Education Law Update: Court Holds that Management Companies & Their Employees are not Entitled to Ohio's Sovereign Immunity Law

A Sixth District Court of Appeals decision will significantly impact community school management companies and employees of management companies. In Cunningham v. Star Academy of Toledo, 2014-Ohio-428, the Sixth District held that management companies and their employees are not covered by Ohio's Sovereign Immunity Law (R.C. Chapter 2744). This distinguishes management companies from community schools, which do enjoy immunity.
 
In Cunningham, a student was injured by a TV cart. The mother brought suit against (1) the management company that operated the community school and (2) the community school's principal. Importantly, the principal was employed by the management company--not the community school.

The management company and the principal sought summary judgment (a legal maneuver to dismiss claims against them) by claiming sovereign immunity under R.C. Chapter 2744. The trial court denied their motions. On appeal, the Sixth District affirmed the trial court by asserting that management companies and the employees of management companies are not entitled to sovereign immunity under R.C. 2744 because they are not political subdivisions.

The Sixth District's opinion centered on who is and is not a political subdivision under R.C. Chapter 2744. The distinction is important because only political subdivisions can enjoy the immunities granted under R.C. 2744.

First, the Court held that community schools are political subdivisions and can be entitled to immunity. The Court's opinion was supported by the Revised Code, which classifies community schools as political subdivisions.

Second, the Court held that community school management companies are not political subdivisions and, therefore, are not entitled to immunity. The Court held that the definition of a public subdivision does not include private, for-profit corporations that contract with a political subdivision. In the Cunningham, the management company was a private, for-profit corporation that performed services for a community school. As a result it was not a political subdivision and was not entitled to immunity under R.C. Chapter 2744.

Finally, the Court held that the principal was also not part of a political subdivision as he was employed by the management company.

The case is significant as it stands for the rule that management companies and the management company's employees are not entitled to the same liability shields as community schools and community school employees.  

If you have any questions about the case, its potential impact, or if you have any other education law questions, please contact Maria L. Markakis, Chair of the Education Law Practice Group at mlmarkakis@dayketterer.com.

If you have any questions regarding the law or this email, please contact us for assistance. This Education Law Update is not intended to present an exhaustive summary of all applicable laws or to take the place of legal advice.