If the State Board of Education takes over a public school district and removes the local school board, does that district become a 'state entity'?
Plain-English summary
Representative Kenneth Ferguson followed up on an earlier opinion (Op. 2023-067) that addressed what happens when the State Board of Education takes over a school district. Under the Arkansas Educational Support and Accountability Act (AESAA), if a district reaches the worst rating, "Level 5 - Intensive Support," the State Board can remove the local school board, take over the district's authority, and run things directly through the Commissioner of Elementary and Secondary Education. The follow-up question was whether that district becomes a "state entity" for the period of state control.
The AG's answer separates the question into two pieces.
Statutory "state entity" definitions: Arkansas has multiple statutes that define "state entity" for their own narrow purposes. The State Entity Energy Efficiency Project Bond Act, the cabinet-departments statute, and the divisive-concepts law each define the term differently, but none of them sweep in school districts. The divisive-concepts statute even goes out of its way to exclude political subdivisions, public schools, and charter schools from "state entity." Nothing in those definitions changes when the State Board takes over operations. So as a statutory matter, a state-controlled district is still not a "state entity."
Sovereign immunity: This is where the answer gets nuanced. Ordinarily, Arkansas school districts are political subdivisions, not state agencies, and they don't get sovereign immunity (Muse v. Prescott Sch. Dist. (1961) and Dermott Sch. Dist. v. Johnson (2000)). But the reason for that ruling was the operational independence of the district. Once the state assumes control, the analysis can shift. In Workman v. Mingo County Schools (S.D. W. Va. 2009) and Denkins v. State Operated Sch. Dist. of Camden (3d Cir. 2017), federal courts held that state takeover transformed a non-immune district into an arm of the state entitled to immunity, applying multi-factor tests. The AG predicts an Arkansas court could reach a similar conclusion, particularly relying on the Eighth Circuit's Hadley test and the Arkansas Supreme Court's Short decision, which both put heavy weight on whether judgments against the entity would come out of the state treasury.
Bottom line: a Level 5 state-controlled school district is generally not a "state entity" under Arkansas's statutory definitions, but in litigation a court might treat it as an arm of the state for sovereign-immunity purposes, depending on the facts about state control and funding.
What this means for you
If you are a parent, employee, or community member in a Level 5 takeover district
Most of the statutes that define "state entity" don't apply to your district even during state control. Your district stays a political subdivision; the local elections, residency rules, and similar features that flow from being a political subdivision don't change because the State Board took over.
Where it could matter is in lawsuits against the district. If your district is sued for civil-rights violations, Title IX claims, or other federal-question claims, the defendants may try to assert sovereign immunity using the Workman and Denkins line of authority. Whether that succeeds depends on the specific facts about how much of the district's day-to-day operation is now in the state's hands and whether any judgment would come out of the state treasury.
If you are a school district lawyer or general counsel
Under Hadley v. N. Ark. Cmty. Technical Coll. and Short v. Westark Cmty. Coll., the Eighth Circuit and the Arkansas Supreme Court look heavily at funding source: would a judgment be paid from state funds? Other factors include the entity's powers, the degree of local autonomy, and how state law treats the entity. During Level 5 takeover, the State Board has assumed authorities normally exercised by the district board (A.C.A. § 6-15-2916). That, plus state-source funding, could swing the analysis.
If you're advising a state-controlled district being sued, sovereign immunity is a defense worth raising even though it would not be available in normal operation. If you're advising a plaintiff, expect that defense and develop the funding-source record carefully.
If you are a state legislator or policy advisor
The AG opinion identifies a gap. Multiple statutes define "state entity" without addressing whether a state-controlled district counts. If the legislature wants a clear answer (in either direction), it should write the answer into the AESAA itself or the relevant statutory definitions.
If you are a school district board member in a district approaching Level 5
Be aware that a takeover changes more than the day-to-day operations: it can shift the legal posture in litigation, the available defenses, and possibly the funding obligations. Document your operations, your funding sources, and your decisions carefully during the transition. Disputes that arise during takeover may turn on the precise scope of state authority at a specific time.
If you are a state official taking over a district
The takeover does not, by itself, transform the district into a "state entity" for energy-bond, cabinet, or divisive-concepts purposes. So you should not assume that the district's transactions, contracts, or employment actions are being handled by a state agency for those statutes. They are still being handled by the district, just under your direction.
But for sovereign-immunity purposes in a future lawsuit, the takeover may end up being relevant. Decisions you make about funding, control, and operational separation can affect later immunity analysis.
Common questions
Q: What is "Level 5 - Intensive Support"?
A: The most serious rating under Arkansas's school accountability framework. When a district reaches Level 5, the State Board of Education can take various remedial actions, including removing or reassigning the superintendent, suspending or removing the local school board, and assuming the school board's authority. The relevant statute is A.C.A. § 6-15-2916.
Q: What is a "state entity" under Arkansas statutory law?
A: It depends on which statute. The State Entity Energy Efficiency Project Bond Act defines it one way (the state plus its agencies, boards, commissions, instrumentalities). The cabinet-departments statute defines it more broadly. The divisive-concepts law defines it narrowly and explicitly excludes political subdivisions, public schools, charter schools, and certain others. Each definition stands on its own.
Q: What is sovereign immunity?
A: A constitutional principle that shields the state from being sued without its consent. In Arkansas it comes from Article 5, Section 20 of the state constitution. The federal version is the Eleventh Amendment. School districts and other political subdivisions are typically not entitled to sovereign immunity because they are not the state itself.
Q: Why would a state-controlled district potentially get sovereign immunity?
A: Because the courts apply multi-factor tests that look at how much state control exists and where the money would come from to pay a judgment. When the state takes over a district and either funds it from state coffers or controls its operations, the factors can swing far enough that a court might treat the district as an arm of the state for immunity purposes.
Q: Has Arkansas faced this question yet?
A: According to the AG, no Arkansas court has decided whether a state-takeover district becomes immune. The opinion predicts that an Arkansas court would look to the Eighth Circuit's Hadley test and the Arkansas Supreme Court's Short decision for guidance, both of which emphasize the state-treasury funding factor.
Q: What's the practical impact of this difference?
A: In litigation, sovereign immunity can result in dismissal of certain claims, especially federal civil-rights claims for damages. So if a state-takeover district is sued, the immunity defense (if it works) could foreclose claims that the local district could not normally avoid.
Background and statutory framework
Arkansas's school accountability framework, the AESAA, gives the State Board of Education a graduated set of interventions when a district underperforms. At Level 5, the most serious tier, the State Board can remove the local board, suspend the superintendent, or assume the school board's authority directly. The AG's prior opinion 2023-067 addressed what the state could do with district property during a takeover; the current opinion addresses the related question of whether the district becomes a state entity during that takeover.
Arkansas case law has long held that school districts are political subdivisions, not state agencies, and don't enjoy sovereign immunity (Muse v. Prescott (1961), Dermott v. Johnson (2000)). The reasoning was that the state's connection with school districts was limited to bringing them into existence; the local boards owned property, operated schools, and were independent of state control.
Cases from other jurisdictions show how that analysis can change under state takeover. In Workman v. Mingo County Schools, the West Virginia state board had taken over the county school system, limiting the local board's powers; the federal court held that the local board had become an arm of the state and was entitled to Eleventh Amendment immunity. In Denkins v. State Operated School District of Camden, the Third Circuit reached the same conclusion for Camden, reversing earlier decisions about Camden's pre-takeover status.
The Eighth Circuit's Hadley test (used to determine whether a community college was an arm of the state) and the Arkansas Supreme Court's Short opinion both put primary emphasis on whether judgments would be paid from the state treasury, with secondary attention to operational autonomy, the scope of the entity's concerns, and how state law treats it.
The opinion notes that Arkansas courts have not directly applied this analysis to a takeover district yet. But it predicts they would adopt the same multi-factor approach.
Citations and references
Statutes:
- A.C.A. § 6-15-2916 (Level 5 - Intensive Support takeover authority)
- A.C.A. § 15-5-1803(3) (State Entity Energy Efficiency Project Bond Act)
- A.C.A. § 25-43-103(5) (cabinet-level departments)
- A.C.A. § 25-1-901(4) (divisive-concepts state-entity definition)
- Ark. Const. art. 5, § 20 (sovereign immunity)
- U.S. Const. amend. XI (Eleventh Amendment)
Cases:
- Muse v. Prescott Sch. Dist., 233 Ark. 789, 349 S.W.2d 329 (1961)
- Dermott Special Sch. Dist. v. Johnson, 343 Ark. 90, 32 S.W.3d 477 (2000)
- Fagan Elec. Co. v. Housing Authority of Blytheville, 216 Ark. 932, 228 S.W.2d 39 (1950)
- Workman v. Mingo County Schools, 667 F. Supp. 2d 679 (S.D. W. Va. 2009)
- Denkins v. State Operated School District of City of Camden, 715 F. App'x 121 (3d Cir. 2017)
- Febres v. Camden Bd. of Educ., 445 F.3d 227 (3d Cir. 2006)
- Hadley v. N. Ark. Cmty. Technical Coll., 76 F.3d 1437 (8th Cir. 1996)
- Short v. Westark Cmty. Coll., 347 Ark. 497, 65 S.W.3d 440 (2002)
- Fitchik v. N.J. Transit Rail Ops., Inc., 873 F.2d 655 (3d Cir. 1989)
- Cash v. Granville Cty. Bd. of Educ., 242 F.3d 219 (4th Cir. 2001)
- Gidney v. Nw. Ark. Cmty. Coll., 2014 WL 2215855 (W.D. Ark. 2014)
Prior AG opinion:
- Ark. Att'y Gen. Op. 2023-067 (state authority over school district facilities during takeover)
Source
Original opinion text
BOB R. BROOKS JR. JUSTICE BUILDING
101 WEST CAPITOL AVENUE
LITTLE ROCK, ARKANSAS 72201
Opinion No. 2025-012
August 25, 2025
The Honorable Kenneth B. Ferguson
State Representative
Post Office Box 5661
Pine Bluff, Arkansas 71611
Dear Representative Ferguson:
I am writing in response to your request for a follow-up opinion related to Attorney General Opinion 2023-067. In response to Question 2 of that opinion, I opined that whether "the Arkansas Department of Education, while in control of a school district, [may] sell or lease any school district facilities or property deemed unused or underutilized to a public charter or private school... depends on whether the State Board of Education has suspended or removed the public school district's board of directors, who has assumed the school board's authority, and the extent to which the State Board may have temporarily removed the school board's powers and duties."
Against this background, you ask the following question:
If a public school district is taken under state control, and the State Board of Education suspended or removed the public school district's board of directors and has assumed the school board's authority, is that public school district under state control considered a state entity for the length of time that it is controlled by the State Board of Education which removed the public school district's board of directors and assumed the school board's authority, powers, and duties?
RESPONSE
Because you have provided no additional background information for your question, I can only guess as to the context in which a school district might be considered a state entity. While a school district under state control likely wouldn't be considered a state entity for certain purposes discussed in the opinion, it might be deemed an arm of the state for sovereign immunity purposes.
DISCUSSION
- Statutory definitions of "state entity." In several different contexts, the Arkansas Code provides a definition of a "state entity." With respect to the State Entity Energy Efficiency Project Bond Act, a "state entity" refers to "[t]he state" and "[a]n agency board, commission, or instrumentality of the state." In Chapter 43 of Title 25, which pertains to cabinet-level departments of the executive branch, a "state entity" is defined as "any instrumentality of state government, including without limitation a board, commission, committee, advisory board, office, department, institution, bureau, council, administrative program, agency, or division." And with respect to the prohibition on state entities "propagat[ing] divisive concepts," a "state entity" means "an instrumentality of state government."
A public school district does not fall within any of these statutory definitions of a "state entity." In fact, schools are explicitly excluded from the definition of a "state entity" in the "divisive concepts" context. And no statutory language or case law suggests that a public school district would transform into a state entity for purposes of any of the above code sections, simply because the State Board of Education temporarily assumes authority over the district to make remedial changes.
- School districts in the context of sovereign immunity. Arkansas courts have held that school districts are not the type of state entity entitled to sovereign immunity either. Rather, they are political subdivisions of the state. In Muse v. Prescott School District, the Arkansas Supreme Court compared a school district to a housing authority. Having previously held that housing authorities are not state agencies because "the State has done nothing except to bring [them] into existence," the Court reasoned, "[s]imilarly, the State's connection with school districts has been limited to the act of bringing such districts into being. The school boards operate the schools in their respective districts, purchase the required property, hold title to the property for the district, and have complete charge of maintenance." Consequently, "school districts, as political subdivisions, are not entitled to the State's constitutional sovereign-immunity protection."
Of course, this independence from the state, and at least part of the explanation for why a school district does not qualify as a state entity, disappears once the State Board of Education assumes control of a school district. As explained in Attorney General Opinion 2023-067, under the Arkansas Educational Support and Accountability Act (AESAA), when a school district is classified as needing the highest level of support (Level 5 - Intensive), the State Board of Education may take extensive remedial action. This action may include removing, reassigning, or suspending the superintendent; removing or suspending some or all of the school district board of directors; or temporarily removing some or all of the school board's powers and duties, but allowing the board to continue to operate under the direction and approval of the Commissioner of Elementary and Secondary Education. In some cases, the Commissioner may assume some or all authority of the district board of directors.
- Case law. In at least a couple of other states with statutes similar to the AESAA (i.e., statutes that allow the state's department of education to take over individual schools, school districts, or both, when they fail certain performance standards), courts have held that local school districts or boards under the control of a state board of education are entitled to sovereign immunity. For example, in Workman v. Mingo County Schools, the district court acknowledged that, "Generally speaking, county boards of education in West Virginia are probably not entitled to Eleventh Amendment protection." But because the West Virginia Board of Education had intervened in the operations of the county school system and limited the county board's power, the court held that this intervention had rendered the Mingo County Board an arm of the state. As a result, the plaintiff's claims against the Mingo County Board were constitutionally barred.
In another case, Denkins v. State Operated School District of City of Camden, the federal Court of Appeals for the Third Circuit found that "the full state takeover and the relocation of responsibilities from the [district] Board to the state-appointed Superintendent" changed the sovereign immunity status of a school district. The Camden School District, which the court had previously held was "not an arm of the state and therefore not deserving of sovereign immunity," became entitled to sovereign immunity following the state takeover.
In both Denkins and Workman, the courts looked to a list of factors previously enumerated by the Third Circuit and Fourth Circuit, respectively, to determine whether an entity is the arm of the state entitled to sovereign immunity. In the Third Circuit, the questions are: "(1) whether the money that would pay the judgment would come from the state treasury; (2) the status of the entity under state law; and (3) the degree of autonomy of the entity." And in the Fourth Circuit, the most important factor "is whether a judgment against the governmental entity would have to be paid from the State's treasury," although this factor is not necessarily dispositive. Other factors to consider include: "(1) the degree of control that the State exercises over the entity or the degree of autonomy from the State that the entity enjoys; (2) the scope of the entity's concerns, whether local or statewide, with which the entity is involved; and (3) the manner in which State law treats the entity."
The Eighth Circuit has set forth a similar test for determining whether an entity is entitled to sovereign immunity, which involves examining (1) the "powers and characteristics" of the entity in question; (2) "the degree of local autonomy and control"; and "most importantly whether the funds to pay any award will be derived from the state treasury." While I have found no binding case law that explicitly addresses whether a local school district becomes entitled to sovereign immunity when it is taken over by the state, I believe an Arkansas court faced with the question would look to these Eighth Circuit factors for guidance. And, as in Workman and Denkins, a court could very well determine that, depending on the facts of the case, the factors support a grant of sovereign immunity for a school district under state control.
- Conclusion. In sum, I have found no statutes or case law that suggest a school district under state control would become a "state entity" for the statutory purposes discussed above. But for purposes of sovereign immunity, a school district under state control might be deemed a state entity entitled to such immunity.
Deputy Attorney General Kelly Summerside prepared this opinion, which I hereby approve.
Sincerely,
TIM GRIFFIN
Attorney General