Sisney v. Reisch
754 N.W.2d 813 (2008)
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Rule of Law:
When the state enters into a contract expressly for the benefit of an identifiable class of third persons, it waives its sovereign immunity from a suit for breach of contract brought by a member of that class.
Facts:
- In 1998, inmate Philip Heftel sued the South Dakota Department of Corrections (DOC) regarding his religious rights.
- In February 2000, Heftel and the DOC entered into a settlement agreement, signed by the Secretary of the DOC.
- The agreement stipulated that the DOC would provide a kosher diet, including pre-packaged certified kosher meals, 'to all Jewish inmates who request it.'
- Charles E. Sisney is a Jewish inmate in the South Dakota State Penitentiary who follows a kosher diet.
- In February 2007, the prison's food service provider stopped serving pre-packaged kosher meals.
- Instead, the provider began serving a diet that included a rice and bean mixture prepared in the main prison kitchen, which Sisney alleged violated the agreement and his religious beliefs.
- Tim Reisch is the current Secretary of the DOC, and Douglas Weber is the Director of Prison Operations.
Procedural Posture:
- Charles E. Sisney filed a pro se complaint against Tim Reisch and Douglas Weber in the South Dakota circuit court (trial court).
- The defendants moved to dismiss for failure to state a claim.
- The circuit court granted the motion to dismiss, concluding the claim was barred by sovereign immunity and that the complaint failed to adequately allege the defendants were responsible for enforcing the agreement.
- Sisney (appellant) appealed the dismissal to the South Dakota Supreme Court (the state's highest court).
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Issue:
Does an inmate have standing as a third-party beneficiary to sue state officials to enforce a settlement agreement made for the benefit of 'all Jewish inmates,' thereby waiving the state's sovereign immunity?
Opinions:
Majority - Zinter, Justice
Yes. An inmate has standing as a third-party beneficiary to sue state officials to enforce a settlement agreement made for the benefit of a class to which he belongs, and sovereign immunity is not a defense to a claim for contractual liability against the state. The Heftel Agreement's language providing a kosher diet 'to all Jewish inmates who request it' clearly expresses an intent to benefit an identifiable class of which Sisney is a member, granting him standing as a third-party beneficiary under state law. Furthermore, even if sovereign immunity generally applies, the state waives it when it enters into a contract. By creating a contractual obligation, the state implicitly gives the other party—or in this case, a third-party beneficiary—a right of action upon it.
Analysis:
This decision clarifies the scope of sovereign immunity waiver in the context of contract law in South Dakota. It establishes that settlement agreements entered into by the state can create enforceable rights for third parties, provided the contract expressly intends to benefit them as a class. This prevents the state from using sovereign immunity as a shield against contractual claims after making a promise intended to benefit a specific group. The ruling is significant for holding government entities accountable for their contractual obligations, particularly those arising from litigation settlements that affect the rights of individuals like prisoners.
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