In the 2003 Walt Disney blockbuster Pirates of the Caribbean: The Curse of the Black Pearl, Hector Barbossa and the crew of the Black Pearl are in a cavern trying to reverse their curse when Elizabeth invokes the right of parley and notes that, according to the Pirate Code, she must be taken to their captain. Barbossa reluctantly agrees, but later reneges on this promise stating, “The Code is more what you’d call ‘guidelines’ than actual rules.” The same can be said of current sovereign immunity law regarding when a state or a local political subdivision of a state can be sued in tort. Knowing when and how a tort action against a governmental entity can be pursued, including the pursuit of subrogation claims, is indispensable for today’s claims professionals.
“Governmental immunity” is the doctrine covering local governments’ immunity from tort-based claims, as well as exceptions to that immunity. Contrasted, a state government is immune from tort suits by individuals under the doctrine of sovereign immunity under common law. Local governments, municipalities (cities), counties, towns, and other political subdivisions of the state are immune from tort suits by virtue of governmental immunity, because the state government grants them this immunity, usually in a state’s Constitution.
The broader doctrine of sovereign immunity traces its common law origins to the notion that the king made the laws, and thus anything the king did was perforce legal. Therefore, there can be no valid suit against a government entity. This doctrine made its way to the U.S. in the early 1800s and was soon adopted by nearly every state. However, the enjoyment of sovereign immunity is limited to government bodies that are truly “sovereign,” namely the U.S. federal government and each state government. This presumed immunity is based on the belief that governments would be paralyzed if they faced potential liability for all actions of their employees. Sovereign immunity today has been limited or eliminated, at least in part, in most jurisdictions by either legislative or judicial action. The doctrine of sovereign immunity for states varies from state-to-state, but is usually contained either in a statutory framework (such as a Tort Claims Act) or within judicial and case decisions. Excluded from the doctrine are cities and municipalities, which are considered to be mere creatures of the legislature and which have no inherent power and must exercise delegated power strictly within the limitations prescribed by the state legislature. As such, by default, municipalities are liable for their actions unless shielded by state law. The constitution of a particular state may grant that state and its political subdivisions “absolute sovereign immunity” — meaning that those local government entities are shielded from suit unless the legislature explicitly creates a statutory exception waiving immunity or the local government entity waives its immunity by contract and purchases insurance to cover any resulting liability obligations.
State Immunity Versus Political Subdivision Immunity
Most states have two parallel systems and bodies of law for governmental tort immunity: one for the state and another for political subdivisions created by the state to help fulfil their obligations (county, city, town, school district, water districts, park districts, airport districts, etc.). A “political subdivision” is a local governmental entity that is in some ways distinct from or a subset of the state, but nevertheless exercises a “slice of state power.” They include counties, cities, towns, villages, and special districts such as school districts, water districts, park districts, and airport districts. In some states, there are separate acts covering each, such as in Pennsylvania where there is a State Sovereign Immunity Act covering the liability of the state (referred to as the “Commonwealth” in Pennsylvania) and a State Tort Claims Act covering the liability of political subdivisions.
Although state law varies from state-to-state, much of the law involving governmental immunity focuses on whether (1) the employee who caused the injury was acting within the scope of the employee’s duties and (2) whether the activity in which the employee was engaged was the type of act which public policy deems worthy of granting immunity. It is almost universally agreed that a total waiver of government immunity is undesirable. However, creating standards and tests to separate those acts that should be protected from those that create liability has been a difficult and complex task. There is a lot of blurring and conflating of concepts used to describe and categorize local government actions from state-to-state. However, in general, the concepts and terms used have distinct differences and you should be familiar with them.
For many years, local government was liable only for proprietary acts and not governmental acts. The rule attempted to distinguish between municipal activities, which are inherently public in nature, and those which merely supplant or parallel the workings of the private sector. The rule made a “vertical” classification of activities, in the sense that broad spheres of official concern such as education, police and fire protection, hospitals, garbage collection, maintenance of streets and sidewalks, sewage, and provision of water, electricity and transportation, are each labeled either governmental or proprietary. Once a service or action was classified as governmental, local governmental immunity applied on all levels in the provision of this governmental service. This simple test failed to take into account the nature of the activity. At its simplest, this distinction looked like this:
Governmental Act: Local government is not liable – had immunity.
Proprietary Act: Local government is liable – immunity waived.
Governmental functions are those activities that are discretionary, political, legislative, or public in nature and performed for the public good on behalf of the State. They are undertakings that are commercial or chiefly for the private advantage of the compact community. Courts had a hard time applying these inexact standards to particular activities, causing irreconcilable splits of authority and confusion. The operation of a municipal airport has been considered a proprietary function, even though a statute may declare it to be governmental. Rhodes v. City of Asheville, 230 N.C. 134 (1949).
Proprietary functions are undertakings that are commercial or performed primarily for the private advantage of the local community. A proprietary function is one that a private entity can perform, and is not uniquely for the benefit of the general public. The discretionary function defense applies to discretionary governmental functions, but not for proprietary (or ministerial) functions. There are many grey areas where states reach different results, such as whether the design of highways is governmental or proprietary. Many states do not consider personal medical services, such as prenatal care clinics and general indigent medical care clinics, to be governmental functions and apply ordinary medical malpractice law to them, although some states do include these under governmental immunity. On the other hand, if the medical service is related to protecting the public, rather than just helping one person, it will be considered governmental. In this regard, the treatment and testing for tuberculosis would be a governmental function.
The older governmental (immune) versus proprietary (not immune) rule looks only to the level at which the decision to undertake the activity was made. Over time, this simple distinction lost its vitality as an accurate or adequate rationale for the immunity privilege. Inconsistency developed with regard to which activities were which. Even the U.S. Supreme Court expressed dissatisfaction with and condemned this simple distinction. Indian Towing Co. v. United States, 350 U.S. 61 (1955). The concept of municipal immunity is driven by a purpose not to jeopardize the quality and efficiency of government by exposing the exercise of discretion in the formulation of government policy to tort liability led to an evolved concept of municipal immunity under which any function (governmental or proprietary) can now come within a discretionary function exception to either liability or immunity.
Discretionary Versus Ministerial Acts
For many years, the broader distinction of proprietary versus governmental was the simple, but inadequate, litmus test. However, over time it became infused with the narrower terminology of ministerial versus discretionary. Rather than local government automatically being immune from suit whenever a governmental act was involved, state law began to borrow the discretionary function rule which originated with the Federal Tort Claims Act in 1946, which exempted from liability any act based on the exercise or performance (or the failure to exercise or perform) a discretionary function or duty, whether or not the discretion is abused. A discretionary act is a government action performed according to legal authority, established procedures or instructions from a superior, without exercising any individual judgment. It can be any act a government employee performs in a prescribed manner, without exercising any individual judgment or discretion. The repair of equipment on a school playground, although a governmental function, was not of such a nature as to pose threats to the quality and efficiency of government if tort liability attached. In this fashion, the concept of a discretionary act test found its way into the field of local governmental immunity.
In general, only discretion and judgment at the highest levels call for the imposition of governmental immunity for local government. Even this test, however, has a lack of an adequate and clear standard for determining what a discretionary function is. No state legislature has attempted to clearly define what this term means. As with the Pirate Code, the rules we are given are more like “guidelines” than actual rules. As a result, states have developed three basic approaches or interpretations:
- Literal or semantic definition. The problem with this approach is that there is some level of discretion involved in almost every governmental act.
- A standard which distinguishes “planning level functions” from “operational level functions.” This generally means that only basic policy decisions are immune. A policy decision (state policy of maintaining highways) may be discretionary, but subsequent ministerial actions undertaken to implement the policy decision (how roads will be salted or where highway signs will be placed) are considered ministerial acts for which liability may attach. Utah, Hawaii and Alaska are examples of states which use this distinction. If an act takes place on a higher, planning level, it is discretionary and immune.
- A flexible approach which evaluates the particular facts in light of the purpose of the exception. Many states, often those without a statutory discretionary function rule, look past the planning/operational distinction, and instead inquire whether the decision is the kind that is delegated to a coordinate branch of government and, therefore, are immune. Does the act involve a basic governmental policy, program, or objective? Is the act essential to the accomplishment of that policy, program, or objective? Does it require evaluation, judgment, and expertise? Oregon and Washington are examples of this approach. There is very little difference in the effect of this approach and the second approach and the difference is mainly one of semantics.
None of these approaches clearly define or set forth those activities for which a government is liable. There is no immunity from liability arising out of the negligent performance of a proprietary or ministerial act by a local governmental employee. A ministerial act is one performed under a given set of facts and in a prescribed manner in obedience to the mandate of legal authority (e.g., statute, established procedure, instructions from a superior, or other legal authority) without regard to, or the exercise of, the individual judgment of the local government employee on the propriety (i.e., the appropriateness) of the act being done. In other words, the local government employee is compelled by law to do the act and to do it in a particular manner. An act is usually ministerial even though the employee must use judgment to determine if a set of facts exist that make it necessary to perform the act. Examples of a ministerial act include entry of an order by a court clerk, notarizing a document, issuing a building permit, approving a real estate subdivision, and determining the existence of facts and applying them as required by law, without any discretion. Acts which would not be considered ministerial include decisions about application of a tax law, auditing an income tax return, and determining facts and applying law to those facts.
“Discretionary” actions which enjoy immunity include governing and supervisory decisions, such as how much priority is placed on the enforcement of ordinances and codes, the allocation of resources, the number of staff assigned to a project, the timing or placement of traffic lights, and how laws are enforced. “Proprietary” actions, on the other hand, include the method of performing government functions. For example, the negligence of a municipal employee that results in injury can expose the municipality to tort liability. The waiver of sovereign immunity in such a case only opens the door to litigation; it does not change burdens of proof or elements of a tort. In order to prevail in a tort suit, a plaintiff must still demonstrate all the necessary elements of a tort: duty, breach, causation, and damages. Under common law, the sovereign state enjoyed absolute governmental immunity while municipalities did not. Although it varies from state-to-state, today, municipalities are only immune for governmental functions, i.e., those inherent state police powers that embody the government’s fundamental legal obligation to preserve the general public health, safety, and welfare. They are generally not immune from liability for proprietary functions, i.e., when acting like a private business on their own behalf and/or for the benefit of their own citizens. When injuries arose from a proprietary function, municipalities can often be held liable like a private individual for negligence.
The development of the immunity standard for local government and political subdivisions has evolved from attempts to create a precise, predictable semantic definition into a flexible, if unpredictable, guideline. There is rarely an easy answer to whether a particular act on the part of local government is immune, which is why cases involving these issues are litigated so frequently. For most states, if an act constitutes “governing” (high-level policy decision for which coordinate branches of government are responsible), immunity will apply. This is most often referred to as the “discretionary function exception.” Where along the continuum of decision-making an act falls is the stuff of lawsuits and legal advocacy. Most states have abandoned a simple formula and decided that “planning-level function” (proprietary) acts are immune and “operational-level function” (ministerial) acts are subject to tort liability. This is unfortunate for the drafters of charts like the chart Matthiesen, Wickert & Lehrer, S.C. (MWL) has created, because most states have avoided a mechanical categorizing of government actions into “immune” or “not immune” columns.
Generally, however, the terms “proprietary”, “ministerial”, and “planning level” usually go together and describe functions for which local government is liable and for which immunity has been waived. The terms “governmental”, “discretionary”, and “operational level” usually go together and describe functions for which local government is not liable and retains its immunity.
A chart detailing the law of state tort liability and immunity in all 50 states can be found HERE. A chart detailing the liability and immunity of municipal, county, and local government in all 50 states, can be found HERE. These charts deal only with the separate body of laws governing claims against state and local governments and political subdivisions of a particular state. They do not cover tort claims against the U.S. federal government under the FTCA which is the subject of another MWL publication that can be found HERE.
If you have any questions regarding the subjection of governmental immunity and the liability of local government for torts committed by its employees or subrogation in general, please contact Gary Wickert at [email protected].