A ruling in Palm Beach Circuit Court finding sovereign immunity protected a school board from paying stormwater utility fees could have statewide ramifications that cost municipalities millions in lost revenue.

The case pitted the School Board of Palm Beach County against the City of West Palm Beach in a dispute over whether a doctrine that protects government entities from civil and criminal suits also shielded the school board from the hefty utility bill.

Complicating the issue was a provision in Florida law that carves out water and sewer expenses, requiring sovereign agencies to pay for these services.

Attorneys for the school board of Palm Beach County argued legislators were explicit about that exception to the rule—but made no such provision for stormwater utilities.

“Any exemption must be clear, unequivocal and explicit,” said school board counsel John J. Fumero, shareholder of Nason Yeager Gerson White & Lioce in Boca Raton.

As a major landowner, the school board used to pay more than $500,000 a year to help maintain drains and other public infrastructure to control water runoff and prevent flooding. It stopped making those payments in May 2012, arguing it had sovereign immunity from any lawsuit the municipality could bring.

West Palm Beach disagreed and threatened to sever multiple school board properties from the city's stormwater system.

But a legal precedent bolstered the case for nonpayment after a state court in 2012 ruled in favor of a public agency claiming sovereign immunity against Key West fees. In that case, the court sided with Florida Keys Community College, and ordered Key West officials to issue a refund to the institution.

The ruling had an immediate ripple effect with the school board in nearby Palm Beach County.

“They advised the city that they were no longer going to pay stormwater utilities,” Fumero said.

In June 2014, the school board filed a complaint for temporary and injunctive relief, seeking temporary and permanent injunctions. It amended its complaint about two years later to include a count for declaratory judgment. In July 2017, it then asked the court to issue declaratory judgment, finding it enjoyed sovereign immunity from suit for nonpayment.

Assistant City Attorneys Douglas Yeargin and Anthony Stella represented West Palm Beach. They moved for partial summary judgment, asking the court to find that Chapter 403 of the Florida Statutes—which governs environmental controls—waived sovereign immunity for stormwater utility fees. They also argued the Key West case was inapplicable because that city had no operational stormwater infrastructure on the college's property.

But Palm Beach Circuit Judge Lisa S. Small ruled for the school board, finding the legal precedent that Fumero and Nason Yeager associate John “Jack” Rice cited ”both controlling and persuasive.”

“Whether the school board receives a benefit from the city's stormwater system is immaterial to a determination, as a matter of law, as to whether the school board enjoys sovereign immunity,” Small ruled.

The decision cost the city at least $4 million in lost revenue and could lead to similar fallout across the state if other agencies follow suit. It could also cost millions more if, like the Key West college, other plaintiffs seek reimbursement.

West Palm Beach spokeswoman Kathleen Walter declined comment, citing ongoing litigation, and Fumero said he client had made no decision about whether to seek a refund from the city.

“For all intents and purposes in our view the case is over,” Fumero said. “We are hopeful that the school board and city can move forward to deal with other important issues.”