IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_______________
No. 92-7501
_______________
THE LAUDERDALE COUNTY SCHOOL DISTRICT,
By and Through Its Board of Education,
JOHN L. KNIGHT, WANDA McPHAIL, and
ARNOLD M. TREAT,
Plaintiffs-Appellees
Cross-Appellants,
VERSUS
ENTERPRISE CONSOLIDATED SCHOOL DISTRICT,
by and Through Its Board of Education,
Defendant-Appellant
Cross-Appellee.
* * * * * *
*
QUITMAN CONSOLIDATED SCHOOL DISTRICT,
Plaintiff-Appellant
Cross-Appellee,
VERSUS
ENTERPRISE CONSOLIDATED SCHOOL DISTRICT,
Defendant-Appellee
Cross-Appellant.
_________________________
Appeals from the United States District Court
for the Southern District of Mississippi
_________________________
(June 16, 1994)
Before WOOD,1 SMITH, DUHÉ, Circuit Judges.
JERRY E. SMITH, Circuit Judge:
This is a consolidated case involving three Mississippi school
districts: the Lauderdale County School District ("Lauderdale"),
the Enterprise School District ("Enterprise"), and the Quitman
School District ("Quitman"). The magistrate judge ordered the
transfer of certain students from Enterprise to Lauderdale and from
Quitman to Enterprise. We reverse these transfers, but we affirm
the other portions of the judgment, regarding interdistrict
payments and the annexation of the Stonewall area by Quitman.
I. Facts.
In 1953, the Mississippi legislature passed a law reorganizing
the state school system in order to provide separate but equal
education for white and black students. 1953 Miss. Laws, Extraor-
dinary Session, ch. 12. All of the school districts in Mississippi
were reorganized by July 1, 1957. The three school districts that
are parties to this case are Lauderdale, which encompasses all of
Lauderdale County except for the City of Meridian; Enterprise,
which encompasses the northern third of Clarke County; and Quitman,
encompassing the southern two-thirds of Clarke County. Lauderdale
County borders Clarke County on the north.
1
Circuit Judge of the Seventh Circuit, sitting by designation.
2
A. Clarkdale School: Pre-desegregation.
Under the 1953 reorganization, Lauderdale County was divided
into two school districts, the Meridian Municipal Separate School
District, encompassing the City of Meridian and the surrounding
area, and Lauderdale, encompassing the remainder of Lauderdale
County. The pre-reorganization Clarkdale Line Consolidated School
District, which had included territory in both Lauderdale and
Clarke counties, was abolished and its territory placed under
control of Lauderdale. The unincorporated area of Meehan, located
in Lauderdale County along the border of Clarke County, was also
brought under Lauderdale's control.
The Clarkdale school,2 a de jure white school during segrega-
tion, straddles the border between Lauderdale County and Clarke
County. For a number of years, Enterprise and Lauderdale entered
into one-year agreements regarding the ownership and operation of
Clarkdale. On February 13, 1962, Lauderdale and Enterprise entered
into a twenty-five-year agreement (the "Clarkdale agreement")
providing that white students from northeastern Clarke County would
attend the Clarkdale school and that approximately 100 students in
the Meehan area in Lauderdale would attend the all-white Enterprise
school in the western part of the Enterprise district.3
2
The parties sometimes refer to a school as an "attendance center," e.g.,
"the Clarkdale Attendance Center."
3
The Clarkdale agreement provided, among other things, that Lauderdale
would operate the Clarkdale school; that Enterprise would take over the operation
of the school if Enterprise acquired a 51% or greater ownership of the property
of the school; that before any principals or teachers were hired at Clarkdale,
Lauderdale would submit their names to Enterprise 30 days before hiring them;
(continued...)
3
Before desegregation, Lauderdale had one black school,
Middleton, which served the entire district. It had four white
schools: Northwest (now West), Northeast, Southeast, and
Clarkdale.
B. Stonewall: Pre-desegregation.
Under Mississippi's 1953 reorganization plan, Clarke County
was reorganized into two districts: the Clarke County Consolidated
School District (later Enterprise) and Quitman. Enterprise
comprised the northern part of the county, including an area called
"Northeast Clarke County," the town of Enterprise, the town of
Stonewall, and the area surrounding Stonewall.4 Quitman comprised
3
(...continued)
that Enterprise could object to the hiring of any principals or teachers at
Clarkdale; that if Lauderdale refused to consider any such objections, the matter
would be submitted to binding arbitration; that the Clarkdale school would be
jointly owned by the Lauderdale County Board of Education and the Board of
Trustees of the Clarke County Consolidated School District (later the Enterprise
school district); that the proportion of ownership would be based upon the
respective amounts of money contributed to the school by citizens in the
respective counties, the amount contributed by Lauderdale and the Clarke County
Consolidated School District, and the amount of state funds allocated to either
county district based upon attendance at Clarkdale; that the Clarkdale school
should be a "white attendance center" for grades one through twelve; that all
"eligible school children" in Northeast Clarke County would be assigned by the
Clarke County Consolidated School District to attend Clarkdale; that all
"eligible school children" in the Meehan area of Lauderdale County would attend
the Enterprise attendance center in the Clarke County Consolidated School
District; that each school district would pay for transportation of its students
attending Clarkdale; that "[a]ll state funds of every description, except
transportation funds, shall follow the child, and shall accrue to and be paid
directly by the state to the district in which the child actually attends school,
and for this purpose the Clarkdale Attendance Center shall be considered to be
in the Lauderdale County School District so long as it shall operate the same";
that the total cost of the school would be divided between the districts on the
basis of the average daily attendance of students; that the contract would be
effective upon approval by the necessary parties and would run for a period of
25 years; and that breach of one part of the agreement would not affect the
binding effect of the agreement.
4
Stonewall and the surrounding area are referred to as the "Stonewall
area."
4
the southern part of the county, including the town of Quitman. In
addition to the two school districts, there was the Clarke County
Board of Education, which had limited supervisory authority over
the transportation of Enterprise and Quitman students and the
authority to hear transfer appeals.
Enterprise had a white elementary school, a white high school,
a black elementary school, and a black high school.5 Quitman had
two black elementary schools, one black high school, one white high
school, one white lower elementary school, one white upper
elementary school, and the Stonewall School.
In 1962, Enterprise announced that it would convert the
Stonewall school, an all-white school, from grades 1-12 to grades
1-6. White parents in Stonewall petitioned to have the Stonewall
area detached from Enterprise and annexed to Quitman. The Quitman
district passed a resolution to annex the Stonewall area. The
Clarke County Board of Education tabled the Enterprise school
district's plan to convert the Stonewall school from grades 1-12 to
1-6 and adopted a resolution detaching the Stonewall territory from
Enterprise and annexing it to Quitman.
Enterprise and Quitman approved a twenty-five-year agreement
providing that all blacks in Stonewall would attend the all-black
school in Enterprise and that all state funds would be paid to the
district where the student attended school. This agreement was
part of a larger compromise agreement that settled litigation over
5
Enterprise Elementary School, Enterprise High School, Central Elementary
School, and Central High School, respectively.
5
ownership of Stonewall.
C. Desegregation.
In 1963, the United States brought a desegregation suit
against Lauderdale. United States v. Lauderdale Sch. Dist.,
No. 1367(E) (S.D. Tex.). In the same district court in 1965,
private plaintiffs filed a desegregation suit against Quitman,
Enterprise, and the Clarke County Board of Education.
Killingsworth v. Enterprise Consol. Sch. Dist., No. 1367(E) (S.D.
Miss.).
In 1967, the district court in Killingsworth instructed
Quitman and Enterprise to file desegregation plans. The court
tentatively accepted the "freedom of choice" desegregation plan
filed by the school districts but, on July 19, 1967, rejected the
"freedom of choice" plans and entered a final order that
(1) enjoined Enterprise, Quitman, and the Clarke County Board of
Education from discriminating on the basis of race or color,
(2) held that Enterprise, Quitman and the Clarke County Board shall
take affirmative action "to establish all school segregation and to
eliminate the effects of the dual system," (3) allowed all
students, irrespective of race or color, to exercise, every year,
the choice of which school in their district to attend, (4) held
that overcrowding of the particular school chosen will be the only
reason for denying the student's choice of which school to attend,
and (5) held that there will would be no more interdistrict
transfers between Enterprise and Quitman "except on terms and by
6
procedures generally applicable regardless of race." Although
asked to do so by plaintiffs in Killingsworth, the court did not
find the contract of June 11, 1962, between Enterprise and Quitman
unconstitutional.
The district court consolidated Killingsworth, Lauderdale, and
other pending desegregation cases. After consolidation, the cases
were reported as United States v. Hinds County School Board. On
July 3, 1969, in a consolidated appeal that included Lauderdale and
Killingsworth, this court reversed and remanded, directing the
district courts to request the United States Department of Health,
Education, and Welfare ("HEW") to collaborate with the school
boards to develop desegregation plans. United States v. Hinds
County Sch. Bd., 417 F.2d 852, 856-59 (5th Cir. 1969), cert.
denied, 390 U.S. 1032 (1970). If an individual school board and
HEW agreed to a desegregation plan by August 11, 1969, the district
courts were to implement the plan if it met constitutional
standards. Id. at 858. If no such agreement could be reached, the
district courts were to implement the HEW plan if it met
constitutional standards. Id. at 858-59.
HEW filed its plans for all three districts on August 11,
1969. On August 28, 1969, this court extended, at the government's
request, the deadline for filing plans from August 11 to
December 1. In effect, this allowed the parties additional time to
redraft the plans. On October 29, 1969, the Supreme Court vacated
the extension of the deadline, directing this court to issue
desegregation orders immediately. Alexander v. Holmes County Bd.
7
of Educ., 396 U.S. 19, 20 (1969) (per curiam). At its discretion,
this court could modify and implement the government plans. Id.
In response to Alexander, this court ordered that all thirty
permanent HEW plans prepared for school districts in the Southern
District of Mississippi, including Lauderdale, Enterprise, and
Quitman, be implemented immediately. United States v. Hinds County
Sch. Bd., 423 F.2d 1264, 1267-68 (5th Cir. 1969), cert. denied, 396
U.S. 1032 (1970).6
The August 11, 1969, HEW plan for Lauderdale contained the
following majority-to-minority transfer provision:
Whenever there shall exist schools containing a majority
of Negro students, this school district shall permit a
student (Negro or white) attending a school in which his
race is in the majority to choose to attend another
school where space is available, and where his race is in
a minority.
Thus, transfers between schools can occur if the student seeking
transfer is a minority in the transferee school. The plan also
contained a Singleton provision prohibiting the interdistrict
transfer of students unless the transfers are done on a
6
This court delayed implementation of a permanent plan for Quitman for one
year:
It appearing that the lack of buildings prevents the immediate
implementation of the permanent plan of the Office of Education
suggested for the Quitman Consolidated school district, the pupil
attendance interim plan of the Office of Education for this district
is authorized for use during the remainder of this school term
(App. 5). The permanent plan shall be effectuated commencing in
September, 1970. This relief is appropriate in view of the
similarity between the proposed attendance plan of the school
district and that of the Office of Education.
423 F.2d at 1268.
8
nondiscriminatory basis and do not increase segregation.7
The rest of the segregation plan, which dealt with attendance
patterns, was amended by this court so that Lauderdale would be
divided into four separate attendance zones of West Lauderdale,
Clarkdale, Southeast, and Northeast. United States v. Lauderdale
County Sch. Dist., No. E88-0059(L) (5th Cir. 1969) (unpublished).
All students living in the zones associated with the West
Lauderdale, Clarkdale, and Southeast schools would attend the
schools in each of the zones. The students residing in the
Northeast zone, which contains both the Middleton school and the
Northeast school, would attend the Middleton school if they were in
grades 1-6 and the Northeast school if they were in grades 7-12.
In the 1969-70 school year, when the desegregation plans were
formulated, Quitman contained 2,929 students, 1,458 (50%) black and
1,471 (50%) white. The desegregation plan projected that Quitman's
student population would total 3,146 students, 1,490 (47%) black
and 1,656 (53%) white. Enterprise's actual enrollment for the
1970-71 school year was 858 students, 339 (40%) black and 519 (60%)
white. Enterprise was projected to contain 768 students, 363 (47%)
black and 405 (53%) white, in 1969. Clarkdale's actual enrollment
as of April 15, 1970, was 553 (80%) white and 142 (20%) black,
7
"If the School District grants transfers to students living in the
district for their attendance at public schools outside the district, or if it
permits transfers into the district of students who live outside the district,
it shall do so on a non-discriminatory basis, except that it shall not consent
to transfers where the cumulative effect will reduce desegregation in either
district or reinforce the dual school system." This provision is named for
Singleton v. Jackson Mun. Separate Sch. Dist., 419 F.2d 1211 (5th Cir. 1969) (en
banc), rev'd in part sub nom. Carter v. West Feliciana Sch. Bd., 396 U.S. 290
(1970).
9
totaling 695. The HEW plans had projected that Clarkdale's
population would be 788 students, 203 (26%) black and 585 (74%)
white. Lauderdale's actual student population, as of April 15,
1970, totaled 4,583, of which 1,716 (37%) were black and 2,867
(63%) were white. The projected student population for Lauderdale
was 5,078 total, of which 1,926 (38%) were black and 3,150 (62%)
were white.
The HEW plans for Enterprise, Lauderdale, and Quitman called
for immediate desegregation of all schools. Like the Lauderdale
plan, the Enterprise and Quitman plans contained a majority-to-
minority transfer provision and a Singleton provision.
D. Clarkdale School: Post-desegregation.
After desegregation, the Northeast Clarke County students
continued to attend the Clarkdale school. Pursuant to the
Clarkdale agreement, Enterprise paid money to Lauderdale for
educating its students. But two years before the twenty-five-year
agreement expired, Enterprise stopped paying Lauderdale.
When the agreement expired, Enterprise refused to allow any
more transfers of its students to Lauderdale. The transfers
nonetheless continued to be made under the authority of the Clarke
County Board of Education, which overruled Enterprise's denials of
requests for transfer.
In the 1991-92 school year, Lauderdale approved the transfer
of 50 students from the old Meehan area, consisting of 36 white
students, 13 black, and one other. Similarly, the Clarke County
10
board approved the transfer of 309 Northeast Clarke County
students, 285 white and 24 black, for attendance at the Clarkdale
School in the 1991-92 school year. Enterprise had also accepted
transfers under an arrangement with Jasper County under which some
83 white students were currently allowed to transfer into
Enterprise.
Beginning with the 1991-92 school year, the magistrate judge
forbade any transfers from Jasper County to Enterprise and forbade
the transfer of Alabama residents to either Jasper County or
Enterprise. Effective January 1, 1992, the Clarke County board was
eliminated under a state-wide reorganization. In 1991-92,
Clarkdale had some 1,052 students on its rolls, 10% black and 90%
white.
E. Stonewall: Post-Desegregation.
Beginning with the school year 1968-69, Quitman refused to pay
Enterprise for educating students transferred from Stonewall and
expressly repudiated the June 11, 1962, agreement in 1977. In that
school year, 135 black students from the Stonewall area attended
schools in Enterprise.
From 1984-85 to 1990-91, an average of 99 black students per
year have transferred to Enterprise. The total number of transfer
students has grown steadily over the years, with approximately 331
students transferring to Enterprise for the 1991-92 school year
(including 31 students who reside in Quitman but attend Enterprise
because their parents or legal guardians are Enterprise instructors
11
or certificated employees). Quitman had denied each requested
transfer but was overruled by the Clarke County Board of Education.
On January 1, 1992, the Clarke County board was eliminated, and
Quitman's denials of the transfers stood.
In 1991-92, Quitman's student population was 2,609; its black
student population increased from 50% in 1969 to 54% in 1991-92.
Quitman now has four schools: a lower elementary school, an upper
elementary school, a junior high school, and a senior high school.
In 1991-92, Enterprise educated 819 students, 29% black and 71%
white. Of Enterprise's enrollment on September 30, 1991, 47% (396)
resided in Enterprise, 37% (300) resided in Stonewall, and 6%
resided in Meehan in Lauderdale County.
II. District Court Proceedings.
A. The Litigation.
Lauderdale filed an action in state court against Enterprise
and the Clarke County board, seeking a judgment against Enterprise
for failing to pay Lauderdale during the final two years of the
Clarkdale agreement and during the years after the agreement
expired. Enterprise removed the case to federal court and filed a
counterclaim, arguing that (1) the Clarkdale agreement had been
materially breached by Lauderdale, (2) the Clarkdale agreement was
unconstitutional, and (3) the transfer of Enterprise students to
Clarkdale violated Lauderdale's 1969 desegregation plan.
Enterprise also sought an injunction against future transfers of
Enterprise students to Clarkdale.
12
Quitman filed suit in federal court against Enterprise and the
Clarke County board, seeking injunctive relief to prohibit the
transfer of Quitman students to Enterprise. Enterprise filed a
counterclaim alleging (1) that the annexation of Stonewall by
Enterprise was constitutionally void and (2) that Quitman owed
Enterprise for educating the Stonewall students since 1968.
The parties agreed to have the matters tried by the magistrate
judge, who consolidated the cases on October 26, 1989. The
Concerned Citizens of Stonewall, Clarke County, Mississippi
("Concerned Citizens"), earlier had moved to intervene in the
Quitman v. Enterprise case, No. E88-0065(L). On October 2, 1989,
the magistrate judge denied Concerned Citizens's motion to
intervene but granted it amicus curiae status. On December 15,
1989, Concerned Citizens filed a motion for relief from the order
denying intervention and appealed the denial to this court, which
dismissed the appeal of the denial of motion to intervene.8 The
magistrate judge denied Concerned Citizens's motion for relief.9
Because of numerous inaccuracies regarding transfers and
student addresses, the magistrate judge directed all parties to
prepare a statistical compilation of all affected students residing
in the respective school districts and required accurate address
information regarding all transfers. On July 5, 1991, the
magistrate judge issued his first opinion, concluding (1) that the
8
February 13, 1990 (Concerned Citizens had failed to file a timely
appellate brief.).
9
March 1, 1990.
13
Stonewall area was legally annexed to Quitman; (2) that students
residing in Northeast Clarke County but who attended Clarkdale
should be considered transfer students under Mississippi law; and
(3) that Enterprise should be maintained as a viable school
district.
On June 1, 1992, the magistrate judge issued a second opinion,
concluding (1) that 100-125 black students must be allowed to
transfer from the Stonewall area to Enterprise in order to preserve
the viability of the Enterprise district, to preserve racial
balance, and to perpetuate Killingsworth; (2) that Enterprise
should recover from Quitman for the years 1987-88 and 1988-89 under
MISS. CODE ANN. § 37-19-33, which then required payment of transfer
funds between districts in the same county; and (3) that Lauderdale
should recover fees from Enterprise for the 1985-86, 1986-87, 1987-
88, 1988-89 years, but for no other years.
On July 10, 1992, the magistrate judge issued the final
judgment, which adopted by reference the two previous opinions.
Under the final judgment, the Stonewall territory was deemed to be
part of Quitman. Beginning with the 1992-93 school year, all white
students residing in Stonewall would begin attending Quitman
schools rather than Enterprise schools. Any white student in
Stonewall desiring to attend Enterprise would have to submit a
transfer request in accordance with state law. High school
sophomores, juniors, and seniors enrolled in Enterprise schools in
the 1991-92 school year could continue to remain in Enterprise
until they graduated.
14
The magistrate judge ordered that, beginning with the 1992-93
school year, Quitman must transfer between 100 and 125 black
Stonewall area students to Enterprise.10 Quitman would pay
Enterprise for the students transferred because of the court
judgment (i.e., all white students from Stonewall attending Quitman
during the transition years of 1992-93 through 1994-95, and 100 to
125 black students transferred in the years 1992-93 and following
years). The magistrate judge ordered Quitman to pay Enterprise
$205,596.91 for Stonewall area students who had attended Enterprise
schools in the years 1987-88 and 1988-89 ($81,022.00 for 1987-88
and $124,574.91 for 1988-89).
The area of Northeast Clarke County area, as defined in the
Clarkdale agreement of February 1962, was deemed to be part of
Enterprise. Those students residing in Northeast Clarke County,
but attending Clarkdale School, were deemed to be transfer
students. The judgment provided for transfers of certain students
in Northeast Clarke County to the Clarkdale school. Beginning with
the 1992-93 school year, a maximum of 125 whites would be allowed
to transfer to Clarkdale. Beginning with the 1992-93 school year,
all white students attending Clarkdale during the 1991-92 school
year, and all white kindergartners, would attend school in the
Enterprise school, with the exception of 10th, 11th, and 12th
graders, who could remain at Clarkdale. Any black student who
attended Clarkdale could continue to attend Clarkdale if he
10
Quitman and Enterprise had to allow all requests for transfer by black
students up to 125. At least 100 black students had to be transferred, even if
fewer than 100 requested a transfer.
15
requested a transfer. Enterprise would pay Lauderdale $302,562.30
for educating Enterprise's students during the 1985-86, 1986-87,
1987-88, and 1988-89 years.
On July 23, 1992, Concerned Citizens made a FED. R. CIV.
P. 59(e) motion to alter or amend the judgment. Quitman filed a
notice of appeal on July 27, 1992; Enterprise filed a notice of
appeal on August 7, 1992, and an amended notice three days later;
Lauderdale filed a notice of cross-appeal on August 20, 1992.
On November 16, 1992, the magistrate judge entered an order on
various post-judgment motions, granting a FED. R. CIV. P. 60(b)
motion by Lauderdale for relief from the final judgment, denying
Concerned Citizens's rule 59(e) motion, granting in part and denied
in part Enterprise's motion for modification of injunction pending
appeal and regarding assignment and transportation of students, and
denying a motion by Lauderdale concerning enforcement and/or
clarification of the first opinion and the final judgment.
Specifically, the court ordered that, first, the word "maximum"
would be replaced by the word "minimum" in the final judgment
regarding the number of white Northeast Clarke County students to
be transferred by Enterprise to the Clarkdale school. Second, up
to forty students in Meehan in Lauderdale County would be
transferred to Enterprise.
Third, Enterprise would be responsible, until further notice,
for transporting those students from Northeast Clarke County
attending the Clarkdale School. Fourth, all siblings of children
transferred either from Enterprise to Clarkdale or from Stonewall
16
to Enterprise under the magistrate judge's authority would also be
allowed to be transferred. Fifth, all students with parents
working in the Clarkdale School or the Enterprise schools would be
allowed to transfer to the school where their parents are employed.
On November 30, 1992, Quitman filed a rule 59(e) motion to
alter or amend the November 16 order. The magistrate judge has not
yet disposed of Quitman's rule 59(e) motion. Each party has filed
notices of appeal of the November 16 order.
The judgment went into effect at the beginning of the 1992-93
school year. Its transfer provisions were phased in during the
school years 1992-93 and 1993-94 and were to be fully applied in
the 1994-95 school year.
B. The Parties' Positions on Appeal.
Lauderdale's position on appeal is that we should affirm the
transfer of students to Clarkdale and, furthermore, that Enterprise
owes it money for students transferred during the 1989-90 and 1990-
91 academic years, not just during the 1985-89 years. Enterprise
argues that the magistrate judge erred by ordering transfers from
Northeast Clarke County to the Clarkdale school, that it should not
be required to pay money to Lauderdale for educating its students,
and further, that it should not be required to bus students to
Clarkdale. Quitman argues that the magistrate judge erred by
transferring 100 to 125 black students from the Stonewall area to
Enterprise and that it does not owe any money to Enterprise for
previous transfers. Quitman agrees with the magistrate judge's
17
decision to allocate the Stonewall area to the Quitman district.
With respect to the Stonewall area, Enterprise argues that the
magistrate judge erred in holding that the annexation to Quitman
was valid. In the event that the annexation is affirmed,
Enterprise contends that the transfer of black students from
Stonewall to Enterprise should be affirmed. Enterprise would even
want the transfers increased. Concerned Citizens, as amicus,
argues that the Stonewall annexation is invalid and that the
Stonewall area should be returned to Enterprise.
III. Appellate Jurisdiction.
A. Finality.
The July 10, 1992, judgment is a final judgment and, as such,
is reviewable on appeal. Under 28 U.S.C. § 1291, a court of
appeals has jurisdiction over final, appealable orders of a
district court. 28 U.S.C. § 1291. In order for a judgment to be
final, it must dispose of all claims of the parties:
In the absence of [a Rule 54(b) action], any order or
other form of decision, however designated, which
adjudicates fewer than all the claims or the rights and
liabilities of fewer than all the parties shall not
terminate the action as to any of the claims or parties,
and the order or other form of decision is subject to
revision at any time before the entry of judgment
adjudicating all the claims and the rights and
liabilities of all the parties.
FED. R. CIV. P. 54(b).
An examination of the July 10 judgment reveals that it
disposed of all claims of all parties. Regarding Quitman v.
Enterprise, the magistrate judge adjudicated the validity of the
18
Stonewall annexation, ordered a transfer of 100-125 black students
from Stonewall to Enterprise, and resolved all monetary issues
between Quitman and Enterprise. Regarding Lauderdale v.
Enterprise, the magistrate judge ordered that Northeast Clarke
County was part of Enterprise, directed the transfer of students
from Northeast Clarke County to Lauderdale, required that those
students would be considered transfer students, and resolved all
monetary issues between Lauderdale and Quitman.
Although the magistrate judge granted two post-judgment
motions on November 16, 1992,11 the original July 10 judgment
covered all the subject matter of the parties' claims. Therefore,
the July 10 judgment was final and appealable.
For purposes of finality, we need not consider whether the two
cases, Lauderdale v. Enterprise, No. E88-0059(L), and Quitman v.
Enterprise, No. E88-0065(L), are one suit or two. The July 10
judgment disposes of all issues in both of the cases. The judgment
therefore is final, whether the suits are treated as one case or
two.
B. Notices of Appeal.
In determining whether the notices of appeal were proper, we
apply the recent amendments to the Federal Rules of Appellate
Procedure. Although this appeal was filed before the effective
date of the amendments, courts should apply the amendments "to the
11
The two post-judgment motions were Lauderdale's rule 60(b) motion for
relief from the final judgment and Enterprise's motion for modification of
injunction pending appeal.
19
maximum extent possible" if such application would not "not work
injustice." Burt v. Ware, 14 F.3d 256, 259 (5th Cir. 1994).12
If the two cases are considered as one, then the operative
notices of appeal are as follows: Quitman's July 27, 1992, notice
of appeal of Quitman v. Enterprise, Enterprise's August 7, 1992,
notice of appeal of both cases, and Lauderdale's August 20, 1992,
notice of appeal of Lauderdale v. Enterprise. Quitman's and
Enterprise's notices were filed within thirty days of the July 10,
1992, judgment. Lauderdale's notice of cross-appeal was filed
thirteen days after Enterprise's notice of appeal. Therefore,
Lauderdale's notice of appeal was valid under FED. R. APP. P.
4(a)(3), which provides that
[i]f one party timely files a notice of appeal, any other
party may file a notice of appeal within 14 days after
the date when the first notice of appeal was filed, or
within the time otherwise prescribed by this Rule 4(a),
whichever period last expires.
If the two cases are considered separately for notice of
appeal purposes, the notices were proper in both cases. In
Lauderdale v. Enterprise, the parties filed their notices of appeal
as follows: Enterprise on August 7, 1992, and Lauderdale on
August 20, 1992. Enterprise's notice was filed within thirty days
of July 10. Lauderdale timely filed its notice of appeal on
August 20, within fourteen days of Enterprise's.
Notices of appeal were also proper in Quitman v. Enterprise.
The parties filed their notices of appeal as follows: Quitman on
July 27, 1992, and Enterprise on August 7, 1992. Both notices of
12
The effective date of the amendments was December 1, 1993.
20
appeal were timely filed within thirty days of July 10. Thus,
whether the two cases are considered together or separately, the
notices of appeal are timely.
C. Concerned Citizens's Rule 59(e) Motion.
Concerned Citizens is not a party to the case, having been
denied intervenor status on two occasions. Enterprise and Quitman
argue, therefore, that Concerned Citizens's rule 59(e) motion is
invalid and does not affect the validity of the notices of appeal.
FED. R. APP. P. 4(a)(4) provides that the time for appeal,
usually thirty days, runs from the entry of an order disposing of
certain motions, including a motion to alter or amend judgment
under rule 59. Because rule 4(a)(4) applies only if a "party makes
a timely motion of a type specified immediately below" (emphasis
added), it would seem that a motion by a non-party would not defer
the thirty-day window.13 We need not determine whether Concerned
Citizens's motion was valid, however, as under the amended
appellate rules the validity of Concerned Citizens's motion does
not affect the notices of appeal.
If a party makes a rule 59(e) motion, the thirty-day period
starts on the day the district court disposes of the motion. See
FED. R. APP. P. 4(a)(4). Any notice of appeal filed after the final
13
But see Thurman v. FDIC, 889 F.2d 1441, 1448 (5th Cir. 1989) (holding
that a motion for new trial filed by a person who was later determined to have
been improperly denied intervenor status was sufficient to trigger the provisions
of rule 4(a)(4)); Boggs v. Dravo Corp., 532 F.2d 897, 900 (3d Cir. 1976) (the
word "party" in FED. R. APP. P. 4(a)(4) "was never intended to operate as a
restrictive rule limiting those who could bring a motion which would have the
effect of terminating the time for appeal.").
21
judgment, but before the disposition of the rule 59(e) motion,
automatically becomes effective when the district court disposes of
the rule 59(e) motion. Id. ("A notice of appeal filed after
announcement or entry of the judgment but before entry of any of
the above motions is ineffective to appeal from the judgment or
order, or part thereof, specified in the notice of appeal, until
the date of the entry of the order disposing of the last such
motion outstanding.").
Therefore, even if the rule 59(e) motion were valid, the
thirty-day period would have commenced on November 16, 1992, the
day the district court disposed of the rule 59(e) motion. The
three notices of appeal were effective on November 16, 1992.
D. The Post-judgment Order.
The magistrate judge entered a post-judgment order on
November 16, 1992. On November 30, 1992, Quitman filed a
rule 59(e) motion to alter or amend the order. Soon afterward,
each party filed a notice of appeal of the post-judgment order.14
As the magistrate judge has not yet disposed of Quitman's rule
59(e) motion, these notices of appeal are ineffective. FED. R. APP.
P. 4(a)(4). Thus, we are unable to review the magistrate judge's
post-judgment order of November 16, 1992.
Our answer would not be different if the rule 59(e) motion by
Concerned Citizens were a valid rule 59(e) motion for purposes of
14
Enterprise filed a notice of appeal on December 1, 1992, Quitman on
December 16, and Lauderdale on December 18.
22
rule 4(a)(4)(C). Such a motion would have deferred the
effectiveness of the notices of appeal until the motion's
disposition on November 16, 1992. On that date, the final judgment
would be immediately reviewable on appeal. Because of Quitman's
rule 59(e) motion of November 30, 1992, we would still be unable to
review the post-judgment order.
One might argue that Quitman's rule 59(e) motion, ostensibly
filed in the Quitman v. Enterprise case, defers the notices of
appeal only in that case and this court still would have appellate
jurisdiction over that portion of the post-judgment order
pertaining to the other consolidated suit, Lauderdale v.
Enterprise. We reject such a contention. The two cases were
consolidated for the purposes of trial and final judgment. Suits
that are consolidated in district court for trial and disposed of
by one final judgment are considered the same case for the purposes
of notices of appeal. Barnett v. Petro-Tex Chem. Corp., 893 F.2d
800, 805 (5th Cir.), cert. denied, 497 U.S. 1025 (1990).
Therefore, we cannot review the contents of the post-judgment
order, whether those contents relate to Lauderdale v. Enterprise,
Quitman v. Enterprise, or both. Specifically, we cannot review the
replacement of the word "maximum" with the word "minimum," the
transfer of forty students from Meehan to Enterprise, the
allocation to Enterprise of the responsibility for busing students
from Northeast Clarke County to the Clarkdale school, the transfer
of siblings, or the transfer of children with parents employed by
the Clarkdale school or the Enterprise school.
23
IV. Clarkdale Transfers.
The magistrate judge ordered the transfer of a maximum of 125
white students, and all black students requesting transfers, living
in Northeast Clarke County, to attend Lauderdale's Clarkdale
school. The magistrate judge reasoned that, first, the students
were closer to Clarkdale and, second, the 1969 desegregation plans
for Lauderdale and Enterprise assumed that the transfers would
continue.15 Enterprise argues that the magistrate judge's transfer
of students to Clarkdale should be reversed because (1) Enterprise
was not a party to the Lauderdale litigation, (2) the transfers
violated the Lauderdale desegregation plan, (3) there is no
evidence of a constitutional violation by Enterprise, and (4) the
15
The magistrate judge stated:
Although we have decided that the Northeast Clarke County students
attending Clarkdale are transfer students, this will not prohibit
transfers to Clarkdale. Initially, it would make little sense from
an academic standpoint to require all Northeast Clarke County
students to travel multiple distances to attend Enterprise School
when a school constructed for their benefit is located several miles
away. Further, this Court finds that the transfer issue was
properly before the Court in USA v. Lauderdale County School
District, Cause No. 1367. During the litigation of Lauderdale
County School District, students residing in Northeast Clarke County
were attending Clarkdale. Interrogatories submitted by Lauderdale
showed the total number of students residing in Northeast Clarke
County and attending Clarkdale. During the Killingsworth
litigation, Enterprise represented to the Court and submitted a map
showing the Northeast Clarke County students attending Clarkdale.
Moreover, Enterprise stipulated that its school district is divided
into two (2) attendance areas )) Enterprise and Clarkdale. Lastly,
as part of an objection to its HEW desegregation plan, Enterprise
submitted statistical compilations showing Northeast Clarke County
students attending Clarkdale. In short, the Court finds sufficient
evidence to conclude that both the district court and the Fifth
Circuit Court of Appeals were aware that Northeast Clarke County
students were attending Clarkdale when desegregation plans were
approved for Enterprise and Lauderdale and the Court envisioned such
transfers would continue.
24
transfers threaten Enterprise's viability as a district.16 Because
there has been no finding of a interdistrict segregative act with
a substantial, direct, and current segregative effect, and because
the 1969 court orders do not compel student transfers, we reverse
the magistrate judge's transfers.
In 1962, Lauderdale and Enterprise agreed that white students
from the northeastern Clarke County area in Enterprise would attend
Clarkdale and that approximately 100 students in the Meehan area in
Lauderdale would attend the Enterprise school. When the agreement
expired, Enterprise refused to allow any more transfers of its
students to Lauderdale. Enterprise's denials of requests for
transfer were overruled by the Clarke County Board of Education
until the board was eliminated in 1991.
The magistrate judge ordered interdistrict transfers, even
though neither party had requested it to do so.17 Lauderdale asked
only for monetary damages in its state court action. Enterprise in
its counterclaim requested only that the 1962 Clarkdale agreement
be declared void and that Lauderdale and the Clarke County board be
enjoined from ordering the transfer of students to Clarkdale. But
the fact that neither party requested interdistrict transfers does
not by itself preclude the district court from ordering such
16
Apparently, neither party challenges the Meehan transfers, which, as we
have pointed out earlier, are not reviewable by this court.
17
See Milliken v. Bradley, 418 U.S. 717, 745 (1974) ("With no showing of
significant violation by the 53 outlying school districts and no evidence of any
interdistrict violation or effect, the court went beyond the original theory of
the case as framed by the pleadings and mandated a metropolitan area remedy.")
(emphasis added).
25
transfers. The district court retains jurisdiction to desegregate
the schools of Lauderdale and Enterprise.18 The district court also
has the power to enforce the HEW plan for Lauderdale as well as
this court's amendments to the plan.
There is no question that federal courts can stop segregation-
promoting transfers of students between school districts, place
restrictions upon the transfers such as the Singleton provision
contained in many of the HEW plans, and remedy violations of
Singleton clauses. It is a different question, however, whether a
court can order the interdistrict transfer of students. For
example, if a school district violates the Singleton provision, the
appropriate remedy is to end the illegal transfers, not to order
broad interdistrict relief:
A finding that a school district has accepted transfer
students in violation of a Singleton clause customarily
supports injunctive relief forcing an end to such
transfers and compliance with the terms of the
desegregation order. A finding that a district has
violated a Singleton transfer provision included in its
desegregation order does not, in and of itself, support
a broader, interdistrict remedial order unless the
conduct which violated the Singleton clause also
comprised an interdistrict constitutional violation when
evaluated under Milliken.
Lee v. Lee County Bd. of Educ., 639 F.2d 1243, 1261 (5th Cir. Mar.
1981).
We evaluate the propriety of court-ordered transfers between
districts under the standard enunciated in Milliken v. Bradley, 418
18
See Davis v. E. Baton Rouge Parish Sch. Bd., 721 F.2d 1425, 1434 (5th
Cir. 1983) ("Until [a] unitary system has been achieved, a district court
overseeing the desegregation effort must retain jurisdiction to insure that the
present effects of past segregation are completely removed." (citing Green v.
County Sch. Bd., 391 U.S. 430, 439 (1968))).
26
U.S. 717 (1974),19 in which the Court considered the district
court's plan to integrate the city of Detroit district, a
predominantly black district, with the predominantly white school
districts in the surrounding suburbs. The Court reversed the
segregation plan. Although de jure segregation existed in Detroit,
the district court had made no finding that the suburban school
districts had violated the constitution or that such a violation
had an interdistrict effect:
Before the boundaries of separate and autonomous school
districts may be set aside by consolidating the separate
units for remedial purposes or by imposing a cross-
district remedy, it must first be shown that there has
been a constitutional violation within one district that
produces a significant segregative effect in another
district. Specifically, it must be shown that racially
discriminatory acts of the state or local school
districts, or of a single school district have been a
substantial cause of interdistrict segregation. Thus an
interdistrict remedy might be in order where the racially
discriminatory acts of one or more school districts
caused racial segregation in an adjacent district, or
where district lines have been deliberately drawn on the
basis of race. In such circumstances an interdistrict
remedy would be appropriate to eliminate the
interdistrict segregation directly caused by the
constitutional violation. Conversely, without an
interdistrict violation and interdistrict effect, there
is no constitutional wrong calling for an interdistrict
remedy.
Id. at 744-45.
This court has noted that Milliken requires that an
interdistrict remedy be imposed only upon "proof of
unconstitutional governmental action that has been a substantial
cause of a significant interdistrict segregative effect." Lee, 639
19
The magistrate judge held that under Mississippi law, students in
Northeast Clarke County attending Clarkdale are considered interdistrict transfer
students. Neither party contests this holding.
27
F.2d at 1256 (internal quotations omitted). In Lee, a school
district comprising the city of Auburn, Alabama, had been carved
out of the larger school district encompassing Lee County. The
county and city school districts reached an agreement whereby some
county students would be transferred to city schools. Because a
dual school system existed in both districts, the black students
were transferred from their all-black county schools to all-black
city schools. Likewise, the white students were transferred from
all white schools in the county to all-white schools in the city.
We held that these past interdistrict transfers did not justify
continuing interdistrict remedies:
[T]he fact that an interdistrict transfer program was
formerly used in order to maintain racial segregation in
districts operating dual school systems does not support
an interdistrict remedial order unless it is established
that these transfer programs have a substantial, direct
and current segregative effect. In the absence of such
a showing of current segregative effect, . . . no
interdistrict remedy is appropriately ordered upon the
basis of earlier interdistrict transfer programs.
Id. at 1260.
In the past, Enterprise transferred only its white students to
Clarkdale. With the adoption of the HEW plan in 1969, transfers
could occur only if done on a nondiscriminatory basis and if they
did not reduce desegregation. There is no record evidence that the
pre-desegregation transfers have a "substantial, direct, and
current segregative effect."
Neither the Enterprise desegregation plan nor the Lauderdale
desegregation plan, as amended, requires that students continue to
be transferred from Enterprise to Lauderdale. The plans make no
28
mention of any transfers from Enterprise to Clarkdale. From this
silence, Lauderdale urges us to infer that the plans intended the
transfers to continue, even after the Clarkdale contract had
expired. We infer the opposite. The courts and the HEW in 1969
knew that the contract would expire at the end of school year
1986-87, and yet they made no provision to mandate the transfers.
We conclude that the 1969 desegregation plans do not mandate the
continued transfer of students from Northeast Clarke County to the
Clarkdale school.
Enterprise makes a number of other arguments that we need not
consider. It contends that the continued viability of the
Enterprise school district is essential to the desegregation plan,
that the magistrate judge's transfer of students from Enterprise to
Clarkdale violates the desegregation plan, that the transfers are
void because they significantly contribute to the segregation of
the Clarkdale school, and that Enterprise should not be affected by
Lauderdale's desegregation order.
Because there is no proof that the pre-desegregation transfers
of students from Northeast Clarke County to Clarkdale had any
substantial, direct, and current segregative effect, we reverse the
magistrate judge's order transferring students from Northeast
Clarke County to Clarkdale. We do not, of course, bar Lauderdale
and Enterprise from agreeing to future transfers as provided by
Mississippi education law. Such transfers, though, must comport
with the Singleton provisions of the desegregation plans.
29
V. Payments for Clarkdale Transfers.
Lauderdale and Enterprise honored the Clarkdale agreement for
twenty-three years of its twenty-five-year term. One notable
change during that period was that, beginning with the January 1970
semester, all students, not just white students, residing within
the Northeast Clarke County area of Enterprise were transferred for
attendance at the Clarkdale school, and all students, not just
white students, residing within the Meehan area of Lauderdale
desiring to attend were transferred to Enterprise.
Sometime in the 1970's, Lauderdale refused to transfer
students in the Meehan area to Enterprise, in violation of the
Clarkdale agreement.20 Beginning with the academic year 1985-86,
Enterprise refused to pay Lauderdale for the students transferred
from Northeast Clarke County to Clarkdale.21 Lauderdale demanded
attendant funds from Enterprise for a six-year period commencing
with the 1985-86 school year and continuing through the 1990-91
school year.22
In determining how much money was in dispute, the magistrate
judge was aided by the fact that the formula for determining
attendant funds for the first two of the six school years was
contemplated by the parties in their February 13, 1962, contract.
Furthermore, Lauderdale and Enterprise have stipulated to the
contract formula, figures, calculations, as well as the accuracy of
20
So stipulated by the parties.
21
The parties have so stipulated.
22
Its first demand was made in February 1988.
30
the compilation for those two years. They have also stipulated to
the average daily attendance ("ADA") figures for the academic years
1985-86 through 1991-92 as follows:
ADA of Northeast Clarke County students attending Clarkdale
1985-86 - 248.32
1986-87 - 265.75
1987-88 - 263.15
1988-89 - 277.92
1989-90 - 278.31
1990-91 - 266.44
ADA of Meehan area (Lauderdale) students attending Enterprise
1985-86 - 39.37
1986-87 - 38.85
1987-88 - 37.94
1988-89 - 38.10
1989-90 - 31.19
1990-91 - 40.91
The magistrate judge ordered that Enterprise pay Lauderdale
for Clarkdale transfer students during the academic years 1985-86
and 1986-87 and during academic years 1987-88 and 1988-89, but not
during 1989-90 and 1990-91. The magistrate judge ordered
Enterprise to pay for those interdistrict transfers ordered by the
district court for the years 1991-92 and subsequent years. Finding
no error, we affirm.
A. 1985-86, 1986-87.
The magistrate judge held that Lauderdale had breached its
duty to pay attendant funds to Enterprise and ordered Lauderdale to
pay Enterprise $29,237.54 for the year 1985-86 and $74,355.05 for
the year 1986-87. These amounts were readily calculated under the
Clarkdale agreement.
31
1. No Material Breach by Lauderdale.
Enterprise argues that Lauderdale breached the Clarkdale
agreement because it failed to transfer all of its Meehan area
students to Enterprise as agreed.23 This breach, Enterprise argues,
voided the agreement and relieved Enterprise of its obligation to
pay Lauderdale.
Under Mississippi law, material breach by either party
terminates a contract. A breach is material if (1) a party fails
to perform a substantial part of the contract or one or more of its
essential terms or conditions, (2) the breach substantially defeats
the contract's purpose, or (3) the breach is such that upon a
reasonable construction of the contract, it is shown that the
parties considered the breach as vital to the existence of the
contract. UHS-Qualicare v. Gulf Coast Community Hosp., 525 So. 2d
746, 756 (Miss. 1987).
Despite Lauderdale's failure to transfer its Meehan students,
Enterprise continued to meet its obligations under the contract
without objecting to the method of transportation of the Meehan
students for several years. As a result, the magistrate judge held
that the failure to transport must not have been a breach of an
essential term or condition of the contract, that the failure did
not substantially defeat the purpose of the contract, and that the
23
The pertinent provision of the Clarkdale agreement is article VIII,
which reads, "The eligible school children of the Lauderdale County School
District residing in [the Meehan area] shall be and they are hereby assigned and
legally transferred by [the Board of Trustees of the Clarke County Consolidated
School District of Lauderdale County, Mississippi, later the Enterprise school
district] to the Enterprise Attendance Center of the Clarke County Consolidated
School District or its successor for the full term of this agreement."
32
parties did not consider the term to be vital to the existence of
the contract. We agree. In addition, article XVI of the Clarkdale
agreement provides that breach of one part of the agreement does
not justify breach of its other parts.24
2. Enterprise's Offset Argument.
Enterprise argues that it should recover damages for
Lauderdale's failure to transfer the Meehan students and that these
damages should offset any damages awarded to Lauderdale. We reject
Enterprise's argument on procedural grounds.
In its original answer in state court, Enterprise argued that
Lauderdale's breach provided Enterprise with an affirmative defense
to its own contract breach:
Third Defense
Affirmative
The plaintiff has failed to perform as required by
said contract. The plaintiff has wholly failed for
approximately ten years to perform pursuant to Paragraph
III of said agreement. The plaintiff has wholly failed
to perform pursuant to Paragraphs VIII and IX of said
agreement for at least a twenty year period in that it
did not assign, transfer and transport all children in
the geographical area eligible under the agreement to the
Enterprise School District.
And now having fully answered said complaint, these
defendants respectfully pray that the Complaint for
Declaratory Judgment filed herein against them be
dismissed at the cost of the plaintiff.
The next section of Enterprise's answer is labeled "Counterclaim,"
24
Article XVI provides, "The breach of any part of this agreement by
either party thereto shall not alter the binding effect of all other covenants
and agreements herein contained upon both of said parties."
33
thus indicating that Enterprise meant to raise the Meehan breach as
an affirmative defense rather than a counterclaim. The
counterclaim section ended with the following requests for relief,
none of which relates to the Meehan transfers: that the Clarkdale
agreement be declared null and void, that attempts by the Clarke
County board and by Lauderdale to transfer Northeast Clarke County
students be declared null and void, that Lauderdale be enjoined
from accepting such students, that the Clarke County board be
enjoined from transferring or transporting such students, and that
Enterprise be awarded reasonable attorneys' fees and court costs.
Ordinarily we would need to consider whether Enterprise's
claim against Lauderdale for breach of contract is a counterclaim,
and, if so, whether Enterprise's failure to raise the counterclaim
waives the claim under FED. R. CIV. P. 13(a). Furthermore, we might
need to consider whether Enterprise's argument was erroneously pled
as an affirmative defense and whether the district court abused its
discretion in refusing to treat the argument as a counterclaim.
See FED. R. CIV. P. 8(c). We need not address these issues,
however, as Enterprise raises the argument that it should recover
damages for the Meehan breach for the first time on appeal, so we
decline to consider the argument. See Oliver v. Collins, 914 F.2d
56, 60 (5th Cir. 1990).
3. Void As Unconstitutional.
Enterprise alleges that the Clarkdale agreement is
unconstitutionally void because it provided that Clarkdale would be
34
a "white attendance center." Before 1970, only white students in
Northeast Clarke County were able to transfer to Clarkdale; black
students continued to attend the segregated black school in
Enterprise.
In September 1970, this course of conduct changed. Lauderdale
and Enterprise began to transfer students of both races, presumably
in order to comply with the Singleton provision of the HEW plans
for each respective school district.
Under Mississippi state law, the subsequent actions of the
parties may modify the contract to an extent consistent with the
subsequent course of conduct. Broome Constr. Co. v. Beaver Lake
Recreational Ctr., 229 So. 2d 545, 547 (Miss. 1969). We believe
that the Clarkdale agreement was modified so as to permit the
transfer of blacks. Therefore, the agreement is not
unconstitutionally void, and the magistrate judge did not err in
relying upon the agreement to award Lauderdale recovery for the
1985-86 and 1987-87 academic years.
B. 1987-88, 1988-89.
The Clarkdale agreement expired at the end of the 1986-87
year. Thereafter, any rights of Lauderdale to payment were
governed by Mississippi law. During the school years 1987-88 and
1988-89, MISS. CODE ANN. § 37-19-27 read:
Legally transferred students going from one school
district to another shall be counted for supportive
services by the school district wherein the pupils attend
school, including maintenance costs, but shall be counted
for transportation allotment purposes in the school
district which furnishes or provides the transportation.
35
When such transfer shall be from school district to
another, the superintendent of schools of the school
district from which said students are transferred shall,
within thirty (30) days after a request in writing to do
so by the superintendent of schools of the other school
district, issue his warrant in an amount equal to the
total number of pupils attending the school from such
school district multiplied by the average expenditure
pupil in the school district from which the pupils are
transferred, on the maintenance fund to pay any sums due
hereunder to the said school district wherein the said
students are attending. His failure to do so shall
render him liable therefor in the amount thereof on his
official bond.
1986 Miss. Laws ch. 492, § 104 (amended 1989).
The basic purpose of the statute was to require local funds to
follow transfer students. To that end, the statute required the
district superintendent of the transferring school district to
request in writing that the superintendent of the receiving school
district issue his warrant identifying the funds requested.
Lauderdale did make such a request in writing for the funds
due from Enterprise. Enterprise District Superintendent Michael
Taylor brought the request to the attention of the Enterprise
board, which unanimously voted not to pay funds to Lauderdale. As
a result, Taylor failed to issue his warrant.
The magistrate judge held that a forfeiture of Taylor's
official bond would be inequitable because his actions were
controlled by his school board. The magistrate judge awarded
Lauderdale $96,731.95 for the 1987-88 school year and $102,237.76
for the 1988-89 school year. Enterprise does not dispute this
award on appeal.
36
C. 1989-90 and 1990-91.
The magistrate judge refused to award Lauderdale any student
money for 1989-90 and 1990-91.25 In 1989, § 37-19-27 was amended
to require school boards approving student transfers to enter into
contracts for the payment or nonpayment of any portion of their
local maintenance funds that they deem fair and equitable. Because
Lauderdale and Enterprise did not enter into any such arrangement,
the magistrate judge held that neither party was obligated to pay
transfer funds for the years beginning with the year 1989-90.
Lauderdale does not dispute the magistrate judge's
interpretation of MISS. CODE. ANN. § 37-19-27 but argues that it
should recover funds under the theory of quantum meruit. In order
to recover under quantum meruit, a plaintiff must show (1) that it
rendered services under the reasonable expectation that it would be
paid and (2) that the defendant knew that the services were being
performed with the expectation that it would pay for the work.
Redd v. L & A Contracting Co., 151 So. 2d 205, 209 (Miss. 1963).
Lauderdale argues that Enterprise should have known that
Lauderdale expected payment because Lauderdale had made written
demands on Enterprise. The Mississippi statutory scheme belies
Lauderdale's argument. The Mississippi statutes, beginning in
1989, required school boards to enter into agreements to divide
money allocated to transfer students. MISS. CODE ANN. § 37-19-27.
Because the Clarke County board failed to enter into an agreement,
25
Apparently, no question of attendant funds for the years 1991-92 was
litigated.
37
and because the twenty-five-year contract had expired, it had no
reasonable expectation of payment from Lauderdale.
D. 1992-93 and Subsequent Years.
For 1992-93 and subsequent years, the district court ordered
Enterprise to transfer certain students to Clarkdale and ordered
Enterprise to make payments to Lauderdale for the transfers.
Although we reverse the transfers, we affirm that Enterprise should
pay for any transfers made under the authority of the magistrate
judge.
VI. Stonewall Annexation.
The magistrate judge held that the Stonewall area had been
validly annexed by Quitman for two reasons. First, Enterprise was
equitably estopped from arguing that the Stonewall area was
improperly annexed to Quitman. Second, Quitman's control over the
Stonewall area would comport with Killingsworth. We agree.
In 1956, pursuant to 1953 Mississippi Laws, Extraordinary
Session, chapter 12, the schools of Clarke County were reorganized
into the Enterprise and Quitman districts. Enterprise (then the
Clarke County Consolidated School District) comprised the northern
third of Clarke County, including the Stonewall area. Quitman
(then the Quitman Consolidated School District) comprised the
southern two-thirds of Clarke County. The state laws created a
county school board with limited authority over both districts.
After reorganization, Enterprise's two de jure black schools,
38
an elementary school and a high school, served black students in
Enterprise and Stonewall. The two de jure white schools in
Enterprise, an elementary school and a high school, served all the
white students in the district, with the exception of the white
students living in the Stonewall area, who attended the Stonewall
school.
In March 1961, the Enterprise board announced an intention to
convert the Stonewall school to an elementary school for grades one
through six.26 Stonewall students in grades seven through twelve
would be required to attend the de jure white Enterprise high
school. Upon learning of the Enterprise board's intent to convert
the Stonewall school, parents and community members of Stonewall
filed a petition requesting the detachment of the Stonewall area
from Enterprise and annexation to Quitman.27 The petition contained
a total of 639 qualified electors of the Stonewall area.
The Quitman board unanimously passed a resolution approving
the annexation of the Stonewall area, which would "become effective
when approved as required by law, on July 1, 1962."28 Over the
objections of some of the citizens of the Stonewall area, the
Enterprise board adopted a long-range plan providing for the
conversion of the Stonewall school.29 The next day, Enterprise met
with the Clarke County board concerning the long range plan and the
26
March 5, 1962.
27
March 10, 1962.
28
March 12, 1962.
29
March 13, 1962.
39
annexation of the Stonewall area to Quitman. At this meeting, the
Clarke County board tabled Enterprise's long-range plan and adopted
a resolution detaching the Stonewall territory from Enterprise and
annexing it to Quitman.
Enterprise appealed the Clarke County board's annexation
decision to the Circuit Court of Clarke County. Griffin v. Clarke
County Bd. of Educ., No. 6176 (Miss. Ch. filed Mar. 23, 1962). The
citizens of the Stonewall area filed an injunction against
Enterprise in the Chancery Court of Clarke County. Green v.
Cooper, No. 6788 (Miss Ch. filed Mar. 30, 1962). The complaint
alleged that Enterprise, in seeking to convert the Stonewall
school, acted arbitrarily, capriciously, and without regard to the
general welfare, health, and morals of the affected students.
Moreover, the complaint alleged that Enterprise did not have the
facilities to accept the 216 white Stonewall students in grades six
to eleven who would be required to attend the white Enterprise
school.
The Clarke County board adopted a resolution disapproving the
conversion of the Stonewall school. The resolution stated that
Enterprise did not have sufficient existing facilities properly and
adequately to teach students in grades seven through twelve without
the Stonewall high school.30 The Clarke County board was granted
leave to intervene in the Green v. Cooper, No. 6788 (Miss Ch. filed
Mar. 30, 1962), to enjoin Enterprise from converting the Stonewall
30
April 2, 1962.
40
school.31 Enterprise filed a petition for writ of certiorari
against the Clarke County board, seeking to set aside the board's
resolution disapproving the conversion of the Stonewall school.
Williams v. Riley, No. 6182 (Miss. Cir. Ct. filed May 1, 1962).
After these suits were filed, Enterprise and Quitman entered
into extensive negotiations in an attempt to resolve the problems
surrounding the Stonewall area. On May 15, 1962, the Enterprise
and Quitman boards, Clarke County's and Quitman's superintendents,
a member of the State Educational Finance Commission, the Executive
Secretary of the State Educational Finance Commission, four members
of the Clarke County board, and two citizens of the Stonewall
territory met and discussed at length the annexation of Stonewall
and other proposals for the continued education of the students
living in the Stonewall area.
Enterprise and Quitman entered into a compromise memorialized
in scattered documents, school board minutes, and an agreement
dated June 11, 1962.32 The magistrate judge found that the
31
April 13, 1962.
32
The most important sources of the agreement are a proposal by the
Enterprise superintendent, a counterproposal by the Quitman superintendent, and
the agreement of June 11, 1969, between Enterprise and Quitman. The proposal of
the Enterprises superintendent reads:
I The suit of Green vs. Cooper (Injunction) to be dismissed.
II Williams vs. Riley (6182) in Circuit Court dismissed (Appeal
from order of County Board of Education April 2 disapproving
District Board order of March 5).
III Order of April 2 of County Board to be rescinded.
IV Order of March 5 of Clarke County District Board to be amended
in Section I(b) to read as follows: "Grades 1 through 8 to be
taught at Stonewall".
(continued...)
41
compromise consisted of six major parts: (1) The Stonewall
territory would be detached from Enterprise and annexed to Quitman,
(2) all black students residing in the Stonewall area would be
transferred to the all-black schools located in Enterprise;
(3) state funds would be paid to the school district where the
32
(...continued)
V Griffin vs. Board of Education (6176) Appeal on Bill of
Exceptions from transfer of territory dismissed.
VI Order of County Board of Education of March 14 to be rescinded
(Transfer of Territory).
VII Stewart vs. Rathburn dismissed.
VIII All high school students now attending Stonewall to be
transferred to any attendance center which will accept them
and pro rata share of District and state funds and teacher
units to follow child. Buses to be run to Enterprise and
Quitman, all other transfers will furnish their own
transportation.
IX Long Range Plan of March 13th to be amended as follows and
approved by district and county boards.
1. Stonewall School to have grades 1-8.
2. Construction and renovation immediately with
equal priority of Items 2, 3, 5, 6 and 7, total
cost - $110,000.00.
3. Item 4 next priority.
X State funds, 16th Section Funds and $45,000.00 negotiable
notes to be used to finance improvements to be made this
summer.
The counter-proposal from the superintendent of Quitman to the president of the
Clarke County board proposed an agreement whereby, among other things, Quitman
agreed that it would transfer children living in the Stonewall area to the black
school in the Clarke County district and that Quitman would agree not to operate
a high school in Stonewall during the 1962-63 school year. The letter began,
"Relative to the proposed annexation of the former Stonewall Consolidated School
District to the Quitman Consolidated School District." The letter noted that the
Quitman school board had adopted, by motion, the contents of the letter on
June 5, 1969.
The June 11, 1969, agreement provided that all blacks in the Stonewall area
would be transferred from Quitman to Enterprise, that state funds for each
student should be paid to the district at which the child attends, that the
agreement would be effective upon approval by the Board of Education of Clarke
County and the State Education Finance Commission, and that the agreement should
continue for 25 years.
42
student attends school, (4) the agreement would be effective upon
approval by the Clarke County board and the State Education Finance
Commission, (5) Griffin v. Clarke County Board of Education,33 Green
v. Cooper,34 and Williams v. Riley35 would be dismissed, (6) and the
agreement would continue for a period of twenty-five years.
On June 11, 1962, the Enterprise and Quitman boards approved
the transfer of blacks from Quitman to Enterprise. On June 12,
1962, the Clarke County board approved the June 11, 1962,
agreement. On June 18, 1962, the Mississippi Educational Finance
Commission approved the annexation of the Stonewall territory and
the June 11, 1962, agreement. For ease of discussion, we refer to
the entire compromise as the "Stonewall compromise agreement" and
the June 11, 1962, agreement related to transfers as the "June 11,
1962, agreement."
On May 21, 1965, suit was filed in federal district court
against Enterprise, Quitman, and the Clarke County board, seeking
to dismantle the dual school system being operated in Clarke
County. Killingsworth v. Enterprise Consolidated Sch. Dist., No.
1302(E). Quitman and Enterprise, pursuant to the preliminary
orders entered in the Killingsworth case, submitted desegregation
plans that incorporated a grade-by-grade "freedom of choice"
concept. These plans were tentatively accepted on August 5, 1965,
33
No. 0176 (Miss. Ch. filed Mar. 23, 1962) (the annexation appeal case).
34
No. 6788 (Miss. Ch. filed Mar. 30, 1962) (the Stonewall injunction
case).
35
No. 6182 (Miss. Cir. Ct. filed May 1, 1962) (Enterprise's petition for
certiorari).
43
and revised on September 22, 1966.
Through discovery, the Killingsworth plaintiffs were made
aware of the June 11, 1962, agreement. On June 14, 1967, the
plaintiffs filed for supplemental relief, requesting the district
court to declare the June 11, 1962, agreement unconstitutional. In
its final order, issued July 19, 1967, the district court in
Killingsworth did not decide the constitutionality of either the
June 11, 1962, agreement or the annexation of Stonewall by Quitman.
The Killingsworth court's final order held that the previously
approved "freedom of choice" plans failed to meet the standards for
desegregation. The court specifically enjoined Enterprise,
Quitman, and the Clarke County board from discriminating on the
basis of race or color, ordered Enterprise, Quitman and the Clarke
County board to take affirmative "action to disestablish all school
segregation and to eliminate the effects of the dual school
system," allowed all students irrespective of race or color to
exercise their choice of which school to attend in their respective
school districts, held that overcrowding of the particular school
chosen would be the only reason for denying a student's choice of
which school to attend, and held that there would be no
interdistrict transfers between Enterprise and Quitman "except on
terms and by procedures generally applicable regardless of race."
On July 3, 1969, this court reversed and remanded
Killingsworth, requiring desegregation plans to be filed by August
27, 1969. The court further ordered that if no plan were submitted
by the respective school districts, HEW could file a desegregation
44
proposal on August 11, 1969, and the parties could object thereto.
On August 11, 1969, HEW filed separate desegregation plans for
Enterprise and Quitman. Enterprise objected to its HEW plan,
filing a motion to strike and to stay action on the plan.
The HEW plans for both Enterprise and Quitman called for
immediate desegregation of all schools, including teachers and
staff members. Intradistrict transfers are not allowed under the
plans unless the student seeking the transfer would be a minority
in the transferee school. The Singleton provisions in the plans
permitted a school board to grant interdistrict transfers only "on
a non-discriminatory basis, except that it shall not consent to
transfers where the cumulative effect will reduce desegregation in
either district or reinforce the dual school system." On
November 6, 1969, this court ruled that the desegregation plans
filed by HEW would be implemented immediately.
For each school year between 1968-69 and 1990-91, some
students residing in the Stonewall area filed petitions requesting
transfers from Quitman to Enterprise. The procedure has been as
follows:
(1) Quitman for each school year after 1968-69 has
consistently denied such requests for transfer by
Stonewall students to attend school in the Enterprise
School District.
(2) Such Stonewall students, upon being denied approval
of their transfer requests by Quitman, have appealed to
the Clarke County Board of Education to overrule the
action of Quitman in denying such requests for transfer;
and
(3) In each and every case after 1968-69 the Clarke
County Board of Education has overruled Quitman and
approved the requests for transfers.
45
The Mississippi legislature phased out county-wide boards of
education effective January 1, 1992. Consequently, the appeal
process by which some Stonewall students attended Enterprise was
eliminated.
The magistrate judge held that Enterprise was equitably
estopped from arguing that Stonewall was not annexed to Quitman and
that the annexation was resolved in Killingsworth. Enterprise
argues that the entire 1962 Stonewall agreement is void because it
is unconstitutional. Enterprise contends that the annexation of
Stonewall by Quitman cannot be legally separated from the transfer
of all black Stonewall children to Enterprise and that both actions
should be voided. We agree. The annexation should be viewed
separately from the rest of the agreement. By itself, the
annexation is constitutional.
A. Equitable Estoppel.
Equitable estoppel requires three elements: "(1) Belief and
reliance on some representation; (2) Change of position as a result
thereof; (3) Detriment or prejudice caused by the change of
position." Suggs v. Town of Caledonia, 470 So. 2d 1055, 1057
(Miss. 1985) (citing Covington County v. Page, 456 So. 2d 739
(Miss. 1984)). The magistrate judge held that Quitman made a
representation that the Stonewall territory was lawfully a part of
Quitman, that Quitman had sufficiently relied upon these
representations, and that Quitman suffered detriment as a result of
Enterprise's representations.
46
Enterprise admitted that Stonewall belonged to Quitman during
the pendency of Killingsworth. During a December 3, 1969, hearing,
Enterprise submitted as evidence a map showing the Stonewall area
as part of Quitman. Enterprise's superintendent testified under
oath that the Stonewall territory was annexed to Quitman in 1962.
The transcript of the hearing reads:
Q: We've indicated on the map introduced into evidence
by stipulation known as the Stonewall area, when
was that area detached from the Enterprise School
District and made a part of the Quitman district?
A: I believe this was in 1962.
Furthermore, in its objection to HEW's desegregation plan for
Enterprise, Enterprise admitted that Stonewall was part of Quitman.
Enterprise's objection reads:
The foregoing facts demonstrate beyond doubt that
[Enterprise] is dependent for its financial solvency, the
quality of its educational program and its very existence
upon pupils who reside outside of [Enterprise] but who
have elected to attend the schools administered by
[Enterprise].
If and when Stonewall Elementary School is closed, the
Enterprise Elementary School must be prepared to
accommodate additional students from the Stonewall
Attendance Zone of the Quitman Consolidated School
District, who will, without doubt, elect to attend school
at Enterprise.
(emphasis added). For over twenty-six years, from June 1962 until
June 17, 1988, when suit was filed, Enterprise did nothing to
indicate that the Stonewall area had not lawfully been annexed to
Quitman.
On appeal, Enterprise asserts that a representation may not be
used as a basis for equitable estoppel unless the other party is
47
ignorant of the true facts. See Chapman v. Chapman, 473 So. 2d
467, 470 (Miss. 1985). Although it is true that Quitman was fully
aware of the facts surrounding the annexation, Quitman was unaware
that Enterprise would suddenly challenge the annexation after
decades of acquiescence. Equitable estoppel applies to parties who
take inconsistent positions. See United States v. Dallas County
Commission, 548 F. Supp. 794, 872-75 (S.D. Ala. 1982), aff'd in
part, rev'd in part on other grounds, 739 F.2d 1529 (11th Cir.
1984), and authorities cited therein.
Enterprise also argues that the doctrine of equitable estoppel
cannot be used to bar the invocation of constitutional rights. The
admittedly sparse authority on applicability of equitable estoppel
indicates the opposite. Two district courts have held that parties
were equitably estopped from arguing constitutional violations. In
Williams v. City of Dothan, 745 F.2d 1406 (11th Cir. 1984), the
district court applied equitable estoppel, although the court of
appeals reversed on the ground that the elements of equitable
estoppel had not been met. Id. at 1410. In Dallas County
Commission, the district court, in an alternative holding, held
that a party was equitably estopped from arguing a constitutional
right. 548 F. Supp. at 872-75. The doctrine of laches, which is
similar to equitable estoppel,36 may prevent a plaintiff from
enjoining changes effected without preclearance as required by the
36
A party asserting laches must show "(1) a delay in asserting a right or
claim; (2) that the delay was not excusable; and (3) that there was undue
prejudice to the party against whom the claim is asserted." Save Our Wetlands,
Inc. (SOWL) v. United States Army Corps of Engineers, 549 F.2d 1021, 1026 (5th
Cir.), cert. denied, 434 U.S. 836 (1977).
48
Voting Rights Act of 1965.37 Lopez v. Hale County, 797 F. Supp.
547, 550-52 (N.D. Tex. 1992) (three-judge court), aff'd mem.,
113 S. Ct. 954 (1993); but see Dotson v. City of Indianola, 514
F. Supp. 397, 400-01 (N.D. Miss. 1981), aff'd mem., 455 U.S. 936
(1982). Enterprise therefore lacks legal support for its argument
that equitable estoppel is inapplicable to constitutional claims.
Enterprise argues that equitable estoppel is inapplicable to
a governmental entity that is asserting the constitutional rights
of a large group of people. We have found no authority to support
such a proposition.
Enterprise also claims that, in a suit against a state
political subdivision, the doctrine of equitable estoppel applies
only if the plaintiff is a private individual and not another state
political subdivision. Rye, the case cited by Enterprise, holds,
however, that the doctrine may apply to suits by private individual
against political subdivisions. It does not foreclose application
in other circumstances: "The State, its counties, subdivisions and
municipalities may be equitably estopped under the proper
circumstances." 521 So. 2d at 908-09.
Enterprise argues that Quitman's belief in the validity of the
annexation did not harm Quitman. We disagree. Quitman planned,
budgeted, forecasted, funded, hired teachers and staff members,
paid taxes, and maintained school property since June 11, 1962,
37
Although there appears to be no bar under constitutional law to the use
of the doctrine of laches, under Mississippi law "the State is not responsible
for the laches of its officers." Bd. of Trustees of Monroe County Bd. of Educ.
v. Rye, 521 So. 2d 900, 908 (Miss. 1988).
49
under the assumption that the Stonewall territory was properly
annexed. Although Quitman received tax revenues from property in
the Stonewall district, Quitman was deprived of state funding for
those students who transferred to Enterprise.
Next, Enterprise claims that it affirmatively made demands on
Quitman to pay money to Enterprise. But this has nothing to do
with Enterprise's failure to argue that it owned the Stonewall
area, or its representations that it did not own the Stonewall
area. We therefore agree with the magistrate judge that Enterprise
is equitably estopped from challenging the validity of the
Stonewall annexation.
B. Killingsworth.
The magistrate judge held that Killingsworth adjudicated
ownership of the Stonewall area. Enterprise disagrees, arguing
that the issue of annexation was never directly litigated in
Killingsworth, and therefore it should not be inferred that the
Killingsworth court approved the Stonewall annexation.
The final desegregation orders in Killingsworth were based
upon interdistrict boundaries that assumed the validity of the
annexation of Stonewall by Quitman. Although neither the three-
judge district court nor this court in Killingsworth specifically
ruled on the validity of the annexation, they did not have cause to
do so. All parties, including Enterprise, represented to the court
that the annexation was valid. Thus, it is not surprising that the
record in Killingsworth reveals no debate about the validity of the
50
Stonewall transfers. We agree with the magistrate judge that it is
far too late for Enterprise to protest the annexation.
C. Separability.
Enterprise argues that the annexation of Stonewall is void
because it is tainted by the unconstitutionality of the June 11,
1969, transfer agreement. The magistrate judge treated the
annexation of Stonewall and the transfer of black students from
Stonewall as a part of a larger agreement. The magistrate's
factual finding is not clearly erroneous. See FED. R. CIV. P.
52(a). But even assuming that the Stonewall annexation and June
11, 1969, transfer agreement are linked, the annexation is not
void.
The annexation of Stonewall was completed under procedures
provided by state law. School districts in Mississippi are
political subdivisions, and state law provides procedures for
changing their boundaries. In 1962, the statutory annexation
procedure was contained in MISS. CODE ANN. § 6274-06, which provided:
If a petition signed by a majority of the qualified
electors of specifically described territory of an
existing school district shall be filed with the county
board of education requesting that said described
territory be taken from such existing district and
annexed to an adjacent district, the county board of
education, after consideration thereof, and with the
consent and approval of the board of trustees of the
district to which such territory is to be annexed, shall
have the power and authority, in its discretion to take
such territory from the existing district and annex same
to the adjacent district. However, before doing so, the
county board of education must find and determine that
the taking of the territory from the existing school
district will not seriously interfere with or impair the
efficiency of such school district, and all orders
51
adopted under the provisions of this section shall be
invalid unless such finding and determination be made.
A review of the record show that the necessary steps were
fulfilled. A petition was filed with the Clarke County
Superintendent of Education on March 10, 1962; the Quitman board
consented to the annexation on March 12, 1960; the Clarke County
board consented to the annexation on March 14, 1960. It was only
later that Enterprise sued to challenge the annexation (Griffin v.
Clarke County Bd. of Educ.). We accept as true the magistrate
judge's finding that Enterprise's court challenge was dropped as
part of the Stonewall compromise agreement, an agreement that
included that June 11, 1969, contract. We are unable to tell from
the record why Enterprise dropped its legal challenge to the
annexation. Perhaps Enterprise believed that its receipt of
transfer students and their attendant funds compensated it for
dropping the lawsuit; or, perhaps Enterprise's appeal had no legal
merit.
An action by a state or its political subdivisions pursuant to
established political procedures is not unconstitutional merely
because the support for such an action is garnered through the
promise of an unconstitutional agreement. Thus, the annexation is
not void merely because Quitman's agreement to transfer the black
Stonewall students may have procured Enterprise's agreement to drop
its lawsuit.
Enterprise argues that if any part of an unconstitutional
agreement is void, all of its provisions must be voided. Even
assuming that the political act of annexation can be linked to the
52
rest of the compromise agreement, we find Enterprise's argument
unpersuasive. None of the authorities cited by Enterprise stands
for the proposition that an entire agreement is void if one of its
parts or provisions is unconstitutional.38
D. Constitutional Validity of Annexation.
A boundary change is void only if it contributes to
segregation.39 The Stonewall annexation did not have the effect of
increasing segregation. Neither before, nor immediately after the
annexation, did any black student in either of the two school
districts go to the same school with a white student. The
Stonewall annexation was no more promotive of segregation than was
any of the other pre-segregation boundary changes among
Mississippi's school districts. As Quitman points out, Stonewall
originally belonged to the Quitman school district and was later
transferred to Enterprise under Mississippi's 1953 school
reorganization. If all school district boundary changes during
segregation were constitutionally void, then both the original
transfer of Stonewall to Enterprise, and its later return to
Enterprise, are void. Thus, Stonewall would belong to Quitman.
38
One case actually seems to show the opposite. In Shelley v. Kraemer,
334 U.S. 1 (1948), the Court held a state could not enforce a restrictive
covenant to prevent a black person from taking possession of a house. It would
have been self-defeating to void the original sale of the house containing the
restrictive covenant, as that would have broken the chain of title, thus
jeopardizing the black purchaser's right of possession. Because this was the
very right vindicated by the Court, we reject the idea that an unconstitutional
clause in a contract automatically voids the entire contract.
39
For example, the annexation of a predominantly white territory by a
predominantly white school district might be void.
53
E. Material Breach by Quitman.
Enterprise argues that Quitman materially breached the
agreement by failing to pay money to Enterprise for students
transferred from Quitman to Enterprise. Enterprise claims that,
therefore, it is not obligated to honor the part of the agreement
transferring Stonewall to Quitman. But even though Quitman stopped
honoring the transfer agreement in 1968, only now does Enterprise
claim that the annexation is void because of Quitman's "material
breach." Just as Enterprise is equitably estopped from arguing
that the annexation is void as unconstitutional, Enterprise is
equitably estopped from arguing that the annexation is void for
material breach by Quitman.
VII. Transfers from Stonewall to Enterprise.
The magistrate judge ordered the transfer of 100 to 125 black
students from the Stonewall area to Enterprise. Quitman opposes
the transfer, arguing that the transfer is not necessitated by
Killingsworth and that there has been no showing of constitutional
violation. We agree with Quitman and reverse the magistrate judge.
The Stonewall area is lawfully annexed to the Quitman
district. Therefore, the transfer of black students ordered by the
magistrate judge is an interdistrict transfer properly analyzed
under Milliken. There has been no showing of a government action
with substantial direct, or current segregative, effect. See Lee,
639 F.2d at 1260.
54
The annexation of Stonewall was not an interdistrict act of
segregation, nor was the transfer agreement. Mississippi schools
were completely segregated before the transfers. After the
transfers, they were still completely segregated. Furthermore, the
transfer agreement has no current segregative effect, because it is
no longer operable. Absent a finding of an interdistrict act,
segregative intent, and a continuing segregative effect, the
magistrate judge had no discretion to order the transfer of
students from Stonewall to Quitman.
Killingsworth did not require the interdistrict transfers from
Quitman to Enterprise. The orders of the three-judge court in
Killingsworth were reversed. United States v. Hinds County Sch.
Bd., 423 F.2d 1264 (5th Cir. 1969), cert. denied., 396 U.S. 1032
(1970). This court did nothing more than order immediate
implementation of the HEW plans for Enterprise and Quitman.
Although the HEW plans prohibited certain interdistrict transfers,
they did not affirmatively mandate any transfers.
Merely because the Killingsworth court was aware of
interdistrict transfers does not mean it approved of them. See
United States v. Hinds County Sch. Bd., 516 F.2d 974, 975 (5th Cir.
1975) (holding that the fact that the 1969 order did not dismantle
school bus routes designed for a segregated school system does not
mean that the order approved of the bus routes). Furthermore, the
Killingsworth courts were aware that the transfer agreement would
end in twenty-five years. Thus, if awareness is equated with
approval, Killingsworth actually would require the cessation of
55
interdistrict transfers under the June 11, 1962, agreement.
The magistrate judge believed that the transfers of black
students from Stonewall was essential to maintain Enterprise.
Since the Killingsworth desegregation order, Enterprise has had a
total student enrollment between 768 and 858. The Enterprise
superintendent testified that in order to maintain its
accreditation, the school needs from 900 to 1,110 students. The
magistrate judge crafted his order so that enough students attended
Enterprise for it to remain viable.
The decision of this court eliminating transfers both to and
from the Enterprise will not significantly reduce the Enterprise
school system. Even so, we do not think that Enterprise's
viability should be a dominant factor in drafting interdistrict
transfers. If insufficient students are transferred to Enterprise
by court order, the consequences are not necessarily disastrous.
Enterprise could get more students by transferring more students
from other districts, so long as these transfers comport with the
desegregation orders and Mississippi state law. Enterprise could
attempt to annex more territory, subject to the same conditions.
If these methods fail, the Enterprise district could be dissolved,
provided that the district court is satisfied that the elimination
of the district would not reduce desegregation.
In conclusion, the transfer is not necessary to remedy an
interdistrict violation, to comply with the Killingsworth order, or
to maintain Enterprises's viability. The magistrate judge abused
his discretion in ordering the transfer of students from Stonewall
56
to Enterprise.
VIII. Funds for Students Transferred from Stonewall.
Enterprise seeks to recover money from Quitman for Stonewall
students transferred from Quitman to Enterprise. Because the
applicable Mississippi law has changed over the years, we approach
this issue chronologically.
A. 1968-69 Through 1986-87.
The magistrate judge held that Enterprise should recover from
Quitman for the years 1987-88 but not for previous and subsequent
school years. Finding no error, we affirm.
We briefly explain the relevant facts. Beginning with the
June 11, 1962, agreement, black Stonewall students were transferred
from the Stonewall area to Enterprise. At the end of the 1967-68
school year, Quitman refused to pay Enterprise any transfer funds
and denied the requests by Stonewall students to transfer to
Enterprise. The Clarke County board overruled Quitman's denials of
the transfer requests.
On April 12, 1973, Enterprise's lawyer sent a letter to the
Quitman superintendent requesting payment of "certain funds" the
Enterprise board considered due to Enterprise. On January 9, 1974,
Quitman's superintendent indicated that the Quitman school board
had reviewed Enterprise's letter and had taken no action.40
40
On December 14, 1973, the Enterprise superintendent stated to the
Quitman superintendent that Enterprise considered the June 11, 1962, contract to
(continued...)
57
Enterprise again requested funds on April 10, 1973, September 11,
1973, November 25, 1975, March 8, 1977, June 4, 1987, February 18,
1988, and October 26, 1988.
Beginning in December 1988, the magistrate judge signed a
series of orders staying the collection of transfer funds and
preserving all claims to funds. The entry of these orders did not
relieve the parties of their obligations and liabilities under the
applicable Mississippi Code provisions.
No law allows Enterprise to recover during the applicable time
period. Enterprise cannot recover funds under the June 11, 1962,
agreement because, as Enterprise admits in its brief, the agreement
is void as unconstitutional. The magistrate judge held that during
1968-69 to 1986-87, no Mississippi statute provided for the
interdistrict payment of funds. A review of the applicable law
during this period confirms the magistrate judge's conclusion.
In 1962, the Mississippi legislature enacted a statute
allowing the transfer of individual students from one school
district to another by the mutual consent of the boards of trustees
of all school districts concerned. 1962 Miss Laws, ch. 357, § 1,
codified at MISS CODE ANN. § 6248-07 (effective May 10, 1962). The
section provided that certain state funding would follow a
transferred student:
Legally transferred students going from one school
district to another shall be counted for teacher
40
(...continued)
be valid, except as to the reference to the race of the students. At some time,
Enterprise had submitted a race-neutral contract to Quitman for approval, but
Quitman never approved it.
58
allotment and allotments for other current costs by the
school district wherein the pupils attend school; but
shall be counted for transportation allotment purposes in
the school district which furnishes or provides the
transportation.
Id. The statute made no provision for payments between districts.
In 1972, the legislature transferred part of the 1962 provision to
a newly-created § 37-19-33 (later renumbered § 37-19-27), entitled
"Counting of legally transferred students." Section 37-19-33
contained the same language in the 1962 law quoted above, except
that if there was a transfer from one county to another, the county
at which a child attended school would pay the county of residence
a fee equal to the average cost of educating a child in the county
of residence multiplied by the number of students transferred.41
In 1978, § 37-19-33 was renumbered as § 37-19-27.
The 1962 statute does not speak to the allocation of payments.
Only in 1987 was § 37-19-27 amended to provide for payments.
Therefore, the magistrate judge was correct in concluding that no
41
Section 37-19-33 provided in full:
Students going from one school district to another, other than a
municipal separate school district shall be counted for teacher
allotment and allotments for other current costs by the school
district wherein the pupils attend school, including maintenance
costs; but shall be counted for transportation allotment purposes in
the school district which furnishes or provides the transportation.
When such transfer shall be from one county to another, the county
superintendent of education of the county from which said students
are transferred shall, within thirty days after a request in writing
to do so by the county superintendent of education of the other
county, issue his warrant in an amount equal to the total number of
pupils attending the school from such county multiplied by the
average expenditure per pupil in the county form which the pupils
are transferred, on the maintenance fund to pay any sums due
hereunder to the said school district wherein the said students are
attending. His failure to do so renders him liable therefore in the
amount thereof on his official bond.
MISS. CODE ANN. § 37-19-33 (1972). Also in 1972, the legislature enacted § 37-15-
31.
59
Mississippi law required Quitman to pay Enterprise for the
Stonewall transfer students.
Enterprise argues that it is entitled to recover funds under
a theory of quantum meruit. Quitman has consistently refused to
pay money since 1968, and it repudiated the entire agreement in
1977. Under these circumstances, Enterprise did not have a
reasonable expectation of compensation, and therefore it should not
recover on a theory of quantum meruit.
The magistrate judge held that Enterprise is equitably
estopped from asserting claims to funds due for the years 1968-69
to 1986-87. The magistrate judge found that Quitman stopped paying
transfer funds in 1968, that Enterprise made its first demand for
payment in 1973, that Enterprise made its second demand in 1987,
and that during the intervening fourteen years, Enterprise never
initiated suit on the debt it alleged to be due from Quitman.
Enterprise argues that the magistrate judge erred in finding
that Enterprise made no demands upon Quitman from 1973 to 1987. It
appears that the magistrate judge failed to note that Enterprise
made additional demands on April 10, 1973, for the 1968-69, 1969-
70, and 1971-72 academic years; on September 11, 1973, for the
1972-73 academic year; on November 25, 1975, for the 1973-74 and
1974-75 academic years; and on March 8, 1977, for the 1975-76
academic year.
We need not reach the issue of whether the magistrate judge
made an erroneous factual finding, or whether any such error
disturbs his conclusion regarding equitable estoppel. We have held
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that Enterprise cannot prevail on its substantive theories of
recovery: contract, state education law, or quantum meruit.
Because Enterprise's arguments are meritless, it does not matter
whether Enterprise is equitably estopped from making the arguments.
B. 1987-88 and 1988-89 Academic Years.
The magistrate judge held that Enterprise should recover from
Quitman for the years 1987-88 and 1988-89 under MISS. CODE ANN.
§ 37-19-27, which required the payment of funds for students
transferred between districts in the same county. The magistrate
judge found the amounts to be paid were $81.022.00 for 1987-88 and
$124,574.91 for 1988-89. Quitman challenges the award, arguing
that the Clarke County board did not consider on an individual
basis the appeals of Quitman's denials of transfer requests, and
that therefore the transfers from Stonewall to Enterprise were
illegal.
In 1987-88 and 1988-89, Enterprise refused requests for
transfer by Stonewall students who made a joint appeal for transfer
to the Clarke County Board. The joint appeal did not contain any
explanation for the transfers of any individual student.
The statute governing transfer payments during the 1987-88 and
1988-89 academic years was MISS. CODE ANN. § 37-19-27. In 1987, the
Mississippi legislature expanded the coverage of § 37-13-27 from
intercounty transfers to interdistrict transfers. 1986 Miss. Laws
1986, ch. 492, § 104 (effective July 1, 1987). Also, § 37-19-27
was amended to require payments to be made only for "legally"
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transferred" students. The transfers from Stonewall to Enterprise
were interdistrict transfers. Therefore, § 37-19-27 applies.
Under § 37-19-27, Enterprise is liable for payments only if the
transfers were valid.
To determine whether the Stonewall students were legally
transferred, we turn to § 37-15-31, which sets out the procedure
for interdistrict transfers. Section 37-15-31 provided that if
either the transferring or the receiving school board refuses a
student's request for transfer,
then an appeal may be had to [the] county board of
education. The said county board of education to which
said appeal is taken shall act thereon not later than the
date of its next regular meeting subsequent to the
disapproval or failure to act by the school board by the
school board of said school district, or not later than
the date of its next regular meeting subsequent to the
filing of such appeal.
MISS. CODE ANN. 37-15-31. Section 37-15-31 did not require the
county school board to consider of transfers "on an individual
basis." We therefore conclude that the actions of the Clarke
County board, and the subsequent transfer of the Stonewall
students, were legal.
Quitman argues that the Stonewall transfers violated Section
37-15-15. Section 37-15-15, which governs intradistrict
assignments, requires school boards to assign students within a
particular district "on an individual basis." It reads in full:
In making assignments of children to schools or
attendance centers, the school board shall take into
consideration the educational needs and welfare of the
child involved, the welfare and best interest of all the
pupils attending the school or schools involved, the
availability of school facilities, sanitary conditions
and facilities at the school or schools involved, health
62
and moral factors at the school or schools, and in the
community involved, and all other factors which the
school board may consider pertinent, relevant or material
in their effect on the welfare and best interest of the
school district and the particular school or schools
involved. All such assignments shall be on an individual
basis as to the particular child involved and, in making
such assignment, the school board shall not be limited or
circumscribed by the boundaries of any attendance areas
which may have been established by such board.
MISS CODE ANN. § 37-15-15. Section 37-15-15 is not applicable to
interdistrict transfers. See Hinze v. Winston County Bd. of Educ.,
103 So. 2d 353, 356 (Miss. 1958) (holding that the predecessor to
§ 37-15-15 does not apply to interdistrict transfers).
C. 1989-90 Through 1991-92.
The magistrate judge held that Enterprise should not recover
for 1989-90 or any subsequent school years because Enterprise and
Quitman did not enter into a contract for the payment of transfer
funds as required by state law. In 1989, section 37-19-27 was
amended to require boards approving transfers to enter into
contracts "for the payment or nonpayment of any portion of their
local maintenance funds which they deem fair and equitable in
support of any transferred students." Absent such a contract, no
such payments can be made. The magistrate judge stated:
[T]his Court is of the opinion that, after 1989, the
applicable Mississippi Code provisions required the
parties to memorialize their transfer agreements. This
Court further finds that Enterprise and Quitman failed to
comply with this code provision, and as a result neither
party was obligated to pay transfer funds to the other
for the years following 1989.
Enterprise urges us to reverse the magistrate judge with
respect to years 1989-90 through 1991-92. Enterprise's only
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affirmative theory of relief for these years would be quantum
meruit. As is discussed above, Enterprise did not have a
reasonable expectation of payment and therefore is not entitled to
recovery.
The magistrate judge required Quitman to make reasonable
payments to Enterprise for court-ordered transfers in the school
years 1992-93, 1993-94, and 1994-95. Quitman does not appeal this
aspect of the district court's decision.
IX. Conclusion.
We REVERSE the magistrate judge's order transferring students
from northeastern Clarke County to Clarkdale and from Stonewall to
Quitman. We AFFIRM all other aspects of the judgment. We REMAND
for further appropriate proceedings.42
42
In light of the resumption of school in the subject districts in the
late summer of 1994, we direct that the mandate shall issue forthwith. See FED.
R. APP. P. 41(a).
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Lauderdale County School District Ex Rel. Board of Education v. Enterprise Consolidated School District Ex Rel. Board of Education
Court: Court of Appeals for the Fifth Circuit
Date filed: 1994-06-16
Citations: 24 F.3d 671
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