enacted legislation awarding attorney's fees to individuals who allege employment
discrimination) (citations omitted).

213. Meyers v. Chapman Printing Co., 840 S.W.2d 814, 820 (Ky. 1992).

214. See, e.g., McNeal v. Armour & Co., 660 S.W.2d 957, 959 (Ky. Ct. App. 1983).

215. 840 S.W.2d 814 (Ky. 1992).

216. Mat 820.

217. Id. (quoting Canamore v. Tube Turns Div. of Chemetron Corp., 676 S.W.2d 800, 804
(Ky. Ct. App. 1984)).

218. 882 S.W.2d 117 (Ky. 1994).

219. Id. at 120.

220. See Brooks v. Lexington-Fayette Urban County Hous. Auth., 132 S.W.3d 790, 806 (Ky.
2004).

221. See id.

111. 132 S.W.3d 790 (Ky. 2004).

464 INDIANA LAW REVIEW [Vol. 42:44 1

344.450."^^^ Therefore, "the decision whether to order reinstatement is an issue
for the trial court and not the jury."^^"^ Even though the plaintiff in Brooks was
entitled to a jury trial, section 344.450 was limited and not all of the issues were
decided by the jury.^^^ The Brooks court also explicitly indicated that section
344.450 does not permit punitive damages.^^^

D. Michigan

The Michigan Civil Rights Act is more commonly known as the Elliott-
Larsen Civil Rights Act.^^^ Like surrounding states, the Act outlaws employment
discrimination.^^^ The investigatory procedure used in Michigan is also similar
to surrounding states, and the default means of dispute resolution is an
administrative hearing that commences when an allegation of discrimination is
filed with the department of civil rights. ^^^

After the allegation is thoroughly investigated, if the department is convinced
that unlawful discrimination has occurred, the department files charges with the
civil rights commission.^^^ The commission then conducts a hearing.^^^ If the
petitioner is successful, the statute permits the commission to deliver "[a] copy
of the order ... to the respondent, the claimant, the attorney general, and to other
public officers and persons as the commission deems proper."^^^ Thus, similar
to Kentucky, which permits its civil rights commission to publicize the result of
administrative hearings, Michigan's statute gives the commission the discretion
to inform individuals about the hearing's outcome.^^^

The statute goes on to detail what relief is available if unlawful
discrimination occurred.^^"^ All of the administrative remedies are similar to
those available in surrounding states. ^^^ However, Michigan also provides

223. /J. at 806.

224. Id.

225. Id.

226. Id. at 808 (citing Ky. Dep't of Corr. v. McCullough, 123 S.W.3d 130, 138-39 (Ky.
2003)).

227. Mich. Comp. Laws Ann. § 37.2101 (West 2001).

228. See id. § 37.2202(1) (listing the types of prohibited conduct); see also 775 III. Comp.
Stat. Ann. 5/2-102(A) (West 2001 & Supp. 2008); Ind.Code § 22-9-l-2(a)&(b) (2007); Ky.Rev.
Stat. Ann. § 344.040 (West 2006); OffloREV. Code Ann. § 41 12.02 (West 2007 & Supp. 2008).

229. See MiCH. COMP. LAWS ANN. § 37.2602(c) (West 2001).

230. Id. § 37.2605(1).

231. Id.

232. Id.

233. Compare Ky. Rev. Stat. Ann. § 344.230(2) (West 2006), with Mich. Comp. Laws Ann.
§37.2605(1) (West 2001).

234. Mich. Comp. Laws Ann. § 37.2605(2) (West 2001). Relief includes hiring,
reinstatement, and posting notices and reporting compliance to the civil rights commission. Id.

235. See 775 III. Comp. Stat. Ann. 5/8A-104 (West 2001); Ind. Code § 22-9-l-6(k) (2007);
Ky. Rev. Stat. Ann. § 344.230(3) (West 2006); Ohio Rev. Code Ann. § 41 12.05(G)(1) (West

2009] EMPLOYEE CIVIL RIGHTS 465

additional remedies, which make its civil rights code unique.^^^ The statute
indicates the availability of remedies including:

(i) Payment to the complainant of damages for an injury or loss caused
by a violation of this act, including a reasonable attorney's fee[; and]

Payment to the complainant of all or a portion of the costs of maintaining
the action before the commission, including reasonable attorney fees and
expert witness fees.^^^

In Department of Civil Rights v. Horizon Tube Fabricating, Inc.,^^^ the Michigan
Court of Appeals interpreted the statute and held that an award of attorney fees
was reasonable and was not an abuse of discretion.^^^ Thus, the appellate court
upheld the trial court's judgment as to the attorney fees.^'^^ The Horizon Tube
court also noted that awards of interest on backpay were allowed in some
situations.^"^' The court based this determination on statutory language
authorizing the civil rights commission to award "other relief that [it] deems
appropriate. "^"^^ Therefore, a Michigan employee can request interest on
backpay, and if the civil rights commission deems it appropriate, the commission
can grant the request.^"^^

Similarly, in King v. General Motors Corp.^^ the court held that although
"the decision to grant or deny an award of attorney fees ... is within the
discretion of the trial court,"^"^^ the legislative intent of the civil rights act
indicated that attorney's fees should be granted:

[A]ttomey fee awards are intended to encourage persons deprived of
their civil rights to seek legal redress as well as to ensure victims of
employment discrimination access to the courts .... A second purpose
in allowing attorney fee recovery under the Elliott-Larsen Civil Rights

2007).

236. See MiCH. COMP. LAWS ANN. § 37.2605(2)(i)&(j) (West 2001).

237. Id. Sections 37.2605(2)(h) and (k) provide additional remedies for individuals who suffer
housing discrimination. Id. § 37.2605(2)(h)&(k). For example, section 37.2605(2)(k) indicates
that a civil fine is a possible remedy "for a violation of [section 33.2501] of this act." Id. §
37.2605(2)(k). The amount of the fine is to be "directly related to the cost to the state for enforcing
this statute [and is] not to exceed: $10,000.00 for the first violation . . . $25,000.00 for the second
violation within a 5-year period . . . [or] $50,000.00 for 2 or more violations within a 7-year
period." M. § 37.2605(2)(k)(i)-(iii).

238. 385 N.W.2d 685 (Mich. Ct. App. 1986).

239. Mat 688-89.

240. Id.

241. /J. at 689-90.

242. Mich. Comp. Laws Ann. § 37.2605(2)(/) (West 2001).

243. Horizon Tube Fabricating, Inc., 385 N.W.2d at 690.

244. 356 N.W.2d 626 (Mich. Ct. App. 1984).

245. Mat 629.

466 INDIANA LAW REVIEW [Vol. 42:441

Act is to obtain compliance with the goals of the act and thereby deter
discrimination in the work force.^"^^

In Michigan, as in Kentucky, an administrative remedy is not a plaintiffs
sole remedy.^"^^ According to section 37.2801,

(1) A person alleging a violation of this act may bring a civil action for
appropriate injunctive relief or damages, or both[; and]

(2) An action commenced pursuant to [this subsection] may be brought
in the circuit court for the county where the alleged violation occurred,
or for the county where the person against whom the civil complaint is
filed resides or has his principal place of business.^"^^

Thus, unlike Indiana, Michigan permits civil litigation. ^"^^ This portion of the
statute has been interpreted to allow not just civil trials, but civil jury trials.
Indeed, the King court emphasized this point when it stated that although "the
EUiott-Larsen Civil Rights Act is silent on the right to a trial by jury, we find that
jury trials are a litigant's right under the act."^^^ Thus, King indicates that
Michigan's civil rights laws are similar to Kentucky's and unlike Indiana' s.^^^
As a result of the civil trial provision contained in section 37.2801, injured
Michigan employees often recover sizable damage awards.^^^ Furthermore,
section 37.2801 permits plaintiffs to recover for mental anguish or emotional
distress. ^^^ For example, in Slay ton v. Michigan Host, Inc.,^^"^ the court
determined that the plaintiff, who was fired after she sued her employer because
he forced her to wear a revealing uniform, had a cause of action under section
37.2801.^^^ The court emphasized that

246. Id. (citations omitted).

247. See Ky. Rev. Stat. Ann. § 344.450 (West 2006); MiCH. COMP. Laws Ann. §
37.2801(l)-(2) (West 2001).

248. Mich. CoMP. Laws Ann. §37.2801(l)-(2) (West 2001).

249. Compare id. § 37.2801, with IND. CODE § 22-9-1-16 (2007) (permitting an election of
civil litigation only in narrow circumstances).

250. /Cmg, 356 N.W.2d at 629.

25 1 . See id. Compare Ky. Rev. Stat. Ann. § 344.450 (West 2006), and MiCH. COMP. LAWS
Ann. § 37.2801 (West 2001), with iND. CODE §§ 22-9-1-16, 22-9.5-7-2 (2007), and Ind. Civil
Rights Comm'n v. Adler, 689 N.E.2d 1274, 1279 (Ind. Ct. App. 1997) (noting that the legislature
has proposed but has never enacted legislation awarding attorney's fees to individuals who allege
employment discrimination), overruled on other grounds by 714 N.E.2d 632 (Ind. 1999).

252. See, e.g., Lilley v. BTM Corp., 958 F.2d 746, 754 (6th Cir. 1992) (damage award of
$350,000 not excessive).

253. See, e.g., Lilley, 958 F.2d at 754 (citing Slayton v. Mich. Host, 332 N.W.2d 498, 500-01
(Mich. Ct. App. 1983)); Moody v. Pepsi-Cola Metro. Bottling Co., 915 F.2d 201, 209-1 1 (6th Cir.
1990).

254. 332 N.W.2d 498 (Mich. Ct. App. 1983).

255. /^. at 501.

2009] EMPLOYEE CIVIL RIGHTS 467

a victim of discrimination may bring a civil suit to recover for damages
for any humiliation, embarrassment, outrage, disappointment, and other
forms of mental anguish which flow from the discrimination injury . . .
. These types of injuries are the kind that the Elliott-Larsen Civil Rights
Act was designed to protect against and to hold otherwise would
undercut the legislative scheme to remedy discriminatory wrongs. ^^^

Because the plaintiff in Slayton had suffered mental anguish from the sexual
discrimination, she was entitled to recover damages. ^^^ However, unlike Ohio,^^^
Michigan does not allow punitive damage awards in employment discrimination
cases.^^^ This was made explicit when the King court stated, "[W]e find error in

the instructions to the jury allowing . . . exemplary damages We thus vacate

the exemplary damages award."^^^

V. Recommendations FOR Indiana

Comparing Indiana's civil rights law to those of Kentucky, Ohio, Michigan,
and Illinois indicates that Indiana's protections fall short of those in surrounding
states. Indiana should amend its civil rights law to ensure that employees who
suffer unlawful discrimination are thoroughly compensated. The most effective
and efficient way to update Indiana's law is to draw inspiration from the civil
rights laws of surrounding states. Although Indiana should not wholly adopt the
civil rights laws of Michigan, Kentucky, Ohio, or Illinois, looking to these states'
laws for guidance is prudent.

A. Permit Civil Suits Without Requiring Consent from Both Parties

Section 22-9-1-16 of the Indiana Code differs from that of any surrounding
state. By allowing civil litigation only when both the complainant and the
respondent consent, Indiana makes it nearly impossible for individuals to have
their cases adjudicated by a judge in a courtroom. To abrogate this problem
Indiana should look to the Kentucky, Ohio, and Michigan civil rights laws, all of
which permit civil trials.^^^ Ohio's Code states, "Whoever violates this chapter
is subject to a civil action for damages, injunctive relief, or any other appropriate
relief. "^^^ However, similar to Indiana's Code, this provision does not apply if

256. Mat 500-01.

257. /^. at 501.

258. See Rice v. CertainTeed Corp., 704 N.E.2d 1217, 1221 (Ohio 1999) (allowing punitive
damages in cases brought under section 41 12.99 as long as actual malice was shown).

259. See King v. Gen. Motors Corp., 356 N.W.2d 626, 628 (Mich. Ct. App. 1984).

260. Id. (citing Veselenak v. Smith, 327 N.W.2d 261, 262 (Mich. 1982)); accord Dep't of
Civil Rights ex rel Johnson v. Silver Dollar Cafe, 499 N.W.2d 409, 410 (Mich. Ct. App. 1993) (per
curiam).

261. See Ky. Rev. Stat. ANN. § 344.450 (West 2006); MiCH. COMP. LAWS Ann. §
37.2801(l)-(2) (West 2001); OfflO Rev. Code Ann. § 41 12.99 (West 2007).

262. Omo Rev. Code Ann. § 41 12.99 (West 2007).

468 INDIANA LAW REVIEW [Vol. 42:441

an individual first files suit with the Ohio Civil Rights Commission.^^^
Therefore, individuals who are not aware that civil litigation is an option may be
unable to obtain a trial if they initially pursue an administrative remedy.
Nevertheless, Ohio' s provision is preferable to Indiana' s provision because Ohio
expressly permits civil litigation and makes the right to a civil trial distinct from
the other available remedies.^^"^

Kentucky's approach is similar to Ohio's because Kentucky expressly
permits civil litigation.^^^ Furthermore, Kentucky provides complainants more
options and more remedies than Indiana because the Kentucky Code has been
construed as providing a civil cause of action in addition to other remedies. ^^^
Because Kentucky's Code explicitly states that civil litigation is available along
with other remedies, ^^^ the state's statute seems more complainant-friendly than
Ohio's statute.

Finally, as in Kentucky and Ohio, Michigan's statute provides for civil
trials.^^^ However, Michigan's statutory language^^^ is not as clear as
Kentucky's. Therefore, based on the clarity and scope of the code provision,
Indiana should adopt Kentucky's statutory language^^^ and interpretation^^ ^ and
allow civil trials in addition to other remedies.

B. Permit Jury Trials

Indiana is also anoutlier with respect to jury trials. Indeed, section 22-9-1-17
of the Indiana Code explicitly states that a "civil action filed under [section 22-9-
1-17] must be tried by the court without benefit of a jury."^^^ Thus, Indiana is
distinguishable from Kentucky, Ohio, and Michigan, which all allow
discrimination cases to be tried, at least to some extent, by a jury.^^^

263. See IND. CODE § 22-9-l-16(b) (2007); Kocak v. Cmty. Health Partners of Ohio, Inc.,
2005 FED App. 0127P, 400 F.3d 466, 472 (6th Cir.).

264. See Kramer v. Windsor Park Nursing Home, Inc., 943 F. Supp. 844, 856 (S.D. Ohio
1 996) (emphasizing that section 411 2.99 creates a private right of action "separate and distinct from
those remedies available in other sections" of the civil rights statute).

265. See Ky. Rev. Stat. Ann. § 344.450 (West 2006); OfflO Rev. Code Ann. § 4112.99
(West 2007).

266. 5^^Palmerv.Int'lAss'nofMachinists& Aerospace Workers, 882S.W.2d 117, 120(Ky.
1994) (section 344.450 provides a civil cause of action "in addition to any other remedies contained
in the chapter").

267. See id.

268. See MiCH. COMP. LAWS ANN. § 37.2801 (l)-(2) (West 2001).

269. See id.

270. See Ky. Rev. Stat. Ann. § 344.450 (West 2006)

271. S^ePa/m^r, 882S.W.2dat 120.

272. Ind. Code §22-9-1 -17(c) (2007).

273. See Meyers v. Chapman Printing Co. Inc., 840 S.W.2d 814, 819-20 (Ky. 1992); King v.
Gen. Motors Corp., 356 N.W.2d 626, 629 (Mich. Ct. App. 1984); Taylor v. Nat'l Group of Cos.,
605 N.E.2d 45, 46 (Ohio 1992).

2009] EMPLOYEE CIVIL RIGHTS 469

Kentucky case law indicates that "[t]he Kentucky Civil Rights Act creates
a jural right as well as a right to redress by administrative procedure. To the
extent it creates a jural right both plaintiff and defendant are entitled to a trial by
jury."^^"^ Thus, although the Kentucky statute never explicitly states that jury
trials are available, the Meyers court emphasized that the purpose of the statute
was to give individuals a full range of remedies. ^^^ However, in recent years
Kentucky courts have limited the application of this decision and restricted the
right to a jury trial by designating some issues for judicial resolution.^^^

Although Ohio permits jury trials in some employment discrimination cases,
the determination is made on a case-by-case basis. For example, the court in
Taylor v. National Group of Companies, ^^^ permitted the plaintiff in a sex
discrimination case to demand a jury trial.^^^ In contrast, in Hoops v. United
Telephone Co.,^^^ an age discrimination case, the court declined the plaintiffs
jury request.^^^ Because Ohio's stance on the right to jury trial is somewhat
unclear, Indiana should look elsewhere for guidance when revising this portion
of its civil rights law.

Michigan's statute is preferable to Ohio's because in Michigan,
administrative remedies are not the sole compensation for the injured plaintiff^^^
and civil litigation is permitted.^^^ Furthermore, the court in King v. General
Motors Corp. indicated that although "the Elliott-Larsen Civil Rights Act is
silent on the right to a trial by jury, . . . jury trials are a litigant's right under the
act."^^^ Thus, King illustrates that Michigan's laws are similar to Kentucky's
laws.'''

By permitting jury trials, Kentucky and Michigan allow complainants an
opportunity to present their claims to a jury of their peers, which provides a

274. Meyers, 840 S.W.2d at 820.

275. See id.

116. See Brooks v. Lexington-Fayette Urban County Hous. Auth., 1 32 S. W.3d 790, 806 (Ky.
2004) (holding that since reinstatement and availability of front pay are equitable remedies, they
are issues resolved by the court, not the jury).

277. 605 N.E.2d 45 (Ohio 1992).

278. Mat 46.

279. Hoops V. United Tel. Co., 553 N.E.2d 252 (Ohio 1990).

280. Id. at 256-57 (denying the right to jury trial because the right did not exist at common
law).

281. See MiCH. COMP. Laws Ann. § 37.2801(1)&(2) (West 2001) ("A person alleging a
violation of this act may bring a civil action for appropriate injunctive relief or damages, or both
[and a]n action commenced pursuant to [this subsection] may be brought in the circuit court for the
county where the alleged violation occurred, or for the county where the person against whom the
civil complaint is filed resides or has his principal place of business.").

282. 5ee /rf. § 37.2801(1) (West 2001).

283. King v. Gen. Motors Corp., 356 N.W.2d 626, 629 (Mich. Ct. App. 1984).

284. Id.\ see also Ky. Rev. Stat. Ann. § 344.450 (West 2006); Mich. Comp. Laws Ann. §
37.2801 (West 2001); Meyers v. Chapman Printing Co. Inc., 840 S.W.2d 814, 819-20 (Ky. 1992).

470 INDIANA LAW REVIEW [Vol. 42:44 1

benefit unavailable to Indiana employ ees.^^^ Furthermore, because plaintiffs'
success rates before juries are slightly higher than success rate before a judge^^^
and because jury trials have a deterrent effect on other employ ers,^^^ Indiana
should adopt language from Michigan's Code and give plaintiffs the option to
proceed before a jury.

C Expand Damage Provisions to Provide More Complete Compensation

One of the major shortcomings of Indiana's Code is that it drastically limits
the damages available to employees injured by unlawful discrimination. ^^^ In
contrast, Kentucky provides a full panoply of remedies in employment
discrimination cases.^^^ Indeed, in Kentucky, damages are available for both
humiliation and personal indignity.^^^

Similarly, Illinois provides more expansive damage provisions than
Indiana.^^^ According to the Illinois Code, relief may include "such action as
may be necessary to make the individual complainant whole, including, but not
limited to, awards of interest on the complainant's actual damages and backpay
from the date of the civil rights violation ^^"^^ By allowing the victorious party
to recover backpay and interest on damages,^^^ Illinois' s civil rights act seems
more plaintiff-friendly. Furthermore, Illinois case law indicates that punitive
damages are permitted when "highly appropriate and necessary."^^"^ Although
this language gives the court a great deal of discretion, addition of Illinois' s
language to the Indiana statute would be a definite improvement.

Ohio also allows recovery of more damages than Indiana.^^^ Ohio' s Code has
been interpreted to permit punitive damage awards when actual malice can be

285. See Ky. Rev. Stat. Ann. § 344.450 (West 2006); Mich. Comp. Laws Ann. § 37.2801
(West 2001); Meyers, 840 S.W.2(i at 819-20; King, 356 N.W.2d at 629.

286. Oppenheimer, supra note 82, at 523.

287. See Johnson, supra note 756 at 216 (discussing the deterrent effect of public resolution
of a dispute).

288. See IND. CODE § 22-9-l-6(k)(A) (2007) (damages limited to those necessary "to restore
complainant's losses incurred as a result of discriminatory treatment," which in an employment
context includes "only wages, salary, or commissions"). Similarly, in Michigan punitive damages
are not available in employment discrimination cases. See King, 356 N.W.2d at 628 ("[W]e find
error in the instructions to the jury allowing both compensatory and exemplary damages for
plaintiffs mental and emotional distress and anguish. We thus vacate the exemplary damages award
. . . .").

289. See Meyers, 840 S.W.2d at 819 (allowing damages for mental and emotional injury).

290. McNeal v. Armour & Co., 660 S.W.2d 957, 958 (Ky. Ct. App. 1983).

291. Compare 775 ILL. COMP. STAT. Ann. 5/8A-104 (West 2001), with iND. CODE § 22-9-1-
6(k) (2007).

292. 775 III. Comp. Stat. Ann. 5/8A-104(J) (West 2001) (emphasis added).

293. Id.

294. Page v. City of Chicago, 701 N.E.2d 218, 228 (111. App. Ct. 1998).

295. OfflO Rev. Code Ann. § 41 12.05(G)(1)(a) (West 2007 & Supp. 2008).

2009] EMPLOYEE CrVIL RIGHTS 471

shown.^^^ In contrast, Indiana does not permit punitive damages in employment
discrimination cases. ^^^ Ohio case law also indicates that in some situations front
pay may be awarded.^^^ However, Ohio's Code provision is not the best choice
for Indiana because Ohio requires the plaintiff to prove actual malice in order to
demand punitive damages.^^^ Because Ohio places this burden on the plaintiff,
Indiana should look to either Illinois or Kentucky for guidance when expanding
its damage provision.

Although there is some variation among surrounding states with respect to
damages in employment discrimination cases, neighboring states, with the
exception of Michigan, all have more extensive damage provisions than Indiana.
Thus, despite the similarity to Michigan law, Indiana should revise its provision
on damages and, at the very least, adopt language similar to Illinois' s statute,
which allows interest on damage awards, as well as backpay.

Furthermore, as written, the ICRL provides fewer remedies than the federal
law does under Title VII. As a result, Indiana plaintiffs will attempt to litigate
in federal court whenever possible.^^^ However, because Title Vn caps
compensatory damage awards^^^ and does not apply to all employers, it is not a
feasible remedy for many plaintiff s.^^^ Although adopting some of Title VII's
damage provisions would certainly improve Indiana's statute, the best choice is
adopting language from either Illinois or Michigan to expand Indiana's damage
provisions.

D. Provide Attorney's Fees to the Prevailing Party

The final difference between Indiana's civil rights statute and those of
surrounding states is that Indiana does not award attorney's fees to the prevailing
party .^^^ Even Michigan, which, like Indiana, refuses to award punitive damages,

296. See Rice v. CertainTeed Corp., 704 N.E.2d 1217, 1221 (Ohio 1999); Berge v. Columbus
Cmty. Cable Access, 736 N.E.2d 517, 542 (Ohio Ct. App. 1999).

297. See IND. CODE § 22-9-l-6(k) (2007); Ind. Civil Rights Comm'n v. Adler, 689 N.E.2d
1274, 1279 (Ind. Ct. App. 1997) (holding that emotional distress and punitive damages are not
available under the Indiana Civil Rights Law), overruled on other grounds by 114 N.E.2d 632 (Ind.
1999).

298. 5^6Potocnik V. Sifco Indus., Inc., 660 N.E.2d 510, 517-18 (Ohio Ct. App. 1995) ("Front
pay is available as a remedy for . . . race discrimination, age discrimination, and sex discrimination.
. . . [F]ront pay is available for handicap discrimination as well, when appropriate. [However, t]he
trial judge must determine if front pay is appropriate and [then] the jury determines the amount of
front pay." (citations omitted)).

299. See Rice, 704 N.E.2d at 1221; Berge, 736 N.E.2d at 542.

300. See Gonzalez, supra note 1 16, at 1 16.

301. Id.

302. 42 U.S.C. § 2000e(b) (2006) (defining the term "employer").

303. Compare 775 ILL. COMP. STAT. Ann. 5/8A- 104(G) (West 2001), andUlCH. COMP. LAWS
Ann. § 37.2801(3) (West 2001), with Ind. Code § 22-9.5-7-2 (2007), and Ind. Civil Rights
Comm'n v. Adler, 689 N.E.2d 1274, 1279 (Ind. Ct. App. 1997) (noting that the legislature has

472 INDIANA LAW REVIEW [Vol. 42:441

allows the victorious party to recover attorney ' s fees.^^"^ Michigan' s statute states
that damages in employment discrimination cases include "[p]ayment to the
complainant of all or a portion of the costs of maintaining the action before the
commission, including reasonable attorney fees and expert witness fees."^^^ The
statute also emphasizes that "[a]s used in [this subsection], 'damages' means
damages for injury or loss caused by each violation of this act, including
reasonable attorney's feesT^^^ In King the court explained that allowing
recovery of attorney's fees is important for policy purposes.^^^ The court stated
that attorney's fees should be liberally granted because "attorney fee awards are
intended to encourage persons deprived of their civil rights to seek legal redress
as well as to ensure victims of employment discrimination access to the
courts."^^^ Furthermore, "allowing attorney fee recovery . . . [facilitates]
compliance with the goals of the act and thereby deter[s] discrimination in the
work force."'°'

Similarly, Illinois' s and Kentucky's civil rights statutes permit the prevailing
party to recover his or her attorney's fees.^'^ Thus, the Kentucky, Michigan, and
Illinois civil rights codes are similar and the Indiana Code is an outlier.^ ^^ By

proposed but has never enacted legislation awarding attorney's fees to individuals who allege
employment discrimination) (citations omitted), overruled on other grounds by 714 N.E.2d 632
(Ind. 1999).

304. Mich. Comp. Laws Ann. § 37.2605(2)(i)&G) (West 2001).

305 . Id. Sections 37.2605(2)(h) and (k) provide additional remedies for individuals who suffer
housing discrimination. Id. § 37.2605(2)(h)&(k). For example, section 37.2605(2)(k) indicates
that a civil fine is a possible remedy "for a violation of [the civil rights statute] of this act." Id. §
37.2605(2)(k). The amount of the fine is to be "directly related to the cost to the state for enforcing
this statute [and is] not to exceed: $10,000.00 for the first violation . . . $25,000.00 for the second
violation within a 5-year period . . . [or] $50,000.00 for 2 or more violations within a 7-year
period." Id. § 37.2605(2)(k)(0-(m).

306. Id. § 37.2801(3) (emphasis added).

307. King v. Gen. Motors Corp., 356 N.W.2d 626, 629 (Mich. Ct. App. 1984).

308. Id.

309. Id.

310. See 11 5 ILL. COMP. STAT. ANN. 5/8A- 104 (West 2001) (stating that damages may include
"[p]ay[ing] to the complainant all or a portion of the costs of maintaining the action, including
reasonable attorney fees and expert witness fees incurred in maintaining this action . . . and in any
judicial review and judicial enforcement proceedings"); Ky. Rev. Stat. Ann. § 344.450 (West
2006) (stating that "[a]ny person injured by any act in violation of the provisions of this chapter
shall have a civil cause of action in Circuit Court to enjoin further violations, and to recover the
actual damages sustained, together with the costs of the law suit. The court's order or judgment
shall include a reasonable fee for the plaintiffs attorney of record and any other remedies contained
in this chapter").

311. Compare 775 ILL. CoMP. STAT. Ann. 5/8 A- 1 04 (West 200 1 ), with Ky. Rev. Stat. Ann.
§ 344.450 (West 2006), and MiCH. COMP. LAWS Ann. § 37.2801(3) (West 2001), with iND. CODE
§ 22-9.5-7-2 (2007), andlnd. Civil Rights Comm'n v. Adler, 689 N.E.2d 1274, 1279 (Ind. Ct. App.
1997) (noting that the legislature has proposed but has never enacted legislation awarding

2009] EMPLOYEE CIVIL RIGHTS 473

awarding attorney's fees, surrounding states make it more feasible for
complainants to litigate disputes. In order to provide individuals injured by
employment discrimination full compensation for their injuries, Indiana should
allow the prevailing party to recoup his or her attorney's fees.

Conclusion

State civil rights laws affect every individual living or working in the
geographic area. Civil rights laws are especially relevant in employment contexts
because they impact the day to day activities of almost all citizens. Although
Title Vn has done much to diminish discrimination and improve the working
environment for individuals, it is not enough. Therefore, States must enact
unbiased, effective anti-discrimination laws to protect employees, as well as
employers. Unfortunately, Indiana appears to be lagging behind surrounding
states with respect to protection of employee civil rights. Unlike the surrounding
states of Michigan, Ohio, Kentucky, and Illinois, Indiana requires both parties to
consent to a civil trial, which means that many complainants will be forced to
rely on the administrative procedure.^ ^^ To increase the protection afforded
employees, Indiana should look to the civil rights laws of surrounding states and
use these statutes to guide a revision of the Indiana Code.

attorney's fees to individuals who allege employment discrimination), overruled on other grounds
by 714 N.E.2d 632 (Ind. 1999).

312. Ind. Code § 22-9-1-16 (2007).

Teachers' Sexual Harassment Claims Based on

Student Conduct: Do Special Education

Teachers Waive Their Right to

A Harassment-Free Workplace?

David Thompson*

Introduction

Title Vn of the Civil Rights Act of 1964 prohibits employment
discrimination based on an individual's sex.* Title VII imposes sexual
harassment liability on employers that subject their employees to a "hostile work
environment."^ A hostile work environment (HWE) is a workplace that is
"permeated with 'discriminatory intimidation, ridicule, and insult' that is
'sufficiently severe or pervasive to alter the conditions of the victim's
employment and create an abusive working environment.'"^ Although the
conduct of a supervisor or co-worker normally creates a HWE, the conduct of
non-employees can also create a HWE.^ In HWE cases, employers are liable if
they know about the harassment and fail to take remedial action in a timely
manner.^

In June 2007, in Mongelli v. Red Clay Consolidated School District Board
of Education,^ the District Court of Delaware faced the novel issue of whether
a school board may be held liable for a Title Vn HWE sexual harassment claim
based on the harassing conduct of a special education student.^ In Mongelli, a
fourteen-year-old mentally-impaired student, over the course of two weeks,
abused his special education teacher, both verbally and physically.^ The teacher,
Ms. Mongelli, alleged that she repeatedly complained of the student's conduct
through written reports she filed with the principal's office and through verbal
complaints she made to the assistant principal.^ She further alleged that the
school did not take any remedial action during the two-week period over which

* J.D. Candidate, 2009, Indiana University School of Law — Indianapolis; B.A., 2004,
DePauw University, Greencastle, Indiana.

1. 42U.S.C. §2000e-2(a)(l)(2006).

2. See, e.g., Harris v. Forklift Systems, Inc., 510 U.S. 17, 23 (1993).

3. Id. at 21 (quoting Meritor Sav. Bank v. Vinson, 477 U.S. 57, 65, 67 (1986)).

4. See Lori A. Tetreault, Annotation, Liability of Employer, Under Title VII of Civil Rights
Act of 1964 (42 U.S.C.A. §§ 2000e et seq.) for Sexual Harassment of Employee by Customer,
Client, or Patron, 163 A.L.R. Fed. 445 (2000).

5. See id.; see also EEOC Guidelines, 29 C.F.R. § 1604.1 1(e) (2008) ("An employer may
also be responsible for the acts of non-employees . . . where the employer . . . knows or should have
known of the conduct and fails to take immediate and appropriate corrective action.").

6. 491 F. Supp. 2d 467 (D. Del. 2007).

7. Mat 476-78.

8. /^. at 471-73.

9. /J. at 471-72.

476 INDIANA LAW REVIEW [Vol. 42:475

the incidents occurred. ^^

The court in Mongelli held that, although schools can be liable for a HWE
sexual harassment claim created by the conduct of a special education student,
Mongelli' s claim failed because the student's conduct was not "severe or
pervasive" enough to meet the requirements for a Title VII claim. ^^

The Mongelli decision has important implications for the thousands of
special education teachers across the nation. Over 600,000 children between the
ages of six and twenty-one classified as mentally retarded were educated by the
U.S. Department of Education under the Individuals with Disabilities Education
Act during the 2000-01 school year.^^ The number soars to a staggering
5,775,000 children when other disabilities are also considered. ^^ If schools are
not held liable for HWEs created by the acts of special education students, the
thousands of teachers responsible for educating these students essentially forfeit
a portion of their right to be free from sexual harassment in the workplace.

This Note explores the parameters of school liability for HWE sexual
harassment claims brought by teachers. Part I addresses the background of Title
Vn sexual harassment claims. Part II takes an in-depth look at the factual
background of the Mongelli case as well as the Mongelli court's holdings. Part
m analyzes the Mongelli court's holdings. It argues that the Mongelli court's
preliminary holdings are valid and that the grant of summary judgment is
defensible in light of existing case law and the imprecise nature of the test courts
must apply in Title Vn HWE cases. Part IV discusses the future of Title Vn
sexual harassment claims brought by teachers who allege sexual harassment by
students. This section suggests measures that schools should take to ensure that
they are not liable for the harassing conduct of students and will conclude by
discussing the appropriate analysis courts should employ when analyzing similar
claims.

I. Title vn Sexual Harassment Background

"Congress enacted Title Vn of the Civil Rights Act of 1964 to protect
employees from discrimination in the workplace." ^"^ Title Vn makes it "an
unlawful employment practice for an employer ... to discriminate against any
individual with respect to his compensation, terms, conditions, or privileges of
employment, because of such individual's race, color, religion, sex, or national
origin."^^ Although Title VII's language clearly prohibited sex discrimination,
it did not "define sexual harassment as discrimination, nor did its legislative

10. Mat 473.
IL Mat 480.

12. Twenty-Fourth Annual Report to Congress on the Implementation of the
Individuals WITH DiSABiLiTffiS Education Act 20 (2002), av«//«W^ izr http://www.ed.gov/about/
reports/annual/osep/2002/section-ii.pdf.

13. Id.

14. Jeffrey S. Lyons, Be Prepared: Unsuspecting Employers Are Vulnerable for Tide VII
Sexual Harassment Environment Claims, 37 U.S.F. L. Rev. 467, 467 (2003) (citations omitted).

15. 42 U.S.C. § 2000e-2(a) (2006).

2009] TEACHERS' SEXUAL HARASSMENT CLAIMS 477

history offer guidance as to whether sexual harassment was a form of
discrimination."^^ As a resuh of this ambiguity, courts did not begin to
"recognize sexual harassment as a type of sex discrimination prohibited by Title
VE" until the late 1970s.^^

"The first type of Title VII sexual harassment claims courts recognized" was
Quid pro quo (QPQ) sexual harassment. ^^ QPQ sexual harassment occurs when
an employer conditions "an employee's future employment status on their
response to the sexual advances" of the employer.'^ The most obvious example
of QPQ sexual harassment is when a supervisor promises a subordinate employee
a promotion in exchange for sexual activities or threatens the employee that
refusing to engage in sexual activity will result in termination. ^°

The second type of sexual harassment claim courts recognized was HWE
sexual harassment.^^ Hostile work environment was first recognized in the form
of racial discrimination.^^ Li Rogers v. EEOC,^^ the Fifth Circuit "reasoned that
Title VII prohibited discriminatory working environments that could destroy the
emotional and psychological stability of minority employees; thus, statutory
protection extended beyond economic or tangible discrimination."^'^ Although
Rogers did not apply to sexual discrimination,^^ after the Rogers decision the
Equal Employment Opportunity Commission (EEOC) "issued guidelines
declaring hostile work environment sexual harassment a violation of Title Vn."^^
These guidelines "essentially created a new form of Title VE action"^^ now
known as HWE sexual harassment.^^ Although the EEOC guidelines were

16. Sarah Pahnke Reisert, Let's Talk about Sex Baby: Lyle v. Wamer Brothers Television
Productions and the California Court of Appeal's Creative Necessity Defense to Hostile Work
Environment Sexual Harassment, 1 5 Am. U.J. GENDER SOC. POL' Y & L. 1 1 1 , 1 1 5 (2006) (citations
omitted).

17. Kelly Ann Cahill, Hooters: Should There Be an Assumption of Risk Defense to Some
Hostile Work Environment Sexual Harassment Claims?, 48 VAlSfD. L. REV. 1 107, 1 1 10 (1995); see
also Rogers v. EEOC, 454 F.2d 234 (5th Cir. 1971), cert, denied, 406 U.S. 957 (1972).

18. Cahill, supra note 17, at 1 1 10.

19. Id.

20. See Robert J. Aalberts & Lome H. Seidman, Sexual Harassment of Employees by Non-
employees: When Does the Employer Become Liable?, 21 Pepp. L. Rev. 447, 455 (1994).

21. See Lyons, supra note 14, at 470; Tetreault, supra note 4, § 2[a].

22. Reisert, supra note 16, at 115.

23. 454 F.2d 234 (5th Cir. 1971), superseded by statute on other grounds, 42 U.S.C. §
2000e-5 (2006), as recognized in EEOC v. Shell Oil Co., 466 U.S. 54, 63 (1984).

24. Reisert, 5M/7ra note 16, at 115.

25. Id.

26. Id. (citing EEOC Guidelines on Discrimination Because of Sex, 29C.F.R. §§ 1604.1 1(a)-
(f) (2008)). The EEOC guidelines, which were issued in 1980, state, in pertinent part, that conduct
which has "the purpose or effect of unreasonably interfering with an individual ' s work performance
or creating an intimidating, hostile, or offensive working environment," is a violation of Title VIL

27. Lyons, supra note 14, at 470.

28. Id.

478 INDIANA LAW REVIEW [Vol. 42:475

adopted in 1980, it was not until 1986 that the Supreme Court recognized HWE
sexual harassment.^^

A. The Supreme Court Recognizes, Defines, and Refines HWE Claims

In four landmark decisions, the United States Supreme Court established a
framework for HWE sexual harassment cases. ^^

L Meritor Savings Bank, F.S.B. v. Vinson.^^ — The Supreme Court first
recognized a Title Vn HWE sexual harassment claim in Meritor Savings Bank,
F.S.B. V. Vinson. In Meritor, a female bank teller alleged that throughout her
four-year employment at the defendant bank her supervisor fondled her,
repeatedly demanded sex from her (to which she consented on multiple occasions
out of "fear of losing her job"),^^ and raped her on several occasions.^^ The bank
argued that the plaintiff did not have an actionable claim because Title Vn
required a tangible loss of an economic character, and did not protect "'purely
psychological aspects of the workplace environment.'"^"^ The Court rejected this
argument.^^ Justice Rehnquist, writing for the Court, opined that "Title Vn is not
limited to 'economic' or 'tangible' discrimination. The phrase 'terms,
conditions, or privileges of employment' evinces a congressional intent 'to strike
at the entire spectrum of disparate treatment of men and women' in
employment."^^ The Court then acknowledged that the EEOC guidelines allowed
HWE claims and also extended the reasoning from Rogers to the sexual context
of Meritor' s case.^^ The Court concluded by stating that, "a plaintiff may
establish a violation of Title Vn by proving that discrimination based on sex has
created a hostile or abusive work environment."^^

Although Meritor was a victory for victims of workplace sexual harassment
in that the Court officially recognized HWE claims, the Court also placed a very
significant limitation on these claims by requiring the harassment to be
"sufficiently severe or pervasive 'to alter the conditions of [the victim's]
employment and create an abusive working environment."^^ The "severe or
pervasive" requirement is a difficult one to satisfy; often, it is the hurdle

29. See Meritor Sav. Bank v. Vinson, 477 U.S. 57, 73 (1986).

30. An affirmative defense to HWE sexual harassment claims is actually set forth in the sister
cases of Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998), and Faragher v. City of Boca
/?«ron, 524 U.S. 775(1998).

31. 477 U.S. 57 (1986).

32. /J. at 60.

33. Id.

34. Id. at 64 (quoting Brief of Petitioner at 30-3 1 , 34, Meritor Sav. Bank, FSB v. Vinson, No.
84-1979 (U.S. Dec. 11, 1985)).

35. Id.

36. Id. (citations omitted).

37. /fif. at 65-66.

38. Mat 66.

39. Id. at 67 (quoting Henson v. City of Dundee, 682 F.2d 897, 904 (11th Cir. 1982))
(emphasis added).

2009] TEACHERS' SEXUAL HARASSMENT CLAIMS 479

plaintiffs cannot overcome when trying to defeat a motion for summary
judgment."^^ Although the Meritor Court required that harassment be severe or
pervasive, "the opinion fell short of providing any clear guidance as to what
would be considered severe or pervasive enough to create such an
environment.'"^^ For example, the Court did not address whether the conduct
must be severe enough to cause the plaintiff psychological injuries. The Court
also failed to specify whether the environment must be hostile according to a
reasonable person standard or simply according to the plaintiff s subjective view
of the environment. The Court, however, answered these questions in the
following cases.

2. Harris v. Forklift Systems, Inc."^^ — Li Harris, a female manager for an
equipment rental company alleged that the company's male president regularly
insulted her due to her gender"^^ and made sexual innuendos about her clothing."^"^
After Harris complained about the president's conduct, the president promised
the conduct would stop."^^ Instead, Harris was compelled to quit when the
president accused her, in front of her coworkers, of promising to have sex with
a customer."^^ The district court ruled for the defendants because the president's
comments were not severe enough to interfere with the work performance of "[a]
reasonable woman manager under like circumstances'"*^ and Harris herself was
not "so offended that she suffered injury.'"*^

After the Sixth Circuit affirmed,"^^ the Supreme Court granted certiorari to
resolve a circuit split about whether, in HWE sexual harassment claims, the
harassing conduct "must 'seriously affect an employee's psychological well-
being' or lead the plaintiff to 'suffer injury. "'^° As one commentator noted, the
"facts of Harris placed the issue squarely before the Court to determine how the

40. See e.g.. Van Horn v. Specialized Support Servs., Inc., 241 F. Supp. 2d 994, 1008-09
(S.D. Iowa 2003) (severe or pervasive element not met where a mentally impaired patient touched
the plaintiffs breasts on two occasions, pinched her inner thigh on another, and made sexually
suggestive comments).

41. Lyons, supra note 14, at 471-72.

42. 510 U.S. 17(1993).

43. Id. at 19. Harris alleged that the president made statements such as: "You're a woman,
what do you know," "We need a man as the rental manager," and at least once referred to her as a
"dumb ass woman." Id. It is interesting to note that this factual scenario would never, by today's
standards, create a HWE. However, the Court granted certiorari because it wanted to resolve a
circuit split. Id. at 20.

44. Id. ai\9.

45. Id.

46. Id.

47. Id. at 20 (quoting Harris v. Forklift Sys., Inc., No. 3-89-0557, 1991 WL 487444, at *7
(M.D. Tenn. Feb. 4, 1991)).

48. Id.

49. Harris v. Forklift Sys., Inc., 976 F.2d 733 (6th Cir. 1992).

50. Harris v. Forklift Sys., Inc., 510 U.S. 17, 20 (1993) (internal punctuation omitted).

480 INDIANA LAW REVIEW [Vol. 42:475

'severe and pervasive' analysis should be applied."^^

In resolving the circuit split, the Harris Court held that harassing conduct in
a HWE claim does not have to cause the plaintiff psychological injury.^^ More
importantly, the Court added the requirement that the environment created by the
conduct must be perceived, both objectively and subjectively, as hostile or
abusive.^^ The Court stated:

Conduct that is not severe or pervasive enough to create an objectively
hostile or abusive work environment — an environment that a reasonable
person would find hostile or abusive — is beyond Title VII's purview.
Likewise, if the victim does not subjectively perceive the environment
to be abusive, the conduct has not actually altered the conditions of the
victim's employment, and there is no Title Vn violation.^"^

Thus, under this requirement, the plaintiff herself^^ must actually perceive the
environment as abusive and the plaintiff must show that a reasonable person
would also find the environment hostile or abusive.^^

After acknowledging that the objective and subjective test was not, and could
not be, "mathematically precise,"^^ the Harris Court stated that when determining
whether an environment is hostile, courts must look at all the circumstances.^^
The Court went on to give examples of factors that the lower courts should
consider, namely "the frequency of the discriminatory conduct; its severity;
whether it is physically threatening or humiliating, or a mere offensive utterance;
and whether it unreasonably interferes with an employee' s work performance."^^

These four factors — frequency, severity, physical threats versus offensive

51. Lyons, supra note 14, at 472.

52. //arm, 510 U.S. at 22.

53. /J. at 21-22.

54. Id.

55. Although the victim of sexual harassment is typically female, the subjective and objective
test applies to both males and females. See Oncale v. Sundowner Offshore Services, Inc., 523 U.S.
75, 78 (1998) ("Title VII's prohibition of discrimination . . . protects men as well as women.")
(citing Newport News Shipbuilding & Dry Dock Co. v. EEOC, 462 U.S. 669, 682 (1983)).

56. See Crist v. Focus Homes, Inc., 122 F.3d 1 107, 1111 (8th Cir. 1997) ("[C]onduct must
be sufficiently severe or pervasive to create an environment that a reasonable person would find
hostile or abusive.").

57. Harris, 510 U.S. at 22. Interestingly, Justice Scalia filed a concurring opinion in which
he complained that the standard adopted by the majority was unclear and gave little guidance to
juries; he was, however, forced to join the majority because he could not find a valid alternative "to
the course the Court today has taken." Id. at 24 (Scalia, J., concurring).

58. Id. at 23 (emphasis added). This approach is known as the "totality of the circumstances"
approach. This name comes from the EEOC Guidelines, which state: "In determining whether
alleged conduct constitutes sexual harassment, the Commission will look at the record as a whole
and at the totality of the circumstances, such as the nature of the sexual advances and the context
in which the alleged incidents occurred." 29 C.F.R. § 1604.11(b) (2008).

59. //arm, 510 U.S. at 23.

2009] TEACHERS' SEXUAL HARASSMENT CLAIMS 481

utterances, and unreasonable interference with work performance — although not
exhaustive, comprise the majority of the analysis that courts consider when
determining whether the severe or pervasive threshold has been met.^° The Court
further refined the totality of the circumstances test in Oncale v. Sundowner
Offshore Services, Inc.^^

3. Oncale v. Sundowner Offshore Services, Inc. — In Oncale, the plaintiff,
a homosexual male, alleged that he was harassed by his male co workers. ^^ The
lower courts ruled that Oncale did not have an actionable Title VII claim because
his alleged harassers were also male.^^ Like in Harris, the Court granted
certiorari to resolve a split among the circuit courts. ^"^ The Oncale Court held
that plaintiffs could bring HWE sexual harassment claims based on harassing
conduct from coworkers of the same sex.^^ Writing for a unanimous Court,
Justice Scalia was careful to emphasize that this holding did not expand Title Vn
into a "general civility code."^^ The Court insisted that it avoided such a result
because of the crucial importance the Court has always given to the Harris
requirement that the environment be objectively hostile. ^^ The Oncale Court
continued, further defining Harris's objective severity of harassment
requirement:

We have emphasized, moreover, that the objective severity of
harassment should be judged from the perspective of a reasonable person
in the plaintiffs position, considering "all the circumstances." In same-
sex (as in all) harassment cases, that inquiry requires careful
consideration of the social context in which particular behavior occurs

and is experienced by its target The real social impact of workplace

behavior often depends on a constellation of surrounding circumstances,
expectation, and relationships which are not fully captured by a simple

60. See Clark County Sch. Dist. v. Breeden, 532 U.S. 268, 270-71 (2001) (using only the
Harris factors); Lockard v. Pizza Hut, Inc., 162 F.3d 1062, 1072 (10th Cir. 1998) (applying the four
factors but noting that they were not exhaustive); Crist v. Focus Homes, Inc., 122 F.3d 1 107, 1111
(8th Cir. 1997) (considering the Harris factors and the plaintiffs' expectations given their choice
of employment); Van Horn v. Specialized Support Servs., Inc., 241 F. Supp. 2d 994, 1008 (S.D.
Iowa 2003) (relying on the Harris factors).

61. 523 U.S. 75 (1998).

62. Id. at 77. Besides being subjected to regular verbal abuse, Oncale was physically
assaulted by two coworkers, one of whom threatened to rape him. Id.

63. Id.

64. See id. at 79 (noting that "state and federal courts have taken a bewildering variety of
stances" on the issue of same sex HWE sexual harassment claims).

65. Id.

66. /J. at 81.

67. Id. The Court viewed the important emphasis it gives to the objectively hostile
requirement as "sufficient to ensure that courts and juries do not mistake ordinary socializing in the
workplace — such as male-on-male horseplay or intersexual flirtation — for discriminatory
'conditions of employment.'" Id.

482 INDIANA LAW REVIEW [Vol. 42:475

recitation of the words used or the physical acts performed.^^

Two very important conclusions necessarily result from the Court's statement.
First, the objective hostility standard used in HWE claims looks at the reasonable
person in the plaintiff's position.^^ Thus, if a female construction worker brings
an HWE sexual harassment claim, a court must determine whether the alleged
conduct would be sufficiently hostile to the reasonable female construction
worker, who will almost certainly differ from the reasonable female librarian.^^
Second, courts must look at the social context surrounding alleged events.^^
Courts must examine the work environment in which conduct occurs. Returning
to the construction example, off -color jokes and vulgar language might be the
norm for a construction site,^^ but these activities would probably never be
tolerated, let alone be considered normal, in a library.

4. Ellerth and Faragher. — In the companion cases of Burlington Industries,
Inc. V. Ellerth'^ and Faragher v. City of Boca Raton ^^ the Supreme Court
established an affirmative defense for employers in Title Vn HWE claims.
Before recognizing the defense, the Court established that in Title Vn claims,
agency principles apply. Employers may be held vicariously liable for the
discriminatory conduct of their supervisors.^^ In order to "square" this holding
with ''Meritor' s holding that an employer is not 'automatically' liable"^^ for the
discriminator)' acts of its supervisors, the Court formulated an affirmative
defense that allowed employers to avoid liability in certain situations.^^ To
invoke the defense, an employer must show, by a preponderance of the evidence,
that the following two elements are met: "(a) that the employer exercised
reasonable care to prevent and correct promptly any sexually harassing behavior,
and (b) that the plaintiff employee unreasonably failed to take advantage of any
preventive or corrective opportunities provided by the employer or to avoid harm

68. Id. at 81-82 (quoting Harris v. Forklift Sys. Inc., 510 U.S. 17, 23 (1993)) (emphasis
added).

69. Id.

70. See Ann C. McGinley, Harassment ofSex(y) Workers: Applying Title VII to Sexualized
Industries, 18 YALE J.L. & FEMINISM 65, 101 (2006) (comparing the severe and pervasive
requirement for blackjack dealers, exotic dancers, and legal prostitutes).

71. Onca/£, 523U.S. at81.

72. See Gross v. Burggraf Constr. Co., 53 F.3d 1531, 1537 (10th Cir. 1995). In Gross, a
female truck driver for a construction company alleged that her supervisor's repeated use of
vulgarity and profanity created a HWE. Id. at 1536. The Gross court recognized that in the "real
world of construction work, profanity and vulgarity are not perceived as hostile or abusive.
Indelicate forms of expression are accepted or endured as normal human behavior." Id. at 1537.

73. 524 U.S. 742(1998).

74. 524 U.S. 775(1998).

75. See id. at 807; see also Ellerth, 524 U.S. at 765.

76. Faragher, 524 U.S. at 804.

77. /^. at 807.

2009] TEACHERS' SEXUAL HARASSMENT CLAIMS 483

otherwise."^^

To meet the first prong of the test, the employer must show that it "took
reasonable measures to educate its employees on proper conduct (prevention) and
to monitor its workplace to address complaints by its employees (correction). "^^
The Court did not give employers specific direction regarding prong two, but the
Court stated that an employer would normally satisfy the second element by
showing that an employee failed to use "any complaint procedure provided by the
employer."^^

B. The Proper Test Today for HWE Claims

These landmark cases make it possible to formulate a comprehensive test for
Title Vn sexual harassment claims. Although there are several different analyses
used by the U.S. circuit courts,^^ most courts (including five circuit courts)^^ use
a test similar to the one established in Henson v. City of Dundee}^ The Henson
elements require the plaintiff to establish that

(1) the employee belongs to a protected group; (2) the employee was
subject to unwelcome sexual . . . harassment; (3) the harassment
complained of was based on employee's sex . . . ; (4) the harassment
complained of affected a term, condition, or privilege of employment;
and (5) existence of employer liability.^'*

The fourth element incorporates the objective and subjective requirement from
Harris. In other words, the fourth element requires that the harassment be
sufficiently severe or pervasive, both objectively and subjectively, to have altered
a term, condition, or privilege of employment.^^ Since Oncale, it is also
necessary to examine the social context of the workplace when determining
whether the objective aspect of the severe and pervasive element is met.^^
Additionally, the fifth element incorporates the affirmative defense set forth in
Faragher^'^ and Ellerth}^

Today, the proper test requires a court to determine whether, under the
totality of the circumstances (including the social context), a plaintiff has
demonstrated that she suffered unwelcome harassment that was "sufficiently

78. Id.

79. Lyons, supra note 14, at 476.

80. EllertK 524 U.S. at 765.

81. See Debra S. Katz, Harassment in the Workplace, SM097 A.L.I.-A.B.A. 121, 134-36
(2007) (describing the different tests used by the circuit courts).

82. Specifically, the Third, Fourth, Sixth, Ninth, and Eleventh Circuits. Id. at 133.

83. 682 F.2d 897 (1 1th Cir. 1982).

84. Katz, supra note 81, at 133.

85. See McGinley, supra note 70, at 101.

86. Oncale v. Sundower Offshore Servs., Inc., 523 U.S. 75, 81 (1998); accord McGinley,
supra note 70, at 101.

87. Faragher v. City of Boca Raton, 524 U.S. 775, 807 (1998).

88. Burlington Indus., Inc. v. Ellerth, 524 U.S. 742, 765 (1998).

484 INDIANA LAW REVIEW [Vol. 42:475

severe or pervasive by objective and subjective measures to alter the terms or
conditions of employment."^^

C. Employer Liability for Acts of Non-employees

Each of the preceding Supreme Court cases dealt with discriminatory
conduct by supervisors or co-workers. The Supreme Court has never explicitly
held that employers are liable for HWEs created by non-employ ees.^° However,
the EEOC guidelines state that "[a]n employer may ... be responsible for the
acts of non-employees . . . where the employer . . . knows or should have known
of the conduct and fails to take immediate and appropriate corrective action."^^
The non-employees responsible for creating a HWE are often customers or
clients,^^ but have also been patients^^ or students.^"^ In the overwhelming
majority of jurisdictions, courts have adhered to the EEOC guidelines'^ and have
allowed HWE sexual harassment claims based on the conduct of non-
employees.'^

Because the Supreme Court has not officially recognized HWE claims based
on the acts of non-employees, the Court has also not addressed an affirmative
defense to such claims.'^ The affirmative defense established in Faragher and
Ellerth only applied to HWEs created by the conduct of the plaintiffs

89. McGinley, supra note 70, at 101.

90. See generally Tetreault, supra note 4. Tetreault's annotation, which lists all of the
"federal cases which considered whether an employer may be held liable for the sexually harassing
acts of nonemployees," does not list any Supreme Court cases that address the issue. Additionally,
not a single case that addresses employer liability for the acts of non-employees cites to authority
from the Supreme Court.

91. 29 C.F.R. § 1604.11(e) (2008).

92. See, e.g., Lockard v. Pizza Hut, Inc., 162 F.3d 1062, 1067 (10th Cir. 1998); Oliver v.
Sheraton Tunica Corp., No. CIV. A. 398CV203-D-A, 2000 WL 303444, at *1 (N.D. Miss. Mar.
8, 2000).

93. See, e.g., Crist v. Focus Homes, Inc., 122 F.3d 1 107, 1 108 (8th Cir. 1997).

94. See, e.g.. Pedes v. N.Y. City Bd. of Educ, No. 97 CV 7109 (ARR), 2001 WL 1328921,
at *1 (E.D.N.Y. Aug. 6, 2001).

95. See Meritor Sav. Bank, FSB v. Vinson, 477 U.S. 57, 64 (1986). The EEOC guidelines,
'"while not controlling upon the courts by reason of their authority, do constitute a body of
experience and informed judgment to which courts and litigants may properly resort for guidance. '"
Id. at 65 (quoting General Electric Co. v. Gilbert, 429 U.S. 125, 141-42 (1976)).

96. See generally Tetreault, supra note 4; see also Mongelli v. Red Clay Consol. Sch. Dist.
Bd. of Educ, 491 F. Supp. 2d 467, 476-77 (D. Del. 2007) (noting that four circuit courts have
followed the EEOC guidelines and citing approximately twenty decisions holding that employers
face liability for the harassing conduct of non-employees). But cf. Ulmer v. Bob Watson Chevrolet,
Inc., No. 97 C 7460, 1999 WL 1101332 (N.D. 111. Nov. 29, 1999) (denying a HWE sexual
harassment claim because the alleged harasser was not employed by the defendant).

97. The Supreme Court does not need to determine whether an affirmative defense to a claim
exists when it has not recognized the claim itself.

2009] TEACHERS' SEXUAL HARASSMENT CLAIMS 485

supervisor(s).^^ It would, however, "appear reasonable ... to expect that an
employer's affirmative defense in a nonemployee situation might be similarly
altered."^^ Once again, most courts follow the EEOC Guidelines and impose
liability only if the employer "knows or should have known of the conduct and
fails to take immediate and appropriate corrective action." *°^

II. MoNGELLi: The District Court Decision

In January 2004, Ms. Mongelli signed a six-month employment contract for
a teaching position with the Red Clay Consolidated School District. ^^^ Even
though she had no experience teaching special education students, Mongelli was
"assigned to John Dickinson High School ... as a teacher for ninth grade special
education students."^^^ "Almost immediately after she began teaching . . . [she]
began having problems with one of her students, JW, who was fourteen years
old."^°^ JW suffered from educable mental retardation as well as psychiatric
problems that were not associated with the mental retardation. ^^'^ Over the next
two months, JW consistently engaged in activity that Ms. Mongelli found
offensive. ^^^ Mongelli alleged that she repeatedly complained of JW's conduct
both by filing written reports with the principal's office and by making verbal
complaints to the assistant principal. ^^^ The written reports (called SBRs) filed
by Ms. Mongelli detailed the following conduct:

1) April 26, 2004: "JW continues to use very inappropriate language. .
. . As [Mongelli] leaned over to help a student who was seated, JW got
out of his seat and came up behind her. He grabbed [Mongelli]
forcefully and proceeded to 'hump' her."

2) May 3, 2004: "When [Mongelli] was teaching the class, JW looked
directly at her breasts and stated: "Your [nipples] are hard." At the end
of the period, [JW] grabbed [Mongelli' s] arm forcefully and pulled her
close to his body. He stated, 'You're a b[it]ch, but I mean that in a good
way.'"

98. Faragher v. City of Boca Raton, 524 U.S. 775, 807 (1998).

99. Tetreault, supra note 4, § 2[b].

100. 29 C.F.R. § 1604.1 1(e) (2008).

101. Mongelli, 491 F. Supp. 2d at 471.

102. Id.

103. Id.

104. Telephone Interview with Joseph Bernstein, Attorney for Ms. Mongelli (Jan. 1 1 , 2008).

105. Mongelli, 491 F. Supp. 2d at 472-73.

106. Id. At the outset, it is important to note that, because the court was ruling on the
defendant's motion for summary judgment, it was required to "'view the underlying facts and all
reasonable inferences therefrom in the light most favorable to the party opposing the motion.'" Id.
at 475 (quoting Pa. Coal Ass'n v. Babbit, 63 F.3d 23 1 , 236 (3d. Cir. 1995)). Therefore, in this case,
the court had to assume that all of Ms. Mongelli' s allegations were true.

486 INDIANA LAW REVIEW [Vol. 42:475

3) May 4, 2004: "At the end of the period, [JW] sat on top of the desk
and stared directly at [Mongelli]. [JW] opened his legs wide and
pretended to be having sex. He moved the lower portion of his body up
and down quite rapidly. He said: 'Oh, oh, aah.' He made 'sucking'
noises with his mouth and pretended he was breathing heavily."

4) May 5, 2004: "As [Mongelli] walked into the classroom . . . , [JW]
grabbed her arm very forcefully and refused to let go. He said, 'Let' s do
the tango.' He pulled [Mongelli] close to his body and moved [her]
forward. When [she] told him to let go of her arm, he said: '[You're]
a b[it]ch. Chill.' Then, he stated: 'Do you have sex?' and 'Who do you
have sex with?'"

5) May 5, 2004: "When [Mongelli] told [JW] to sit down, he threatened:
'My mom is going to take care of you. She's going to rock you.'
[Mongelli] wrote out [a referral to the time out room] and gave it to JW.
He yelled, 'I ain't f[uc]king going anywhere. You're a f[uc]king bitch.'
He tore the form in half. [Mongelli] called the main office for an
administrator. [Principal Chad] Carmack . . . came to the classroom and
removed [JW]. Mr. Carmack sent [JW] back to [Mongelli' s] classroom
before the end of the period."

6) May 6, 2004: "[JW] got out of his seat, came up to [Mongelli' s] desk,
and stared directly at [her]. Then, [JW] sang a rap song stating, 'How's
your p[uss]y?' He sang the [word] 'p[uss]y' several times during his rap
song. When [Mongelli] told him to go to [the time out room], he
continued singing even louder. After [JW] sang, he made 'sucking'
noses with his mouth."

7) May 7, 2004: "[JW] got out of his seat and walked over to
[Mongelli]. Then, [he] sang a rap song stating, 'Ms. Mongelli gives
h[ea]d.' He sang this four times. As he was singing, [JW] pointed to his
p[eni]s three times."^^^

These allegations constitute the only conduct the court considered in Mongelli' s
claim. ^^«

Mongelli alleged that she placed each of the SBRs in the principal's mailbox
"on the day it was written." '^^ The school, however, did not take any disciplinary
action in response to the reports until after Mongelli filed the last report on May

107. Id. at 472-73 (internal footnotes omitted).

108. The court failed to include four SBRs that concerned JW's conduct prior to April 26,
2004. The prior incidents consisted of vulgar language similar to that contained in the complaints
the court did consider and did not include any physically threatening act. First Amended Complaint
\ 15, Mongelli, 491 F. Supp. 2d 467 (D. Del. 2007) (No. 05-359 SLR).

109. Mongelli, 491 F. Supp. 2d at 473 n.lO.

2009] TEACHERS' SEXUAL HARASSMENT CLAIMS 487

1}^^ On May 8, 2004, JW was "permanently removed from [Mongelli's]
classroom and suspended from school for five days."^'* After a conmiittee
evaluated JW s conduct and determined that "JW s behavior was a manifestation
of his disability,"^ ^^ the assistant principal and JWs mother "mutually agreed
that JW would remain home for the remainder of the school year.""^

On May 13, 2004, Mongelli agreed to a one year teaching contract with the
school. ^^"^ Approximately one month later, as a result of the incidents Mongelli
alleged, the Delaware State Police criminally charged JW with "Unlawful Sexual
Contact in the Third Degree, Sexual Harassment, and two counts of Offensive
Touching (all of which are misdemeanors)."^ ^^ JW eventually entered into a plea
bargain and pled guilty to "two counts of Offensive Touching and one count of
Sexual Harassment."^ *^

Approximately one month after JW was criminally charged, Mongelli was
fired, allegedly for complications with her teaching license.^ ^^ She then brought,
inter alia, a Title Vn HWE sexual harassment claim against the school district
and the board of education.'*^

Ultimately, the district court denied Mongelli's claim and granted the
defendant school board's motion for summary judgment. ^^^ However, before
reaching its decision, the Mongelli court had to make three preliminary
determinations.

A. The Mongelli Court's Preliminary Holdings

First, the Mongelli court had to determine whether employers could be held
liable for a HWE created by the conduct of a non-employee. ^^^ The court
recognized that the "emerging trend" in federal courts was to allow such claims
under Title Vn.^^^ Because the court could find "no reason to deviate" from the
trend, it held that "employers may, under certain circumstances, be held liable for

110. Mat 474.

111. Id.

112. Id. (internal brackets and emphasis omitted).

113. Id. (citation omitted).

114. Id.

115. Id.

116. Plaintiffs Answering Brief in Opposition to Defendant's Motion for Summary Judgment
at 6, Mongelli, 491 F. Supp. 2d. 467 (D. Del. 2007) (No. 05-359 SLR).

1 17. Mongelli, 491 F. Supp. 2d at 474.

118. Id.

119. /J. at 483.

120. Id. at 475-77. The Mongelli court actually framed the "first issue" as whether "a teacher
. . . [could] sue the school district for which she works" based on the harassing conduct "allegedly
committed by one of the teacher's students." Id. at 475. Answering this question required the court
to first answer the question concerning employer liability for the acts of non-employees. Id. at 476-
77.

121. /^. at 476. The court pointed out that the First, Eighth, Ninth, and Tenth U.S. Circuit
Courts of Appeal's decisional law had followed the EEOC guidelines, which allow these claims.

488 INDIANA LAW REVIEW [Vol. 42:475

sexual harassment suffered by their employees at the hands of non-employ ees."^^^
Second, the Mongelli court had to determine whether schools could be liable
for a hostile work environment created by the harassing conduct of students
against their teachers. ^^^ The court stated:

[SJuch a scenario involves competing public interests, namely, a school' s
duty to protect teachers from abusive students versus its obligation to
teach those students how to conduct themselves in a socially acceptable
way. Unlike cases involving abusive co-workers or customers, a school
district cannot easily "terminate" a student or permanently ban him from
the premises; instead, the district must attempt to deal with the abusive
student using the limited tools and resources at its disposal. '^"^

Despite recognizing the difference between student-on-teacher harassment and
non-employee HWE sexual harassment claims involving customers, the Mongelli
court held that, generally, schools can be liable for HWE "claims under Title Vn
. . . [if the schools] fail to address teachers' claims of harassment by students. "^^^
Finally, the court examined whether a teacher could bring a Title Vn HWE
claim "when the abuse is perpetrated by a special education student." ^^^ The
court first discussed its concerns with allowing such a claim, noting that special
education students are unique in that "school districts are obligated under federal
law to teach [them]"*^^ and they "are prone to disruptive behavior by virtue of
their disabilities."*^^ However, the court reasoned that prohibiting such claims
would essentially "'immunize' schools from liability" *^^ whenever a special
education student harassed a teacher, regardless of the circumstances or the
severity of the harassment. *^^ Further, "[sjuch a blanket prohibition would do a
disservice to teachers, who deserve a working environment free from abuse, and
would provide schools with no incentive to remedy incidents of harassment in
their special education classrooms."*^* Based on this reasoning, the Mongelli
court determined that "while the requisite threshold of abuse will necessarily be
higher than with students lacking developmental disabilities . . . harassment of
teachers by special education students can constitute a hostile work environment
for Title Vn purposes."*^^ In sum, the court held that Mongelli could bring a
Title vn HWE sexual harassment claim against the school based on JW's
conduct.

122. Mat 477.

123. Id.

124. Id.

125. Mat 478.

126. Id.

127. Id.

128. Id.

129. Id.

130. Id.

131. Id.

132. Id.

2009] TEACHERS' SEXUAL HARASSMENT CLAIMS 489

B. The Mongelli Court Denies Mongelli 's Claim

After clearing the path for Mongelli to bring her Title VII HWE claim, the
court immediately proceeded to shoot it down. According to the court,
Mongelli' s claim failed for two reasons. ^^^

First, the "severity of the conduct and the context in which it took place
[were] not sufficient to satisfy Title VII's 'severe or pervasive' requirement. "^^"^
In making this determination, the court should have considered "'all the relevant
circumstances surrounding the discriminatory conduct. '"^^^ However, the court
only considered the "short period of time" over which the incidents occurred and
that the school eventually removed JW from the plaintiffs classroom. '^^

Second, the court found that "[e]ven if JW's conduct were deemed to satisfy
the 'severe or pervasive' requirement . . . [Mongelli] has failed to establish that
a reasonable person in her situation would have been detrimentally affected by
the objectionable conduct."'^^ According to the court, the record was insufficient
to show where "the tolerance threshold of a reasonable special education teacher
lies."'^^ In other words, the record failed to show what conduct a reasonable
special education teacher would find hostile enough to alter the terms or
conditions of employment. ^^^

Based on these findings, the Mongelli court granted the School Board's
motion for summary judgment. ^"^^

in. Analysis OF THE Mo/vGELL/ Decision

The Mongelli court was correct in each of its three preliminary holdings. In
addition, the court was probably correct in its decision to grant summary
judgment for the defendant school board. ^"^^

A. The Mongelli Court's Preliminary Holdings Are Valid

The Mongelli court's preliminary holdings are valid because they are
consistent with existing case law.

7. Employers May Be Held Liable for HWE's Created by the Conduct of
Non-employees. — As discussed in Part I.C, the overwhelming majority of courts

133. /^. at 480-81.

134. /J. at 480.

135. Id. (quoting Arasteh v. MBNA Am. Bank, N.A, 146 F. Supp. 2d 476, 494-95 (D. Del
2001)).

136. Id.

137. Id.

138. /J. at 481.

139. Id.

140. Id.

141. This will, unfortunately, never be decided by an appellate court. Although Mongelli filed
an appeal, the case was later settled in mediation for an undisclosed amount. Telephone Interview
with Joseph Bernstein, Attorney for Ms. Mongelli (Jan. 11, 2008).

490 INDIANA LAW REVIEW [Vol. 42:475

have held that, in certain situations, Title Vn imposes liability upon employers
for the harassing acts of non-employees. ^'^^ The court in Mongelli decided that
there was "no reason to deviate from this trend." ^"^^ Even though the Supreme
Court has not explicitly held that Title Vn imposes liability in these situations, ^"^
in the absence of the Court's direction to hold otherwise, the Mongelli court was
correct in following the current weight of authority.

2. Title VII Imposes Liability on Schools for HWEs Created by Student-on-
Teacher Harassment. — Few courts have confronted the issue of school liability
under Title Vn for student-on-teacher harassment. ^"^^ The Supreme Court has yet
to address the issue^"^^ and scholarly commentary is noticeably lacking.^"^^
However, the few courts that have addressed the issue have unanimously found
that Title Vn imposes liability on schools for student-on-teacher harassment. ^"^^

The court in Plaza-Torres v. Rey^"^^ recognized that the issue had never been
expressly resolved, '^° but held that "student-on-teacher sexual harassment may
be inferred from recent Title VII [and] Equal Protection . . . case law."^^^ The
Rey court relied on two equal protection cases, Schroeder v. Hamilton School
District^^^ and Lovell v. Comsewogue School District, ^^^ and a Title VII case,
Peries v. New York City Board of Education .^^"^

Both Schroeder and Lovell involved students harassing a teacher based on
the teacher's sexual orientation. ^^^ However, these claims were structured as
Equal Protection claims because Title Vn does not "provide for a private right
of action based on sexual orientation discrimination." ^^^ The courts in both
Schroeder and Lovell held that plaintiffs could bring Equal Protection claims

142. See supra notes 92-96 and accompanying text.

143. Mongelli, 491 F. Supp. 2d at 477.

144. See supra note 90 and accompanying text.

145. See Plaza-Torres v. Rey, 376 F. Supp. 2d 171, 181 (D.P.R. 2005) (noting that only a
"handful of cases" dealt with student-on-teacher harassment).

146. /£/. atl80.

147. The research for this Note produced a good deal of scholarly work focusing on teacher-
on-student harassment or student-on-student harassment, but none concerning student-on-teacher
harassment.

148. See Rey, 376 F. Supp. 2d at 1 80; Peries v. New York City Bd. of Educ, No. 97 CV 7 109
(ARR), 2001 WL 1328921 (E.D.N.Y. Aug. 6, 2001); accord Schroeder v. Hamilton Sch. Dist., 282
F.3d 946, 951 (7th Cir. 2002); Lovell v. Comsewogue Sch. Dist., 214 F. Supp. 2d 319, 322
(E.D.N.Y. 2002).

149. 376 F. Supp. 2d 171 (D.P.R. 2005).

150. Mat 180.

151. Id.

152. 282 F.3d 946 (7th Cir. 2002).

153. 214 F. Supp. 2d 319 (E.D.N.Y. 2002).

154. No. 97 CV 7109 (ARR), 2001 WL 1328921 (E.D.N.Y. Aug. 6, 2001).

155. In both cases, a teacher alleged that students repeatedly referred to the teacher using
homophobic slurs. See Schroeder, 282 F.3d at 948-49; Lovell 214 F. Supp. 2d at 321.

156. Schroeder,2%2V3ddX95\.

2009] TEACHERS' SEXUAL HARASSMENT CLAIMS 491

based on student-on-teacher harassment. ^^^ The court in Schroeder also stated:
"Were this a Title Vn case, the defendants could be liable to [the plaintiff] if he
demonstrated that they knew he was being harassed and failed to take reasonable
measures to try to prevent it."^^^

Finally, the court in Pedes, a. Title VII case based on student-on-teacher
racial harassment, determined that schools should be held to the same standard
that employers are held to in cases involving the harassing conduct of non-
employees. ^^^ Therefore, according to the Peries court, schools could be held
liable for HWEs created by student conduct. '^^

Although the Rey court recognized that these three cases were only
persuasive authority, it concluded that "absent clear directive from the U.S.
Supreme Court ... we will not limit the reach of Title VII liability by closing the
door on student-on-teacher harassment. After all, Title VII seeks to eliminate all
forms of sex discrimination in all work environments." ^^^

The Mongelli court's opinion is consistent with Rey and the cases on which
the Rey court relied. Thus, the Mongelli court's holding that Title VII imposes
liability on schools for HWEs created by student-on-teacher harassment seems
sound.

3. Title VII Imposes Liability on Schools for HWEs Created by the
Harassing Conduct of Special Education Students. — Courts have consistently
held that Title VII imposes liability for the harassing conduct of mentally
challenged non-employees. ^^^

For example, in Crist v. Focus Homes Inc.,^^^ three female plaintiffs ^^"^ were
employed by Focus Homes, an organization that ran homes for individuals with
developmental disabilities. ^^^ Focus Homes opened a new facility and hired the
plaintiffs for the positions of manager, assistant manager, and lead program

157. Plaza-Torres v. Rey, 376 F. Supp. 2d 171, 182 (D.P.R. 2005).

158. Schroeder, 2S2F. 3d at 951.

159. P£n>5, 2001 WL 1328921 at *6.

160. Id.

161. /?^j, 376 F. Supp. 2d at 182.

162. See Crist v. Focus Homes, Inc., 122 F.3d 1 107, 1 108 (8th Cir. 1997) (allowing Title VII
claim based on conduct of severely impaired patient); Van Horn v. Specialized Support Services,
Inc., 241 F. Supp. 2d 994, 1012-13 (S.D. Iowa 2003) (finding actionable a claim based on conduct
of patient with Down syndrome); Peries, 2001 WL 1328921, at *6-7 (allowing claim where special
education students harassed teacher because of his ethnicity); McGuire v. Virginia, 988 F. Supp.
980, 988 (W.D. Va. 1997) (allowing claim where incompetent adult son of board member
repeatedly harassed a secretary); Salazar v. Diversified Paratransit, Inc., 1 1 Cal. Rptr. 3d 630, 637
(Ct. App. 2004) (allowing claim where developmentally disabled bus passenger repeatedly
assaulted the bus driver).

163. 122 F.3d 1 107 (8th Cir. 1997).

164. Id. at 1 108. The individual plaintiffs were Crist, Miskowic, and Fibers.

165. Id.

492 INDIANA LAW REVIEW [Vol. 42:475

staff. ^^^ Throughout a four month span, a severely impaired patient (J.L.)^^^
repeatedly abused the plaintiffs, both physically and sexually. ^^^ For example,
"over thirteen reports involved J.L.'s grabbing of the [plaintiffs'] breasts,
buttocks, or genital areas." ^^^ Other incidents included J.L. openly masturbating
and exposing himself to the plaintiffs. '^°

Despite these egregious incidents, the district court granted the defendant's
motion for summary judgment. ^^^ The district court found that because of the
patient's severe impairments, "his conduct could not constitute sexual
harassment." ^^^ Further, the district court determined that even if J.L.'s conduct
did constitute sexual harassment, "Focus Homes could not be held responsible
for his behavior because it could not control the behavior."^^^

The Eighth Circuit reversed because the district court wrongly focused on the
patient's intent. '^"^ The court stated that "the actor who engages in physical
conduct need not have the intent to create an abusive working environment.
Rather, the focus of sexual harassment cases is primarily on the effect of the
conduct." ^^^ Similarly, in the educational setting, courts should not focus on the
ability of a special education student to form intent, but rather on the effect of the
student's conduct.

Penes v. New York City Board of Education^^^ is the only case beside
Mongelli that specifically addressed whether schools may be held liable when
special education students harass a teacher. In Peries, a special education teacher
alleged that throughout a five year span, special education students repeatedly
directed racist remarks at him.'^^ The court recognized that the case was unusual
because the harassment came from students, '^^ but determined that the school
could be held liable. ^^^ The Peries court reached its conclusion by focusing on
the control the school had over the students rather than on the students' intent. ^^°

As with the first two preliminary holdings, the Mongelli court's holding that

166. Id.

167. J.L. was only sixteen years old, but he was over six feet tall and weighed over two
hundred pounds. Id. Despite his size, he only "fiinctioned at the level of a two-to-five-year-old."
Id.

168. Id.

169. /d at 1109.

170. Id.

171. Mat 1110.

172. Id.

173. Id.

174. Mat 1110-11.

175. M. at nil.

176. No. 97 CV 7109 (ARR), 2001 WL 1328921 (E.D.N. Y. Aug. 6, 2001).

177. The students regularly taunted Peries, calling him names such as "fucking Hindu" and
"Indian Shit." Mat* 1-2.

178. M. at*5.

179. M. at*6.

180. Id.

2009] TEACHERS' SEXUAL HARASSMENT CLAIMS 493

Title Vn imposes liability on schools for the harassing conduct of special
education students is correct because it is consistent with existing case law.

B. The Mongelli Court's Grant of Summary Judgment Was Probably Correct

Part LB of this Note determined that the proper Title VII test was whether,
under the totality of the circumstances, a plaintiff demonstrated that she suffered
unwelcome harassment that was "sufficiently severe or pervasive by objective
and subjective measures to alter"^^^ the terms, conditions, or privileges of
employment, keeping in mind the social context of the workplace. ^^^

The Mongelli court determined that Mongelli did not meet the objective
requirement because she "failed to establish that a reasonable person in her
situation would have been detrimentally affected."^^^ To analyze whether the
Mongelli court correctly decided that the objective element was not met, this
section describes a theoretical test that determines whether the terms or
conditions of employment were altered. ^^"^ It then examines existing case law to
determine whether the Mongelli decision is consistent with decisions that have
addressed similar issues.

7. The Terms and Conditions Approach. — In her article. Harassment of
Sex{y) Workers: Applying Title VII to Sexualized Industries, ^^^ Ann McGinley
noted that the Title Vn test requires the trier of fact to first determine the terms,
conditions, or privileges of employment. ^^^ McGinley formulated a three
question test "[t]o determine whether particular behavior constitutes a term or
condition of employment." ^^^ The three questions are:

1) whether the behavior in question is necessary to the particular job
performed by the employee; 2) whether it relates to the essence of the
business in which the job is performed; and 3) whether the employer
communicated to the employee, either implicitly or explicitly, that this
behavior constituted part of the employee's job. ^^^

181. McGinley, supra note 70, at 101.

182. Oncale v. Sundowner Offshore Servs., Inc., 523 U.S. 75, 82 (1998).

183. Mongelli v. Red Clay Consol. Sch. Dist. Bd. of Educ, 491 F. Supp. 2d 467, 480 (D. Del.
2007).

184. McGinley, supra note 70, at 101.

185. Id.

186. Id. at 102. McGinley' s article focuses on women in sexualized professions, including
exotic dancers and prostitutes (in legal brothels). Despite the difference in professions, the Title
VII analysis remains the same. McGinley is concerned with the range of conduct exotic dancers
must endure. Similarly, this Note examines the range of conduct special education teachers must
endure.

187. Id.

188. Id. The three questions in McGinley' s test basically ask the same thing: should the
employee have expected the harassing conduct? If a behavior is necessary to the particular job
being performed, the employee may reasonably expect that she will be required to endure that
behavior. Similarly, if the employer explicitly informs the employee that the behavior is part of the

494 INDIANA LAW REVIEW [Vol. 42:475

If the answer to all three questions is yes, then the behavior at issue is a term or
condition of employment. ^^^ If the court answers yes to all three questions, the
behavior in question cannot create a HWE because, by definition, a behavior that
is a term or condition of employment cannot alter a term or condition of
employment. ^^^ After the three question test determines the terms or conditions
of employment, the trier of fact must then decide whether these terms or
conditions were altered by the harassing conduct. ^^^

To illustrate, McGinley uses the example of exotic dancers. vShe explains
that "a term or condition of employment for exotic dancers in gentlemen's clubs
may require tolerating hooting and staring." *^^ Thus, for an exotic dancer, "being
asked to endure hooting and staring would not alter the terms or conditions of
employment, because tolerating this behavior is [already] a term or condition of
employment." ^^^

Applying this test to Mongelli's case, the pertinent questions are whether
enduring JW's conduct was necessary to teaching a ninth grade special education
class, and whether the school board informed Mongelli that enduring this sort of
behavior was part of her job.

2. Relevant Case Law. — The Mongelli court held that the threshold of abuse
in Title Vn claims was necessarily higher for special education teachers. ^^"^
Therefore, the most helpful cases to determine whether Mongelli was decided
correctly examine workplace environments where employees might be expected
to tolerate some severe conduct. These cases can be separated into two
categories: (1) the employee was regularly exposed to crude situations in the
workplace, or (2) the employee knew that the harasser suffered from a condition
that made the harasser more prone to engage in harassing conduct.

a. Employees regularly exposed to crude behavior in the workplace. — In
Gross V. Burggraf Construction Co.,^^^ the plaintiff, a female truck driver for a
construction company, complained that her supervisor referred to her using
derogatory terms and constantly used profanity. ^^^ The court in Gross stated that
the proper Title Vn sexual harassment test is contextual and changes "depending

job, then the employee will expect the behavior.

189. Id.

190. Id.

191. Id

192. Id.

193. Id.

194. Mongelli v. Red Clay Consol. Sch. Dist. Bd. of Educ, 491 F. Supp. 2d 467, 478 (D. Del.
2007).

195. 53 F.3d 1531 (10th Cir. 1995).

196. Id. at 1536. Gross alleged that, on one occasion, her supervisor referred to her as a
"cunt," and that on another, he stated to a co-worker, "Mark, sometimes don't you just want to
smash a woman in the face?" Id. However, the court found that the evidence concerning the use
of "cunt" was inadmissible. Id. at 1541.

2009] TEACHERS' SEXUAL HARASSMENT CLAIMS 495

upon the work environment"'^^ in which the conduct occurred. '^^ The court
recognized that "[i]n the real world of construction work, profanity and vulgarity
are not perceived as hostile or abusive." '^^ The court instead viewed profanity
as a normal and accepted form of expression.^^^ According to the court, because
construction workers must expect crude language in the workplace, the
supervisor's vulgar comments were insufficient to create a HWE.^^'

In Coolidge v. Consolidated City of Indianapolis, ^^^ the court was confronted
with a peculiar factual scenario. The plaintiff, Coolidge, worked in a forensic
crime lab.^^^ Coolidge' s former supervisor, who had been fired for sexually
harassing Coolidge,^^"^ allegedly left two videotapes that contained pornography
depicting necrophilia and other "disturbing images" where he knew Coolidge
would find them.^^^ Coolidge found the tapes and became nauseous after viewing
their content.^^^ The court held that the videotapes did not create a HWE because
the "encounter was brief and not particularly severe."^^^ In its analysis of the
tapes' severity, the court stated, "Crime Lab employees frequently worked with
corpses, so pornography depicting necrophilia might not have the same shocking
overtones there as it would in another setting."^^^ Thus, although the facts were
markedly different, in both Coolidge and Gross, the courts found that offensive
conduct did not alter the terms or conditions of employment where the plaintiffs
were regularly exposed to similar behavior in the course of their work.

Gross and Coolidge illustrate a deficiency in McGinley's three question
terms and conditions test.^^^ McGinley's test fails to account for behaviors that,
although not necessary for the particular job or business involved, are common
in certain workplace environments. For example, in Gross, the court did not find
that enduring profane language was necessary to performing the job of a truck
driver.^ '^ The Gross court also did not find that profanity or vulgarity related to
the essence of either construction work or truck driving.^' ' Rather, the Gross
court merely found that profanity was a normal behavior in the construction

197. Mat 1538.

198. This is consistent with Oncale, which requires courts to examine the social context in
which conduct takes place. See Oncale v. Sundowner Offshore Servs., Inc., 523 U.S. 75, 82 (1998).

199. Gw55,53F.3datl537.

200. Id.

201. /^. at 1547.

202. 505 F.3d 731 (7th Cir. 2007).

203. Mat 732-33.

204. Mat 733.

205. Id.

206. Id.

207. M. at 734.

208. Id.

209. See McGinley, supra note 70, at 102.

210. Gross V. Burggraf Constr. Co., 53 F.3d 1531, 1537 (10th Cir. 1995).

211. M. at 1537-38.

496 INDIANA LAW REVIEW [Vol. 42:475

industry.^ ^^ Similarly, the Coolidge court did not find that enduring pornographic
materials depicting necrophilia was necessary to a forensic scientist's job.^^^
Thus, it would be appropriate to add an inquiry to McGinley's test: is a behavior
so common in a workplace that exposure to such behavior would not sufficiently
alter the terms or conditions of employment? If so, then exposure to such a
behavior would not create a HWE.

b. Employee is aware that individual is prone to harassing conduct. — The
cases in this category involve plaintiffs who were allegedly harassed by mentally
or psychiatrically impaired individuals. In each case, the court determined that
a Title VII claim could theoretically be brought. The courts, however, differed
on whether summary judgment was appropriate.

(i) Plaintiff's claim survived summary judgment. — In Peries v. New York
City Board of Education, ^^"^ discussed in Part in.A.3., the court allowed a special
education teacher's Title VII HWE racial harassment claim to survive summary
judgment even though the alleged conduct came from special education
students.^'^ The court found that five years of "ongoing name-calling,
mimicking, and other abuse" could have been "sufficiently severe or pervasive
to alter the conditions" or terms of employment.^ ^^

Similarly, in Crist v. Focus Homes Inc.,^^^ also discussed in Part IQ.A.B, the
court allowed the plaintiffs' claims even though the alleged harasser was severely
mentally impaired.^^^ Recall that in Crist the patient repeatedly grabbed the
employees' genital areas and masturbated in front of the employees.^^^ The court
in Crist recognized that whether J.L. ' s conduct was hostile or abusive '*require[d]
particularized consideration of the circumstances, including ... the [plaintiffs']
expectations given their choice of employment. "^^° However, because of "factual
disputes in the record,"^^^ the court found that whether J.L.'s conduct was
abusive, under the circumstances, was an issue for a jury after a full trial.^^^

Finally, in Salazar v. Diversified Paratransit, Inc.,^^^ the plaintiff, a bus
driver for a company that transported developmentally disabled individuals,
brought a Title Vn HWE sexual harassment claim after a passenger with Down
syndrome harassed her on several occasions and exposed his genitals to Salazar

212. Id.

213. Coolidge, 505 F.3datl34.

214. Peries v. N.Y. City Bd. of Educ, No. 97 CV 7109 (ARR), 2001 WL 1328921 (E.D.N. Y.
Aug. 6, 2001).

215. /^. at*6-7.

216. Id.at*6.

217. 122 F.3d 1 107 (8th Cir. 1997).

218. /^. at nil.

219. Mat 1109.

220. Mat 1111.

221. Id.
111. Id.

113. 1 1 Cal. Rptr. 3d 630 (Ct. App. 2004).

2009] TEACHERS' SEXUAL HARASSMENT CLAIMS 497

twice.^^"^ The second exposure incident culminated when the passenger attacked
Salazar, attempting to touch "her all over and . . . put his hands under her shirt
and shorts."^^^ The Salazar court held that a jury should have determined the
case.^^^

(ii) Plaintiff's claim did not survive summary judgment. — The court in Van
Horn V. Specialized Support Services, Inc}^^ found that the plaintiffs HWE
claim failed because she could not establish the objective part of the severe or
pervasive test.^^^ The plaintiff worked for a company that provided care for
"mentally retarded and developmentally disabled clients."^^^ She specifically
worked with KB, a twenty-one year old male with Down syndrome. ^^° During
the span of one month, KB touched Ms. Van Horn inappropriately on three
separate occasions.^^^ In the first incident, KB briefly touched Ms. Van Horn's
breasts.^^^ In the second, he pinched her inner thigh.^^^ In the third, KB pinched
Ms. Van Horn's breast near the nipple.^^"^ KB also made a few sexually
suggestive comments, the worst of which was "Betty wears pantyhose, I could
take them off her, ooooh."^^^ Despite the three physical incidents, the Van Horn
court found that the plaintiff s HWE claim failed because she did not sufficiently
establish the objective part of the severe or pervasive test.^^^ The court
emphasized that the alleged conduct "took place over a period of less than one
month,"^^^ most of the conduct was mere utterances and not physically
threatening or humiliating,^^^ and of the three physical incidents only the last
(breast pinching) was objectively severe.^^^

224. /J. at 633-34.

225. /t/. at 634.

226. Id. at 637-38. In Salazar, the case was initially tried to a jury, but at the "conclusion of
Salazar' s case, the trial court granted nonsuit in favor of the defendants" on the grounds that
employers were not liable for the acts of a client or customer. Id. at 634. The California Court of
Appeals upheld the nonsuit. Id. However, the California legislature subsequently passed a bill to
abrogate the appellate court's decision. Id. At the direction of the California Supreme Court, the
court of appeals reexamined the case in light of the new legislation. Id. at 635. Upon
reexamination, the Salazar court determined that the trial court's grant of nonsuit in favor of
defendants was no longer proper. Id. at 637-38.

227. 241F.Supp. 2d 994 (S.D.Iowa 2003).

228. Id. at 1008-09.

229. Mat 998.

230. Id. at 999.

231. /J. at 1000-04.

232. Id. at 1000.

233. Id at 1002.

234. /6f. at 1004.

235. Id. at 1004.

236. Id. at 1008-09.

237. /^. at 1009.

238. Id at 1008.

239. Id.

498 INDIANA LAW REVIEW [Vol. 42:475

3. The Mongelli Court's Grant of Summary Judgment Is Defensible. — The
Mongelli court' s grant of summary judgment is defensible because it is consistent
with the case law previously discussed.

The factual scenario in Mongellf"^^ most closely resembles the factual
scenario from Van Hom?"^^ In both cases, the alleged harassment took place in
the span of less than one month, consisted mostly of offensive utterances, and did
not consist of incidents that were overly physically threatening or humiliating.
The Van Horn court found that the objective test was not met because the
incidents occurred over a short period of time and only one incident was
objectively hostile or abusive. ^"^^ Similarly, in Mongelli, the incidents occurred
over a short period of time and probably only one incident (JW humping
Mongelli) was objectively severe.^"^^

Although the majority of cases discussed allowedTitle Vn claims based on
the conduct of mentally impaired non-employees, the cases that survived
summary judgment involved harassment that was either inherently more severe^"^
than JW's conduct or much more frequent than JW's conduct.^'*^ For example,
the patient in Crist grabbed the plaintiffs' genital areas and repeatedly
masturbated in front of the plaintiff s.^"^^ The harassment in Peries, although not
physically threatening, occurred repeatedly for five years.^"^^ JW's conduct was
not inherently severe and only occurred over a two week span.^"^^ Thus, as with
the patient's conduct in Van Horn, JW's conduct "did not rise to the level of the
conduct"^"^^ present in the cases that survived summary judgment.

This conclusion is somewhat dissatisfying because Title Vn "seeks to
eliminate all forms of sex discrimination in all work environments."^^^ Further,
it would seem that conduct severe enough to incur criminal charges would be
sufficiently severe for the purposes of Title VII. However, as the Harris court
noted, the objectively severe and pervasive test is, "by its nature,"
mathematically imprecise.^^^ JW's conduct was probably severe enough that
another court may have ruled differently. However, given the social context of

240. Mongelli v. Red Clay Consol. Sch. Dist. Bd. of Educ, 491 F. Supp. 2d 467 (D. Del.
2007).

241. Van Horn v. Specialized Support Servs., Inc., 241 F. Supp. 2d 994 (S.D. Iowa 2003).

242. Mat 1008.

243. See Mongelli, 491 F. Supp. 2d at 480. Furthermore, JW humping Mongelli is probably
not as severe as KB pinching the plaintiffs breast in Van Horn.

244. See, e.g., Crist v. Focus Homes, Inc., 122 F.3d 1 107, 1 108-10 (8th Cir. 1997).

245. See, e.g., Peries v. N.Y. City Bd. of Educ, No. 97 CV 7109 (ARR), 2001 WL 1328921,
at *6 (E.D.N. Y. Aug. 6, 2001).

246. Crist, 122F.3datll09.

247. Peries, 2001 WL 1328921 at *l-2.

248. Mongelli, 491 F. Supp. 2d at 472-73.

249. Van Horn v. Specialized Support Servs., Inc., 241 F. Supp. 2d 994, 1009 (S.D. Iowa
2003).

250. Plaza-Torres v. Rey, 376 F. Supp. 2d 171, 182 (D.P.R. 2005).

251. Harris v. Forklift Sys., Inc., 510 U.S. 17, 22 (1993).

2009] TEACHERS' SEXUAL HARASSMENT CLAIMS 499

the special education classroom, and in light of the Van Horn decision, the
Mongelli court's grant of summary judgment is defensible.

IV. Suggestions for the Future

Despite the lack of explicit instruction from the Supreme Court,^^^ the early
case law indicates that teachers will be allowed to bring HWE claims based on
the conduct of mentally impaired students.^^^ It also appears that schools will be
allowed to use the Faragher affirmative defense against these claims.^^"^
Therefore, although the conduct in Mongelli was not sufficient to establish a
HWE, it is important for schools to be aware of the potential for liability and the
need to implement procedures to avoid it.

A. Suggestions for Schools

Because liability in HWE sexual harassment claims results when harassing
conduct creates a HWE and the employer fails to take remedial action,^^^ schools
should put programs in place to prevent harassment and to remedy any
harassment that occurs.^^^

1. Preventive Measures. — The "primary objective"^^^ of Title Vn is to
prevent harassment."^^ The EEOC Guidelines stress that "[p]revention is the best
tool for the elimination of sexual harassment."^^^ The Supreme Court recognized
that Title VII' s preventive goals warranted an affirmative defense for employers
that "exercised reasonable care to prevent and correct promptly any sexually
harassing behavior."^^^ As one commentator noted, the Supreme Court's
message is clear: 'To avoid going to trial and losing a Title Vn sexual

252. See Rey, 376 F. Supp. 2d at 1 80 (U.S. Supreme Court has not addressed "school liability
for sexual harassment suffered by a teacher on account of a student.").

253. See discussion supra Part III.A.3.

254. See Pedes v. N.Y. City Bd. of Educ, No. 97 CV 7109 (ARR), 2001 WL 1328921, at *6
(E.D.N. Y. Aug. 6, 2001) (stating that a teacher could prevail in his claim based on student
harassment only if he could show "that the school board either provided no reasonable avenue of
complaint or knew of the harassment and failed to take appropriate remedial action").

255. See, e.g., Lockard v. Pizza Hut, Inc., 162 F.3d 1062, 1071-72 (10th Cir. 1998). In
Lockard, the defendants had a sexual harassment policy in place that every employee was required
to read. However, when male customers harassed a female employee, the manager did not take
remedial action. As a result, the owner of the restaurant was held liable for the conduct of the non-
employees. Id. at 1074-75.

256. Lyons, supra note 14, at 476.

257. Faragher v. City of Boca Raton, 524 U.S. 775, 806 (1998).

258. Id.\ accord Sean Obermeyer, Note, Resolving the Catch 22: Franchisor Vicarious
Liability for Employee Sexual Harassment Claims Against Franchisees, 40 IND. L. REV 611, 636
(2007) (noting that Title VII's focus on prevention is correct because of the staggering costs of
sexual harassment in the workplace).

259. 29 C.F.R. § 1604.11(f) (2008).

260. Faragher, 524 U.S. at 807.

500 INDIANA LAW REVIEW [Vol. 42:475

harassment suit, employers must take preventative measures. ^^^ According to the
EEOC,

An employer should take all steps necessary to prevent sexual
harassment from occurring, such as affirmatively raising the subject,
expressing strong disapproval, developing appropriate sanctions,
informing employees of their right to raise and how to raise the issue of
harassment under [T]itle Vn, and developing methods to sensitize all
concerned. ^^^

Therefore, schools should implement programs aimed at educating teachers about
student harassment.^^^ These programs should, at a minimum, alert teachers to
the types of behaviors the school does not consider harassment. The school
should also design specific and clear procedures that teachers use to register
complaints concerning student conduct. ^^

2. Remedial Action. — A school district's remedial action plan should be
designed so that the employee responsible for receiving teachers' complaints is
also the employee responsible for taking remedial action. This design minimizes
the risk that a lack of communication will result in school liability. For example,
suppose a school district's policy concerning teachers' complaints is structured
in the following manner:

(1) All teachers shall file complaints of harassing conduct with the
assistant principal.

(2) The assistant principal shall relay all harassment complaints to the
head principal.

(3) The head principal shall inform the school board of complaints she
deems to be significant.

(4) The school board shall take remedial action as it deems appropriate.

In this scenario, the school can be held liable in one of three ways. First, the
assistant principal may fail to inform the principal of a complaint (and thus no
action would be taken). Second, the principal might not inform the school board
of a complaint, either out of carelessness, or because she determines that the
complaint is minor in nature. Finally, the school board may fail to take action
when it should have. This scenario may to lead to a devastating lack of
communication — either from the assistant principal to the principal, or from the
principal to the school board.

On the other hand, if the employee who receives the complaints is also the
individual responsible for taking remedial action, there is no chance that a lack
in communication between employees will impose liability on the school. To

261. Lyons, supra note 14, at 489.

262. 29 C.F.R. § 1604.1 1(f) (2008).

263. See Lyons, supra note 14, at 476.

264. It is important for schools to establish clear complaint procedures so that the school can
raise an affirmative defense in cases where a teacher fails to take advantage of the complaint
procedures. See Burlington Indus., Inc. v. EUerth, 524 U.S. 742, 765 (1998).

2009] TEACHERS' SEXUAL HARASSMENT CLAIMS 501

illustrate, suppose instead that the school district's policy states:

(1) All teachers shall file complaints of harassing conduct with the
principal.

(2) The principal shall take immediate action to remedy the situation.

(3) The principal shall notify the board of any and all complaints as well
as the action taken to remedy the situation.

This scenario corrects the communication problems presented in the previous
example. Because the principal is responsible for receiving the complaints and
taking remedial action, the potential for error is limited to an error in the
principal's discretion.

B. Suggestions for Courts

Courts should take teachers' claims of student-on-teacher sexual harassment
seriously. Early court decisions extended Title Vn to cover student-on-teacher
harassment.^^^ Therefore, a court should deny a school board's motion for
summary judgment if a teacher can demonstrate that she suffered unwelcome
harassment that was "sufficiently severe or pervasive by objective and subjective
measures to alter"^^^ the terms, conditions, or privileges of employment. As in
any other Title VII case, this demands examination of both the subjective and
objective severity of behavior^^^ and the social context in which the behavior
occurred.^^^

Conclusion

The title of this Note questions whether special education teachers waive
their right to be free from sexual harassment from students. Case law directly
related to the topic is sparse, but the early decisions indicate that teachers may
bring Title VII HWE sexual harassment claims against schools that know (or
should have known) about students harassing teachers and did nothing to remedy
the situation.^^^ Although special education teachers may be required to expect
a heightened degree of abuse from their students,^^^ they should not completely
forfeit their right to work in an environment free of sexual harassment.^^*

265. See discussion supra Part III.A.2.

266. McGinley, supra note 70, at 101.

267. Harris v. Forklift Sys., Inc., 510 U.S. 17, 22 (1993).

268. Oncale v. Sundower Offshore Servs., Inc., 523 U.S. 75, 80-81 (1998).

269. See discussion supra Part III.A.2-3.

270. See Mongelli v. Red Clay Consol. Sch. Dist. Bd. of Educ, 491 F. Supp. 2d 467, 478 (D.
Del. 2007).

27 1 . See id. (teachers deserve a working environment free from abuse).

The Problematic Application of Title VII's

Limitations Period in the Pay Discrimination

Context: Ledbetter v. Goodyear^ the Ledbetter

Fair Pay Act, and an Argument for

A Modified Balancing Test

JONATHON Wright*

Introduction

The United States Supreme Court has decided several pay discrimination
cases throughout the past four decades.' However, due to the unique nature
of compensation decisions, courts have struggled to consistently apply Title
Vn's limitation period^ to disparate-treatment pay cases.^ Specifically, courts

* J.D. Candidate, 2010, Indiana University School of Law — Indianapolis. M.B.A.
Candidate, 2010, Kelley School of Business — Indianapolis. B.S., 2005, Kelley School of
Business — Indianapolis. Recipient of the Papke Prize for Best Note in Volume 42, endowed by
and named in honor of David R. Papke, former R. Bruce Townsend Professor of Law and faculty
advisor to the Indiana Law Review.

1. See, e.g., Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007), superseded
by statute, Lilly Ledbetter Fair Pay Act of 2009, Pub. L. No. 111-2, 123 Stat. 5 (2009) (to be
codified at 29 U.S.C. §§ 626, 794a, and 42 U.S.C. §§ 2000e-5, -16).; Bazemore v. Friday, 478 U.S.
385 (1986); Hazelwood Sch. Dist. v. United States, 433 U.S. 299 (1977); United Air Lines, Inc.
V.Evans, 431 U.S. 553(1977).

2. Title VII defines a timely charge in the following manner:

(1) A charge under this section shall be filed within one hundred and eighty days after
the alleged unlawful employment practice occurred and notice of the charge (including
the date, place and circumstances of the alleged unlawful employment practice) shall be
served upon the person against whom such charge is made within ten days thereafter,
except that in a case of an unlawful employment practice with respect to which the
person aggrieved has initially instituted proceedings with a State or local agency with
authority to grant or seek relief from such practice or to institute criminal proceedings
with respect thereto upon receiving notice thereof, such charge shall be filed by or on
behalf of the person aggrieved within three hundred days after the alleged unlawful
employment practice occurred, or within thirty days after receiving notice that the State
or local agency has terminated the proceedings under the State or local law, whichever
is earlier, and a copy of such charge shall be filed by the Commission with the State or
local agency.
42 U.S.C. § 2000e-5(e)(l) (2006). Accordingly, in so-called deferral states, which have relevant
state or local laws giving state agencies primary jurisdiction in Title VII discrimination claims, the
applicable charge must be brought within 300 days of the unlawful act to be timely. Id. In non-
deferral states, where there is no relevant state or local agency, to be timely, the applicable charge
must be brought within 180 days. Id.

3. See Ledbetter, 550 U.S. at 623 (case citations omitted) (noting the split regarding the
proper application of the limitations period in Title VII disparate-treatment pay cases among the
lower courts).

504 INDIANA LAW REVIEW [Vol. 42:503

have disagreed about exactly which activity constitutes the unlawful employment
action in the context of compensation decisions."^ Some courts identified both the
pay-setting decision and the actual payment of the discriminatory wage as
actionable employment actions.^ Others recognized only the pay-setting decision
as the unlawful employment action and viewed the payment of discriminatory
wages merely as an effect of past discrimination.^

On May 29, 2007, the United States Supreme Court determined that pay
decisions alone are the unlawful employment practices in disparate-treatment pay
cases. ^ In so holding, the Court reasoned that the actual payment of the
discriminatory wage was merely an adverse effect of the previous pay-setting
decision: "A new violation does not occur, and a new charging period does not
commence, upon the occurrence of subsequent nondiscriminatory acts that entail
adverse effects resulting from the past discrimination."^ In other words, Title Vn
plaintiffs must focus on intentional pay decisions during the charge filing period
for their pay discrimination claim to be timely.^

Just weeks after the Supreme Court's Ledbetter decision. Representative
George Miller (Democrat — California) introduced the Lilly Ledbetter Fair Pay
Act of 2007 (the Bill)^° in the House of Representatives.^^ Although this
particular Bill ultimately failed a cloture motion in the Senate,*^ President Obama

4. Title VII makes it unlawful for an employer to "discriminate against any individual with
respect to [the individual's] compensation . . . because of such individual's race, color, religion,
sex, or national origin." 42 U.S.C. § 2000e-2(a)(l) (2006).

5. See, e.g., Forsyth v. Fed'n Employment & Guidance Serv., 409 F.3d 565, 573 (2d Cir.
2005) (holding that both the decision to implement a discriminatory pay scale and payments made
in accordance with such a scale may be the basis for pay discrimination causes of action under Title
VII), abrogated by Ledbetter, 550 U.S. 618.

6. See, e.g., Ledbetter v. Goodyear Tire & Rubber Co., 421 F.3d 1 169, 1182-83 (1 1th Cir.
2005) (finding Title VII plaintiffs may not base pay discrimination claims on pay decisions
occurring before the last pay decision affecting the plaintiffs pay during the limitations period),
ajfd, Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007), superseded by statute, Lilly
Ledbetter Fair Pay Act of 2009, Pub. L. No. 111-2, 123 Stat. 5 (2009) (to be codified at 29 U.S.C.
§§ 626, 794a, and 42 U.S.C. §§ 2000e-5, -16).

7. Ledbetter, 550 U.S. at 628-29.

8. Id at 628.

9. Id. Note, however, this framework does not apply to facially-discriminatory pay
structures. Such pay schemes are controlled by Bazemore v. Friday, 478 U.S. 385 (1986). That
is, an employer who intentionally retains a facially-discriminatory pay schedule is liable as long as
it continues to use the discriminatory pay scheme. Ledbetter, 550 U.S. at 634-35.

10. H.R. 2831, 1 10th Cong. (2007).

11. Govtrack.us, H.R. 2831 [1 10th]: Lilly Ledbetter Fair Pay Act of 2007 (Jul. 31, 2007),
http://www.govtrack.us/congress/bill.xpd?bill=h 11 0-2831 [hereinafter Govtrack.us, H.R. 2831
[110th]].

12. See Carl Hulse, Republican Senators Block Pay Discrimination Measure, N.Y. TIMES,
Apr. 24, 2008, at A22.

2009] LEDBETTER V. GOODYEAR 505

signed the Lilly Ledbetter Fair Pay Act of 2009 (LFPA),^^ a nearly identical
version, into law on January 29, 2009.'"^ The LFFA amends Title Vn of the Civil
Rights Act of 1964 (among other anti-discrimination statutes), effectively
overturning the Ledbetter decision and embracing the paycheck accrual theory
the Supreme Court so adamantly rejected.*^

This Note examines the application of Title VII's limitations period in the
context of pay discrimination cases. Part I briefly reviews the Supreme Court
cases that provided the pre-Ledbetter foundation for identifying the unlawful
employment practice in the pay discrimination context; it also explores the split
among lower courts concerning the application of the limitations period in Title
vn disparate-treatment pay cases. Part n examines the Ledbetter decision in
detail. It explores the case's factual circumstances, Lilly Ledbetter' s legal
strategy. Justice Alito's majority opinion, and Justice Ginsburg's dissent. Part
III describes the LFPA, evaluates its legal effects, and addresses its practical
implications. Finally, Part IV examines whether current judicial doctrines are
flexible enough to adequately protect victims of pay discrimination and
advocates a modified balancing test for the application of Title VII's limitations
period in the pay discrimination context.

I. Pre-Ledbetter Supreme Court Cases Identifying the Relevant

Unlawful Employment Practices for the Purposes of Applying

Title VII' s Limitations Period to Disparate-Pay Cases

The Supreme Court has ruled on the application of Title VII's limitations
period in the pay discrimination context numerous times since the statute's
inception.'^ The most poignant decisions of the past four decades serve as a
foundation for understanding how the lower courts ultimately split in their
interpretation of the limitations period in Title VII pay discrimination
jurisprudence.

A. The Early Cases

L Unfortunate Historical Events with No Legal Consequences: United Air
Lines, Inc. v. Evans. '^ — Throughout the 1960s, United Air Lines, Inc. (United)
maintained a policy that refused to employ married flight attendants. ^^
Accordingly, after her marriage in 1968, United forced Carolyn Evans (Evans)

13. Lilly Ledbetter Fair Pay Act of 2009, Pub. L. No. 111-2, 123 Stat. 5 (2009) (to be
codified at 29 U.S.C. §§ 626, 794a, and 42 U.S.C. §§ 2000e-5, -16).

14. Govtrack.us, S.181 [111th]: Lilly Ledbetter Fair Pay Act of 2009 (Apr. 18, 2009),
http://www.govtrack.us/congress/bill.xpd?bill=sl 1 1-181 [hereinafter Go vtrack.us, S 181 [1 1 1th]].

15. See Lilly Ledbetter Fair Pay Act of 2009, Pub. L. No. 1 1 1-2, 123 Stat. 5 (2009) (to be
codified at 29 U.S.C. §§ 626, 794a, and 42 U.S.C. §§ 2000e-5, -16).

16. 5^^ cases cited 5M/7ra note 1 .

17. 431 U.S. 553(1977).

18. Mat 554.

506 INDIANA LAW REVIEW [Vol. 42:503

to resign from her flight attendant position. ^^ Despite United' s questionable
policy, Evans did not file a claim with the Equal Employment Opportunity
Commission within the applicable limitations period.^^ Therefore, Evans' s claim
arising from her separation with United expired.^^

In November 1968, United entered a new collective-bargaining agreement,
which effectively ended the "no marriage" flight attendant policy and provided
for reinstatement of some of the flight attendants who had been terminated
pursuant to that policy. ^^ The agreement, however, did not cover Evans. ^^ In
1972, after unsuccessfully seeking reinstatement several times, Evans applied,
and was hired as a new employee.^'^

Despite carrying an identical employee identification number. United treated
Evans as a new employee for seniority purposes. ^^ Evans sued, claiming that
even though the original adverse employment action was time-barred. United' s
refusal to give her credit for prior service gave present life to the past
discriminatory act.^^ That is, Evans asserted her Title VII claim under a
continuing violation theory.^^

The Supreme Court acknowledged that the seniority system or, rather,
United' s refusal to recognize Evans's previous seniority benefits, continually
impacted Evans' s pay and benefits.^^ However, the Court distinguished between
continuing and present violations. ^^ Justice Stevens wrote for the Court, stating:
"A discriminatory act which is not made the basis for a timely charge ... is
merely an unfortunate event in history which has no present legal
consequences."^^ The Court noted that United' s seniority system treated the
discriminatorily discharged employees in the same manner as those non-
discriminatorily discharged.^ ^ That is. United applied the system neutrally. ^^
Therefore, the Court implied that there must be some intentional discriminatory
act during the limitations period in order for a Title Vn action to be timely.^^

The Evans decision expressly rejected the continuing violation theory.^"^
Distinguishing time-barred discriminatory acts and their effects during the

19. Id.

20. /^. at 555.

21. Id.

22. Id.

23. Id.

24. Id.

25. Id.

26. Mat 556-57.

27. See id. at 558.

28. Id.

29. Id.

30. Id.

31. Id.

32. Id.

33. Id.

34. See id.

2009] LEDBETTER V. GOODYEAR 507

statutory period from violations actually occurring within the statutory period,
the Court created a rather stringent approach for applying Title VII's limitations
period for plaintiffs in such a position:

Respondent is correct in pointing out that the seniority system gives
present effect to a past act of discrimination. But United was entitled to
treat that past act as lawful after respondent failed to file a charge of
discrimination within the 90 days then allowed by [Section] 706(d). A
discriminatory act which is not made the basis for a timely charge is the
legal equivalent of a discriminatory act which occurred before the statute
was passed.^^

Even at this early time in Title Vn jurisprudence, the Court began developing a
framework for applying the relevant limitations period in a manner that would
not transfer discriminatory intent from expired discriminatory acts to related
effects that fall within the statutory period. ^^

2. Effects V. Acts: Delaware State College v. Ricks.^^— In March 1974,
Delaware State College (Delaware) denied Columbus Ricks (Ricks), a black
Liberian junior faculty member, tenure as a member of the college faculty.^^
Unsatisfied with that result. Ricks filed a grievance with Delaware's Educational
Policy Committee which, in May 1974, took the matter under reconsideration.^^

While the grievance was pending, Delaware continued its plans for Ricks' s
eventual dismissal."^^ On June 26, 1974, pursuant to university policies
disfavoring the immediate termination of junior faculty members not offered
tenure, Delaware offered Ricks a final, nonrenewable one-year contract."^ ^
Delaware informed Ricks that the contract would expire on June 30, 1975."^^
Ricks signed the contract on September 4, 1974."^^ One week later, the
Educational Policy Committee denied Ricks' s grievance."^ Ricks filed suit under
Title vn and other federal anti-discrimination statutes, arguing that the
limitations period ran from his termination date, not when Delaware denied his
tenure. "^^

The Supreme Court rejected Ricks' s argument and found the action time-
barred."^^ The Court held that the limitations period for Ricks 's Title VII action

35. Id.

36. See id.

37. 449 U.S. 250(1980).

38. Id. at 252.

39. Id.

40. Id.

41. Mat 252-53.

42. Mat 253.

43. Mat 253-54.

44. Mat 254.

45. Id.

46. Id. at 256.

508 INDIANA LAW REVIEW [Vol. 42:503

ran from the time Delaware communicated its decision to deny Ricks' s tenure."^^
The Court emphasized that Ricks failed to allege any discriminatory act
occurring during the charging period."^^ Rather, the Court categorized Ricks' s
termination as an effect of Delaware's previous decision to deny tenure.'^^

The Ricks Court's categorization of acts and effects further reinforced
Evans's progeny, limiting employer liability to specific and distinct
discriminatory acts that occur within the limitations period.^^

3. Lessons from the Early Cases: The Continuing Violation Theory Will Not
Support a Timely Title VII Action. — While Evans and Ricks do not involve
disparate pay, they arguably foreclose the idea of the continuing violation theory
in pay discrimination cases. Indeed, the Court's language essentially states this
point.^^ The distinction between "acts" and "effects" implies that the law is
unwilling to transfer discriminatory intent from earlier employment actions to
later consequences. Justice Stevens's term, "merely an unfortunate event in
history which has no present legal consequences,"^^ represents the Court's early
and somewhat strict framework for applying Title VII's limitations period. At
this point, courts had no excuse for disagreeing about whether subsequent
discriminatory wages from time-barred discriminatory pay-setting decisions were
actionable. Evans implies that the time barred pay-setting decision constitutes
"relevant background evidence in a proceeding in which the status of a current
practice is at issue, but separately considered," it "is the legal equivalent of a
discriminatory act which occurred before the statute was passed."^^ Ricks would
term the discriminatory wages within the limitations period "effects" of an
employer's alleged discriminatory act.^"^ However, the progression of the civil
rights movement and language from later opinions opened the door for debate
about whether subsequent discriminatory pay from time-barred discriminatory
pay-decisions constitutes an actionable wrong under Title Vn.

B. The Modem Cases: Sources of Disagreement Among the Lower Courts

I, Facially-Discriminatory Compensation Schemes: Bazemore v.
Friday. ^^ — Prior to August 1, 1965, the North Carolina Agricultural Extension

47. Mat 259.

48. /J. at 257.

49. /J. at 258.

50. See id.

5 1 . See id. ("The emphasis is not upon the effects of earlier employment decisions; rather,
it 'is [upon] whether any present violation exists.'") (quoting United Air Lines, Inc. v. Evans, 431
U.S. 553, 558 (1977)); Evans, 431 U.S. at 558 ("[Evans] emphasizes the fact that she has alleged
a continuing violation. . . . But the emphasis should not be placed on mere continuity; the critical
question is whether any present violation exists.").

52. Evans, 4^1 U.S. at 558.

53. Id.

54. Ricks, 449 U.S. at 257-58.

55. 478 U.S. 385 (1986).

2009] LEDBETTER V. GOODYEAR 509

Service (NCAES) segregated Caucasian and African-American service
employees into two branches. ^^ The Caucasian branch served Caucasian
customers, while the African-American branch served African-American
customers.^^ In response to the Civil Rights Act of 1964, North Carolina merged
the NCAES branches into a single department.^^ This unification, however, did
not result in the immediate elimination of pay disparities that existed between the
Caucasian and African- American branches.^^ After Congress extended Title VII
to include public employees in 1972, some African- American employees brought
suit seeking recovery for the pay disparities that continued to exist from the old,
dual pay scale.^^ The United States intervened, and the African-American
workers amended their complaint on the eve of trial to add a claim under Title

The Supreme Court reversed the Court of Appeals decision, which rejected
the African- American employees' Title Vn disparate pay claim.^^ Specifically,
the Court held that when employers implement a facially discriminatory pay
scheme, they engage in intentional discrimination whenever they issue paychecks
to disfavored employees in accordance with that scheme. ^^

Although the Court issued a per curium opinion, all members of the Court
joined Justice Brennan's separate opinion, concurring in part.^"^ In relevant part.
Justice Brennan stated: "Each week's paycheck that delivers less to a black than
to a similarly situated white is a wrong actionable under Title Vn."^^ Justice
Brennan's simple statement is perhaps the most profound source of disagreement
among lower courts' application of Title VII' s limitation period to pay
discrimination claims. One school of thought limits Bazemore and its progeny
regarding individual payments of discriminatory wages to facially discriminatory
pay structures.^^ The Supreme Court's L^JZ^^rr^r opinion ultimately accepts this

56. /^. at 390.

57. Id.

58. Mat 390-91.

59. /d at 390.

60. /^. at 391.

61. Id.

62. Mat 397.

63. Mat 396-97.

64. See Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618, 646-47 (2007) (Ginsburg,
J., dissenting) (noting that all members of the court agreed with Justice Brennan's Bazemore
concurrence regarding discriminatory low payments to similarly situated African American
employees, superseded by statute, Lilly Ledbetter Fair Pay Act of 2009, Pub. L. No. 111-2, 123
Stat. 5 (2009) (to be codified at 29 U.S.C. §§ 626, 794a, and 42 U.S.C. §§ 2000e-5, -16).

65. Bazemore, 478 U.S. at 395-96 (Brennan, J., concurring in part, joined by all members of
the Court).

66. See, e.g., Ledbetter v. Goodyear Tire & Rubber Co., 421 F.3d 1 169, 1 182-83 (1 1th Cir.
2005), ajfd, Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007), superseded by
statute, Lilly Ledbetter Fair Pay Act of 2009, Pub. L. No. 1 1 1-2, 123 Stat. 5 (2009) (to be codified
at 29 U.S.C. §§ 626, 794a, and 42 U.S.C. §§ 2000e-5, -16).

510 INDIANA LAW REVIEW [Vol. 42:503

approach.^^ A number of courts, however, cite Justice Brennan's Bazemore
opinion for the proposition that each discriminatory paycheck is a new Title Vn
violation, regardless of when the employer made the pay decision.^^

2. Congressional Response as a Source of the Continuing Violation Theory:
Lorance v. AT&T Technologies, Inc.^^ — In 1979, AT&T Technologies, Inc.
(AT&T) changed its method for calculating seniority under its collective-
bargaining agreement with tester employees, positions traditionally held by
men.^^ Prior to the change, all employees at the plant earned seniority based
solely on the number of years the plant had employed the employee.^* The 1979
agreement made seniority for employees in tester positions depend on the time
spent in that position alone. ^^ Three years later, AT&T laid-off several female
testers because of their lower seniority status under the 1979 collective-
bargaining agreement.^^ The female testers filed a charge with the Equal
Employment Opportunity Commission, alleging that AT&T adopted the new
seniority system with the purpose of protecting male testers from lay-offs when
women with more plant seniority moved into the traditionally-male tester
positions. ^"^

The Supreme Court found the women's action untimely because they failed
to file within the charging period.^^ The Court determined that because the
female testers alleged that AT&T adopted the new system with discriminatory
intent but applied it neutrally to both genders, the limitations period ran from the
time of the agreement's execution, not when the female testers felt the effects of
the discriminatory act.^^

Notably, Congress responded by amending Title Vn to allow for employer
liability stemming from both the adoption of an intentionally discriminatory

67. See Ledbetter, 550 U.S. at 637 (majority opinion).

68. See, e.g., Forsyth v. Fed'n Employment & Guidance Serv., 409 F.3d 565, 573 (2d Cir.
2005) (describing the position set forth in Bazemore as "every paycheck stemming from a
discriminatory pay scale is an actionable discrete discriminatory act"), abrogated by Ledbetter, 550
U.S. 618 (2007); Shea v. Rice, 409 F.3d 448, 452 (D.C. Cir. 2005) ("[E]mployer[sl commit[] a
separate unlawful employment practice each time [they pay] one employee less than another for a
discriminatory reason." (citing Bazemore v. Friday, 478 U.S. 385, 396 (1986))); Goodwin v.
General Motors Corp., 275 F.3d 1005, 1009 (10th Cir. 2002) {''[Bazemore] has taught a crucial
distinction with respect to discriminatory disparities in pay, establishing that a discriminatory salary
is not merely a lingering effect of past discrimination — instead it is itself a continually recurring
violation.").

69. 490 U.S. 900 ( 1 989), superseded by statute. Civil Rights Act of 199 1 , 42 U.S.C. § 2000e-
5(e)(2) (2006).

70. /£?. at 901-02.

71. Id.

72. Id. 2X902.

73. Id.

74. /^. at 902-03.

75. Mat 91 1-12.

76. Id. at 912.

2009] LEDBETTER V. GOODYEAR 511

seniority system and its application.^^ This response reinforced the schism
between courts' treatment of the Title Vn limitations period in the pay
discrimination context. The congressional response after Lorance led some
courts to believe that the Lorance decision incorrectly restricted employer
liability in many cases involving current effects of past discrimination.^^ Of
course, proponents of the other school of thought restricted the congressional
intent inherent in the 1991 amendment to an expansion of employer liability only
in the arena of seniority sy stems. ^^

3. The Great Divide: The Continuing Violation Theory in the Pay
Discrimination Context v. Discriminatory Wages as Ejfects of Time-Barred
Unlawful Acts. — Evans and Ricks developed a strict approach for applying Title
Vn's limitations period.^^ Under these early cases, the Court consistently
distinguished between time-barred discriminatory acts and the effects of such
acts that fall within the statutory period.^ ^ These cases, however, did not involve

77. The amended statute provides:

For purposes of this section, an unlawful employment practice occurs, with respect to
a seniority system that has been adopted for an intentionally discriminatory purpose in
violation of this subchapter (whether or not that discriminatory purpose is apparent on
the face of the seniority provision), when the seniority system is adopted, when an
individual becomes subject to the seniority system, or when a person aggrieved is
injured by the application of the seniority system or provision of the system.
42 U.S.C. § 2000e-5(e)(2) (2006).

78. Indeed, Justice Ginsburg's dissenting opinion in Ledbetter mterprets this legislative move
as such:

Until today, in the more than [fifteen] years since Congress amended Title VII, the

Court had not once relied upon Lorance. It is mistaken to do so now. Just as Congress'

"goals in enacting Title VII . . . never included conferring absolute immunity on

discriminatorily adopted seniority systems that survive their first [ 1 80] days," Congress

never intended to immunize forever discriminatory pay differentials unchallenged within

180 days of their adoption.

Ledbetter V. Goodyear Tire & Rubber Co., 550 U.S. 618, 653-54 (Ginsburg, J., dissenting) (quoting

Lorance, 490 U.S. at 914 (1989) (Marshall, J., dissenting), superseded by statute. Civil Rights Act

of 1991, 42 U.S.C. § 2000e-5(e)(2) (2006)), superseded by statute, Lilly Ledbetter Fair Pay Act of

2009, Pub. L. No. 111-2, 123 Stat. 5 (2009) (to be codified at 29 U.S.C. §§ 626, 794a, and 42

U.S.C. §§ 2000e-5, -16).

79. See id. at 627 n.2 (majority opinion) ("After Lorance, Congress amended Title VII to
cover the specific situation involved in that case. . . . [T]he very legislative history cited by the
dissent explains that this amendment and the other 1991 Title VII amendments 'expand[ed] the
scope of relevant civil rights statutes in order to provide adequate protection to victims of
discrimination.' For present purposes, what is most important about the amendment in question
is that it applied only to the adoption of a discriminatory seniority system, not to other types of
employment discrimination.") (citations omitted).

80. See Del. State Coll. v. Ricks, 449 U.S. 250, 257-58 (1980); United Air Lines, Inc. v.
Evans, 431 U.S. 553, 558 (1977).

81. See, e.g.. Ricks, 449 U.S. at 257-58.

512 INDIANA LAW REVIEW [Vol. 42:503

pay discrimination. In Bazemore, the Court's first ruling on the application of
Title Vn's application period for disparate payment of wages, the Court found
discriminatory wages within the limitations period separately actionable.^^ While
the scope of this holding is arguably limited to facially discriminatory pay
schemes,^^ it opened the door for the interpretation that each discriminatory
paycheck is an actionable wrong under Title VII.^"^ Under this interpretation,
discriminatory wages paid within the relevant statutory period each constitute an
actionable wrong under Title Vn.^^ The congressional response after Lorance
reinforced the possibility that Congress actually intended for the current effects
of discriminatory acts that occurred outside the limitations period to be
actionable.^^ Lower courts waited for clarification on the proper scope of these
holdings in the pay discrimination context.

C National Railroad Passenger Corp. v. Morgan:^^ A New Framework
for Identifying Unlawful Employment Actions in Title VII Cases

In 2002, the Supreme Court addressed the circuits' problematic application
of Title VII' s limitation period in the pay discrimination context with its Morgan
decision.^^ The Court approached the problem by distinguishing between two
types of unlawful employment actions: "[D]iscrete acts" and "claims . . . based
on the cumulative effect of individual acts."^^

The Court held that discrete acts are temporally distinct;^^ thus, they each
constitute an actionable unlawful practice. ^^ The Supreme Court stated the
following rule with respect to discrete discriminatory acts: "[D]iscrete
discriminatory acts are not actionable if time barred, even when they are related
to acts alleged in timely filed charges. Each discrete discriminatory act starts a
new clock for filing charges alleging that act."^^ Therefore, there is no
continuing violation theory with respect to discrete discriminatory acts.^^ Rather,

82. Bazemore V.Friday, 478 U.S. 385,395-97(1986).

83. See Ledbetter, 550 U.S. at 637.

84. Bazemore, 41S\J.S.at395-96.

85. See, e.g., Forsyth v. Fed'n Employment & Guidance Serv., 409 F.3d 565, 573 (2d Cir.
2005) (holding that both the decision to implement a discriminatory pay scale and payments made
in accordance with such a scale may be the basis for pay discrimination causes of action under Title
VII), abrogated by Ledbetter, 550 U.S. 618.

86. See, e.g., Ledbetter, 550 U.S. at 652-54 (Ginsburg, J., dissenting) (generalizing the
congressional response to Lorance as evidence that the Lorance decision was at odds with the
overall purpose of Title VII).

87. 536 U.S. 101 (2002).

88. Id.

89. Mat 114-15.

90. Mat 114.

91. Id.

92. Mat 113.

93. See id.

2009] LEDBETTERV. GOODYEAR 513

each alleged violation must be "independently discriminatory and . . . timely
filed" in order to be actionable.^"^ This definition of discrete acts does little to
change the Court's historical dichotomy between acts and effects. Indeed, under
Morgan 's definition of discrete acts, the employer practices in Evans and Ricks
are not actionable. ^^ Therefore, the reader might wonder what this new definition
of discrete acts really does to clarify which specific employment practices
constitute the appropriate act for application of Title VII's limitation period.^^

The Court acknowledged that claims based on the cumulative effects of
individual acts were different in nature and, thus, should be treated accordingly.^^
The Court classified hostile work environment claims within this category
because of their successive nature, the emphasis on the totality of the
environment, not individual acts, and the lack of a particular temporal
existence.^^ Thus, the series of acts "collectively constitute one 'unlawful
employment practice. '"^^

The Court's new dichotomy between discrete acts and cumulative effects of
individual acts did little to clarify the appropriate application of the Title VII
limitations period. Indeed, the introduction of a new category of employment
practices that plaintiffs can aggregate into one adverse employment action may
have actually blurred the appropriate boundaries for Title VII' s limitations period
even further. It certainly created another attractive argument for plaintiffs that
found themselves without an independent discriminatory practice within the
relevant statutory period. Now, plaintiffs could attempt to aggregate the current

94. Id.

95. In Evans, United applied the seniority system in a neutral manner. United Airlines, Inc.
V. Evans, 43 1 U.S. 553, 558 (1977). Therefore, United's application of the system would not have
met the Court's standard for discrete acts, because it was not independently discriminatory. See
Morgan, 536 U.S. at 1 13 (stating that a discrete act must be independently discriminatory in order
to be actionable). Further, even if United adopted the system with the sole intent of discriminating
against women with respect to seniority, the implementation of the system would not be actionable
because Evans' claim was untimely. See id. (stating that a discrete act must be timely filed in order
to be actionable).

Similarly, in Ricks, Delaware's decision to deny Ricks tenure would not be actionable because
Ricks did not file within the relevant statutory limitations period. Del. State Coll. v. Ricks, 449
U.S. 250, 256 (1980). Nothing in the Morgan decision would change Ricks's termination from an
effect of Delaware's decision to deny him tenure to an actual discriminatory act. See Morgan, 536
U.S. at 1 12-13 ('"Mere continuity of employment, without more, is insufficient to prolong the life
of a cause of action for employment discrimination.' . . . IRicks] could not use a termination that
fell within the limitations period to pull in the time-barred discriminatory act. Nor could a time-
barred act justify filing a charge concerning a termination that was not independently
discriminatory.") (quoting Ricks, 449 U.S. 257).

96. Note, however, that untimely discriminatory acts may still be used as evidence in support
of a timely claim. Morgan, 536 U.S. at 1 13.

97. /6?. at 115-16.

98. Id.

99. M at 117 (quoting 42 U.S.C.§2000e-(5)(e)(l) (2000)).

5 14 INDIANA LAW REVIEW [Vol. 42:503

effects of past discriminatory acts into one unlawful action arising from the
cumulative effects of a time-barred individual discriminatory act.^^

D. The Circuit Split

Given the Supreme Court's often-imprecise application of the limitations
period in Title VII cases, it comes as no surprise that lower courts disagreed
about whether each paycheck made subject to an untimely discriminatory
decision is actionable. After all, it is not clear exactly which employer actions
constitute discrete acts and which do not. Moreover, some of the Court's
language actually seemed to promote such a theory. '°'

This approach interpreting each paycheck made subject to an untimely
discriminatory decision as actionable, however, seems to fly in the face of
previous Supreme Court cases, such as Evans and Ricks, which were left intact
by the Bazemore decision. For example, in Evans, the Court concluded that the
"continuing effects of the precharging [sic] period discrimination did not make
out a present violation."^^^ Similarly, in Ricks, the Court held that the filing
charge ran from the time Delaware communicated its decision not to offer the
plaintiff tenure, not his actual termination. ^^^ Together, these cases illustrate the
Court's tendency to distinguish between acts and effects. '^"^

The Supreme Court's response in Morgan to this disagreement among
circuits was apt. However, the Court' s approach, distinguishing between discrete
acts and cumulative effects merely restated the problem. AfiQT Morgan, although
courts no longer had to determine whether related, discrete acts falling outside

100. Justice Ginsburg's dissenting Ledbetter opinion, discussed infra Part n.C.2, is one such
attempt. See Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618, 651-52 (2007) (Ginsburg,
J., dissenting) (describing the alleged discriminatory pay as a cumulative and gradually-developing
scheme of discrimination, rather than a series of discrete acts), superseded by statute, Lilly
Ledbetter Fair Pay Act of 2009, Pub. L. No. 1 1 1 -2, 1 23 Stat. 5 (2009) (to be codified at 29 U.S.C.
§§ 626, 794a, and 42 U.S.C. §§ 2000e-5, -16).

101. Remember Justice Brennan's statement in Bazemore: "Each week's paycheck that
delivers less to a black than to a similarly situated white is a wrong actionable under Title VII,
regardless of the fact that this pattern was begun prior to the effective date of Title VII." Bazemore
V. Friday, 478 U.S. 385, 395-96 (1986) (Brennan, J., concurring in part, joined by all Members of
the Court). Taken in isolation, many circuits cited Bazemore in support of a continuing violation
theory or paycheck accrual rule. See Ledbetter v. Goodyear Tire & Rubber Co., 421 F.3d 1 169,
1 181 n. 17 (1 1th Cir. 2005) (naming the Third, Fourth, Sixth, Eighth, Ninth, Tenth, Eleventh, and
D.C. Circuits among those that approved of such an interpretation), affd, Ledbetter v. Goodyear
Tire & Rubber Co., 550 U.S. 618 (2007), superseded by statute, Lilly Ledbetter Fair Pay Act of
2009, Pub. L. No. 111-2, 123 Stat. 5 (2009) (to be codified at 29 U.S.C. §§ 626, 794a, and 42
U.S.C. §§2000e-5, -16).

102. Ledbetter, 550 U.S. at 625 (majority opinion).

103. Del. State Coll. v. Ricks, 449 U.S. 250, 258 (1980).

104. See supra Part LA.

2009] LEDBETTERV. GOODYEAR 515

the statutory time period for filing charges under Title VII were actionable, ^^^
they now had to determine whether disparate pay claims based on compensation
decisions before the statutory period involve a series of discrete discriminatory
low paychecks or the cumulative effects of an individual act, the pay decision.

n. The Supreme Court Interpretation:
Ledbetter v. Goodyear Tire & Rubber Co. ^°^

Lilly Ledbetter worked for Goodyear Tire & Rubber Co. (Goodyear) at its
Gadsen, Alabama, plant for nearly nineteen years. ^°^ During most of this time,
Ledbetter served as an area manager, a typically male-dominated position. ^°^
Initially, Ledbetter received a salary on par with her male counterparts
performing similar work. ^^^

Goodyear provided or denied raises for salaried employees based primarily
on their supervisors' evaluation of the individual's job performance."^ Over
time, Ledbetter' s salary slipped in comparison with the male area managers that
had equal or less seniority."^ In March 1998, Ledbetter submitted a
questionnaire with the Equal Employment Opportunity Commission."^ After
retiring in November 1998, Ledbetter filed suit in federal court, alleging, among
other things, that Goodyear violated Title Vn when it paid her a discriminatorily
low salary because of her sex."^

A. The Trial Court Decision

The district court granted summary judgment for Goodyear on a number of
Ledbetter' s claims.""^ It did, however, allow Ledbetter' s pay discrimination
claim to proceed to trial. "^ At trial, Ledbetter claimed that several of her
Goodyear supervisors gave her poor performance evaluations because of her

105. In Morgan, the Supreme Court explicitly rejected the continuing violations theory:
The Court of Appeals applied the continuing violations doctrine to what it termed
"serial violations," holding that so long as one act falls within the charge filing period,
discriminatory . . . acts that are . . . related to that act may also be considered for the
purposes of liability. With respect to this holding, therefore, we reverse.

Nat'l R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 114 (2002) (citation omitted).

106. 550 U.S. 6 1 8 (2007), superseded by statute, Lilly Ledbetter Fair Pay Act of 2009, Pub.
L. No. 111-2, 123 Stat. 5 (2009) (to be codified at 29 U.S.C. §§ 626, 794a, and 42 U.S.C. §§
2000e-5, -16).

107. Mat 621.

108. Id. at 643 (Ginsburg, J., dissenting).

109. See id. at 622-23 (majority opinion).

110. Mat 621.

111. M. at 622.

112. M. at 620.

113. M. at 621-22.

114. Mat 622.

115. Id.

516 INDIANA LAW REVIEW [Vol. 42:503

sex.^^^ She argued that, as a result of these discriminatory evaluations, Goodyear
did not increase her pay as much as it would have if the supervisors had
evaluated her in a nondiscriminatory manner. ^^^ Finally, Ledbetter introduced
evidence that she received substantially less compensation than any of her male
peers in similar positions. '^^ The jury found in favor of Ledbetter and awarded
her $223,776 in backpay, $4662 in mental anguish, and $3,285,979 in punitive
damages.' '^ After denying Goodyear' s motion for judgment as a matter of law,
the district court reduced the jury's recommended award. '^° Accordingly, the
court entered judgment for Ledbetter in the sum of $360,000, plus attorneys' fees
and costs. '^'

B. The Court of Appeals Decision

Goodyear appealed to the Eleventh Circuit Court of Appeals. '^^ On appeal,
Goodyear claimed that all of Ledbetter' s pay discrimination claims based on pay
decisions prior to the relevant 180-day filing period were time-barred.'^^
Goodyear further argued that no intentional discriminatory act occurred after the
filing period began to run.'^'' The Eleventh Circuit reversed the district court's
decision and held that a Title VII disparate-treatment pay claim may not be based
on pay decisions before the last pay decision affecting the employee' s pay during
the limitations period. '^^ Ledbetter appealed to the Supreme Court. '^^

C. The Supreme Court Decision

Essentially, Ledbetter' s arguments fell under four broad categories. First,
Ledbetter relied on evidence of past discrimination in an attempt to show that
each paycheck that Goodyear issued during the charging period was a separate
and discrete discriminatory act.'^^ In support of this argument, Ledbetter cited

116. Id.

117. Id.

118. Id.

1 19. Ledbetter v. Goodyear Tire & Rubber Co., 421 F.3d 1 169, 1 176 (1 1th Cir. 2005), qff'd,
Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007), superseded by statute, Lilly
Ledbetter Fair Pay Act of 2009, Pub. L. No. 1 1 1-2, 123 Stat. 5 (2009) (to be codified at 29 U.S.C.
§§ 626, 794a, and 42 U.S.C. §§ 2000e-5, -16).

120. Id.

121. Id.

122. Id.

123. /f/. at 1177.

124. Id.

125. /d at 1182-83.

126. Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007), superseded by statute,
Lilly Ledbetter Fair Pay Act of 2009, Pub. L. No. 1 1 1-2, 123 Stat. 5 (2009) (to be codified at 29
U.S.C. §§ 626, 794a, and 42 U.S.C. §§ 2000e-5, -16).

127. Mat 624.

2009] LEDBETTER V. GOODYEAR 517

Bazemore for the application of the "paycheck accrual rule."^^^ Second, and in
the alternative, Ledbetter argued that Goodyear' s 1998 decision to deny her a
raise "was unlawful because it carried forward intentionally discriminatory
disparities from prior years."'^^ Third, Ledbetter attempted to draw analogies
between other civil rights statutes and Title VII. Specifically, Ledbetter cited the
Equal Pay Act,^^^ the Fair Labor Standards Act of 1938,^^^ and the National
Labor Relations Act.^^^ Finally, Ledbetter introduced a number of policy
arguments in favor of allowing an alleged victim of discrimination more time to
file in the pay discrimination context. ^^^ In particular, Ledbetter argued that pay
discrimination is more difficult to detect than other forms of discrimination. ^^"^

7. The Majority Opinion. — Writing for the majority. Justice Alito first
emphasized that a Title Vn plaintiff must file a charge with the Equal
Employment Opportunity Commission within the relevant statutory period. ^^^
Justice Alito noted that, in order to determine whether a Title VII plaintiff filed
on time, courts must first "identify with care the specific employment practice
that is at issue."'^^

The Court concluded that prior precedent made it clear that new violations
do not occur and, thus, a new limitations period does not run, merely because
subsequent nondiscriminatory acts involve "adverse effects" of past
discrimination. ^^^ Then, the Court explicitly stated that the "pay-setting
decision[s] [are] . . . 'discrete act[s].'"^^^ Perhaps in response to the confusion
ignited by Morgan 's distinction between discrete acts and cumulative effects of
individual acts. Justice Alito went on to explain that the term "employment
practice generally refers to a discrete act."'^^ Therefore, cumulative effects of
individual discriminatory acts, such as hostile work environment, are the
exception, rather than the rule.^"^^ Finally, the Court stated that "[b]ecause a pay-
setting decision is a 'discrete act,' it follows that the period for filing an [Equal
Employment Opportunity Commission] charge begins when the act occurs."^"^^
That is, Title VII plaintiffs may not bring pay discrimination claims based on

128. /J. at 623.

129. /J. at 624 (internal quotations omitted).

130. 29 U.S.C. § 206 (2006).

131. Id. §§201-219.

132. Id. § 160.

133. Ledbetter, 550 U.S. at 642-43.

134. Id. at 642.

135. Id. at 623-24 (citing 42 U.S.C. § 2000e-5(e)(l) (2006)).

136. Id. at 624.

137. /J. at 628.

138. Id. at 621.

139. Id. at 628 (citing Nat'l R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 110-111 (2002))
(internal quotations omitted).

140. See id.

141. Id. at 621.

5 1 8 INDIANA LAW REVIEW [Vol. 42:503

current salary. ^"^^ Instead, plaintiffs must establish that an unlawful pay decision
was actually made within the relevant statutory period. '"^^

In response to Ledbetter's policy arguments favoring a longer limitations
period for pay discrimination claims under Title Vn, the Court cited a number
of policy arguments of its own.'"^ Specifically, the majority noted that
limitations periods represent important legislative judgments about limiting
liability. ^"^^ It follows that Title VII's relatively short filing period indicates a
clear congressional intent to encourage prompt resolution of claims under the
statute. The Court also voiced concerns regarding the dangers of lost evidence
when allowing tardy claims to proceed. ^"^^

Finally, and perhaps once again, to clarify the scope of its Bazemore holding,
the Court explicitly rejected Ledbetter's paycheck accrual approach. ^"^^ The
Court limited Bazemore'^ holding to cases involving facially discriminatory pay
structures: "An employer that adopts and intentionally retains [a facially
discriminatory] pay structure can surely be regarded as intending to discriminate
... as long as the structure is used."^"^^

2. The Scathing Dissent. — "Justice Ginsburg took the unusual step of
reading a strongly worded dissent from the bench." ^"^^ According to Justice
Ginsburg, pay discrimination does not fit within the class of discrete
discriminatory acts that are "easy to identify."^^^

Justice Ginsburg conveyed a number of concerns regarding the common
characteristics of pay discrimination. First, because pay discrimination usually
occurs in small increments and is gradual over time, it only becomes
recognizable after a long period of time.^^* Second, employers often keep
comparable pay information hidden from employees; therefore, even if victims
of pay discrimination recognize that their compensation is stagnant, they may not
be able to discover that the employer is treating others more favorably. ^^^
Finally, the dissent recognized Morgan's categorical approach to unlawful

142. Id.

143. Id. Note how the majority's approach severely limits the bite of Title VII in the pay
discrimination context. Under Ledbetter, a plaintiff must establish an intentional and unlawful pay-
setting decision within the limitations period. See id. Practically speaking, the likelihood a plaintiff
will both recognize an unlawful pay-setting decision and file the action within the relevant statutory
period is relatively low.

144. See id. ai 642-43.

145. /rf. at 632, 642-43.

146. Id. at 632.

147. Mat 633.

148. Id. at 634.

149. David Copus, Pay Discrimination Claims After Ledbetter 9 (Oct. 20, 2007) (unpublished
manuscript, on file with the American Employment Law Council).

150. LeJ^ett^r, 550 U.S. at 648-49 (Ginsburg, J., dissenting).

151. /^. at 645.

152. Id.

2009] LEDBETTER V. GOODYEAR 519

employment actions. ^^^ Justice Ginsburg found, however, that pay discrimination
is more akin to hostile work environment claims, and, thus, should be categorized
as "'claims . . . based on the cumulative effect of individual acts.'"^^"^ In support
of this argument, she noted that Ledbetter's pay fell from fifteen to forty percent
below similarly situated male employees only after numerous successive
performance evaluations and pay adjustments.'^^

Justice Ginsburg next appealed to prior Supreme Court precedent, statutory
language, and lower court cases. She cited Bazemore for the proposition that
"the unlawful practice is the current payment of salaries infected by gender-
based (or race-based) discrimination . . . [and] occurs whenever a paycheck
delivers less to a woman than to a similarly situated man."'^^ The dissent also
emphasized the fact that Congress amended Title Vn after the Lorance decision,
a move she claimed illustrated a congressional intent to foster protection for
victims of discrimination.'^^ In regards to Title VII's statutory language, Justice
Ginsburg acknowledged that Title VII's back-pay provision'^^ already allows
employer liability to accrue for two years before the charge is filed, which
"indicates that Congress contemplated challenges to pay discrimination
commencing before, but continuing into, the . . . filing period." '^^ Finally, Justice
Ginsburg argued that the majority' s opinion flew in the face of the overwhelming

153. Id. at 647-48- Justice Ginsburg's argument that Title VII pay discrimination claims
should be treated as cumulative effects, rather than discrete acts, recognizes the true bite of the
majority's opinion. Under the majority's view, Title VII plaintiffs may not base pay discrimination
claims on current salary. See id. at 621 (majority opinion). Rather, they must rely on an unlawful
pay-setting decision within the past 180 days (or 300 days in jurisdictions with state agencies that
enjoy primary jurisdiction). See id. This is a rather tough burden to meet. Under the dissent's view
of Title VII pay discrimination as claims based on the cumulative effects of individual acts,
plaintiffs could rely on the overall effect of past decisions as they impact current salary. See id. at
648 (Ginsburg, J., dissenting).

Therefore, the LFPA may be misplaced in focusing on the timeliness issue. See infra Part III.
That is, the LFPA does little to address the categorization of pay discrimination as a discrete act.
See Lilly Ledbetter Fair Pay Act of 2009, Pub. L. No. 1 1 1-2, 123 Stat. 5 (2009) (to be codified at
29 U.S.C. §§ 626, 794a, and 42 U.S.C. §§ 2000e-5, -16). Title VII plaintiffs will still have to focus
on discrete, unlawful compensation decisions or payments, within the relevant statutory period.
Although a longer statutory period provides Title VII plaintiffs with more time to bring claims, it
is often more difficult for plaintiffs to reconstruct unlawful decisions affecting similarly situated
individuals further into the past. Thus, it is unclear just how effective the LFPA will be.

154. Ledbetter, 550 U.S. at 648 (Ginsburg, J., dissenting) (quoting Nat'l R.R. Passenger Corp.
V. Morgan, 536 U.S. 101, 115 (2002)).

155. Mat 648-49.

156. Id. at 645 (citing Bazemore v. Friday, 478 U.S. 385, 395 (1986) (Brennan, J., concurring
in part, joined by all other members of the Court)).

157. Mat 652-53.

158. See 42 U.S.C. § 2000e-5(g)(l) (2006) ("Back pay liability shall not accrue fi-om a date
more than two years prior to the filing of a charge with the Commission.").

159. Ledbetter, 550 U.S. at 654 (Ginsburg, J., dissenting) (citing Morgan, 536 U.S. at 1 19).

520 INDIANA LAW REVIEW [Vol. 42:503

majority of Courts of Appeals decisions on the subject.

160

D. Pay Discrimination: Discrete Acts or Cumulative Effects

The Ledbetter majority and dissent each offer very different, yet
understandable, approaches to the problematic application of Title VII' s
limitations period in the pay discrimination context. On one hand, the Ledbetter
majority emphasized that "[s]tatutes of limitations serve a policy of repose." ^^^
Statutory limitations periods are legislative judgments about the appropriate
amount of time that a party has to bring an action. ^^^ Therefore, Title VII's
relatively short limitations period actually represents congressional preference
for prompt resolution of employment discrimination claims. ^^^ Limiting Title
Vn's limitations period in the pay discrimination context in a manner similar to
other Title Vn discrimination cases encourages employees to bring prompt
claims. Therefore, Title Vn disparate-treatment pay claims should be treated like
other Title Vn discrimination allegations regarding the application of the
statute's limitations period.

On the other hand. Justice Ginsburg offers some legitimate observations
regarding the unique nature of pay discrimination. ^^"^ Because differences in pay
may be due to numerous performance evaluations and take a long time to become
substantial enough to observe, it may be unfair to expect employees to bring
actions within the same limitations period as the other forms of unlawful acts
under Title Vn.*^^ Perhaps these special considerations should require courts to
treat discriminatory pay in a way that reflects its evasive nature. After all. Title
Vn's ultimate goal is achieving "equality of employment opportunities."^^^

Both the majority and dissent make strong arguments. Indeed, each
represents one of the competing interests that must be considered when applying
Title vn's limitations period in the pay discrimination context. The majority's
view favors the interest in "' protect [ing] employers from the burden of defending
claims arising from employment decisions that are long past.'"^^^ The dissent's
view favors the employee's interest in avoiding evasive, unlawful discriminatory
actions that create unequal employment opportunities. ^^^ Given the strong
arguments on each side, it is no surprise that Congress responded by proposing
legislation that would help clarify the "appropriate" application of Title VII's

160. See id. at 654-55.

161. Id. at 630 (citing Am. Pipe & Constr. Co. v. Utah, 414 U.S. 538, 554-55 (1974)).

162. See id. (quoting United States v. Kubrick, 444 U.S. 111,117 (1979)).

163. See id. at 630-3 1 (citing Occidental Life Ins. Co. v. EEOC, 432 U.S. 355, 367-68 (1977)).

164. See id. at 645 (Ginsburg, J., dissenting).

165. Mat 650-51.

166. Occidental, 432 U.S. at 368 (citing Alexander v. Gardner-Denver Co., 415 U.S. 36, 44
(1974)).

1 67. Ledbetter, 550 U.S. at 630 (majority opinion) (quoting Del. State Coll. v. Ricks, 449 U.S.
250,256-57 (1980)).

168. See id. at 645 (Ginsburg, J., dissenting).

2009] LEDBETTER V. GOODYEAR 521

limitations period in the pay discrimination context.

m. Congressional Response: The Lilly Ledbetter Fair Pay Act

On June 22, 2007, just weeks after the Supreme Court's L^JZ^^/r^r decision,
congressional Democrats responded. Representative George Miller of California
introduced the Bill^^^ in the United States House of Representatives. Support for
the LFPA was largely divided along party lines. ^^^

A. Proposal and Status

Democratic proponents of the Bill claimed that the legislation merely
attempted to reverse the Supreme Court's Ledbetter decision. ^^^ As such.
Democratic supporters basically argued that each paycheck resulting from earlier
discrimination should constitute a violation under the Civil Rights Act of 1 964. ^^^
Republicans, however, termed the Bill "hastily- written" and "the most substantial
change to employment law in more than four decades." ^^^

On July 31, 2007, the Bill passed the House of Representatives by a vote of

169. H.R. 2831, 1 10th Cong. (2007).

170. Republicans represented just two of the 225 votes supporting the LFPA, or 0.89%.
Govtrack.us, H.R. 2831 [110th], supra note 11. Democrats represented six of the 199 nays, or
1.51%. Id. Nine representatives did not vote. Id.

171. See, e.g. , Press Release, Democratic Committee on Education and Labor, U.S. House of
Representatives, House Passes Bill to Restore Workers' Rights to Challenge Pay Discrimination
Claims: The Lilly Ledbetter Fair Pay Act Rectifies Flawed Supreme Court Ruling on Pay
Discrimination (July 31, 2007) [hereinafter Democratic Committee], available at
http://www.house.gov/apps/list/speech/edlabor_dem/rel073 1 07 .html ("The Lilly Ledbetter Fair Pay
Act would clarify that every paycheck or other compensation resulting, in whole or in part, from
an earlier discriminatory pay decision constitutes a violation of the Civil Rights Act. As long as
workers file their charges within 180 days of a discriminatory paycheck, their charges would be
considered timely. This was the law prior to the Supreme Court's May 2007 [Ledbetter]
decision.").

172. Id.

173. Press Release, Republican Committee on Education and Labor, U.S. House of
Representatives, House Democrats Undermine 40 Years of Civil Rights Law, Open the Door for
Unbridled Litigation (July 31, 2007) [hereinafter Republican Committee], available at
http://republicans.edlabor.house.gov/PRArticle.aspx?NewsID=224. Senior Republican Member
of the House Committee on Education and Labor, Congressman Howard P. "Buck" McKeon,
stated:

[A]s we combat discrimination in the workplace, we also must stand firmly behind a
process that ensures justice for all — and that includes protecting against the potential
for abuse and excessive litigation. That, I believe, is where Democrats and Republicans
diverge. We aren't taking sides for or against discrimination in the workplace. Rather,
we're staking out distinct positions on fair and equitable justice and the rule of law.
Id.

522 INDIANA LAW REVIEW [Vol. 42:503

225 to 199.'^'^ The Senate placed it on the Senate Legislative Calendar under
General Orders. ^^^ On April 23, 2008, however, the Bill failed a cloture motion
for consideration in the Senate. ^^^ The cloture motion received fifty-six ayes,
four short of the sixty necessary to begin the Bill's consideration in the Senate.^^^
On January 8, 2009, Senator Barbara Mikulski (Democrat — Maryland)
introduced the LFPA to the United States Senate. ^^^ It passed the Senate and
House of Representatives on January 22, 2009, and January 27, 2009,
respectively. ^^^ President Obama signed the LFPA into law on January 29,
2009.^^^ The LFPA, as enacted, is nearly identical to the Bill, deviating only with
respect to minor grammar syntax and an updated citation to the Supreme Court's
Ledbetter decision. ^^^

B. Legal Effect

The LFPA essentially amends four statutes: (1) the Civil Rights Act of
1964;i82 (2) the Age Discrimination in Employment Act of 1967;*^^ (3) the
Americans with Disabilities Act of 1990;^^'* and (4) the National Rehabilitation
Act of 1973.^^^ The LFPA provides, in pertinent part, as follows:

[A]n unlawful employment practice occurs, with respect to
discrimination in compensation in violation of this title, when a
discriminatory compensation decision or other practice is adopted, when
an individual becomes subject to a discriminatory compensation decision
or other practice, including each time wages, benefits, or other
compensation is paid, resulting in whole or in part from such a decision
or other practice. ^^^

Accordingly, the LFPA clearly overturns the Ledbetter majority opinion. ^^^ In

174. GovtracLus, H.R. 2831 [1 10th], supra note 11.

175. Id,

176. Id.

111. Carl Hulse, Republican Senators Block Pay Discrimination Measure, N.Y. TIMES, Apr.
24, 2008, at 22.

178. Govtrack.us,S. 181 [111th], 5M/7ra note 14.

179. Id.

180. Id.

181. Compare Pub. L. No. 111-2, 123 Stat. 5 (2009) (to be codified at 29 U.S.C. §§ 626,
794a, and 42 U.S.C. § 2000e-5, -16), with H.R. 2831, 1 lO'^ Cong. (2007).

182. 42 U.S.C. §§ 2000a-2000h-6 (2006).

183. 29 U.S.C. §§ 621-34 (2006).

184. 42 U.S.C. §§ 12101-12213 (2006).

185. 29 U.S.C. §§701-796/(2006).

186. Lilly Ledbetter Fair Pay Act of 2009 § 3, Pub. L. No. 1 1 1-2, 123 Stat. 5 (2009) (to be
codified at 42 U.S.C. § 2000e-5(e)).

1 87 . Note, however, the LFPA does not address the Ledbetter majority' s categorization of pay
discrimination as a discrete act. See supra note 153. That is, although the legislation may change

2009] LEDBETTER V. GOODYEAR 523

fact, the legislation adopts the paycheck accrual rule that the Supreme Court
expressly rejected. ^^^ The LFPA's ramifications, however, are not limited to its
impact on the procedural application of Title VII's limitations period in pay
discrimination cases. ^^^ It has the potential to go much further and substantially
change the face of discrimination law in many other areas as well as reallocate
the policy priorities determined by current employment law.'^^

C. Practical Implications

Given the LFPA's potentially broad reach, it is important to understand the
practical implications of the legislation's enactment. The LFFA certainly
addresses Justice Ginsburg's concerns in her Ledbetter dissent; '^^ however,
critics remain unconvinced that the proposed legislation is an equitable approach
to applying Title VII's limitations period in the pay discrimination context. ^^^

applicable limitations periods in the compensation context, it will not relieve Title VII plaintiffs'
hardships in many other areas. See Lilly Ledbetter Fair Pay Act of 2009 § 3, Pub. L. No. 111-2,
123 Stat. 5 (2009) (to be codified at 42 U.S.C. § 2000e-5(e)). Therefore, the reader should
remember that even though critics or proponents make the following, albeit compelling, arguments,
the practical impact of the LFPA is largely unknown. It is, however, important to comprehend the
arguments on both sides to properly understand the competing interests at hand and formulate any
truly "appropriate" application of Title VII's limitations period. Therefore, at the very least, this
Part discusses some of the most important policy considerations inherent in the application of Title
VII's limitations period in the pay discrimination context. Even though the LFPA addresses this
problem by attempting to change the categorization of pay discrimination from a claim based on
a discrete act to one based on the cumulative effect of individual acts, the same competing interests
are still at play. Thus, they are relevant to any proposed solution to the problematic application of
Title VII's limitation period in the pay discrimination context.

188. See Lilly Ledbetter Fair Pay Act of 2009 § 3, Pub. L. No. 1 1 1-2, 123 Stat. 5 (2009) (to
be codified at 42 U.S.C. § 2000e-5(e)).

189. 5^^ Republican Committee, >yM/7ra note 173.

190. Id.

191. Compare Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S . 6 1 8, 645 (2007) (Ginsburg,
J., dissenting) ("The Court's insistence on immediate contest overlooks common characteristics of
pay discrimination. Pay disparities often occur ... in small increments; cause to suspect that
discrimination is at work develops only over time. . . . Employers may keep [any pay differentials]
under wraps . . . ."), with Lilly Ledbetter Fair Pay Act of 2009 § 2(2), Pub. L. No. 1 1 1-2, 123 Stat.
5 (2009) ("The limitation imposed by the [Ledbetter] Court on the filing of discriminatory
compensation claims ignores the reality of wage discrimination . . . .").

1 92. See Press Release, National Retail Foundation, NRF Calls Fair Pay Act "Litigation Time
Bomb" (July 30, 2007), available at http://www.nrf.com/modules.php?name=News&op=
viewlive&sp_id=346 ("The National Retail Federation today urged the House to reject legislation
that would effectively eliminate the statute of limitations in employment discrimination cases,
calling the measure a 'litigation time bomb' that would create 'a lawsuit bonanza' for trial
lawyers."); Republican Committee, supra note 173 ("In reality, however. House Republicans and
a coalition of some 40-plus organizations have exposed [the LFPA] as an effort to open the door

524 INDIANA LAW REVIEW [Vol. 42:503

1. Concerns: The LFPA 's Shortcomings. — Critics of the LFPA point to the
legislation's broad scope as an indicator that it has the potential to significantly
expand employer liability. '^^ For example, because the LFPA amends several
civil rights statutes, it essentially removes a limitations period for all factual
scenarios that can be framed as a "discriminatory compensation decision or other
practice." ^^"^ Similarly, the LFPA's language about "wages, benefits, or other
compensation"'^^ has the potential to significantly expand temporal liability for
employers. '^^

If the term "benefits," for example, includes retirement or pension plans, an
employer could potentially remain liable for a pay decision that took place
several decades ago. Further, almost all adverse employment actions have an
impact on compensation. For example, denied promotions or disciplinary actions
often affect an employee's compensation entitlement.'^^ Critics argue such a
broad reading of compensation would lead to almost a complete elimination of
limitation periods for far too many Title Vn claims. '^^ For example, following
the LFPA introduction, the American Benefits Council expressed its concern that
removing Title VII's limitations period could substantially undermine the
solvency of pension plans in the United States. '^^

This poses some obvious concerns for employers and courts. Frivolous suits
are often the product of stale claims and lost evidence. Moreover, the mere cost
for employers to retain documentation to protect against such a broad concept of
liability is troublesome.

Additionally, the Equal Employment Opportunity Commission only requires
employers to keep records made regarding "rates of pay or other terms of
compensation" for one year.^^^ "The agency selected one year as the appropriate
period 'so that there [would be] no possibility that an employer or labor
organization [would] have legally destroyed its employment records before being
notified that a charge [had] been filed. "'^^* When a plaintiff files a charge with

for trial lawyers across the nation to cash-in on the most substantial change to employment law in
more than four decades.").

193. See, e.g.. Republican Committee, supra note 173.

194. Lilly Ledbetter Fair Pay Act of 2009, Pub. L. No. 111-2, 123 Stat. 5 (2009) (to be
codified at 29 U.S.C. §§ 626, 794a, and 42 U.S.C. §§ 2000e-5, -16). See The Impact o/Ledbetter
V. Goodyear on the Effective Enforcement of Civil Rights Laws: Hearings on H.R. 2831 Before the
House Subcomm. On the Constitution, Civil Rights, and Civil Liberties of the Committee on the
Judiciary, 1 10th Cong. 63 (2007) [hereinafter Hearings] (testimony of Neal D. Mollen).

195. Lilly Ledbetter Fair Pay Act of 2009 § 3, Pub. L. No. 1 1 1-2, 123 Stat. 5 (2009) (to be
codified at 42 U.S.C. § 2000e-5(e)).

196. See Hearings, supra note 194, at 63 (testimony of Neal D. Mollen).

197. Id. at 60 (testimony of Neal D. Mollen).

198. Id. at 62-63 (testimony of Neal D. Mollen).

199. Republican Committee, supra note 173.

200. 29 C.F.R. § 1602.14 (2007).

201. Hearings, supra note 194, at 58 (quoting 54 Fed. Reg. 6551 (Feb. 13, 1989) (emphasis
in original)) (testimony of Neal D. Mollen).

2009] LEDBETTER V. GOODYEAR 525

the Equal Employment Opportunity Commission, however, the employer must
keep all records related to the complaint until the claim is resolved.^^^ These
administrative decisions reflect a desire to balance the need to retain evidence
related to a Title Vn discrimination charge with the costs of doing so, and this
balancing test was assumedly a factor in Congress's decision to define a
relatively short limitations period for Title Vn claims. With the passage of the
LFPA, employers may "be obligated to keep [pay and compensation] records, not
for one year, but in perpetuity."^^^

Finally, the LFPA does not distinguish between those plaintiffs who do not
report pay discrimination due to its evasive nature and those who delay
allegations for their own self-interest. Therefore, the legislation shifts
responsibility from plaintiffs who, perhaps intentionally, sit on stale claims, to
employers who are vulnerable to lost evidence. As one commentator noted.

It violates the most basic notions of justice to allow an individual — even
one who may have been subjected to discrimination — to wait until the
employer is essentially defenseless to raise the allegation. The
[Ledbetter] Court rightly concluded that this sort of delay is
unacceptable. That decision should be embraced, not reversed.^^"^

That is, the LFPA's failure to distinguish among a plaintiffs motivations in
waiting to bring suit may perpetuate any problems created by lost evidence and
stale claims.

2. Progress: Recognizing Where the LFPA Succeeds. — Although critics of
the LFPA raise valid concerns, the LFPA effectively advances progress in
combating discrimination in a number of areas. First, and most importantly, it
emphasizes Title VII's "primary objective" of "bring[ing] employment
discrimination to an end."^^^ It replaces the Ledbetter decision's employer-
favored policy considerations regarding limitations periods with those to which
the statute explicitly cites. Indeed, Section 2(1) of the LFPA provides:

The Supreme Court in [Ledbetter v. Goodyear Tire & Rubber Co.], 550
U.S. 618 (2007), significantly impairs statutory protections against
discrimination in compensation that Congress established and that have
been bedrock principles of American law for decades. The Ledbetter
decision undermines those statutory protections by unduly restricting the
time period in which victims of discrimination can challenge and recover
for discriminatory compensation decision or other practices, contrary to
the intent of Congress. ^°^

Second, the LFPA addresses Justice Ginsburg's concerns regarding the
unique nature of pay discrimination by creating a new statute of limitations for

202. Id. at 59 (testimony of Neal D. Mollen).

203. /J. (testimony of Neal D. Mollen).

204. /flf. (testimony of Neal D. Mollen).

205. Ford Motor Co. v. EEOC, 458 U.S. 219, 228 (1982).

206. Lilly Ledbetter Fair Pay Act of 2009 § 2(1), Pub. L. No. 1 1 1-2, 123 Stat. 5 (2009).

526 INDIANA LAW REVIEW [Vol. 42:503

Title Vn disparate-pay cases. The congressional findings included in the LFPA
state, "The limitation imposed by the [Ledbetter majority] on the filing of
discriminatory compensation claims ignores the reality of wage discrimination
and is at odds with the robust application of the civil rights laws that Congress
intended."'^^

While critics would argue that the LFPA actually attempts to eliminate the
previous Title Vn limitations period for all claims that could theoretically be
categorized as compensation decisions or practices,^^^ the Act' s proponents claim
that the legislation merely returns the law to its place before the Ledbetter
decision.^^^ Representative George Miller stated: "As long as workers file their
charges within 180 days of a discriminatory paycheck, their charges would be
considered timely. This was the law prior to the Supreme Court's [Ledbetter]
decision."^^^ Further, LFPA-supporters argue that returning to this "prior law"
will not result in a significant increase in direct spending or affect revenues.^^^

Finally, the LFPA addresses the fact that the Civil Rights Act of 1 964 already
has several pro-employer factors built into Title Vn.^^^ These include: (1) the
employee bears the burden of proof ; (2) the employer' s burden is often extremely
easy to meet; (3) proof of employer intent is often difficult to obtain; (4)
equitable doctrines that frequently protect employers from liability; and (5) Title
Vn's limitation on damages.^*^ LFPA-supporters claim that increasing the
employee's burden amidst these pro-employer characteristics actually restricts
courts' ability to promote the preventative purpose of Title VII.^^"^

rv. Reconciling the Party Split: Competing Policies, Equitable
Judiciary Doctrines, and a Modihed Balancing Test for Tolling
Title vn's Limitations Period in the Pay Discrimination Context

Not surprisingly, the LFPA's critics and proponents represent competing
interests in the fair and equitable resolution of pay discrimination claims under
Title vn. The critics' primary concerns include: (1) excessive litigation due to

207. Lilly Ledbetter Fair Pay Act of 2009 § 2(2), Pub. L. No. 11 1-2, 123 Stat. 5 (2009).

208. See Hearings, supra note 194, at 63 (testimony of Neal D. MoUen).

209. See, e.g.. Democratic Committee, supra note 171. See also The Supreme Court, 2006
Term— Leading Cases III, 121 Harv. L. Rev. 355, 364 n.62 (2007) [hereinafter Lea Jm^ Cases]
(arguing that the Second, Third, Fourth, Sixth, Eighth, Ninth, Tenth, Eleventh, and D.C. Circuits
all applied the paycheck accrual rule prior to the Ledbetter decision). But see Hearings, supra note
194, at 60 (testimony of Neal D. Mollen) (mentioning the Seventh Circuit's decision in Dasgupta
V. Univ. of Wis. Bd. of Regents, 121 F.3d 1 138 (7th Cir. 1997), as evidence that lower courts did
not uniformly embrace the paycheck accrual rule).

210. See e.g.. Democratic Committee, supra note 171.

211. Congressional Budget Office, 1 10th Cong., Report on Cost Estimate for H.R. 283 1 : Lilly
Ledbetter Fair Pay Act of 2007 (Comm. Print 2007).

212. See Leading Cases, supra note 209, at 364.

213. Id.

214. Id.

2009] LEDBETTER V. GOODYEAR 527

the LFPA' s abrogation of any meaningful limitations period; (2) expansion in the
scope of liability due to ambiguous statutory language and "compensation" as a
broad category; and (3) prejudice to employers from lost evidence in stale
claims.^^^ The LFPA's supporters are primarily concerned with: (1) quick
resolution of pay discrimination claims; (2) judicial cognizance of pay
discrimination's idiosyncrasies; and (3) fairness to discrimination victims.^'^

Party lines and politics aside, both views raise legitimate concerns that
discrimination law has attempted to balance over the past four decades.
Therefore, any satisfactory approach to the application of Title VII's limitations
period in the pay discrimination context must, at the very least, recognize each
position.

A. Equitable Judiciary Doctrines as a Means of Tolling Title VII's

Statutory Limitations Period

The reader may wonder if any change in pay discrimination jurisprudence
was necessary, given the various equitable doctrines the judiciary has at its
disposal to deal with timeliness issues. Therefore, before considering whether
the LFPA is a necessary congressional response to a complex interaction of
competing interests in the pay discrimination context, one should determine
whether equitable judiciary doctrines would allow the court enough flexibility
to manage the majority of cases within this arena.

I. The Discovery Rule. — The discovery rule addresses when a claimant's
statute of limitations actually begins to run.^^^ Essentially, it is a common law
equitable doctrine that delays a limitations period from running until a plaintiff
discovers the injury in question.^^^

The Supreme Court has expressly mentioned the possibility that the
discovery rule could potentially apply in the employment discrimination context
on several occasions.^'^ The Court acknowledged the issue in both Morgan and
Ledbetter, but declined to rule on it in each case.^^^ Previous Supreme Court

215. S^e 5w/7ra Part III.C.

216. See supra Part III.C.

217. Copus, supra note 149, at 13.

218. Id.

219. See generally id. at 13-19.

220. Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618, 642 n.lO (2007) ("We have
previously declined to address whether Title VII suits are amenable to a discovery rule. Because
Ledbetter does not argue that such a rule would change the outcome in her case, we have no
occasion to address this issue.") (citation omitted), superseded by statute, Lilly Ledbetter Fair Pay
Act of 2009, Pub. L. No. 111-2, 123 Stat. 5 (2009) (to be codified at 29 U.S.C. §§ 626, 794a, and
42 U.S.C. §§ 2000e-5, -16); Nat'l R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 1 14 n.7 (2002)
("There may be circumstances where it will be difficult to determine when the time period should
begin to run. One issue that may arise in such circumstances is whether the time begins to run when
the injury occurs as opposed to when the injury reasonably should have been discovered. But this
case presents no occasion to resolve that issue.").

528 INDIANA LAW REVIEW [Vol. 42:503

decisions, however, imply that the Court does, indeed, apply the discovery rule
when determining when the limitations period accrues in the employment
discrimination context.^^' For example, in Ricks, the Court held that the
limitations period began when Delaware's "decision was made and
communicated to Ricks."^^^ The Ledbetter opinion also relied on the employer' s
communication of the discriminatory conduct as the point of the cause of action' s
accrual. The Court stated: "Ledbetter should have filed an [Equal Employment
Opportunity Commission] charge within 180 days after each allegedly
discriminatory pay decision was made and communicated to her."^^^ "In theory
at least, an employee suffers an injury at the time the employer makes the
allegedly unlawful decision."^^"^ Therefore, the limitations period should accrue
when the employer makes the decision. The Court's continual reference to the
time when the employer communicates the unlawful decision to the employee,
however, indicates that the plaintiff s discovery of the injury actually commences
the limitations period. ^^^

Even if the Supreme Court formally acknowledges its application of the
discovery rule in Title Vn pay discrimination cases, the equitable doctrine will
do little to address the concerns of Justice Ginsburg and LFPA proponents. ^^^
The discovery rule would only postpone the accrual of the limitations period
until the employee learns of the unlawful decision, even if the employee is
unaware of its discriminatory effect.^^^ Therefore, under the discovery rule, the
limitations period would begin to run when the employee learned of the
discriminatorily low pay, even if the employee was unaware that it was, in fact,
discriminatory. This equitable doctrine does little to address the employee's
difficulty in accessing comparative pay information and the gradual development
of discriminatory pay differentials.

2. Equitable Tolling and Equitable Estoppel. — Equitable tolling and
equitable estoppel revolve around the idea that defendants should not be allowed
to avoid liability by courts' formulaic application of limitations periods.^^^
Courts, however, generally decline to invoke these doctrines where the employer

221. See Copus, supra note 149, at 18-19.

222. Del.StateColl.v. Ricks, 449 U.S. 250,258(1980).

223. Ledbetter, 550\].S.2A62'^.

224. Copus, supra note 149, at 1 6. Note Ledbetter expressly applied Morgan 's "discrete act"
dichotomy to the pay discrimination context: "Because a pay-setting decision is a 'discrete act,'
it follows that the period for filing an [Equal Employment Opportunity Commission] charge begins
when the act occurs." Ledbetter, 550 U.S. at 621.

225. Copus, supra note 149, at 18-19.

226. Id. at 13.

227. Id. at 17 n.9.

228. Glus V. Brooklyn E. Dist. Terminal, 359 U.S. 231, 232-33 (1959) ("[N]o man may take
advantage of his own wrong. Deeply rooted in our jurisprudence this principle has been applied
in many diverse classes of cases by both law and equity courts and has frequently been employed
to bar inequitable reliance on statutes of limitations.").

2009] LEDBEJTERV. GOODYEAR 529

did not engage in misconduct.^^^ Further, even where the employer deceives a
plaintiff, some courts still refuse to suspend limitations periods if the plaintiff
remained suspicious about discrimination or should reasonably have been.^^^

Equitable tolling and estoppel, therefore, usually only apply in cases of
extreme employer misconduct. While these doctrines would allow some
plaintiffs to suspend their charge-filing periods, they would do little to address
the majority of cases. When the employer intentionally pays an employee a
discriminatory wage, these doctrines would not generally protect employees
unless the employer also proactively attempted to mislead the employee.^^*

3. The Effectiveness of the Common Law Equitable Doctrines of Limitations
Periods in the Pay Discrimination Context. — Current common law equitable
doctrines are inadequate with respect to the majority of pay discrimination cases.
Even if applied, the discovery rule would generally only suspend the limitations
period from accruing for a few days.^^^ In other words, because the discovery
rule only operates to delay the accrual of the limitations period in pay
discrimination cases until the employee learns of the discriminatory pay, the
charging period will usually begin to run when the employer issues the next
discriminatory paycheck. This doctrine may marginally increase the length of
limitations periods in Title VII pay discrimination cases, but it does not
materially impact the large majority of cases. ^^^

Equitable tolling and estoppel are somewhat more useful for plaintiffs in the
pay discrimination arena. These doctrines, however, have consistently been
limited to those instances of extreme employer misconduct.^^"^ Therefore, they
will only protect employees in the most extreme cases.

B. A Policy-Oriented Modified Balancing Test for Applying Title VII's
Limitations Period in the Pay Discrimination Context

Because current equitable judicial doctrines of limitations periods do not
adequately address the majority of pay discrimination cases, the Ledbetter rule
failed to recognize some very important policy considerations. The Ledbetter
rule ignored the idiosyncrasies of pay discrimination and Title VII' s ultimate goal
of eradicating discrimination. ^^^ It also failed to recognize that Title VII has
many pro-employer tendencies.^^^ The LFPA, however, addresses these policy

229. Copus, supra note 149, at 23.

230. See id. at 22.

231. See id. at 22-23.

232. /J. at 13.

233. See id.

234. /fi. at 22-23.

235. See Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618, 646-50 (2007) (Ginsburg,
J., dissenting), superseded by statute, Lilly Ledbetter Fair Pay Act of 2009, Pub. L. No. 1 1 1-2, 123
Stat. 5 (2009) (to be codified at 29 U.S.C. §§ 626, 794a, and 42 U.S.C. §§ 2000e-5, -16); Ford
Motor Co. V. EEOC, 458 U.S. 219, 228 (1982).

236. Leading Cases, supra note 209, at 364.

530 INDIANA LAW REVIEW [Vol. 42:503

considerations with extreme preference for employee-friendly policies.
Specifically, the LFPA ignores the problem of lost evidence and Congress's
preference for prompt resolution of discrimination claims. ^^^ Not only does the
LFPA exchange the Ledbetter rule's pro-employer policies for an equally pro-
plaintiff perspective, but it also has the potential to substantially increase the
amount of employment discrimination litigation via broad and ambiguous
statutory language. ^^^

Any approach to the application of Title VII's limitations period in the pay
discrimination context must recognize all of the important, albeit competing,
interests at stake. Specifically, it must weigh the: (1) potential for excessive
litigation due to variations in Title VII's limitations period; (2) expansion in the
scope of claims; (3) prejudice to employers from lost evidence in stale claims;
(4) quick resolution of pay discrimination claims; (5) idiosyncrasies of pay
discrimination; and (6) fairness to discrimination victims. Ledbetter' s pro-
employer rule fails to address concerns regarding fairness to employees and the
realities of pay discrimination. The LFPA does not address lost evidence due to
stale claims and the benefits of prompt actions. Both fall short.

A modified approach that balances the interests of both employers and
employees is necessary to adequately manage the application of Title VII's
limitations period in the pay discrimination context. Under this modified
approach, as a default rule. Title VII's charging period will commence when the
employee learns of the discriminatory act, i.e., pay.^^^ An alleged victim of pay
discrimination could, however, expand the limitations period by presenting
sufficient evidence that a reasonable person would not have known that the
payments were discriminatory. ^"^^ Where a plaintiff presents sufficient evidence
in this regard, the court will balance a number of factors to determine whether,
and to what extent, the limitations period should be tolled. These factors include
the: (1) length of time that has passed since the discriminatory act; (2) prejudice
to the employer from lost evidence; (3) impact on the quick resolution of pay
discrimination claims; (4) wrongfulness of the employer's conduct; (5) alleged
victim's ability to obtain comparable pay information while receiving
discriminatory pay; and (6) differences in pay between the alleged victim and
similarly situated victims.

If, on balance, the court determines that the facts of the case justify the
plaintiff's inaction, the court may, within its discretion, toll the limitations period
in a manner that is equitable, given the totality of the circumstances. Of course,

237. See Hearings, supra note 194, at 58-59 (testimony of Neal D. Mollen).

238. See Lilly Ledbetter Fair Pay Act of 2009, Pub. L. No. 1 1 1-2, 123 Stat. 5 (2009) (to be
codified at 29 U.S.C. §§ 626, 794a, and 42 U.S.C. §§ 2000e-5, -16).

239. The employee's knowledge of the act, however, does not require knowledge of
discriminatory effect or motive. This shortcoming will be checked by the employee's ability to
expand the limitations period by establishing that a reasonable person would not have known that
the payments were discriminatory.

240. Note this approach essentially converts the current discovery rule into an equitable
doctrine that justifies a plaintiffs inaction where it is reasonable under the circumstances.

2009] LEDBETTERV. GOODYEAR 531

the length of tolling will likely vary depending on the court' s evaluation of many
of the modified balancing test factors. For example, all else being constant,
greater employer misconduct will result in a longer tolling period; greater access
to information about pay disparity will lead to a shorter tolling period.

These factors address the primary concerns of both employer and employee
policies and allow for flexibility so that the judiciary can address the equities of
the specific factual circumstances. Applying Title VII's current limitations
period as a default rule and placing the burden of proof regarding the
reasonableness of pay differential knowledge promotes prompt resolution of pay
discrimination claims. Weighing the prejudice to the employer from lost
evidence recognizes the difficulty in proving a non-discriminatory motive in stale
claims and deters plaintiffs from waiting until employers are defenseless to bring
pay discrimination claims. The wrongfulness of the employer' s misconduct and
the plaintiffs access to comparable pay information address the realities of pay
discrimination. That is, it allows the court to toll the limitations period when
employers hide pay information or employees have no reasonable means to
access it. Finally, the difference in pay between the plaintiff and similarly
situated individuals gauges whether the plaintiff should have reasonably
recognized the discriminatory effect earlier, weighs the employer's misconduct,
and recognizes that fairness to discrimination victims, in many cases, requires a
finding of damages.

Critics of this approach to the application of Title VII's limitations period in
the pay discrimination context will, undoubtedly, emphasize the fluidity of the
modified balancing test. Many will say it has no workable standard, resulting in
ambiguity for employers and employees alike, not to mention challenges in
judicial application. That view, however, fails to recognize the amount of
flexibility necessary to adequately deal with the complexities of pay
discrimination. Organizations employ different policies regarding the disclosure
of compensation information, and discriminatory acts vary in severity. This test
allows courts to address the unique nature of each claim and use its discretion to
find the optimal length of Title VII's limitation period under the circumstances.

Critics will also say that this approach, like the LFPA, essentially eliminates
any meaningful limitations period for Title VII pay discrimination cases. If this
ambiguity is truly more troublesome than the inequities in ignoring the
complexities in pay discrimination cases, this argument has merit. The modified
test, however, will apply Title VII's current limitations period, unless plaintiffs
can establish that the unique nature of pay discrimination unfairly kept them from
identifying the wrong. Therefore, it favors the current limitations period, unless
justice requires otherwise.

Even if the critics are correct in arguing that this modified test merely
replaces current law with an unworkable standard that eliminates meaningful
limitations on liability, they must at least admit that the optimal application of
Title Vn's limitations period will recognize the very real and very different
political interests at hand. The current lopsided approaches inevitably result in
unfairness to either employers, in the case of the LFPA, or employees, in the case
of the Ledbetter rule. Therefore, a compromising standard that allows courts to
recognize both competing interests is necessary if the judiciary is ever to

532 INDIANA LAW REVIEW [Vol. 42:503

effectively manage the problematic application of Title VII's limitations period
in the pay discrimination context.

Conclusion

The competing interests inherent in pay discrimination claims make the
application of Title VII's limitations period particularly troublesome within that
context. Several early Supreme Court Title Vn decisions distinguished between
intentional discriminatory acts outside Title VII's charging period and the
consequences of those acts that occur during the statutory period.^'*^ Subsequent
decisions and congressional amendments, however, opened the door for
confusion among lower courts with respect to the broad congressional intent for
the Civil Rights Act of 1964 and pay discrimination claims, in particular. ^"^^ In
May 2007, the Ledbetter Court finally clarified the Supreme Court's approach
for applying Title VII's limitations period in pay discrimination cases.^"^^
However, Congress responded quickly and overturned Ledbetter with the
LFPA.^"^"^ Neither approach fully appreciates the complexities of pay
discrimination. Further, traditional common law doctrines for tolling limitations
period are not adequate to rectify the shortcomings.^"^^ Therefore, a modified
approach is necessary. This approach must recognize both employee and
employer perspectives as well as retain the flexibility necessary to adjust
limitations periods when justice so requires. Only then will courts genuinely
promote the congressional intent and case-specific equities inherent in Title Vn
pay discrimination claims.

241. See, e.g., Del. State Coll. v. Ricks, 449 U.S. 250, 259 (1980); United Air Lines, Inc. v.
Evans, 431 U.S. 553, 558 (1977).

242. See Lorance v. AT&T Techs., Inc., 490 U.S. 900, 912(1 989), superseded by statute. Civil
Rights Act of 1991, 42 U.S.C. § 2000e-5(e)(2) (2006).

243. Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618, 621 (2007), superseded by
statute, Lilly Ledbetter Fair Pay Act of 2009, Pub. L. No. 1 1 1-2, 123 Stat. 5 (2009) (to be codified
at 29 U.S.C. §§ 626, 794a, and 42 U.S.C. §§ 2000e-5, -16).

244. See Lilly Ledbetter Fair Pay Act of 2009, Pub. L. No. 1 1 1-2, 123 Stat. 5 (2009) (to be
codified at 29 U.S.C. §§ 626, 794a, and 42 U.S.C. §§ 2000e-5, -16).

245. See generally Copus, supra note 149, at 13-23.