At any rate, the contentions of the plaintiffs here are significantly differen from those in McInnis. The instant complaint employs a familiar standard which has guided decisions of both the United States and California Supreme Courts discrimination on the basis of wealth is an inherently suspect classification which may be justified only on the basis of a compelling state interest. (See cases cited, part III, supra.) By contrast, the McInnis plaintiffs repeatedly emphasize "educational needs" as the proper standard for measuring school financing against the equal protection clause. The district court found this a "nebulou concept" (293 F.Supp. 327, 329, fn. 4)—so nebulous as to render the issue nonjusticiable for lack of "discoverable and manageable standards'" (Id. a p. 335.) In fact, the non-justiciability of the "educational needs" standard wa the basis for the McInnis holding; the district court's additional treatment of the substantive issues was purely dictum. In this context, a Supreme Court affirmance can hardly be considered dispositive of the significant and complex con stitutional questions presented here."

37

Assuming, as we must in light of the demurrers, the truth of the material allegations of the first stated cause of action, and considering in conjunction there with the various matters which we have judicially noticed, we are satisfied that plaintiff children have alleged facts showing that the public school financ ing system denies them equal protection of the laws because it produces substantial disparities among school districts in the amount of revenue available for education.

The second stated cause of action by plaintiff parents by incorporating the first cause has, of course, sufficiently set forth the constitutionally defective financing scheme. Additionally, the parents allege that they are citizens and residents of Los Angeles County; that they are owners of real property assessed by the county; that some of defendants are county officials: and that as a direct result of the financing system they are required to pay taxes at a higher rate than taxpayers in many other districts in order to secure for their children the same or lesser educational opportunities. Plaintiff parents join with plaintiff children in the prayer of the complaint that the system be declared unconstitutional and that defendants be required to restructure the present financial system so as to eliminate its unconstitutional aspects. Such prayer for relief is strictly injunctive and seeks to prevent public officers of a country from acting under an allegedly void law. Plaintiff parents then clearly have stated a cause of action since “[i]f the . . . law is unconstitutional, then county officials may be enjoined from spending their time carrying out its provisions. . . ." (Blair v. Pitchess (1971) 5 Cal.3d : Code Civ. Proc.. § 526a.) 38

Because the third cause of action incorporates by reference the allegations of the first and second causes and simply seeks declaratory relief, it obviously sets forth facts sufficient to constitute a cause of action.

By our holding today we further the cherished idea of American education that in a democratic society free public schools shall make available to all children equally the abundant gifts of learning. This was the credo of Horace Mann. which has been the heritage and the inspiration of this country. "I believe,"

36 The plaintiffs in Burruss also relied on an "educational needs" standard in their attack on the Virginia school financing scheme, causing the district court to remark "However, the courts have neither the knowledge, nor the means, nor the power to tailor the public moneys to fit the varying needs of these students throughout the State." (310 F. Supp. at p. 574.)

37 In a comprehensive article on equal protection and school financing, three commentators have stated: "The meaning of McInnis v. Shapiro is ambiguous; but the case hardly seems another Plessy v. Ferguson. Probably but a temporary setback, it was the predictable consequence of an effort to force the court to precipitous and decisive action upon a novel and complex issue for which neither it nor the parties were ready.... [T]he plaintiffs virtual absence of intelligible theory left the district court bewildered. Given the pace and character of the litigation, confusion of court and parties may have been inevitable, fore ordaining the summary disposition of the appeal. The Supreme Court could not have been eager to consider an issue of this magnitude on such a record. Concededly its per curiam affirmance is formally a decision on the merits, but it need not imply the Court's permanent withdrawal from the field. It is probably most significant as an admonition to the protago nists to clarify the options before again invoking the Court's aid." (Coons, Clune & Sugarman, supra, 57 Cal. L. Rev. at pp. 308-309.)

The Supreme Court's willingness to order a full hearing by a federal district court on the issues raised in Hargrave v. Kirk (see Askew v. Hargrave, supra, 401 U.S. 476), ind: cates to us that it does not consider the applicability of the equal protection clause t educational financing foreclosed by its decisiors in McInnis and Burruss.

38 Although plaintiff parents bring this action against state, as well as county, officials, it has been held that state officers too may be sued under section 526a. (Blair v. Pitchess supra. 5 Cal. 3d: California State Employees' Assn. v. Williams (1970) 7 Cal. App. 31 390, 395: Ahlgren v. Carr (1962) 209 Cal. App. 2d 24S, 252-254.)

he wrote, "in the existence of a great, immortal immutable principle of natural law, or natural ethics, a principle antecedent to all human institutions, and incapable of being abrogated by any ordinance of man. . . which proves the absolute right to an education of every human being that comes into the world, and which, of course, proves the correlative duty of every government to see that the means of that education are provided for all. . . ." (Original italics.) (Old South Leaflets V, No. 109 (1846) pp. 177-180 (Tenth Annual Report to Mass. State Bd. of Ed.), quoted in Readings in American Education (1963 Lucio ed. p. 336.)

The judgment is reversed and the cause remanded to the trial court with directions to overrule the demurrers and to allow defendants a reasonable time within which to answer.

We concur.

WRIGHT, C. J.

PETERS, J.

TOBRINER, J.

Mosk, J.

BURKE, J.

SERRANO . PRIEST, L.A. 29820

DISSENTING OPINION BY MCCOMB, J.

SULLIVAN, J.

I dissent. I would affirm the judgment for the reasons expressed by Mr. Justice Dunn in the opinion prepared by him for the Court of Appeal in Serrano v Priest (Cal.App.) 89 Cal.Rptr. 345.

MCCOMB, J.

UNITED STATES DISTRICT COURT, DISTRICT OF MINNESOTA, THIRD

DIVISION

(No. 3-71 Civ. 243)

Memorandum and Order

DONALD VAN DUSARTZ AND AUDREY VAN DUSARTZ, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED; ET. AL., PLAINTIFFS

v.

ROLLAND F. HATFIELD, AUDITOR OF THE STATE OF MINNESOTA, ET. AL., DEFENDANTS

Roger S. Haydock, Delores C. Orey, Michael A. Wolff, John E. Drauch, Legal Assistance of Ramsey County, St. Paul, Minn., attorneys for plaintiffs. John E. Coons, Berkeley, California, of counsel.

John Mason, Solicitor General, and Douglas Skor, Special Assistant Attorney General, State Capitol, St. Paul, Minn., attorneys for defendants.

This is one of three actions brought by various parties to challenge the constitutional validity of Minnesota's system of financing public elementary and Secondary education. The companion cases are Minnesota Federation of Teachrs, et al v. Hatfield, et al. 4-71 Civ. 458, and Minnesota Real Estate Taxpayers Association, et al. v. State of Minnesota, et al., 3–71 Civ. 233.

Plaintiffs in the above-entitled action base their claims solely on the alleged denial of equal protection of the laws to a class of plaintiff school children they purport to represent. Jurisdiction of this court is invoked pursuant to 28 U.S.C. 13 (3) and (4) because plaintiff's cause of action arises under the Civil Rights Act, 42 U.S.C. § 1983.

Defendants have moved to dismiss in all three cases on the grounds that the Complaints fail to state a claim upon which relief can be granted and that the cases are moot.

Since the above-entitled case appears to be on solid jurisdictional grounds as to the plaintiff pupils and does not raise pendent claims under the laws or Constitution of Minnesota, this Court chooses to analyze the narrow claims presented here in light of the recent California Supreme Court decision in Serrano v. Priest, Cal. 3d 584, — p. 2d (1971). Although separate orders will be entered

denying defendants' motions to dismiss in the other two cases, the Court chooses to postpone any ruling on the other complex issues presented by those complaints. The primary purpose here is to test the plaintiff children's cause of action, and to examine the substantive issues raised by their complaint. With proper deference to the Legislature, it is appropriate to consider the correctness of the Serrano rule and to examine the applicability of the equal protection clause to the instant

case.

The issue posed by the children, here as in Serrano, is whether pupils in publicly financed elementary and secondary schools enjoy a right under the equal protection guarantee of the 14th Amendment to have the level of spending for their education unaffected by variations in the taxable wealth of their school district or their parents. This Court concludes that such a right indeed exists and that the principle announced in Serrano v. Priest is correct. Plainly put, the rule is that the level of spending for a child's education may not be a function of wealth other than the wealth of the state as a whole. For convenience we shall refer to this as the principle of "fiscal neutrality", a reference previously adopted in Serrano,1

This Court will treat defendants' motion to dismiss as a motion for summary judgment in which, for the purposes here, plaintiffs' allegations of fact must be taken as true. These allegations will be supplemented by judicial notice of facts appearing in official public records and reports which have been stipulated to by the parties herein. The State has argued that the expiration of M.S.A. § 124.211 has rendered thhe complaint moot. If in fact the existing vacuum in "equalizing" state aids were to continue, the influence of district wealth variations would be even more extensive and invidious than what we are about to describe. In fact, the opposite is true; it has seriously aggravated the injury. In fairness to the State it shall be assumed-contrary to fact-that there presently continues in existence a system of subventions similar to the recently expired system.

The recently expired Minnesota system appears structurally indistinguishable in its basic parts from the California system described in the Serrano opinion, supra at 591-595. The Minnesota pupils like those in Serrano-allege that the number of dollars per pupil spent in their school districts is a function of the amount of taxable wealth per pupil located within the boundaries of those districts and thus subject to the local educational levy. See M.S.A. Chapter 124. School districts in Minnesota differ in taxable wealth per pupil. Indeed, some districts have almost no taxable wealth while others range up to and even above 30.000 dollars per pupil. The plaintiff children reside in relatively poor districts, The State has assisted the poorer districts with "equalizing" aid but in a manner which offsets only a portion of the influence of district wealth variations. To be specific, in 1970-71 if a school district's tax rate were at least 20 mills, it was guaranteed a total of $404 spendable dollars by the State. Thus, if the local levy of 20 mills raised only $200 (in a district with $10,000 assessed valuation per pupil) the State supplemented this with a subvention of $204 per pupil. If the district was sufficiently wealthy that a 20-mill levy raised more than the $404 guarantee, it retained the excess collection and now has it available for expenditure. There appear to be a number of districts in this enviable position.

In addition the State has guaranteed to every district a minimum state subvention of $141 per pupil. Thus a rich district which raised $450 at the 20-mill rate may spend $591 per pupil. What is important about this flat grant is that it is useful only to the richer districts. Even if it were abolished, those districts poor in taxable wealth would receive no less than they now do, because the $141 is counted as part of the equalizing aid. As in our previous example, a poor district raising only $200 with the 20-mill local rate would receive its $204 from

1 The analysis here generally parallels that appearing in J. Coons, W. Clune, and S. Sugarman, Private Wealth and Public Education (Cambridge, Harvard University Press, 1970), hereinafter cited as Private Wealth and Public Education.

2 The rule adopted here and in Serrano does not depend upon the personal wealth of the pupils or their parents. It is sufficient that the plaintifs be members of the larger class of districts. Serrano v. Priest, 5 Cal. 3d at 601. P. 2d at. Whether "relative" poverty pupils injured which class is defined as the pupil population of relatively poor school includes every district poorer than that one district richest in assessed valuation per pupil need not now be determined, nor would this appear to have great practical significanes in the application of the general principle.

3 The examples that follow in the text are all hypothetical applications of M.S.A § 124.211.

the state in "equalizing" money even if the $141 guaranteed minimum did not exist. Thus this latter guarantee acts in effect as a unique bonus solely for the benefit of rich districts.

Finally, insofar as districts exceed the 20-mill local tax rate (apparently all poor districts do) they are essentially on their own. For every additional mill on its local property a district with $20,000 valuation per pupil adds another $20 per child in spending; a district with $5,000 valuation per pupil adds only $5 in spending. Put another way, above 20 miles there is a high correlation per pupil wealth and the amount available to spend for education for the small mill rate.

To sum up the basic structure, the rich districts may and do enjoy both lower tax rates and higher spending. A district with $20.000 assessed valuation per pupil and a 40 mill tax rate on local property would be able to spend $941 per pupil; to match that level of spending the district with $5,000 taxable wealth per pupil would have to tax itself at more than three times that rate, or 127.4 mills.

There are apparently many minor refinements and subventions, none of which alter this essential pattern. The overall conclusion is inescapable. The level of spending for publicly financed education in Minnesota is profoudly affected by the wealth of each school district. Children living in districts poorer than the richest are proportionately disadvantaged. It is this class which pupil plaintiffs claim to represent.

It may be true, of course, that not every difference in spending level is traceable into a difference in effectiveness of education. We must recognize that there has been disagreement among scholars over the degree to which money counts." For present purposes, however, it is sufficient that the relation between cost and quality of education has been alleged. In any event, the Legislature would seem to have foreclosed this issue to the State by establishing a system encouraging variation in spending; it would be high irony for the State to argue that large portions of the educational budget authorized by law in effect are thrown away. The courts that have considered the issue are in agreement. Furthermore, this Court notes the affidavit of Van D. Mueller, attached to plaintiffs' brief in that it gives an indication of the correlation between spending per pupil and the quality of education. The statements made in the affidavit must, under the law, be taken as true for the purpose of determining whether plaintiffs have spelled out a cause of action. Mueller flatly states:

The districts having the lowest per-pupil expenditure, which are generally the poorest districts in terms of assessed valuation per-pupil unit, offer an education that is inferior to the districts having the highest per-pupil expenditures." While the correlation between expenditure per pupil and the quality of education may be open to argument, the Court must assume here that it is high. To do otherwise would be to hold that in those wealthy districts where the per pupil expenditure is higher than some real or imaginary norm, the school boards are merely wasting the taxpayers' money. The Court is not willing to so hold, absent some strong evidence. Even those who staunchly advocate that the disparities here complained of are the result of local control and that such Control and taxation with the resulting inequality should be maintained would Bot be willing to concede that such local autonomy results in waste or inefficiency. The disparities demonstrated by the California court in Serrano stood out in bold relief, while the figures supplied by the Minnesota Department of Education tend to show a lack of such great disparities. Nevertheless, this Court must accept at face value the affidavit of Mueller which states that if the statistics for Minnesota are arranged in the same manner as in California, that is, dividing lementary and secondary school figures, the disparities are "very comparable". Thus, there is little or no difference between the factual allegations in this case and those in Serrano.

'Defendants' contention that other categories of state aids substantially increase the enge of many schools may raise a question of fact, i.e. whether dependence on local bool district wealth is overcome by these other aids. However, for purpose of this otion, we must accept as true plaintiffs' allegation of wealth dependence. The competing views are summed up in Serrano v. Priest, 5 Cal. 3d at 601, P2d at — f. 16). It is noteworthy that, while Prof. James Coleman's earlier work is sometimes terpreted to question the cost-quality relation, his foreword to Private Wealth and Pale Education suggests that spending differences are a significant factor in education. The cases are collected in the Serrano opinion at f.n. 16, 5 Cal. 3d at 601. — P. 2d

II

The United States Supreme Court has employed two distinct approaches to claims asserted under the equal protection clause of the 14th Amendment. See, e.g. Shapiro v. Thompson, 394 U.S. 618 (1969) and McGowan v. Maryland, 366 U.S. 420 (1961). These approaches involve substantially different degrees of deference for state legislation depending upon its subject matter and character. Most regulation by the states of most kinds of interests is judged merely by the rationality of the relation between the state's objective and the means of regu lation (the statutory or administrative classifications) chosen. The Court does not ordinarily undertake to evaluate purposes and effects as such. This test of the relation of means to ends might plausibly be applied to the Minnesota system here attached. If the State's objective is a "general and uniform system" of educa tion, as Article VIII, Sections 1 and 2 of the Minnesota Constitution declare, it might be wondered whether the means chosen are rationally adapted to that goal However, this issue is not reached because, in the present case, the stricte test of equal protection is clearly more appropriate. This approach requiring clos scrutiny of the state law by the Court is triggered whenever either a "funda mental interest" is at stake or the state has employed a "suspect classifica tion". Here both such factors are involved and mutually reinforce the pupi plaintiff's attack upon the system.

First, as to the specially protected interest: Where the onus of a legislativ classification falls upon an interest which is classified as "fundamental", the Stat bears the burden of demonstrating a compelling interest of its own which served by the challenged legislation and which cannot be satisfied by any othe convenient legal structure. That approach fits this case because the interest : stake is education. The Serrano opinion, supra at 604–610, has correctly inferr from relevant expressions of the United States Supreme Court and from t nature of education itself that this interest is truly fundamental in the constit tional sense.

It is unnecessary to repeat the persuasive analysis of the California court this point, but it is worth observing that education in this respect is to be sharp distinguished from most other benefits and services provided by governmen It is not the "importance" of an asserted interest which alone renders it special protected. One can concede the significance of welfare payments to an indige and yet accept the result in Dandridge v. Williams, where the Court did not fa a suspect classification." Education has a unique impact on the mind, personali and future role of the individual child. It is basic to the functioning of a fr society and thereby evokes special judicial solicitude.10

Now we consider the relevance of the legislative classification. As noted abo the pupils' objection to the financing system is augmented by the nature of t classifying fact-district wealth-by which the distribution of education is fected and, in significant degree, determined. In a number of decisions over t last fifteen years the United States Supreme Court has made it plain that cl: sifications based upon wealth are suspect. These decisions, convincingly analyz in Serrano," are well known and need no comment here. What is important to n

Shapiro v. Thompson, 394 U.S. 618 (1969). See also Griffin v. Illinois, 351 U.S. (1956) Douglas v. California, 372 U.S. 353 (1963); Harper v. Virginia Board of E tions, 383 U.S. 66s (1966): Kramer v. Union Free School District No. 15, 395 U.S. 4 (1969). The fundamental interest cases and the rationale of the correlative "compell interest" test are considered at length in the Serrano opinion, 5 Cal. 3d at 604–611. P. 2d at -

8 And thus, incidentally, does not constitute an opening wedge for eventual fineutrality in all government services through the medium of the 14th Amendme Serrano . Priest, 5 Cal. 3d at 613-614; Coones, Clune, and Sugarman, Private Wealth & Public Education, 414-419 (1970).

9397 U.S. 471 (1970). See also James v. Valtierra, 402 U.S. 137 (1971). (The inter in housing). In another respect Valtierra actually supports the "fundamentality" of interest in education. The Court there emphasized the special importance of the democri process exemplified in local plebiscites. That perspective here assists pupil plaintiffs ask no more than equal capacity for local voters to raise school money in tax referen thus making the democratic process all the more effective.

10 Even the majority opinion in Dandridge seems to intimate this by its citation of decision in Shelton v. Tucker, 364 U.S. 479 (1960) as the exemplar of the Court's com ment to a special view of equal protection in those areas where "freedom guaranteed by Bill of Rights" may be affected. 397 U.S. at 484. In Shelton, Mr. Justice Stewart for majority had declared that "The vigilant protection of constitutional freedoms is now more vital than in the community of American Schools ', 364 U.S. at 487.

115 Cal. 3d at 597-604. Elaborate analyses of these cases appear in Note, "Developme In the Law-Equal Protection", 82 Harv. L. Rev. 1065 (1969); Michelman, "On Protect the Poor Through the Fourteenth Amendment", 83 Harv. L. Rev. 7 (1969); Priv Wealth and Public Education, 359–387.