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SHOOK v. DISTRICT OF COLUMBIA FIN. RESPONSIBILITY

April 30, 1997

KAREN SHOOK et al., Plaintiffs,
v.
DISTRICT OF COLUMBIA FINANCIAL RESPONSIBILITY AND MANAGEMENT ASSISTANCE AUTHORITY, Defendant.



The opinion of the court was delivered by: KESSLER

 This matter is before the Court on Defendant's Motion to Dismiss [# 10] and Plaintiffs' Motion for Summary Judgment [# 11]. Plaintiffs, members of the District of Columbia Board of Education, brought this action in their official and individual capacities.

 This case presents enormously significant issues concerning the statutory relationship and structural tensions between the District of Columbia Financial Responsibility and Management Assistance Authority (commonly referred to as the "Control Board"), created and appointed by Congress in 1995, and the Board of Education, which Congress created in 1906 as an appointive body but subsequently modified, in 1968, to be a body elected by the voters of the District of Columbia. While understandable concerns about preservation of Home Rule *fn1" permeate Plaintiffs' pleadings, the legal question before the Court is a good deal narrower than the parties' rhetoric would suggest. Put simply, the question is whether the Control Board had the authority--both statutory and constitutional--to issue its Order of November 15, 1996. For all the reasons set forth herein, the Court concludes that the answer is "yes".

 Plaintiffs initially requested that the Court issue a Temporary Restraining Order enjoining the Control Board from taking any action affecting the structure or responsibilities of the Board of Education. After a hearing on November 15, 1996, the Court denied Plaintiffs' Motion for Temporary Restraining Order. The Parties agreed to consolidate the hearing on Plaintiffs' Motion for Preliminary Injunction with a hearing on the merits pursuant to Fed. R. Civ. P. 65(a)(2). An expedited briefing schedule was set pursuant to section 105(d) of the District of Columbia Financial Responsibility and Management Assistance Act of 1995, Pub. L. 104-8, D.C. Code § 47-291.5(d). Several Washington, D.C.-based organizations *fn2" filed an amicus brief in support of Plaintiffs' Motion.

 The Court has considered the parties' Motions, the amicus brief, the Oppositions thereto, the Replies, the supplemental memoranda submitted by Defendant, and the excellent oral arguments presented by counsel on February 14, 1997. For the reasons discussed below, Defendant's Motion to Dismiss [# 10] is granted and Plaintiffs' Motion for Summary Judgment [# 11] is denied.

 I. Background

 In April 1995, in response to the District's well-documented continuing fiscal crisis, Congress established the Control Board. District of Columbia Financial Responsibility and Management Assistance Act of 1995, Pub. L. 104-8, 109 Stat. 97 ("FRMAA"). In section 2 of FRMAA, labeled "Findings; Purpose", Congress laid out the significant problems that faced the District because of "accumulated operating deficits, cash shortages, management inefficiencies, and deficit spending". FRMAA § 2(a)(1). Congress also recognized that "the District of Columbia government fails to provide its citizens with effective and efficient services in areas such as education, health care, crime prevention, trash collection, drug abuse treatment and prevention, human services delivery, and the supervision and training of government personnel". Id. § 2(a)(2).

 FRMAA gave the Control Board oversight of the financial activities of the District of Columbia government. The only part of the District government explicitly exempted from Control Board authority was the District of Columbia court system. Id. § 2(c)(3). FRMAA gave the Control Board sweeping powers with respect to the District's budget, including planning and enforcing a budget, id. §§ 201-203, approving the District's attempts to borrow funds, id. § 204, making recommendations to various District and Federal officials to ensure compliance with the budget and to improve the efficient delivery of services to District residents, id. § 207, and issuing bonds, id. §§ 211-214.

 In September 1996, Congress passed several amendments to FRMAA as part of a general appropriations bill. Act of September 30, 1996, Pub. L. No. 104-208, 111 Stat. 3 (the "FRMAA Amendments"). The FRMAA Amendments gave the Control Board new and expanded powers to issue orders, rules, and regulations. FRMAA Amendment § 5203(f) (enacting FRMAA Section 207(d)(1)), provides that:

 
the Authority may at any time issue such orders, rules, or regulations as it considers appropriate to carry out the purposes of this Act and the amendments made by this Act, to the extent that the issuance of such an order, rule, or regulation is within the authority of the Mayor or the head of any department or agency of the District government, and any such order, rule, or regulation shall be legally binding to the same extent as if issued by the Mayor or the head of any such department or agency.

 FRMAA § 207(d)(1).

 In November 1995, the Control Board issued "Children in Crisis: A Report on the Failure of D.C.'s Public Schools." In more than 50 pages of text and 23 pages of graphs and supporting statistics, the Control Board detailed the deplorable condition of the District's public school system and the quality of education received by District of Columbia children. The Report concluded that the "lack of leadership from the District's elected Board of Education and the Superintendent of Schools" was at the heart of "most of the problems in the school system". Crisis Report at 2.

 On November 15, 1996, the Control Board issued a "Resolution, Order and Recommendation Concerning District of Columbia Public School System" (the "November Order"). This was the first action taken by the Control Board pursuant to its powers under FRMAA section 207(d). The November Order established a new body, the Emergency Transitional Education Board of Trustees ("Board of Trustees") and the position of CEO-Superintendent. The Board of Trustees consists of nine members: five appointed by the Control Board; one member selected by the Control Board from a list of three parents of District school children provided by the Mayor; one member selected by the Control Board from a list of three District teachers provided by the City Council; the Chief Executive Officer ("CEO")-Superintendent; and the President of the District of Columbia Board of Education. *fn3" The initial appointment of the CEO-Superintendent was to be made by the Board of Trustees; all later appointments are to be made by the Board of Trustees with the Control Board's approval. The CEO-Superintendent's duties are coextensive with those of the Superintendent of Schools.

 The November Order transferred most of the powers and duties of the Board of Education to the Board of Trustees. Despite Defendant's attempt to characterize the situation differently, the reality is that the November Order gave the Board of Trustees "all the authority, powers, functions, duties, responsibilities, exemptions, and immunities of the Board of Education . . . including but not limited to the District of Columbia School Reform Act of 1995." *fn4" November Order P 6. Further, the Board of Trustees is directed to oversee "all facility planning, construction, improvement, repair, rehabilitation, and maintenance . . . with respect to school buildings and grounds." Id. P 9. The Board of Trustees also approves the CEO-Superintendent's appointments and proposed annual budget, and may establish procurement and labor policies. Id. PP 10-11, 14-16. The duties delineated as Board of Education responsibilities under the School Reform Act are, in the November Order, assigned jointly to the Board of Trustees and the CEO-Superintendent. Id. P 13.

 The Board of Education, through its President, may cast one vote on the Board of Trustees. Its role under the November Order is limited to providing "input, advice, counsel, guidance, reports and recommendations on general educational policy", all of which are to be given "due and appropriate weight" by the Board of Trustees and the CEO-Superintendent. The Board of Education also retains authority to act as a chartering authority under the School Reform Act of 1995.

 Plaintiffs in this case are current and former elected members of the Board of Education who are also registered voters who voted in the November 1996 election to elect members of the Board of Education. Suing in both their official capacities and in their individual capacities as District of Columbia voters, Plaintiffs bring several statutory and constitutional challenges to the Control Board's November Order. Defendant has moved to dismiss Plaintiffs' Amended Complaint and Plaintiffs have moved for summary judgment.

 II. Statutory History

 Congress has, and has always had, a special relationship with the District of Columbia. The Constitution grants Congress the authority "to exercise exclusive Legislation in all Cases whatsoever, over such District . . . as may . . . become the Seat of the Government of the United States . . . ." U.S. Const. art. I, § 8, cl. 17. It is undisputed that Congress' power over the District is plenary, which means that:

 
The Congress of the United States, being empowered by the constitution 'to exercise exclusive legislation in all cases whatsoever' over the seat of the national government, has the entire control over the District of Columbia for every purpose of government -- national or local. It may exercise within the District all legislative powers that the legislature of a state might exercise within the state . . . .

 Capital Traction Co. v. Hof, 174 U.S. 1, 5, 43 L. Ed. 873, 19 S. Ct. 580 (1899) (quoted in Palmore v. United States, 411 U.S. 389, 397, 36 L. Ed. 2d 342, 93 S. Ct. 1670 (1973)).

 In 1906, Congress exercised its plenary power to create the Board of Education. 1906 Act to Fix and Regulate the Salaries of School Officers and Other Employees of the Board of Education, 34 Stat. 31 (the "1906 Act"). Under the 1906 Act, the Supreme Court of the District of Columbia appointed the members of the Board of Education. The 1906 Act provided that "the control of the public schools of the District of Columbia is hereby vested in a board of education." With respect to the duties of the Board of Education, the 1906 Act provided, inter alia, that:

 
The board shall determine all questions of general policy relating to the schools, shall appoint the executive officers hereinafter provided for, define their duties, and direct expenditures. All expenditures of public funds for such school purposes shall be made and accounted for as now provided by law under the direction and control of the Commissioners of the District of Columbia. The board shall appoint all teachers in the manner hereinafter prescribed and all other employees provided for in this Act. . . . the board shall appoint one superintendent . . . [and] shall have the power to remove the superintendent at any time for adequate cause affecting his character and efficiency.

 Id. The control of the budget remained vested in the Commissioners of the District of Columbia, although the Board of Education had discretion to perform its functions within the limitations of that budget.

 Congress retained the "control" language of the 1906 Act in subsequent legislation and the functions and role of the Board of Education remained essentially unchanged. In 1968, Congress enacted the District of Columbia Elected Board of Education Act, Pub. L. No. 90-292, 82 Stat. 101, which gave District residents, for the first time, the right to vote for members of the Board of Education. By granting them the right to vote, Congress intended to give District residents a "voice in helping determine educational policies." Sen. Rep. No. 942, 90th Cong., 1st Sess. 1-2 (1968). The 1968 legislation provided that the Board of Education was to work with the Commissioners of the District of Columbia to improve and coordinate educational and other municipal programs.

 The next major piece of legislation affecting the duties and powers of the Board of Education was the 1973 District of Columbia Self-Government and Governmental Reorganization Act, Pub. L. No. 93-198, 87 Stat. 774 (commonly referred to as the "Home Rule Act"). The Home Rule Act covered a number of topics. The Charter of the District of Columbia (the "District Charter") is contained in Title IV of the Home Rule Act. Congress structured the Act in this manner so that it could take certain actions with respect to the existing District of Columbia government, even if District voters did not adopt the District Charter, which would create the future government of the District of Columbia. Home Rule Act § 102(b).

 The Home Rule Act abolished certain offices, including the Commissioners of the District of Columbia, transferred their functions to other entities established by the District Charter, and provided for the District's annual federal payment. Id. §§ 501, 502, 711-719. The District Charter established the City Council as the legislative branch of the District of Columbia government, id. §§ 401-404, 411-413, the Mayor as the executive branch, id. §§ 421-423, and the District of Columbia Court of Appeals and the Superior Court of the District of Columbia as the judicial branch, id. §§ 431-434. The District Charter also created five independent, non-executive branch agencies not subject to control by the Mayor or the City Council, including the Board of Education. Id. §§ 491-495. Again, Congress retained the "control" language included in earlier legislation in the provisions of the District Charter that established the Board of Education. The District Charter codified the Board of Education in the same form in which it existed before the Home Rule Act.

 In promulgating the Home Rule Act, Congress gave District citizens the power to control various aspects of their government through the electoral process. Id. § 401(a) (election of members of the City Council); id. § 421(a) (election of the mayor); id. § 738(b) (election of Advisory Neighborhood Council members). However, Congress specifically reserved the right to exercise its constitutional plenary power over the District

 
by enacting legislation for the District on any subject, whether within or without the scope of legislative power granted to the Council by this Act, including legislation to amend or repeal any law in force in the District prior to or after enactment of this Act and any act passed by the Council.

 Home Rule Act § 601, D.C. Code § 1-206. All parties concede that to exercise its reserved power to amend the District Charter and alter the parameters of Home Rule, Congress need not explicitly state in subsequent legislation that it is so doing.

 In 1978, the District Charter was amended to give District voters the right to recall elected Board of Education members. D.C. Law 2-46, Charter Amendment No. 2, D.C. Code §§ 1-291, 1-292.

 In 1995, Congress passed FRMAA, creating the Control Board and delegating to it broad powers over the District of Columbia, including: approval of the District's financial plan and annual budget, FRMAA §§ 201-202; review of all acts passed by the City Council; id. § 203(a); pre-execution review of collective bargaining contracts and such leases "as the [Control Board] may specify" and post-execution review of all other contracts and leases to ensure compliance with the approved financial plan and annual budget, id. § 203(b); control over the District's borrowing, id. § 204; and control over the annual Federal payment to the District, id. § 205. The Control Board was given ultimate control and responsibility for the District of Columbia's budget and is accountable to Congress. Further, Congress empowered the Control Board to make recommendations to improve the financial stability and management responsibility of the District government. Id. § 207. If the District government fails to adopt a Control Board recommendation, the Control Board, after consultation with the appropriate congressional committees, may adopt and implement the recommendation itself. Id.

 In 1996, Congress passed the District of Columbia School Reform Act of 1995 as part of Pub. L. 104-134. That law charged the Superintendent of Schools, in consultation with the Board of Education, the Mayor, the City Council, the Control Board, and the Consensus Commission, with developing a long-term plan for the public schools. The long term plan was to include recommendations affecting nearly every aspect of the District of Columbia's public schools, including, inter alia, curriculum, teaching standards, workforce training, adult education, after-school programs, dress codes, and teacher certification. Id. § 2101(b). Pursuant to the statute, the long-term reform plan was to be consistent with the District of Columbia budget under FRMAA. Id. § 2101(a)(1). Although the Reform Act provides differing roles for the varying government entities involved in the planning process, the Board of Education has final "approval" authority for nearly all of the actions to be taken pursuant to that Act. Id. § 2311(d).

 The last congressional action relevant to this case occurred in 1996, when Congress passed the FRMAA Amendments, giving the Control Board substantial additional powers. First, with respect to the schools, Congress directed the Control Board to improve the physical facilities of the schools by giving it the "authority to contract with a private entity (or entities) to carry out a program of school facility repair." FRMAA Amendments § 5201. Second, Congress gave the Control Board the power to issue such orders, rules and regulations

 
as it considers appropriate to carry out the purposes of [FRMAA], to the extent that the issuance of such an order, rule, or regulation is within the authority of the Mayor or the head of any department or agency of the District government, and any such order, rule, or regulation shall be legally binding to the same extent as if issued by the Mayor or the head of any such department or agency.

 FRMAA Amendments § 5203(f) (amending FRMAA to add § 207(d)). Thus, the Control Board no longer has to make recommendations and await their adoption or rejection by the District of Columbia government, ...


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