Papasan v. Allain

PETITIONER:Papasan
RESPONDENT:Allain
LOCATION:Circuit Court of Jefferson County

DOCKET NO.: 85-499
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Fifth Circuit

CITATION: 478 US 265 (1986)
ARGUED: Apr 22, 1986
DECIDED: Jul 07, 1986

ADVOCATES:
Richard Lloyd Arnold – on behalf of the respondents
T. H. Freeland, III – on behalf of the petitioners

Facts of the case

Question

Audio Transcription for Oral Argument – April 22, 1986 in Papasan v. Allain

Warren E. Burger:

We will hear arguments next in Papasan against Mississippi.

Mr. Freeland, I think you may proceed whenever you are ready.

T. H. Freeland, III:

Mr. Chief Justice, and may it please the Court, there is a line drawn across the State of Mississippi, an arbitrary line that divides the school children of that state into two classes.

The school children in the southern 59 counties of Mississippi receive the entire income from the federally created school lands trust in our state, while the school children in the Chickasaw Cession, the 23 counties that we represent, receive not a nickel of this trust income, but instead a pittance in the form of an annual appropriation which the Mississippi legislature may or may not make each year.

Byron R. White:

Could I ask you right now, do you claim that it is contrary to federal law or the Constitution for the state to allow this school land money to be allocated to the counties in which the land is?

Do you think they must administer for the state as a whole and distribute it equally?

T. H. Freeland, III:

I think it is contrary to federal law, Justice White, for them to do as they are doing.

In other words–

Byron R. White:

Well, that doesn’t answer my question.

T. H. Freeland, III:

–I think it is contrary… yes, to answer your question in a word.

Byron R. White:

Good.

So you think they should take the total trust income from trust lands and divide it among the counties in accordance with the number of students or some other neutral standard?

T. H. Freeland, III:

I think that they could do that as part of the relief that we seek, yes.

Byron R. White:

I know, but I thought you said that it would be contrary to federal law to let the counties in which the land is located have all the money generated for that land.

T. H. Freeland, III:

Not precisely.

What I said was that it is contrary to federal law to allow all of the trust income to go to 59 counties, and at the same time none of it to go to the 23 that we represent.

Byron R. White:

Well, suppose there wasn’t this Cherokee land involved at all, and every county in the state had that section of land or whatever it was, those sections of land, but that those lands in the different counties produced different income, different levels of income, and some counties from the school land would be getting X dollars per child, and other counties would be getting one-tenth that per child.

Now, would that be permissible?

T. H. Freeland, III:

Well, in the first place–

Byron R. White:

Would it be, or not?

T. H. Freeland, III:

–Yes, yes, indeed, it would be, and that is the situation that does in fact exist in lots of state, where the state has not done–

Byron R. White:

So you do not attack allocating the income to the counties in which the land is located.

T. H. Freeland, III:

–As a matter of fact, the language of the trust says that that is what is to be… in other words, the land is to be maintained for the benefit of the township in which the land is located, but we have gone beyond that in Mississippi.

Byron R. White:

I understand.

T. H. Freeland, III:

That is my point.

Lewis F. Powell, Jr.:

Mr. Freeland, I am not sure I understand the facts.

My understanding was that the counties you represent were owned by an Indian tribe, and when the United States government took that land over and sold it, they gave the proceeds to the State of Mississippi.

The state then invested the proceeds in bonds of a railroad that went broken during the War Between the States.

Is that correct?

T. H. Freeland, III:

No, Justice Powell, that is–

Lewis F. Powell, Jr.:

That is incorrect?

T. H. Freeland, III:

–That is incorrect.

Lewis F. Powell, Jr.:

All right.

Tell me what the facts are.

T. H. Freeland, III:

All right.

What happened was this.

First of all, the entire school lands trust was created at one time in 1817 in Mississippi’s enabling Act and the Land Sales Act.

The Land Sales Act provided that the 16 section lands were to be retained throughout the state in trust for the schools.

Then, in the sale of the lands in what is called the Chickasaw Cession, the 23 counties that we represent, rather than retain the lands in trust, as was supposed to be done, they sold them and gave the money to the Indians, and not to the state.

Lewis F. Powell, Jr.:

The United States Government did that, didn’t it?

T. H. Freeland, III:

That is correct, and of course the United States government realized what it had done, subsequently passed a statute that said, we are going to give the state 177,555 acres of new lands to replace these lands that we wrongfully, if you will, sold to the Indians.

Thereafter, after this happened, the State of Mississippi first leased these lands.

They are in the Mississippi Delta, some of the richest farmland in the world.

They leased these lands, and following that, the Congress in 1852 passed a statute that said, you can now sell the lands provided you retain the funds, proceeds of the sale in trust for the schools, or as an alternative you can lease the lands, but if you do, if you do sell the lands, you have got to get permission of the counties where… that would benefit from the lands in order to do so.

Of course, the state never did do this.

In 1856, the state comes along.

They… well, first, in 1854 they gave away the reversionary interest in the land.

They had the lands leased for 99 years.

They said, we will give you a fee simple title for no additional charge, which they did.

This was Delta land.

Subsequent to that, in 1856, the state said, okay, we have got something over $1 million in a fund in the state treasury.

They by statute converted that to the use of the state, and put it in the general fund, and spent it just like they would any other money in the general fund.

In other words, the trustee gave away the corpus of the trust or converted it.

Now, the same statute that you are referring to, I believe, does talk about lending money to the railroads, a highly speculative venture in Mississippi in 1856, but that was done after the money was converted to the use of the state.

Lewis F. Powell, Jr.:

Did they put all of that money in the railroads?

T. H. Freeland, III:

No, as a matter of fact, if you read the statute, I believe they put about $400,000 of it into the railroads, railroads, incidentally, that had no rolling stock, had not been built, and to add insult to injury, they were in south Mississippi, not in north Mississippi where our 23 counties are.

Lewis F. Powell, Jr.:

And no suit has been brought against the state in all the years that have passed since then?

T. H. Freeland, III:

Until this day.

Sandra Day O’Connor:

Mr. Freeland, I assume as far as you are concerned that we could take judicial notice of the matters in the public record such as the annual report of the superintendent of public education to the state legislature from Mississippi.

T. H. Freeland, III:

Certainly, Justice O’Connor.

T. H. Freeland, III:

I certainly hope the Court will do that.

Sandra Day O’Connor:

And in looking at that report, it appears that there are other state funds that go toward the pupil costs of public education in the State of Mississippi other than the 16th Section and lieu lands revenue.

T. H. Freeland, III:

Is the Court referring to general appropriations or are we talking about–

Sandra Day O’Connor:

Appropriations that go to the costs of public school education.

T. H. Freeland, III:

–Aside from the school lands trust.

Sandra Day O’Connor:

Yes, aside from the 16th Section and the lieu lands revenues.

T. H. Freeland, III:

That is precisely correct.

Sandra Day O’Connor:

What percentage of the funds per pupil would you say comes from other funds, local, state, and possibly federal, other than these moneys you are worried about, the lieu lands and 16th Section?

T. H. Freeland, III:

May I illustrate in dollars?

In dollars, in the Chickasaw Cession 63 cents per student, moneys in lieu of trust funds prior to 1985; outside the Chickasaw Cession, $75 per student.

Sandra Day O’Connor:

Well, my question goes to what other revenues go toward public school education.

Those figures, of course, are in your brief, but the other figures are not.

T. H. Freeland, III:

The fund represents outside the Chickasaw Cession approximately 20 percent of the total school funds available to the schools in the State of Mississippi.

This is outside the Chickasaw Cession.

That is less teachers’ salaries.

In other words, these are basically used as discretionary funds.

So if you discount teachers’ salaries, the fund represents approximately 20 percent of the total school funds available in the State of Mississippi.

Sandra Day O’Connor:

State, local, and federal?

T. H. Freeland, III:

I believe that’s correct.

Sandra Day O’Connor:

All money, state, local, and federal.

T. H. Freeland, III:

I believe that’s correct.

I’m not positive of that answer, but I believe that’s correct.

Harry A. Blackmun:

I share Justice O’Connor’s concern.

Don’t you end up in a situation where the children in the Chickasaw Cession lands get about the same overall as those in the southern part of the state?

T. H. Freeland, III:

Justice Blackmun, that is precisely our complaint.

They do not.

Harry A. Blackmun:

I get the other impression from looking at the facts here, but go ahead and explain.

T. H. Freeland, III:

No, they certainly do not.

In other words, against 60, a little better than 60 cents per pupil in the Chickasaw Cession prior to ’85; in the rest of the state, $74.

Harry A. Blackmun:

I know, you say that, but we are asking, overall, with all other funds available, what is the answer?

T. H. Freeland, III:

The answer is the same.

That difference is not made up with these other funds.

William H. Rehnquist:

But what order of magnitude are we talking about?

Is it a correct interpretation of your answers to Justice Blackmun that about 80 percent of the public funds from everywhere in Mississippi for schools come from sources other than these lieu lands?

T. H. Freeland, III:

Outside the Chickasaw Cession.

That’s correct.

William H. Rehnquist:

And how much comes in… much more than 80 percent, perhaps approaching 100 percent?

T. H. Freeland, III:

No, no, no.

In the Chickasaw Cession, less than 3 percent because of the amount of moneys that we get.

In other words, again, you are talking about a difference.

William H. Rehnquist:

Counsel, what we are interested in is, what is the disparity, when you add all the figures together of all sources for public education?

What is the disparity between the southern part of the state and what you refer to as the Chickasaw Cession?

Is it roughly 100 percent to 80 percent?

T. H. Freeland, III:

It is… if I have got my mathematics correct, Justice Rehnquist, it is… yes, roughly, I would say that would be correct.

Sandra Day O’Connor:

And is it your position that the 80 percent funding does not give a minimally adequate education?

T. H. Freeland, III:

It is our position that the lack of a minimally adequate education, and as the Court understands, we are here on a 12(b)(6) motion, is the effect of the denial of the rights that we claim under this trust, and not the cause.

The cause, we say, is denial of these rights under this federally created trust.

Sandra Day O’Connor:

And you say that the absence of the cession lands revenues makes the difference between a minimally adequate education and not?

T. H. Freeland, III:

That is correct.

Lewis F. Powell, Jr.:

Mr. Freeland, I would like to go back to the fundamentals.

Do the localities have the primary responsibility for financing public education in Mississippi?

The Localities?

T. H. Freeland, III:

I would say not, the state.

Lewis F. Powell, Jr.:

The state has.

T. H. Freeland, III:

Yes.

Lewis F. Powell, Jr.:

Is the funding of public education the largest single item in the state budget?

T. H. Freeland, III:

That, I believe, is true.

Lewis F. Powell, Jr.:

I think that is true in most states.

Now, I get back to the question you have been asked several times.

Is that allocated on a per pupil basis?

T. H. Freeland, III:

Average daily attendance I believe is the basis.

Lewis F. Powell, Jr.:

Average daily attendance.

Is that fairly done across the state, including the counties you represent?

T. H. Freeland, III:

We have no complaint about that.

Lewis F. Powell, Jr.:

None whatever.

T. H. Freeland, III:

None whatever.

That is not the issue in this case.

Lewis F. Powell, Jr.:

What percentage, again I ask you, of the funds in these counties comes from that state appropriation?

Did you say 80 percent?

T. H. Freeland, III:

I am not positive of that figure, but I would say it would be approximately correct.

Byron R. White:

You said it was 80 percent in the south.

T. H. Freeland, III:

In the south, and it would be higher than that–

Byron R. White:

And it would be, I thought you said, about 97 percent, that only 3 percent of the money came from the lieu lands.

T. H. Freeland, III:

–The 3 percent was trying to compare what we get from the lieu lands.

It is actually less than that, Justice White.

Byron R. White:

So again, how much, what percentage in the north part of the state is comparable to the 80 percent in the south?

What would that figure be?

T. H. Freeland, III:

The percent that we actually get from the state?

Byron R. White:

Yes.

T. H. Freeland, III:

The funding is basically the same.

How we break it down–

Byron R. White:

The percentage.

T. H. Freeland, III:

–Well, let me say this first.

We are not attacking school funding in Mississippi as a general proposition.

That is not our lawsuit as we view it.

Our lawsuit as we view it is simply this trust created by the federal government is being violated because our clients, or the schools that they attend, I should say, are not getting their rightful share of the trust income.

That is the basis for our lawsuit.

Now, as far as the overall school funding of the State of Mississippi is concerned, we are not… that is not the thrust of our lawsuit in the least.

William H. Rehnquist:

Insofar as you claim a violation of the trust, that really occurred over 100 years ago, didn’t it?

T. H. Freeland, III:

Not the violation that we are suing on.

T. H. Freeland, III:

Now, Justice Rehnquist.

The violation that we are suing on is the violation that occurs each year when this trustee, who either converted the trust corpus or gave it away, and owes us a continuing duty.

William H. Rehnquist:

Well, but that is, you know, that is the way everybody tries to get around the statute of limitations, is to say, well, this didn’t just happen in 1868.

It is a continuing offense, but a lot of courts reject that as kind of phoney.

T. H. Freeland, III:

This Court has said that where there is a trust and the trustee converts the corpus of the trust, and thereafter continues to admit, as the State of Mississippi has done in this situation, that the duty is owed to continue paying income, that the statute of limitations doesn’t run.

The only way the statute commenced to run is if the trustee repudiates the trust, which the trustee didn’t do.

It didn’t say the trust was void–

William H. Rehnquist:

The trustee doesn’t admit of any greater duty, obviously, than to pay the income from the substitute funds.

T. H. Freeland, III:

–That is another point.

There is no substitute fund.

It is entirely mythical.

The fund of something over $1 million was arrived at simply by taking 177,555 acres and multiplying it by $6.

The fund doesn’t exist and has not existed since 1856.

William H. Rehnquist:

So the legislature simply appropriates what would have… a hypothetical income on that fund?

T. H. Freeland, III:

For years they appropriated first 8 percent, starting with ’56, then they dropped it to 7, and then in the constitution of 1890 they dropped it to 6 percent, which amounted to something over $60,000 per annum to be divided amongst 23 counties, and then in 1984 they came back again and said, we know we have violated this trust.

We know we should do something about it.

William H. Rehnquist:

The only reason that the northern counties are treated any differently than the southern was the bad investment during the Civil War… pardon me, the War Between the States, wasn’t it?

T. H. Freeland, III:

The state of Mississippi would like to… I hope this is the last occasion on which any state official from Mississippi uses the Civil War as an excuse for some of their wrongdoing.

0 [Generallaughter.]

They do it every time.

You would think, you know, after all these years, but here they are again, and they say the Civil War had no more to do with this… the money was converted in 1856, before the Civil War ever occurred.

Sandra Day O’Connor:

Well, aren’t you really asking damages for prior breaches of the trust obligation?

T. H. Freeland, III:

Absolutely not.

We are asking–

Sandra Day O’Connor:

There is no corpus left.

T. H. Freeland, III:

–That, though, is the fault of the state, the trustee and the state officials who are acting as trustees, and where a trustee does that the law of trust places the trustee under a very specific obligation.

Ha is under a continuing duty, a trustee is, to pay income for the trust intended purpose, and the purpose of this was to educate children.

The way he has converted the trust corpus, the trustee has to continue paying income after the conversion.

The trustee’s duty to pay income continues in that if recurs annually, and each time, each year that rolls around and he doesn’t pay the income he should it is another violation, and that is why we are suing to stop these annual recurring violations.

Lewis F. Powell, Jr.:

Mr. Freeman, I am sure Mississippi, like other states in the public school system tests the progress of pupils periodically in different grades.

Lewis F. Powell, Jr.:

Does the record in this case show the achievement test scores of the counties in Northern Virginia as compared with other rural counties in the state?

T. H. Freeland, III:

The record does not.

There is a statement made in the Attorney General’s brief which is entirely outside the record that my home county had high test scores.

Well, it also happens to be the seat of the University of Mississippi, for what that is worth.

It doesn’t show, for example, what the records are in Mr. Papasan’s home county, Tunica County, where–

Lewis F. Powell, Jr.:

Without such a showing, how can you persuade as that people in your county, children in your county are not receiving a minimally adequate education?

T. H. Freeland, III:

–Because, Justice Powell, this case is here on a 12(b)(6) motion, and that is our allegation, and for purposes of this argument–

Lewis F. Powell, Jr.:

But you have to allege facts to support it.

That is a conclusion, isn’t it?

T. H. Freeland, III:

–The fact that we allege is that this is the result of the denial.

Lewis F. Powell, Jr.:

How do you define minimum adequate education?

T. H. Freeland, III:

Well, let’s say at the minimum it would be something that would raise the pupil above the level of a functional illiterate, and we literally have schools in Mississippi where they are being denied even that, and a lot of them are not… Tunica County,… I keep going back to that.

The poorest county in the whole United States.

The only poorer place in the whole country is the leper colony on Molokai.

The point, though, of the matter is that here we are dealing with a federally created trust.

We are not just dealing with appropriations of school money for the State of Mississippi.

We are dealing with a trust created by the federal government.

We are dealing with a trust that the state admits it has violated over these years and has continued to violate, and it comes down to this, to say that a suit such as we have here on the basis of this continuing violation is barred by the Eleventh Amendment, and that is the state’s primary argument, is to say that there is no trust at all.

There is no continuing duty at all, in other words.

If there is a trust, there is a continuing duty.

Now, of course, this Court has repeatedly and recently upheld the school lands trusts, in Lassen versus Arizona, Arizona… Alamo Land and Cattle Company versus Arizona.

William H. Rehnquist:

Both those cases came up through the state court system, didn’t they?

T. H. Freeland, III:

Lassen… Alamo did not.

William H. Rehnquist:

Alamo came up through the federal courts?

T. H. Freeland, III:

It came up through the federal courts.

There are other cases that the Court, like United States versus Ervine, that did come up through the federal court system, where in fact the United States was seeking to enforce the provision of the trust and the states were arguing there was no trust here at all.

William H. Rehnquist:

Well, of course, the Eleventh Amendment is no bar to a suit by the United States against the states.

T. H. Freeland, III:

And we submit, Justice Rehnquist, the Eleventh Amendment is no bar to prospective injunctive relief, which tells these trustees to cease violating the terms of this trust in the future, to do your duty in the future, and that is what we are asking here.

Of course, we don’t… the entire thrust of our case is not just the trust.

Assuming arguendo there is no trust, we still say that the way these schools are being financed has no rational basis whatsoever.

Byron R. White:

This is an equal protection case?

T. H. Freeland, III:

Yes, it certainly is.

What is the basis for it?

Well, an accident of land value is a basis, the state says.

There is no land to put a value on in North Mississippi.

They are trying to make a Rodriguez argument.

We want to have local administration of local schools.

That is the basis for it.

There is no school lands trust to administer in Northern Mississippi.

The state either gave it away or took it.

Contrast this case with Rodriguez.

For example, there you have a facially neutral situation.

You do have a difference in land values.

It is just one section of San Antonio had a higher value of land than another.

Here we have a discriminatory act the way this money is divided up and no basis for it.

The relief that we seek is simple enough, an adjudication that the trust is valid, that it is governed by federal law, that it is violated annually by the respondent state officials, and that it the recurring violations are a derogation of the equal protection clause as well as the contracts clause of the Constitution.

We seek prospective injunctive relief to stop these trustees from doing what they have been doing with these kids in the future, to give them a chance, and see that their schools receive the support for which the trust was created in the first place, and which is now being denied.

What we say about this trust is certainly consistent with the decisions of this Court dealing with school lands trusts generally.

For example, we are asking the Court to apply certain common law principles to this situation just as the Court did in Oneida II.

There you had a trust created by the Non-Intercourse Act of 1793, and the Court said, well, we don’t have any law to look to here, there was no regulatory scheme for enforcing the trust, so we are going to apply common law principles.

These same principles apply here.

We are asking this Court to declare that this is in fact the trust, something that the court has done each and every time it has ever had an opportunity to rule on the question, and that the law governing the trust, because it is created by federal law, is, of course, federal law, and the trust is enforceable.

In other words, the short answer to what we want is for the trustees to honor their obligations in the future.

To argue, as the state does, that the Eleventh Amendment bars any such remedy or the trustee’s diminution of the trust corpus is to say that there is no trust at all, contrary to the statutes which created it, that there is no enforceable continuing duty, nothing that can be enforced in federal court, that any claim under federal law would have to be left to the tender mercies of the state court.

The Fifth Circuit’s holding is nothing less than that this trust is simply not there because they said there is no continuing duty.

Granted, says the Fifth Circuit, there was a valid compact created 130 years ago.

What we are looking at now is some weird creature that has to do with Mississippi trust law, and they flatly refuse to enforce the continuing duty, and really that is what this lawsuit is about.

If this is a trust, and we certainly contend that it is, the it follows as the night the day that the trustees of this trust, and those are the people that we are suing, are obliged to honor it, and as part of that they are obliged to pay or see that the trust income is properly divided or paid in the future from some source, and they can be made to do that because they are acting in derogation of federal law and they are acting in derogation of the equal protection clause.

We submit that they could be made to do that by this Court, and that indeed they should be made to do that by this Court.

Are there any other questions?

T. H. Freeland, III:

May I reserve the rest of my time?

Warren E. Burger:

Yes.

Mr. Arnold.

Richard Lloyd Arnold:

Mr. Chief Justice, and may it please the Court, initially I would like to correct some misstatements by counsel as to the Chocktaw Cession counties, and that is the way it is referred to.

There was the Chocktaw Indian Tribe in basically the southern two-thirds of the state, the Chickasaw Indian Tribe in the northern one-third, relatively speaking.

Every school district, and let’s talk school districts and not counties, because school districts are the geographical areas, every school district in the southern part of Mississippi in the Chocktaw Cession does not receive income from 16th Section lands.

It is just simply not the case.

For instance, the Meridian Public School System receives from 16th Section lands zero.

It has no 16th Section lands.

The Greenwood Municipal Separate School District, located in the Mississippi Delta, which has been referred to earlier, receives some 16th Section land zero.

It has no 16th Section lands there.

There are at least 20 school districts in the southern half of the State of Mississippi which receive less than the Chocktaw… the Chickasaw Cession districts, the lowest Chickasaw District receives from the State of Mississippi.

Sandra Day O’Connor:

Mr. Arnold–

Richard Lloyd Arnold:

Yes, Your Honor?

Sandra Day O’Connor:

–is the state under an obligation to return the money attributable to 16th Section lands to the school district in which the 16th Section is located?

Richard Lloyd Arnold:

Your Honor, I don’t believe so.

We don’t believe that the petitioners here have ever asked that, that the funds be returned to them in any way, and I don’t believe the state would be in an obligation to make that return to them.

The state had the–

Sandra Day O’Connor:

Are they pooled then?

Richard Lloyd Arnold:

–Yes, Your Honor.

Sandra Day O’Connor:

All 16th Section lands–

Richard Lloyd Arnold:

No.

Sandra Day O’Connor:

–income is pooled?

Richard Lloyd Arnold:

No.

Pardon me, Your Honor.

I misunderstood your question.

The 16th Section money from the leases does not come to the state.

I misspoke myself.

I thought you were referring to the Chickasaw Cession funds being returned to the Chickasaw counties.

No, Your Honor.

Richard Lloyd Arnold:

The state does not receive those funds.

Those funds are dependent upon the lease by the local school district.

Sandra Day O’Connor:

My question was, is there some obligation that those moneys from the 16th Section go to the school district in which the section is located?

Richard Lloyd Arnold:

Yes, I believe that is correct, Your Honor.

Sandra Day O’Connor:

Is that a state law requirement–

Richard Lloyd Arnold:

No, ma’am.

Sandra Day O’Connor:

–or a federal law requirement.

Richard Lloyd Arnold:

That is a federal law requirement.

I believe that is found in the enabling act, Land Sales Act, found in the joint appendix at Page 56… 55, pardon me, Section 12, where the 16th Section lands reserved in each township for the schools therein and also it is found in the 1917 land Sales Act where Mississippi became a state, joint appendix 60, reserves for the schools therein.

Byron R. White:

Who does do the leasing?

I thought it was the county.

Richard Lloyd Arnold:

No, sir, it is… the individual board of education in that school district leases the lands and the minerals thereunder, Your Honor.

Byron R. White:

So that it is only those school districts in which lands are located that are going to get any of the money.

Richard Lloyd Arnold:

Yes, sir, and the amount they get depends upon the geographical location of the school district.

Byron R. White:

I understand.

And so there could be two adjoining school districts in that part of the state.

One gets some money, and the other get none.

Richard Lloyd Arnold:

Yes, sir, that is a fact.

For instance, the Meridian School District is located in Lauderdale County, Mississippi.

I believe Lauderdale County schools do get some income from 16th Section lands whereas the Municipal Separate School District, due to its geographical location and configuration, receives none, and also the fact, I believe the lands in Meridian, there may have been some lands located there at one time, but they were also sold, the 16th Section lands were sold.

William H. Rehnquist:

And a school district that occupied two or three townships, I suppose it would have two or three sources of this kind of income.

Richard Lloyd Arnold:

Yes, sir, it would if it had the 16th Section lands in it.

Yes, sir.

They had not been previously disposed of in some way, and we do have that in some areas of the state where there was no prohibition on the alienation of these lands under the state constitution, and the lands were sold some years ago.

Other lands had been previously settled prior to the extinguishment of the Indian claims under the Spanish dominion or the French dominion.

Sandra Day O’Connor:

What do you think governs the obligation to return that money to the school district in which it is located?

Is it governed by the Schmidt case, where Justice Holmes said the obligation is just an honorary, not an enforceable one?

Richard Lloyd Arnold:

To return the money in the Chocktaw, where they actually have the land, Your Honor?

Sandra Day O’Connor:

Sixteenth Section lands.

Richard Lloyd Arnold:

Well, I think it could have been done another way.

Richard Lloyd Arnold:

I think the state had the option, perhaps, to have leased all the lands that it so desired, brought the money in, and redistributed based upon some form–

Sandra Day O’Connor:

And put it in a pool and redistribute it.

Richard Lloyd Arnold:

–Yes, I think it could have done that, but it also had the option to allow–

Sandra Day O’Connor:

So, has the state made it a state law that it will not do that?

Richard Lloyd Arnold:

–Yes, ma’am, it is in the constitution, Section 211.

Sandra Day O’Connor:

The state constitution.

Richard Lloyd Arnold:

Yes, ma’am, provides for how it is done.

As we correct a few other items here, with reference to the fact that the Delta lands were so valuable, they weren’t then.

It was swamp, overflow lands, very few roads, and $6 an acre for the sale of the land was probably pretty good money back then.

The Delta wasn’t really settled and drained and roads built and railroads built in there until some time after the 1870’s.

Warren E. Burger:

Would those values have any impact on the issues raised in this case, do you think?

Richard Lloyd Arnold:

They seem to think, Your Honor… we think the issues come down very simply in this case.

They are saying either raise the amount that is in the corpus, the principal amount, or raise the interest that is paid.

That appears to us to be the issue here in this case.

That is the reason for the Eleventh Amendment jurisdictional bar we have made in the District Court, the Fifth Circuit Court of Appeals before this Court, but be that as it may, I don’t… they seem to think that the principal should be raised or the interest should be raised.

And we think the Eleventh Amendment jurisdictional ball would prohibit that.

If we look at who… and it has been referred to, the trustees, the trustees, the trustees.

Not one single named state official in our office is a trustee of the Chickasaw fund.

Not one.

Not in the constitution.

Not in the state law.

Or they have made a trustee of that fund.

The legislature of the state, the state itself has helped itself to be a trustee of the Chickasaw fund.

It cannot be funded except by the legislature.

The legislature is the only… the state is the trustee of the fund, not the Governor of the State of Mississippi, not the Secretary of State.

Byron R. White:

What does the Secretary of State say?

Richard Lloyd Arnold:

Well, he had a lot to say, I believe, Your Honor, that we somewhat oppose, but I don’t believe the Secretary of State spoke to the issues in the case here.

He spoke to maybe the emotional issues of school children, and–

Byron R. White:

What is his role?

I thought he had a supervisory role with respect to all 16th Section land.

Richard Lloyd Arnold:

–He has a supervisory role as to the 16th Section lands in the Chocktaw Cession.

That is correct.

But he his no supervisory role as to the trust, the monetary trust on the Chickasaw lands, none whatsoever.

Byron R. White:

I understand.

I understand that.

But what is the scope of his duties with respect to the non-Chickasaw lands?

Richard Lloyd Arnold:

The Chocktaw?

His duty is to check and see two primary things, that the land is not disposed of because our constitution now which was adopted in 1890 prohibits the sale of 16th Section lands.

They cannot be sold.

Before that time there was no prohibition as to the sale of these lands.

One, he sees that.

Two, he sees that the lands are administered in such a way that a reasonable income is derived therefrom, and that they are not donated.

The law in Mississippi on 16th Section lands underwent a dramatic change in 1978.

Up until that time they had been very loosely administered in that regard.

The legislature proposed a constitutional amendment, changed it around, gave the Secretary of State much more power.

The Supreme Court of Mississippi affirmed this power to go out and check on these counties and see if they were in fact getting the highest amount they could from the lands there.

So he has that duty.

Sandra Day O’Connor:

Mr. Arnold, do you agree with the statements of Mr. Freeland about the amount of money that goes per pupil for education from all sources other than these 16th Section and lieu lands moneys?

Richard Lloyd Arnold:

Your Honor, I do not agree with some of his statements there.

I do not have an exact figure or percentage as to the amount.

However, much like Texas had done in the San Antonio versus Rodriguez case, the State of Mississippi, every child, every school district in the state as far as an appropriation is concerned from the State of Mississippi, gets the exact same amount of money per teacher unit.

There is no distinction, whether it runs from Tunica county all the way to Jackson County on the opposite end of the state.

This money also goes… Mr. Freeman says it does not go for teachers’ salaries.

On the contrary, it does.

The money can be used for teachers’ salaries, and this is separated, divided up when it goes to the schools there, teachers’ salaries, superintendent and principals’ salaries, separate services such as salaries for art and music teachers, librarians, guidance counselors, as well as providing for nurses and lunchroom personnel together with the funds for textbooks, audiovisual equipment, building improvements, and cost of transportation.

John Paul Stevens:

Mr. Arnold, could I ask a question right there?

Richard Lloyd Arnold:

Yes, Your Honor.

John Paul Stevens:

As I understand it, the discrepancy with regard to the trust fund income is the difference between 63 cents and $75 per pupil, and as I understand what you are saying now, the additional money supplied by the State of Mississippi are the same per pupil, whether it is $50 or–

Richard Lloyd Arnold:

Yes.

John Paul Stevens:

–So the discrepancy between $75 and 63 cents, although it would be a different percentage, in absolute dollars is the same percentage after you add in the Mississippi supplemental fund.

John Paul Stevens:

Is that right?

Richard Lloyd Arnold:

Based on the figures that are there, Your Honor, those figures–

John Paul Stevens:

Maybe they are a little off.

Richard Lloyd Arnold:

–They have changed substantially since 1985.

The state is now appropriating… well, July 1st of this year it will be $2 million, which will go to the Chickasaw Cession school districts there.

John Paul Stevens:

Does that $2 million totally eliminate the differential, or does it just reduce it a great deal?

Richard Lloyd Arnold:

No, sir.

I think it reduces it a great deal, but even as this money goes, I think we really have a de minimis effect here as far as the question of a minimally adequate education.

I am not sure that I understand what it is, Your Honor, based upon the–

John Paul Stevens:

But on that point I also was wondering with regard to Justice Powell’s earlier question, as I understand the Court of Appeals opinion, they took the allegations of the complaint at face value and said that your motion to dismiss was properly sustained.

And don’t we just really… we are talking about a lot of facts here, but aren’t we pretty much confined to what they say in their complaint?

Richard Lloyd Arnold:

–Yes.

John Paul Stevens:

Which does make this allegation about not a minimally adequate education, whatever it is.

And I think your argument is that even if that is all true, there is still no federal relief that they are entitled to.

Richard Lloyd Arnold:

That is the position of the state, Your Honor.

John Paul Stevens:

But I am just wondering, we are really limited to the complaint itself for purposes of our decision as to whether it needs further–

–To the well pleaded facts.

Richard Lloyd Arnold:

Well pled facts, I believe.

Thank you, Your Honor.

Not just–

Byron R. White:

And $75 per student, that is just the… is that the highest that any school district gets from the 16th Section lands?

Richard Lloyd Arnold:

–No, sir, I believe that is an average.

Byron R. White:

That is an average.

Richard Lloyd Arnold:

Average.

Byron R. White:

But aren’t there some school districts in the Chocktaw area that don’t get any?

Richard Lloyd Arnold:

Yes, sir, there are some that get absolute zero, as I pointed out.

Byron R. White:

And which is less than the Chickasaw school districts get.

Richard Lloyd Arnold:

Yes, sir, that’s correct.

There are at least two that get zero, and as I recall, I believe the Biloxi Municipal Separate School District gets substantially under $100 a year total.

I mean, total amount, not–

Byron R. White:

From the 16th Section lands?

Richard Lloyd Arnold:

–Yes, sir.

I mean, we are speaking not per student or anything.

We are speaking total amount of money that they get at all there.

Byron R. White:

I understand.

Richard Lloyd Arnold:

And a distinction that should be made, I believe–

Byron R. White:

What would be the… is that $75 per student, is that the average per student in the school districts that get something, or does that average out through all of the school districts?

Richard Lloyd Arnold:

–I think that is the average for all school districts.

That is taking, as I understand it–

Byron R. White:

Including the ones who don’t get anything?

Richard Lloyd Arnold:

–Yes, Your Honor, and of course that is inflated.

Some school districts have vast mineral wealth under them, under their 16th Section lands, and they have leased that.

Of course, prices have been falling lately.

I think these figures may change around based on some changes in the economic pattern here in the last few months or years for that matter.

Another point I would like to make is the Chickasaw Cession counties are getting an appropriation from the state, albeit it only $66,000, 66 percent of the corpus on the trust.

They are getting something that not another county or school district in the state gets.

They are getting, as we say, a land… something they are getting that no one else is getting there from the state–

So I think that when we look at it from the standpoint that the state allows the local school districts to manage their own 16th Section lands subject to state oversight to make sure there is no donation of the land or disposition of the land that is not permitted under state law under the constitution, that there is no unequal treatment here.

This Court has also said that the equal protection clause is not applicable, I believe, and geographical differentials there.

It is between persons, and this is a geographical differential simply because the initial action of not reserving the 16th Section lands precipitated this whole lawsuit.

That is what started it.

The 16th Section lands were not reserved–

Finally, some five or six years, seven years later, the state was allowed to select some lands, the Governor of the State, and that is the only thing that any named official in this complaint has ever done in regard to the Chickasaw Cession lands.

The federal government allowed the Governor to go out and select these lands in the Mississippi Delta which were virtually unsettled at the time, as I said, swamp and overflow land.

The Attorney General has never done anything in regard to these lands, nor has he been authorized to.

There has been no duties imposed upon the Attorney General of the state.

The mere fact that he may be a member of the board of education, or was at one time until the law was changed, just simply does not subject him to being enjoined in this thing.

There is nothing he can do.

He can’t change it around.

He can’t invest it in some other type of investment.

Richard Lloyd Arnold:

He can’t change it around or change the interest paid.

The same is true of the Secretary of State.

He does not administer the trust.

He no longer sits on the board of education.

He is a member of the State Lieu Land Commission, and under our law, which is still in effect, and under the constitution lieu lands can be disposed of to this day, right now.

I believe there are something like 37 acres left that nobody really wants, but you can dispose of lieu lands under state law at this time.

So, it is our contention… and also the Superintendent of Education at one time was a member of the board of education.

He is not any more.

Ha was appointed by the board of education.

The Assistant Secretary of State, that person is basically someone there who keeps up with the state lands, where is the state land, has it been leased, is it coming up for renewal, and this sort of thing.

These offices, and that is what is sued here, they are only sued in their official capacity, have never acquired or disposed of the Chickasaw lieu lands or handled any funds from there.

In order to accomplish what the petitioners seek here, the State of Mississippi, the State of Mississippi would have to grant the relief.

If there is an injunction issued in this case, as petitioners seek, it would have to be out of the corpus of the State of Mississippi to pay this money in the future.

That is where it would come from, and we submit that this would be proscribed by the Eleventh Amendment on the decisions of this Court that start back with Hans v. Louisiana and come forward all the way through Green versus Mansour, I believe, decided this term by the Court.

One other matter we would point out to the Court at this time is that the… if the Court were to make the order that petitioners seek, we believe it would literally open the proverbial Pandora’s Box.

Every school district in the southern district of the State of Mississippi would then sue the state, saying, well, another school district has got more money or more land or receives more income from there because of geographical variances than we do, so we will sue, and we will get our money back, or get some more money back, although we have sold our lands some years ago.

Sandra Day O’Connor:

Mr. Arnold, what… to the extent that the plaintiff said in the complaint Mississippi is depriving the children of the plaintiff class of a minimally adequate education, and that is prohibited by the equal protection clause, now, just to that extent, is that barred in your view also by the Eleventh Amendment, that kind of a claim?

Richard Lloyd Arnold:

Your Honor, I believe it would be.

As I read Filer v. Doe and San Antonio there, what this Court has said in the past is that it is the absolute deprivation of an education that is barred by the–

Sandra Day O’Connor:

Well, assuming that what the Court said was that you will apply a higher level of scrutiny if a child is denied a minimally adequate public school education, and that is alleged in the complaint, do you think the Eleventh Amendment absolutely bars that complaint in federal court?

Richard Lloyd Arnold:

–If the state is the real true party in interest, Your Honor, to require the state to expend funds, perhaps it would.

I think it would depend on the facts as they have evolved by the Court, but in the facts that we have alleged here–

Sandra Day O’Connor:

Well, I guess the facts weren’t developed, were they?

Richard Lloyd Arnold:

–Right, but as the facts are alleged here, I believe the Eleventh Amendment would proscribe that, would be a jurisdictional bar as far as the State of Mississippi, and it is the real party in interest in this case, we submit.

The other defendants are nominal defendants only for the purpose of attempting to evade the Eleventh Amendment jurisdictional bar which would apply to the state.

So, I think it would in this case.

William H. Rehnquist:

If you are right, why wouldn’t the San Antonio case have gone off on the Eleventh Amendment grounds rather than the substantive equal protection decision?

Richard Lloyd Arnold:

I am not sure, Your Honor.

I don’t know if they raised that or not in the San Antonio case.

I don’t recall it in seeing if they raised the Eleventh Amendment as a jurisdictional bar in that case there.

Richard Lloyd Arnold:

But be that as it may, assuming arguendo that the Eleventh Amendment is not a jurisdictional bar in this case, there just simply has not been a cause of action stated that can survive a motion to dismiss under 12(b)(6).

A boilerplate allegation, just boilerplate, deprived of a minimally adequate education, it is just not there.

That is just not something I think this Court or any federal court could address.

The Court would be continually looking over this.

Sandra Day O’Connor:

The reason it was difficult to address it, of course, is that the record that we got just didn’t really reflect what other funding the state gives to peoples.

That is the handicap.

Richard Lloyd Arnold:

Perhaps in the record not, Your Honor, but in our brief, I believe, on Page 6 we referred to the minimum program for education that the State of Mississippi provides and what those funds go to, and how it goes to each school district based upon the teacher units.

Perhaps I did not make this clear as I should have to the Court.

But other than that, that fund going to these school districts throughout the state, the only other appropriation specifically out of the state treasury to education is the money to the Chickasaw Cession.

In that regard, I believe the figures will show, the most recent figures show in the State of Mississippi approximately 62 or 63 percent, in that range, of the total state budget is directed to educational matters throughout the state and the public education in the state.

I think this year it probably increased.

There have been some increases as far as the amount the state would pay in teachers’ salaries.

But we would submit to the Court that the State of Mississippi is the real true party in interest in this case.

They are seeking what they call an injunction, but it would require the state to expend its funds out of the state treasury.

We also submit that there is no equal protection claim based upon the allegations made in the complaint here, because to the contrary of not receiving everything that the state appropriates to every school district, the districts in the northern section of the state receive more as far as appropriation from the State of Mississippi itself there.

And the fact that one school district may be able to raise more money because the land is valuable or it has minerals under it is not an equal protection question that should be addressed by this Court or any other lower federal court.

Thank you.

Warren E. Burger:

Mr. Freeland.

T. H. Freeland, III:

Mr. Chief Justice, counsel says that there are school districts in the State of Mississippi that get no 16th Section land money.

That may be.

I would like, though, to refer the Court, if I may, to Joint Appendix 45, where the Secretary of State points out precisely how much moneys are received from the trust by the various counties in the State of Mississippi.

Byron R. White:

Counties or school districts?

T. H. Freeland, III:

Counties and school districts.

I am using them synonymous, Justice White, because that is the way the money is divided up.

Byron R. White:

Are the leases made by the counties?

T. H. Freeland, III:

Under the supervisor of the Secretary of State.

Byron R. White:

I know, but the counties don’t make… the lease rental is not paid to the county, is it?

T. H. Freeland, III:

No, it is paid to the county school board as it now stands.

Byron R. White:

It is paid to school districts, isn’t it?

T. H. Freeland, III:

School districts.

T. H. Freeland, III:

Yes, sir.

That’s correct.

William H. Rehnquist:

Well, school districts are not necessarily coterminus with counties, are they?

I mean, may there not be more than one school district in a county?

T. H. Freeland, III:

Absolutely, and that is the point also as to Meridian, for example.

What happened with that 16th Section land, it was sold, and the money is held in trust, and they get the income from the trust.

So, to say that they are not getting any income from 16th Section lands of the trust begs the question.

They still are, and our complaint is that we are not, and that is what this lawsuit is about.

It is about the trust.

It is not about how the State of Mississippi funds its schools around the state.

They do that on more or less an equal basis, and that is another basis for our complaint, however.

How is it that they can give everybody the same amount of state money, and yet acting as trustees of the trust give us not one nickel of the trust income and say that they are treating us on any sort of rational, reasonable basis?

And then they point at Rodriguez and say, well, there wasn’t any discrimination in Rodriguez.

Of course there wasn’t.

The case was tried, and that is what the trial court found, that the scheme in Rodriguez was facially neutral, but of course we allege here that we are dealing with rank discrimination, and that is what the pleadings have to say.

The Eleventh Amendment, we contend that this claim concerns only continuing violations of federal statutory and constitutional law, and it falls therefore within the rules permitting suits alleging conduct contrary to the supreme authority of the United States, as this Court mentioned in Penhurst, or it said in Green versus Mansour, a recent opinion, that such prospective relief as we are looking for vindicates the authority of the United States, and that is all we ask.

We ask that this trust be enforced.

We don’t ask the Court to interfere with the way schools are funded in Mississippi.

Byron R. White:

What if we disagree with you that there is any trust at all?

Then do you still claim that there is an equal protection violation?

T. H. Freeland, III:

I do indeed.

Byron R. White:

Even if there is no trust.

T. H. Freeland, III:

If there is no trust.

Precisely.

Byron R. White:

And even if the Chickasaw counties or school districts have no claim whatsoever to any moneys from 16th Section lands or from lieu lands.

T. H. Freeland, III:

Then what they are doing is totally irrational, because they are giving $75 or $74 a pupil in 59 counties, and at the same time they are giving 63 cents a pupil in the rest of the–

Byron R. White:

I would think you would rather have us find there was no trust.

T. H. Freeland, III:

–I would rather have you find that there is a trust, Your Honor, because just as the Court has done in–

Byron R. White:

Aren’t you arguing against yourself really?

T. H. Freeland, III:

–I am arguing that I have got a two-way street here.

T. H. Freeland, III:

Not only do we have the trust, which this Court has repeatedly upheld in Andres, Lassen, Alamo Land and Cattle, more cases than I can name, but also that the scheme that the state has set up is so totally irrational that we also have an equal protection claim which we press.

Warren E. Burger:

Thank you, gentlemen.

The case is submitted.