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DC Association of Chartered Public Schools v. District of Columbia

United States District Court, District of Columbia

September 30, 2017

D.C. ASSOCATION OF CHARTERED PUBLIC SCHOOLS, et al., Plaintiffs,
v.
DISTRICT OF COLUMBIA, et al., Defendants.

          MEMORANDUM OPINION

          TANYA S. CHUTKAN, UNITED STATES DISTRICT JUDGE

         Plaintiffs allege that the District of Columbia has provided inequitable funding to the District's public charter schools in violation of the School Reform Act and the Home Rule Act. In October 2015, this court granted in part Defendants' motion to dismiss. (ECF No. 31). Plaintiffs have moved for summary judgment on their remaining two claims, and Defendants cross-moved for summary judgment. (ECF Nos. 43, 46 (“Defs. Mem.”)). For the reasons stated herein, Plaintiffs' motion is DENIED and Defendants' cross-motion is GRANTED.

         I. BACKGROUND

         A. Statutory Framework and the District's School Funding Practices

         This case fundamentally involves the sui generis nature of Congress's and the District's complex and co-existing authority to legislate on local issues within the District. Article I, Section 8 of the U.S. Constitution (“the District Clause”) vests Congress with the authority to “exercise exclusive Legislation in all Cases whatsoever” over the District of Columbia. U.S. Const. art. I, § 8, cl. 17. For most of its history, Congress exercised this legislative authority and governed the District directly.[1] In 1973, in order to “relieve Congress of the burden of legislating upon essentially local District matters, ” Congress passed the District of Columbia Self-Government and Governmental Reorganization Act (the “Home Rule Act”), which created the D.C. Council and “delegate[d] certain legislative powers to the [District].” Pub. L. No. 93-198, 87 Stat. 774 (1973) (codified as amended at D.C. Code § 1-201.01 et seq.).

         The D.C. Council may act within its delegated legislative authority on matters pertaining to the District, and Congress has thirty days to review each act of the Council, during which time it may disapprove the legislation by passing a joint resolution. D.C. Code § 1-206.02(c)(1). Congress must also affirmatively approve or reject the District's budget requests. Id. § 1-204.46. The Home Rule Act further provides that the Council “shall have no authority to . . . [e]nact any act, or enact any act to amend or repeal any Act of Congress, which . . . is not restricted in its application exclusively in or to the District.” Id. § 1-206.02(a)(3). The District argues that this clause means that Congress in fact delegated authority to amend or repeal acts of Congress that do apply exclusively to the District. Congress may also “enact[] legislation for the District on any subject, whether within or without the scope of legislative power granted to the Council by this chapter, including legislation to amend or repeal any law in force in the District prior to or after enactment of this chapter and any act passed by the Council.” Id. § 1-206.01.

         This case centers on the D.C. School Reform Act of 1995 (the “School Reform Act” or “Act”), which overhauled the District's public education system by establishing public charter schools and further requiring the creation of a uniform formula to annually fund both charter schools and D.C. Public Schools (“DCPS”). Pub. L. No. 104-134, 110 Stat. 1321 (1996) (codified as amended at D.C. Code § 38-1800.01 et seq.). Section 2401, at issue here, is titled “Annual Budgets for Schools, ” and directs that the formula must account for the amount of “[t]he annual payment to the Board of Education for the operating expenses of [DCPS]” and “[t]he annual payment to each public charter school for the operating expenses of each public charter school.” D.C. Code § 38-1804.01(b)(1)(A)-(B). Congress left the key term “operating expenses” undefined in the statute, and, despite subsequent amendments to the Act, has never defined the term. The statute provides only that the Mayor and Council, in consultation with the Board of Education and the Superintendent, shall establish the formula. Id. § 38-1804.01(b)(1). The District must then calculate the annual formula allotment for DCPS and each public charter school by multiplying a uniform dollar amount by the number of students within DCPS and for each charter school. Id. § 38-1804.01(b)(2).

         Pursuant to Congress's command in the School Reform Act, the District enacted the Uniform Per Student Funding Formula (“UPSFF”). D.C. Law 12-207 (1998) (codified at D.C. Code § 38-2901 et seq.). Under the UPSFF, the formula “appl[ies] only to operating budget appropriations from the District of Columbia General Fund for DCPS and for Public Charter Schools” and does “not apply to funds from federal or other revenue sources, or to funds appropriated to other agencies and funds of the District government.” D.C. Code § 38-2902(b). For nearly two decades, the UPSFF has used a “foundation level” amount, which is the District's determination of the cost of providing education to each student. Id. §§ 38-2903, 38-2901(5). The foundation level is adjusted based on grade level and other student characteristics, and is multiplied by the number of students in DCPS or each charter school to determine the total UPSFF appropriation for each year. See Id. §§ 38-2902(a), 38-2904, 38-2905, 38-2905.01, 38-2906(a)-(b).

         Under District law, DCPS is an executive agency. Id. § 38-172. DCPS receives its annual UPSFF appropriation, which accounts for central administration and support costs, in a yearly lump sum during the city's budget process in October. Id. § 38-2906(a). While a DCPS school's enrollment may change later in the year, the formula appropriation amount remains the same. Id. §§ 38-2906(a), 38-1804.03. The District points out that “[t]he DCPS operating budget is, however, subject to reprogramming, the same as all other District agencies [and] likewise, Anti-Deficiency Act requirements prohibit DCPS from carrying over operating funds from year to year.” (Defs. Mem. at 15 (citing D.C. Code §§ 47-365, 1-204.46)). “Public charter schools are not subject to these constraints.” (Id. at 15 n.22). While traditional D.C. public schools receive an annual payment, the District pays public charter schools their UPSFF appropriations quarterly, in July, October, January, and April. D.C. Code §§ 38-2906.02, 38-1804.03. The first payment is based on each school's projected enrollment, while the second and third are based on the school's October enrollment report, and the final payment is based on the results of the annual enrollment audit. Id. § 38-2906.02(b)(1)-(4). Separate from these payments, charter schools may receive supplemental allocations if they enroll or identify students entitled to special education or English language learner services after the audit. Id. § 38-2906.02(d)(1)(A). According to the District, such adjustments are not available to DCPS. (See Defs. Mem. at 16).

         The District also regularly pays out supplemental and/or non-formula appropriations to DCPS and public charter schools, related to increases or decreases in grant funding or other budgetary needs. In 2012, for example, the District enacted a supplemental appropriations bill that provided over $27 million to DCPS to cover budget shortfalls. (ECF No. 43-2 (Plaintiffs' Statement of Material Undisputed Facts (“PSMF”)) ¶¶ 77-80; Pls. Ex. 11 at D-2; Pls. Ex. 3 at D-19; Pls. Ex. 5 at 2). In 2014, DCPS received a supplemental appropriation of nearly $10 million, and in 2015 it received nearly $7 million. (PSMF ¶¶ 81-86; Pls. Ex. 11 at D-22; Pls. Ex. 21 at D-28; Pls. Ex. 15 at E-1; Pls. Ex. 26 at D-14). The District's 2013 revised budget request increased funding to charter schools and DCPS by $2 million, with the funding to public charter schools being distributed “equally” instead of under the UPSFF. See D.C. Law 20-14, § 2. The District also provided several examples of non-formula appropriations to individual charter schools between 2011 and 2015. (See Defs. Mem. at 17-18 (listing appropriations)).

         The District also submitted examples of non-formula expenditures and services provided to DCPS and charter schools, including on-site school nurses upon request from the D.C. Department of Health, crossing guards provided by the D.C. Department of Transportation near DCPS and charter schools, security officers provided by the Metropolitan Police Department, and mental health services through the D.C. Department of Behavioral Health. (Defs. Mem. at 18-19). Plaintiffs do not challenge any of these non-formula expenditures. The District divides facilities maintenance costs between DCPS, which pays for custodial teams to perform routine maintenance out of its formula appropriation, and the D.C. Department of General Services (“DGS”), which provides repair and maintenance services for all District-owned properties, including those used by DCPS, through appropriations not included in the formula calculation. (See Defs. Ex. 10; D.C. Code § 10-551.02(4)). Plaintiffs challenge these appropriations to DGS. The District also pays each charter school $3, 100 per student annually for facilities expenses, apart from the formula appropriation, D.C. Code § 38-2908(b-2)(2), and Plaintiffs do not challenge these non-formula appropriations.

         Finally, the District contributes to the DCPS Teachers' Retirement Fund, as first required by Congress in the D.C. Retirement Reform Act of 1979. Pub. L. No. 96-122, § 123, 93 Stat. 866, 872-75. Since 1997, the District has paid the entirety of these funds to the Retirement Fund as part of its annual budget process, which is separate from the formula calculations. See D.C. Law 12-152 (1998); D.C. Code § 1-901.01; Balanced Budget Act of 1997, Pub. L. No. 105-33, § 11002, 111 Stat. 251, 715-16.

         B. Procedural History

         Plaintiffs-two District charter schools and an association that represents 39 District charter schools-brought suit in July 2014, alleging that the District has creatively circumvented the funding formula described above in order to supplement DCPS's budget, to the detriment of charter schools. On October 1, 2015, in a written Opinion, this court granted Defendants' motion to dismiss Plaintiffs' Supremacy Clause claim and denied the motion with respect to the Home Rule Act and School Reform Act claims.

         II. SUMMARY JUDGMENT STANDARD

         Summary judgment is appropriate where there is no genuine dispute of any material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); George v. Leavitt, 407 F.3d 405, 410 (D.C. Cir. 2005). In determining whether a genuine issue of material fact exists, the court must view all facts in the light most favorable to the nonmoving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986) (citing United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)). The movant must rely on materials in the record to demonstrate the absence of any genuinely disputed issues of material fact. Fed.R.Civ.P. 56(c); Celotex Corp., 477 U.S. at 323. The nonmoving party, in response, must present evidence beyond the pleadings of specific facts showing that there is a genuine issue for trial. Celotex Corp., 477 U.S. at 324. A fact is material if “a dispute over it might affect the outcome of a suit, ” and an issue is genuine if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Holcomb v. Powell, 433 F.3d 889, 895 (D.C. Cir. 2006) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)) (internal quotation marks omitted). The non-movant is “required to provide evidence that would permit a reasonable jury to find” in his or her favor. Laningham v. U.S. Navy, 813 F.2d 1236, 1242 (D.C. Cir. 1987) (citations omitted).

         III. DISCUSSION

         Plaintiffs challenge the District's educational funding on two grounds. First, in Count I of their Complaint, they allege that the District has exceeded its authority under the Home Rule Act by enacting legislation and making budgetary appropriations that conflict with and contravene the School Reform Act. (ECF No. 1 (“Compl.”) ¶¶ 79-84). Second, in Count III, Plaintiffs allege that the District's funding enactments and practices violate the School Reform Act's requirement to apply a uniform funding formula. (Id. ¶¶ 90-92). The parties have filed cross-motions for summary judgment on both of these claims, and neither party has identified genuine disputes regarding any material fact. As this court noted in its prior Opinion, the two claims rise and fall together, and there are two issues that would aid the court's analysis: first, whether “Congress left the Council with the discretion to take actions in addition to or outside of the funding formula” such that the District's actions do not violate the School Reform Act; and second, whether relevant provisions of the Act “ha[ve] been amended or repealed by Council enactments (through Congressional acquiescence or otherwise).” (ECF No. 32 (“MTD Op.”) at 22-23).

         A. Compliance with the ...


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