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Stevens v. Illinois Department of Juvenile Justice

United States District Court, N.D. Illinois, Eastern Division

December 1, 2016

JAMES E. STEVENS, as trustee of the bankruptcy estate of Kye E. Gaffey, Plaintiff,


          Andrea R. Wood United States District Judge

         Plaintiff James E. Stevens, trustee of the bankruptcy estate of Kye Gaffey, claims that Gaffey was summarily terminated from his position as superintendent of Illinois School District 428 (“District 428”) in violation of his due process rights and in breach of his employment contract. Stevens accordingly asserts claims on behalf of Gaffey's bankruptcy estate for the alleged constitutional violation and breach of contract against District 428's board (“Board”), the Board's current members and those who served at the time of his termination, and the Illinois Department of Juvenile Justice (“IDJJ”), which is the state agency alleged to control District 428. Now before the Court are Defendants' motions to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). (Dkt. Nos. 8, 23) With their motions, Defendants contend that the IDJJ and the Board are both immune from suit pursuant to the Eleventh Amendment to the United States Constitution and also that Illinois law did not give Gaffey the expectation of continued employment necessary to support his claim of a due process right. Defendants ask that the constitutional claims be dismissed and that the Court decline to exercise jurisdiction over the state contract law claims. For the reasons explained below, the motions are granted in part and denied in part-the claims against IDJJ are dismissed but the other claims survive.


         As alleged in the complaint, on August 21, 2011, Gaffey was offered and accepted a one-year contract for employment as superintendent of District 428, which administers Illinois's education programs for wards of the state and incarcerated juveniles. (Compl. ¶¶ 6, 13, 14, 35- 39, Dkt. No. 1.) Gaffey's employment was governed by the following provision of the Illinois School Code applicable to superintendent contracts:

Notice of intent not to renew a contract must be given in writing stating the reason therefor by April 1 of the contract year unless the contract specifically provides otherwise. Failure to do so will automatically extend the contract for an additional year.

105 ILCS 5/10-21.4. Yet Gaffey received no notice or opportunity to be heard before he was terminated in August 2013. (Compl. ¶¶ 16-18, 20, 42, 44, Dkt. No. 1.)

         Stevens alleges that the termination violated Gaffey's due process rights. He seeks relief for the alleged constitutional violation under 42 U.S.C. § 1983 from the former president of District 428's Board, Defendant Arthur Bishop (Count I); the Board itself and its individual members (Count II); and the IDJJ (Count III). He also asserts claims for breach of contract against the Board for compensation owed Gaffey for the 2013-2014 (Count IV) and 2014-2015 (Count V) school years, alleging that the failure to give proper notice of termination triggered the automatic statutory renewal of his contract for each year.

         The IDJJ, the Board, and current District 428 Board members Candice Jones, Heather Dalmage, Tresa Dunbar Garrett, David A. Green, John P. Griffin, Candice M. Smith, and Jennifer Vidis now move for dismissal of Stevens's § 1983 claims pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. They argue that the IDJJ and the Board are immune from suit under the Eleventh Amendment and that Gaffey had no interest in future employment that could have generated constitutional due process rights. They also assert that, after dismissing the § 1983 claims, the Court should decline to exercise supplemental jurisdiction over the state law breach of contract claims. In a separate motion, former Board president Arthur Bishop and former Board members Carl Ellis, Anthony Grady, James Gunnell, and Donald Smoot adopt the arguments of their co-defendants.[1]


         Under Federal Rule of Civil Procedure 8(a)(2), a complaint must include “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). To survive a Rule 12(b)(6) motion to dismiss, a complaint must “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 547 (2007). “[A] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Adams v. City of Indianapolis, 742 F.3d 720, 728 (7th Cir. 2014) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). In deciding such a motion, the Court must accept all factual allegations in the complaint as true. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007). While a complaint need not include detailed factual allegations, there “must be enough to raise a right to relief above the speculative level.” Iqbal, 556 U.S. at 555.

         I. State Agency Immunity

         Defendants first move to dismiss all claims against the IDJJ and the Board, claiming that both are immune from suit under the Eleventh Amendment. The Eleventh Amendment, with exceptions not at issue here, grants states and their agencies immunity from private suits in federal court without their consent. Nuñez v. Ind. Dep't of Child Servs., 817 F.3d 1042, 1044 (7th Cir. 2016). States and their agencies also have a distinct defense to § 1983 claims, since they are not suable “persons” within the meaning of that statute. Thomas v. Illinois, 697 F.3d 612, 613 (7th Cir. 2012).

         To determine whether an entity is an “arm of the state” entitled to immunity, courts consider the entity's financial autonomy from the state and the “general legal status” of the entity. Burrus v. State Lottery Comm'n of Ind., 546 F.3d 417, 420 (7th Cir. 2008) (citing Kashani v. Purdue Univ., 813 F.2d 843, 845-47 (7th Cir. 1987)). The predominant factor in the inquiry is the extent of the entity's financial autonomy from the state. Id. In assessing the financial independence of the entity, courts consider “the extent of state funding, the state's oversight and control of the entity's fiscal affairs, the entity's ability to raise funds independently, whether the state taxes the entity, and whether a judgment against the entity would result in the state increasing its appropriations to the entity.” Id.; see also Hess v. Port Auth. Trans-Hudson Corp., 513 U.S. 30, 48 (1994) (identifying the vulnerability of a state's funds to any judgment as the “most salient factor in Eleventh Amendment determinations”). In assessing the “general legal status” of the entity, courts in the Seventh Circuit look to the state statute but value “substance rather than form.” Peirick v. Ind. Univ.-Purdue Univ. Indianapolis Ath. Dep't, 510 F.3d 681, 696 (7th Cir. 2007). Courts consider whether the entity's governing council or board of trustees are independently selected, the entity's ability to exercise powers independently (e.g., entering into contracts without approval), and whether the entity serves the whole state or only a region of the state. See, e.g., Kashani, 813 F.2d at 847; Peirick, 510 F.3d at 696; Parker v. Franklin Cty. Cmty. Sch. Corp., 667 F.3d 910, 928 (7th Cir. 2012).

         The analysis differs somewhat when the state agency status of a local school district is at issue. A local school district is not ordinarily an arm of the state and therefore generally may be sued in federal court. Parker, 667 F.3d at 927 (citing Gary A. v. New Trier High Sch. Dist. No. 203, 796 F.2d 940, 945 (7th Cir. 1986)). Four factors are relevant in determining whether a local school district is an arm of the state: (1) the characterization of the district under state law; (2) the guidance and control exercised by the state over the local school board; (3) the degree of state funding received by the district; and (4) the ...

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