UNITED STATES SUPREME COURT DECISIONS ON-LINE

Federal school land grants to Mississippi in the early 19th century did not apply to lands in northern Mississippi that were held by the Chickasaw Indian Nation, an area that came to be the northern 23 counties in the State. The Chickasaws thereafter ceded this area to the United States by a treaty under which the lands were sold, but no lands for public schools (Sixteenth Section lands) were reserved from sale. Congress then provided for the reservation of lands in lieu (Lieu Lands) of Sixteenth Section lands not reserved in the Chickasaw Cession, and for vesting of the title to the Lieu Lands in the State for the use of schools within the Cession. These Lieu Lands were given to the State. The state legislature, however, sold the Chickasaw Cession Lieu Lands and invested the proceeds in loans to railroads that were later destroyed in the Civil War, and never replaced. Under a current Mississippi statute, remaining Sixteenth Section and Lieu Lands "constitute property held in trust for the benefit of the public schools." Another state statute provides that all funds derived from Sixteenth Section or Lieu Lands shall be credited to the school districts of the township in which such Sixteenth Section lands are located or to which any Lieu Lands belong, and shall not be expended except for the education of children of the school district to which the lands belong. Consequently, all proceeds from Sixteenth Section and Lieu Lands are allocated directly to the township in which the lands are located or to which the lands apply. With respect to the Chickasaw Cession counties, to which no lands now belong, the state legislature has paid "interest" on the lost principal acquired from the sale of those lands in the form of annual appropriations to the Chickasaw Cession schools. This dual treatment has resulted in a disparity in the level of school funds from the Sixteenth Section lands that are available to the Chickasaw Cession schools as compared to the schools in the rest of the State, the average Sixteenth Section income per pupil in the latter schools being much greater than the average income per pupil in the former schools. Petitioner local school officials and schoolchildren from the Chickasaw Cession filed suit in Federal District Court against respondent state officials, challenging the disparity in Sixteenth Section funds clubjuris

Page 478 U. S. 266

and alleging (1) that the sale of the Chickasaw Cession school lands and the unwise investment of the proceeds had abrogated the State's trust obligation to hold those lands for the benefit of Chickasaw Cession schoolchildren in perpetuity and (2) that the disparity deprived those schoolchildren of a minimally adequate level of education and of the equal protection of the laws. Declaratory and other relief was sought. The District Court dismissed the complaint, holding the claims barred by, inter alia, the Eleventh Amendment. The Court of Appeals affirmed, holding that, although the equal protection claim asserted a current ongoing and disparate distribution of state funds for the support of local schools, the remedy for which would not be barred by the Eleventh Amendment, dismissal of the complaint was proper since such differential funding was not unconstitutional under San Antonio Independent School Dist. v. Rodriguez, 411 U. S. 1.

Held:

1. Petitioners' trust claims are barred by the Eleventh Amendment, even if petitioners' characterization of the legal wrong as being a breach of a continuing obligation to comply with the trust obligations is accepted. There is no substantive difference between a not-yet-extinguished liability for a past breach of trust and the continuing obligation to meet trust responsibilities asserted by petitioners. Edelman v. Jordan, 415 U. S. 651. In both cases, the trustee is required, because of the past loss of the trust corpus, to use its own resources to take the place of the corpus or the lost income from the corpus. Thus. petitioners' trust claim, like the claim rejected in Edelman, may not be sustained. Pp. 478 U. S. 279-281.

2. Petitioners' equal protection claim is not barred by the Eleventh Amendment. The alleged ongoing constitutional violation -- the State's unequal distribution of the benefits of school lands -- is precisely the type of continuing violation for which a remedy may permissibly be fashioned under Ex parte Young, 209 U. S. 123. The essence of the equal protection claim is the present disparity in the distribution of the benefits of state-held assets, and not the State's past actions. Pp. 478 U. S. 281-282.

3. The assertion in the complaint that petitioners are being deprived of a minimally adequate education is a legal conclusion, rather than a factual allegation that must be accepted as true. Consequently, focusing only on the funding disparities properly pleaded, the Court of Appeals properly determined that Rodriguez dictates the applicable standard of review: the alleged differential treatment violates equal protection only if not rationally related to a legitimate state interest. The Court of Appeals incorrectly determined, however, that Rodriguez controlled this case. Rodriguez did not purport to validate all funding variations that might result from a State's public school funding decisions, but held merely that the variations that resulted from allowing local control over clubjuris

Page 478 U. S. 267

local property tax funding of the public schools were constitutionally permissible in that case. This case is different from Rodriguez, because here the differential financing is attributable to a state decision to divide state resources unequally among school districts. Nevertheless, the question remains whether the variations in the benefits received by school districts from Sixteenth Section or Lieu Lands are, on the allegations in the complaint and as a matter of law, rationally related to a legitimate state interest, and this question should be resolved by the Court of Appeals on remand. A crucial consideration in resolving this question is whether federal law requires the State to allocate the economic benefits of school lands to schools in the townships in which those lands are located. If, as a matter of federal law, the State has no choice in the matter, whether the complaint states an equal protection claim depends on whether the federal policy is itself violative of the Equal Protection Clause. If it is, the State may be enjoined from implementing such policy. But if the federal law is valid and the State is bound by it, then it provides a rational reason for the funding disparity. Pp. 478 U. S. 283-292.

756 F.2d 1087, affirmed in part, vacated in part, and remanded.

WHITE, J., delivered the opinion of the Court, in which O'CONNOR, J., joined; in Parts I and III of which BRENNAN, MARSHALL, BLACKMUN. and STEVENS, JJ., joined; and in Part II of which BURGER, C.J.,and POWELL and REHNQUIST, JJ., joined. BRENNAN, J., filed an opinion concurring in part, concurring in the judgment in part, and dissenting in part, in which MARSHALL, BLACKMUN, and STEVENS, JJ., joined, post, p. 478 U. S. 292. BLACKMUN, J., filed an opinion concurring in part and dissenting in part, post, p. 478 U. S. 293. POWELL, J., filed an opinion concurring in part and dissenting in part, in which BURGER, C.J.,and REHNQUIST, J., joined, post, p. 478 U. S. 295.