School Board is ‘Organization’ Barred from Recovering Legal Fees from State
2008-1480. Cincinnati City School Dist. Bd. of Edn. v. State Board of Edn., Slip Opinion No. 2009-Ohio-3628.
Hamilton App. No. C-070494, 176 Ohio App.3d 678, 2008-Ohio-2845. Judgment reversed, and judgment of the trial court reinstated.
Moyer, C.J., and Lundberg Stratton, O'Connor, O'Donnell, Lanzinger, and Cupp, JJ., concur.
Pfeifer, J., dissents.
Opinion: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2009/2009-Ohio-3628.pdf 
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(July 30, 2009) In a decision announced today, the Supreme Court of Ohio held that Cincinnati City School District Board of Education is an “organization” that employs more than 500 people, and therefore is not eligible to be reimbursed by the state for legal fees it incurred in pursuing a successful court action against the State Board of Education and Ohio Department of Education. The Court’s 6-1 decision, authored by Justice Evelyn Lundberg Stratton, reversed a ruling by the 1st District Court of Appeals.
R.C. 2335.39 provides that under specified circumstances an eligible party that successfully pursues a civil claim against the state may recover its attorney fees incurred in that litigation. The statute enumerates several categories of litigants that are ineligible to recover attorney fees. Among parties excluded from eligibility are “a partnership, corporation, association or organization” that has a net worth exceeding $5 million or employs more than 500 people.
In this case, the Cincinnati City School District prevailed in a court action in which it sought an adjustment in the method used by the State Board of Education to calculate the district’s share of state school funding dollars.
The school district subsequently sought to recover its attorney fees incurred in the litigation from the state under R.C. 2335.39. The state opposed that motion, arguing that the district was ineligible to recover attorney fees because it fell within the statutory exclusion for an “organization” that has more than 500 employees. The trial court agreed with the state’s argument and denied the district’s motion. The school district appealed. On review, the 1st District Court of Appeals reversed the trial court’s ruling and remanded the case for further proceedings. The court of appeals held that a school district did not qualify as an “organization” as that term is used in R.C. 2335.39, and found that the statute does not preclude recovery of attorney fees from the state by a local government entity such as a school district. The state appealed, and the Supreme Court agreed to review the 1st District’s decision.
Writing for the Court in today’s decision, Justice Stratton disagreed with the court of appeals’ conclusion that the language used by the legislature in identifying parties not eligible for recovery of legal fees indicated legislative intent to exclude only certain private businesses, and was not applicable to a school district or other governmental entity.
“R.C. 2335.39 does not define ’organization.’ When a word is not defined, we use its common, ordinary and accepted meaning unless it is contrary to clear legislative intent. ... Webster’s Third New International Dictionary (1986) ... defines organization as ‘a group of people that has a more or less constant membership, a body of officers, a purpose and usu. a set of regulations.’ Black’s Law Dictionary (8th Ed. 2004) ... defines organization as ‘A body of persons (such as a union or corporation) formed for a common purpose.’ ... Thus, the common meaning of the term ‘organization’ requires a group of members having a common purpose. A school district board of education is a statutorily created entity composed of individual members responsible for governing a school district or educational service center. R.C. 3311.055. It is described as ‘a body politic and corporate.’ R.C. 3313.17. Thus, the common, ordinary meaning of the word ‘organization’ encompasses a school district.”
The majority also rejected the school district’s argument that because R.C. 2335.39 expressly lists “the state” as a party excluded from recovery of legal costs, and local political subdivisions are not included in the statutory definition of the state, political subdivisions are not excluded from eligibility to recover their attorney fees.
Justice Stratton wrote: “In general, we agree that political subdivisions are not excluded under R.C. 2335.39(A)(2)(a); however, we do not read this exclusion as broadly as the Cincinnati school board suggests to include all political subdivisions as eligible parties. ... R.C. 2335.39(A)(2) excludes from eligibility those who most likely have the ability to pay litigation costs: entities with a certain number of employees or net worth, wealthy individuals, and the state. The Cincinnati school board is an organization with more than 500 employees; thus, it is excluded from being an eligible party. This exclusion comports with the underlying purpose of this fee-shifting statute: to assist economically disadvantaged parties who have prevailed in proceedings in which the state is a party. ... It was passed to censure frivolous government action that coerces a party to resort to the courts to protect his or her rights. It serves to ‘encourage relatively impecunious private parties to challenge unreasonable or oppressive governmental behavior by relieving such parties of the fear of incurring large litigation expenses.’ For the foregoing reasons, we reverse the judgment of the court of appeals and reinstate the judgment of the trial court.”
Justice Stratton’s opinion was joined by Chief Justice Thomas J. Moyer and Justices Maureen O’Connor, Terrence O’Donnell, Judith Ann Lanzinger and Robert R. Cupp.
Justice Paul E. Pfeifer dissented. He wrote: “I would affirm the judgment of the court of appeals. Yes, ‘organization’ is a rather general term, but it appears in R.C. 2335.39(A)(2)(d) among a list of words describing voluntarily created business enterprises. In contrast, a local board of education is a statutorily created political subdivision. In regard to governmental entities, R.C. 2335.39(A)(2)(a) excludes only ‘The state.’ R.C. 2335.39(A)(2)(a) would have been the logical place to list other political subdivisions that were also excluded from an award of fees. Moreover, R.C. 2335.39(A)(2)(c) also refers to an ‘organization’ but speaks in terms of net worth and possible tax-exempt status under the Internal Revenue Code. It’s not talking about school districts. A board of education simply does not fit as an R.C. 2335.39(A)(2)(d) exclusion. And if it doesn’t fit, we must omit.”
Contacts
Benjamin C. Mizer, 614.466.8980, for the State Board of Education and Ohio Dept. of Education.
Jennifer A. Flint, 614.227.2365, for the Cincinnati City School District Board of Education.