## Facts

- Lois Pace was a tenured faculty member at the University of Idaho in the Cooperative Extension Service, terminable only for “adequate cause” under university policies.
- The governing policies placed the burden on the university to prove adequate cause and defined “financial exigency” as an imminent financial crisis that could not be alleviated except by reducing employment.
- In 1981, after the legislature appropriated less than the Extension Service had requested (but more than it had received the prior year), the Idaho State Board of Education declared financial exigency and authorized personnel reductions.
- Pace was selected for termination under the declared financial exigency.
- By the end of 1981, the Extension Service had a budget surplus of $383,500, including $112,000 in uncommitted funds.
- The trial court found the Board did not consider alternatives to personnel reductions, the uncommitted funds could have alleviated any claimed crisis, and the Board had not been informed of the surplus when it acted.
- Pace sued state education officials, alleging that terminating her tenured appointment on a non-existent financial exigency was arbitrary and violated substantive due process.

## Issues

1. Whether the trial court correctly placed on the university/Board the burden to prove “financial exigency” as adequate cause for terminating a tenured faculty member.
2. Whether substantial competent evidence supported the finding that no “financial exigency,” as defined by the governing policies, existed.
3. Whether terminating a tenured appointment based on an unproven financial exigency constituted a substantive due process violation.

## Decision

- The Idaho Supreme Court affirmed the judgment for Pace.
- The court held the trial court properly required the university/Board to prove financial exigency, consistent with the governing tenure policies allocating the burden of proof.
- The court held substantial evidence supported the finding that no qualifying financial exigency existed, including the later-identified surplus and the failure to consider alternatives to termination.
- Because the asserted cause for termination was not established, the termination was an arbitrary deprivation of a protected property interest and violated substantive due process.

## Legal Principles

- When tenure policies allocate to the institution the burden to prove “adequate cause” for termination, courts will enforce that burden allocation.
- “Financial exigency” justifying termination of tenure is limited to the policy definition: an imminent financial crisis that cannot be alleviated except by reducing employment.
- A tenured faculty appointment is a protected property interest; terminating tenure on a claimed ground that is not proven, particularly where decisionmakers fail to consider available alternatives or funds, may constitute arbitrary state action violating substantive due process.
- Appellate review of a trial court’s finding on the existence of financial exigency applies a substantial evidence standard.

## Conclusion

The court upheld liability because the university failed to prove a policy-defined financial exigency and terminated a tenured faculty member despite evidence of available funds and unconsidered alternatives, making the termination arbitrary and a substantive due process violation.


Pace v. Hymas, 726 P.2d 693 (Idaho 1986)