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Richard Milburn Public Charter Alternative High School v. Cafritz

May 23, 2002


Petition for Review of Action by the District of Columbia Board of Education

Before Steadman, Farrell & Washington, Associate Judges.

The opinion of the court was delivered by: Washington, Associate Judge

Argued December 18, 2001

Petitioners, Richard Milburn Public Charter Alternative High School (Milburn) and World Public Charter School, Inc. (World), seek review of the District of Columbia Board of Education's (Board) decision denying them a trial-type contested case hearing prior to the final revocation of their charters pursuant to the District of Columbia School Reform Act of 1995, D.C. Code § 38-1802.13 (c) (2001). The charter schools argue that they have a statutory right to a contested case hearing based on the language of the District of Columbia Administrative Procedures Act (DCAPA), D.C. Code § 1-1509 (1999). In the alternative, they argue that they have a constitutional right to a contested case hearing because only such a hearing will provide them with the procedural safeguards required by the due process clause of the Fifth Amendment. We conclude that neither the DCAPA nor the Constitution entitles petitioners to a contested case hearing.


A. School Reform Act of 1995

In 1996, Congress enacted the District of Columbia School Reform Act of 1995 (School Reform Act), Pub. L. No. 104-134, § 2002, 110 Stat. 1321 (1996) (codified as amended at D.C. Code § 38-1800.02 et seq. (2001)), in order to provide a framework for educational reform in selected areas of the public education system, particularly with respect to providing a process for conferring, renewing, and revoking charters. *fn1 The public charter schools were seen as a vehicle for increasing educational options for the District's students and parents by providing a more diverse mix of educational programs; testing innovative teaching approaches; promoting community and parent involvement in public education; and dispensing with regulatory and bureaucratic obstacles. The statute allows the charter schools to operate without being subject to the District's education laws and regulations, D.C. Code § 38-1802.04 (c)(3)(A) and (B), and to receive funding comparable to that received by the traditional public schools within the system. Id. at § 38-1802.10. Under the statute, charters are conferred by an "eligible chartering authority," one of which is the Board of Education, id. at §§ 38-1800.02 (17)(A); a charter may be issued after various statutory requirements are met by the charter applicant. Id. at § 38-1802.03 (d).

The School Reform Act sets out requirements with which both the Board and the charter schools must comply once a charter application is approved by the Board and the charter is issued. For example, the public charter schools must submit an annual report to the Board. Id. at § 38-1802.04 (c)(11). The annual report includes various forms of data concerning the school's progress in meeting programmatic and financial requirements. *fn2 Id. at § 38-1802.04 (c)(11). The statute also requires that the public charter schools provide the Board with student enrollment data, id. at § 38-1802.04 (c)(12), and a program of education. Id. at § 38-1802.04 (c)(14). The Board is responsible for overseeing each charter school's operations, for ensuring that each school complies with the applicable laws and the provisions of their charters, and for monitoring the progress of each school "in meeting student academic achievement expectations" as reflected in its charter. Id. at 38-1802.11 (a)(1). The Board may also require a public charter school "to produce any book, record, paper, or document" required by the Board to carry out its oversight function. Id. at § 38-1802.11 (a)(2).

With respect to revocations, the statute provides that a charter may be revoked within five years of its conferral when the Board determines that the school has "[c]ommitted a violation of applicable laws or a material violation of the conditions, terms, standards, or procedures set forth in the charter, including violations relating to the education of children with disabilities." Id. at § 38-1802.13 (a)(1)(A). With respect to fiscal mismanagement, a charter may be revoked if the school "(1) [h]as engaged in a pattern of nonadherence to generally accepted accounting principles; (2) [h]as engaged in a pattern of fiscal mismanagement; or (3) [i]s no longer economically viable." Id. at § 38-1802.13 (b). However, charters may not be revoked during the first five years of a charter school's existence based exclusively on its failure "to meet the goals and student academic achievement expectations set forth in the charter." Id. at § 38-1802.13 (a)(2).

The School Reform Act provides procedures that must govern the consideration of a proposed revocation. The Board must provide a charter school with written notice that it proposes to revoke its charter; the notice must indicate the reasons for the proposed revocation; and the notice must apprise the charter school of its right to an informal hearing before a final decision is made. Id. at § 38-1802.13 (c)(1). If the charter school decides that it would like an informal hearing, it must make such a written request within fifteen days of receiving notice of the proposed revocation. Id. at § 38-1802.13 (c)(2). Upon receiving such a request, the Board must "set a date and time for the hearing and shall provide reasonable notice of the date and time." Id. at § 38-1802.13 (c)(3)(A). The notice of the informal hearing must also indicate "the procedures to be followed at the hearing." Id. The Board is required to hold the hearing within thirty days of the charter school's written request. Id. at § 38-1802.13 (c)(3)(B). The Board's final decision must be in writing and must be issued within thirty days after the hearing is completed. Id. at § 38-1802.13 (c)(4)(A)(ii). The final decision must also indicate the reasons for the revocation. Id. at § 38-1802.13 (c)(4)(B). The charter school has the right to judicial review, and the Board's revocation decision "shall be upheld unless the decision is arbitrary and capricious or clearly erroneous." Id. at § 38-1802.13 (c)(6).

B. Milburn

Milburn was granted a charter to operate effective July 1, 1998. *fn3 The charter included sections on accountability, reporting requirements and revocation among others, which mirror the various statutory provisions of the School Reform Act. Although the charter did not specifically describe the revocation procedures, it indicated that such procedures will be governed by the School Reform Act.

In a letter dated August 2, 2001, the Board informed Milburn that the Board's Committee on Teaching and Learning planned to hold a special meeting on August 6, 2001, and possibly August 8, 2001 regarding its charter. At the August 6, 2001 meeting, a draft report prepared by a consultant and entitled "Monitoring of the Richard Milburn Public Charter Alternative High School on June 7, 2001 " ("monitoring report") was made available to Milburn. The data contained in the report was based on the December 5, 2000 and June 7, 2001 monitoring team visits, and referred to the outcomes of earlier monitoring team visits to the school. *fn4

The problems catalogued in the draft monitoring report include the following: little indication that Milburn's Trustees were playing "a viable role as legal and fiduciary agents of the school"; a lack of school books, instructional materials and supplies; poor record keeping with respect to student progress; a lack of documentation identifying students who require special education and related services; a failure to submit an accountability plan to the Board despite the fact that such a plan had been due since August 1998, and had been requested during a December 1999 monitoring visit; a failure to provide information to the Board concerning the school's accreditation process, the provision of which is a term of their Contract; disparities between information in the Annual Report submitted by Milburn for School Year (SY) 1999-2000 and information received during monitoring visits on December 6, 1999 and June 1, 2000, concerning that school year; the unavailability of information concerning contracts; a lack of information as to the use of federal program grants; the submission of a cash management plan that was broad and "lacked sufficient detail to ensure the availability of funds throughout the school year"; and the failure to prepare regularly profit and loss statements. The monitors found that Milburn's failure to submit independently audited financial statements for Fiscal Years (FYs) 1999 and 2000, and the reference to Milburn as a Virginia corporation in its Certified Corporate Resolution for Depositing Authorization rose to the level of "serious" violations of its charter.

At the August 6, 2001 meeting, the Board initially voted to place Milburn on probation rather than propose the revocation of its charter. Several Board members believed that this would be the best course of action since their discussions concerning Milburn had not been as extensive as those concerning World and New Vistas Public Charter School, the other charter schools being considered for revocation; Milburn's infractions were considered less egregious than the other faltering charter schools; and there was concern that the student population at Milburn would have no other alternatives in the event that Milburn's charter was revoked. Those in favor of revocation pointed to Milburn's violations of the law in failing to make records available to the Board, and evidence of fiscal mismanagement as reflected by the lack of school supplies and unaddressed maintenance problems. After discussions, the motion to place Milburn on probation was withdrawn and a motion to decide on either probation or revocation at the next Board meeting on August 8, 2001, was approved.

On August 8, 2001, the Board voted unanimously to revoke Milburn's charter. In a letter of that same date, the Board informed Milburn's Board of Trustees that it had begun the process of revoking the school's charter. The letter specifically listed fourteen findings constituting violations of the School Reform Act and Milburn's charter, which served as the basis for the revocation. The Board also informed Milburn that it had the right to request an informal hearing with respect to the proposed revocation provided that the request was made within fifteen days. The violations noted by the Board were based on the findings from the December 5, 2000 and June 7, 2001 monitoring team visits.

In response, on August 22, 2001, Milburn took exception to the Board's informal hearing procedures, and informed the Board that the charter school had the right to a "contested hearing" under the DCAPA, D.C. Code § 1-1509. Milburn's letter referenced the District of Columbia Council's overlapping legislation regarding public charter schools, which provides for a formal hearing pursuant to D.C. Code § 31-2820 (c)(1) and (3). In addition, Milburn argued that a contested case hearing was also required by the due process clause of the Fifth Amendment. The Board was not persuaded and, in an August 23, 2001 letter, scheduled an informal hearing for August 27, 2001, and explained the procedures which would govern the proceeding. Pursuant to these procedures, Milburn would have thirty minutes to present oral testimony, including an opening statement, and one hour would be allowed for questions and answers. The Board also requested the submission of written testimony, as well as written responses to the list of fourteen reasons that served as the basis for the proposed revocation. The list of reasons included with this letter is a mirror image of the list included in the Board's August 8, 2001 letter informing Milburn of the proposed revocation decision. On the same day that Milburn was informed that the informal hearing had been scheduled for August 27, 2001, the school requested a continuance. The Board granted the continuance, and rescheduled the meeting for August 30, 2001.

On August 28, 2001, Milburn filed a Petition for Review of Agency Action with this court challenging the Board's August 23, 2001 decision denying Milburn's request for a contested case hearing. On the same day, Milburn filed an Emergency Application for a Stay of Agency Action, requesting an immediate stay of the Board's informal hearing regarding the proposed revocation while this court considered the Petition for Review.

C. World

In a letter dated August 8, 2001, the Board provided World with written notice of the proposed revocation, and indicated that World had the right to an informal hearing before the Board made a final decision. The letter also indicated that a Board monitoring team had visited World on June 5, 2001, to assess the school's compliance with the applicable laws regarding public charter schools and with the terms and conditions of the charter; that a copy of this draft report had been made available to World on July 2, 2001; and that although World had been given a ten-day review period to address the issues raised in the report, the Board had not received a written response.

The findings of the monitoring team upon which the Board relied in proposing revocation included the following violations of law and of the terms and conditions of World's charter: continued violation of the requirements of special education students' Individualized Education Programs (IEPs) and the federal guidelines outlined in the Individuals with Disabilities Educational Act (IDEA); the lack of a plan for providing services for Limited English Proficiency students; failure to ensure verification of residency in the District of Columbia for all enrolled students; failure to submit a corrected and complete accountability plan; failure during the 2000-2001 school year to document any activity or progress toward achieving accreditation within a five-year period as required by the charter; failure to submit a complete annual report for SY 1998-1999 or SY ...

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