Baltimore Teachers Union v. Maryland State Board of Education

840 A.2d 728, 379 Md. 192, 175 L.R.R.M. (BNA) 3085, 2004 Md. LEXIS 2

• Court: Court of Appeals of Maryland
• Decided: January 16, 2004
• Docket: 120, Sept. Term, 2000
• Status: Published

Opinions

ELDRIDGE, J.

Baltimore Teachers Union, American Federation of Teachers, Local 340, AFL-CIO, filed in the Circuit Court for Baltimore City a complaint for a declaratory judgment and injunctive relief, alleging that the Maryland State Board of Education lacked statutory authority to enter into a contract with Edison Schools, Inc. for the operation and management of three Baltimore City public elementary schools. The Circuit Court held that the State Board acted within its statutory authority conferred by the General Assembly. Before argument in the Court of Special Appeals, the Union filed in this Court a petition for a writ of certiorari. We granted the petition and shall affirm.

I.

Governance of the Maryland public school system is two-tiered. The Maryland State Board of Education is the head of the State Department of Education, a principal department of the State government. Maryland Code (1978, 1999 RepIVol.), §§ 2-101 and 2-102 of the Education Article. Twenty-three county boards of education and the New Baltimore City Board of School Commissioners (the “New Board”) operate as the statutory heads of the twenty-four local public school systems.¹ The State Board is charged with the general supervision of the Maryland public schools, including the development and implementation of educational policies. § 2-205 of the Education Article.² The State Board is authorized to adopt rules and regulations for the administration and enforcement of the education law. § 2-205(c). In 1993, the Board promulgated regulations establishing public school performance standards that were adopted and codified in the Code of Maryland Regulations (COMAR) 13A.01.04.01-.08. Regulation .01 establishes the scope of the regulations and regulation .02 is the definition section. The student performance areas tracked by the State are set forth in regulation .03. Regulation .04 establishes the standards that apply to the student performance areas. Regulation .05 sets out the reporting requirements, and the mandate that each public school develop a school improvement plan is set forth in regulation .06.

The regulations further set forth a two-phased process for public schools that fail to meet the prescribed student performance standards. Regulations .07 and .08 describe “local reconstitution” where, if a school fails to meet all standards at a level of satisfactory or better in the student performance areas, the State Board may require the overall program and management of a school to be placed under the direct control of the local school board.³ By February 2000, the State Board had ordered 97 schools throughout Maryland to be placed under local reconstitution. Of these, 83 schools were in Baltimore City.

If a school under local reconstitution fails to show sufficient improvement, regulation .10 provides for “state reconstitution” by which the State Board determines the overall program and management of the school. In 1999, the State Board reconstituted three of the lowest performing public elementary schools in Baltimore City, Furman L. Templeton, Montebello, and Gilmor. Student performance remained stagnant at these elementary schools despite being under local reconstitution for at least three years. No more than 10% of the students at the schools had met the State’s standard in all student performance areas in any year since 1993 when the school performance regulations were adopted.

The State Board examined the feasibility of closing one or more of the underperforming elementary schools. The Board determined that any closure would result in increased transportation costs and the transfer of students to other low performing public schools already under local reconstitution. The Board concluded that the most viable option was to contract out the operation and management of the three schools to a third party.⁴ Following a request for proposals in accordance with the State procurement procedure, the State Board and the New Board entered into a “Contract for the Operation and Management of Schools Under State Reconstitution in Baltimore City” with Edison Schools, Inc., for a term of five years.⁵ The contract with Edison was approved by the Maryland Board of Public Works on March 22, 2000.

Edison is a private company specializing in the management of public schools. It operates under contracts with local school districts and boards of charter schools. Pursuant to its contract with the State Board, Edison is required to provide the three public elementary schools with curriculum and curriculum development, instructional services, instructional and support personnel, teaching tools, special education and related services, educational services with limited or no English proficiency, and other services which may be necessary. Edison serves as the employer of all employees hired for the elementary schools and is responsible for providing management and professional development for all personnel working in the three schools. Edison has the power to hire, assign, discipline, and dismiss all personnel hired at the schools.

The Baltimore Teachers Union initiated the present action in the Circuit Court for Baltimore City against the State Board and the New Board. The gist of the Union’s action was set forth in the beginning of its complaint as follows:

“1. This is an action for declaratory judgment, injunctive and equitable relief. The facts and claims in this action are solely a matter of statutory law and turn on the authority of the Maryland State Board of Education (‘MSBE’) and the New Baltimore City Board of School Commissioners (‘Local Board’) as granted by the State legislature.

“2. Plaintiff shall request that the Court find that MSBE acted ultra vires in its promulgation of C.O.M.A.R. 13A.01.04.08. and 13A.01.04.02(B)(8)(b).”

The State Board and the New Board filed motions to dismiss the complaint for lack of standing. Alternatively, the State Board moved for summary judgment, maintaining that the Board acted within the scope of its statutory authority by promulgating the challenged regulations and contracting with a private vendor for the operation of the three elementary schools. The Union filed a cross-motion for summary judgment. Edison filed a motion to intervene which was unopposed.

Following a hearing, the Circuit Court issued an order declaring that the Union had standing, that the challenged regulations were within the State Board’s statutory authority, and that the two Boards were statutorily authorized to enter into the contract.

The Union filed a notice of appeal to the Court of Special Appeals, and the State Board filed a cross-appeal on the standing issue. Prior to argument in the intermediate appellate court, the Union filed in this Court a petition for a writ of certiorari which we granted. Baltimore Teachers v. State Board of Education, 362 Md. 359, 765 A.2d 142 (2001). The petition presented the single question of whether the challenged regulations and contract were authorized by the General Assembly.

II.

As a threshold matter, we must first consider whether the Baltimore Teachers Union had standing to challenge the reconstitution regulations and the Edison contract. The respondent State Board filed a motion to dismiss the Union’s complaint for declaratory judgment on the ground that the Union lacked standing to bring the instant matter, and the Board’s cross-appeal challenges that portion of the declaratory judgment upholding the Union’s standing. See Joseph H. Munson Co. v. Secretary of State, 294 Md. 160, 168, 448 A.2d 935, 939 (1982), affirmed, 467 U.S. 947, 104 S.Ct. 2839, 81 L.Ed.2d 786 (1984).

The Board argues that for an organization like the Union to have standing “to bring a judicial action, it must ordinarily have a ‘property interest of its own ... separate and distinct from that of its individual members.’ ” Medical Waste Associates, Inc. v. Maryland Waste Coalition, Inc., 327 Md. 596, 612, 612 A.2d 241, 249 (1992), quoting Citizens Planning and Housing Association v. County Executive, 273 Md. 333, 345, 329 A.2d 681, 687 (1974). The Board further argues that the Union has not “ ‘suffered some kind of special damage from such wrong differing in character and kind from that suffered by the general public.’ ” Medical Waste, 327 Md. at 613, 612 A.2d at 249, quoting Rogers v. Maryland-National Capital Park and Planning Commission, 253 Md. 687, 691, 253 A.2d 713, 715 (1969). We disagree. The Union’s interests are sufficient to satisfy standing requirements.

The Union is an unincorporated association and the exclusive collective bargaining agent for the employees of the Baltimore City Public School System. See §§ 6-401 and 6-407 of the Education Article. As the designated collective bargaining agent, the Union is charged with statutory rights and fiduciary duties to negotiate for, and to act in the best interests of, the public school employees. § 6-510(b). The Union has a legal relationship with the New Board by way of the protection and benefits embodied in the negotiated labor agreement on behalf of Baltimore City public school employees. The function of the labor agreement is to set wages and establish minimum labor standards for the bargaining unit.

The reconstitution regulations and the Edison contract disturb those established standards and interject a competing labor pool with the bargaining unit. Additionally, the labor agreement does not apply to Edison; thus, the Edison contract reduces the size and scope of the Union’s bargaining unit. The contract removes the Union from three schools, thus making its bargaining unit that much smaller. While no employee may be compelled to be a “member” of the Union, every Baltimore City Public School employee is a member of the Union’s bargaining unit. The Union is empowered and, indeed, obligated by statute to represent all employees of the bargaining unit whether members of the Union or not. If more positions are included in the bargaining unit, the Union may have greater power to negotiate more advantageous agreements and to carry out more effectively its fiduciary duties. The Union’s status as the representative of public employees is diminished by the Edison contract.

Accordingly, we hold that the Union has demonstrated that, as the designated collective bargaining representative of Baltimore City Public School employees, it has standing to maintain the present judicial action.

III.

Turning to the merits of the case, Baltimore Teachers Union argues that COMAR 13A.01.01.02B(8) and 13A.01.04.08 exceed the statutory authority of the Maryland State Board of Education, and that the State Board’s contractual delegation of the operation and management of the reconstituted schools illegally grants powers to Edison which are vested exclusively in the New Board. While the State Board exercises general supervisory authority, the Union argues that the State Board lacks statutory authority to take over the basic functions of the local boards. The Union contends that there exists “no statute which directly and without equivocation authorizes the State Board” to turn over a public school to a third party and place it under the sole control of a private business.

We need not and shall not decide whether the State Board was statutorily authorized to adopt the reconstitution regulations in 1993. Even if the State Board lacked the statutory authority to promulgate the reconstitution regulations in 1993, subsequent enactments by the General Assembly remove any doubt as to the statutory authorization for the State Board’s actions. The General Assembly has passed legislation which confirms and ratifies the State Board’s power to issue the reconstitution regulations and to enter into third party contracts pursuant to those regulations. The legislation makes clear that the General Assembly knew of and approved of the State Board’s exercise of its statutory authority to contract with Edison for the operation and management of the three public elementary schools.

The principle of legislative ratification is well-established in the law. In the situation where a governmental entity takes action which may or may not be statutorily authorized, but where the appropriate legislative body later ratifies that action, the ratification clearly validates the action prospectively and, in the absence of constitutional limitations, may validate the action retroactively. As Justice Harlan stated for the Supreme Court long ago, “it is not perceived why subsequent legislative ratification is not, in the absence of constitutional restrictions upon such legislation, equivalent to original authority.” Grenada County v. Brown, 112 U.S. 261, 271, 5 S.Ct. 125, 130, 28 L.Ed. 704, 708 (1884). This Court has also recognized “that whatever a legislative body ‘may authorize in prospect, it may adopt and validate in retrospect, so long as there is no interference with vested rights,’ ” Washington Nat’l Arena v. Prince George’s Co., 287 Md. 38, 45, 410 A.2d 1060, 1064, cert. denied, 449 U.S. 834, 101 S.Ct. 106, 66 L.Ed.2d 40 (1980) (emphasis deleted), quoting County Council v. Carl M. Freeman Assoc., 281 Md. 70, 79, 376 A.2d 860, 865 (1977). See also, e.g., Bolles v. Town of Brimfield, 120 U.S. 759, 762, 7 S.Ct. 736, 737, 30 L.Ed. 786, 788 (1887) (“the legislature, by subsequent ratification, [can] make that legal which was originally without legal sanction”); Anderson v. Township of Santa Anna, 116 U.S. 356, 364, 6 S.Ct. 413, 417, 29 L.Ed. 633, 636 (1886) (“ ‘Unless ... there be a constitutional inhibition, a legislature has power, when it interferes with no vested right, to enact retrospective statutes ... to ratify and confirm any act it might lawfully have authorized in the first instance,’ ” quoting United States Mortgage Co. v. Gross, 93 Ill. 483, 494 (1879)); Dryfoos v. Hostetler, 268 Md. 396, 404, 302 A.2d 28, 32-33 (1973).

In 1997, the General Assembly directed the New Board to take actions necessary to “[i]mprove the status of schools that are subject to a State reconstitution notice.” § 4 — 309(d)(15) of the Education Article. In 1999 the General Assembly passed legislation regarding stipends for classroom teachers and, in doing so, distinguished between a local school board as an employer and a private employer of a teacher in a reconstituted school.⁶ Section 6-306(b)(4) mandates that a classroom teacher holding an advanced professional certificate, who teaches in a public school identified by the State Board “as a reconstitution school, a reconstitution-eligible school, or a challenge school, shall receive a stipend from the State in the amount of $2,000 for each year that the teacher performs satisfactorily in the classroom.” This language is in contrast to subsection (b)(2) that authorizes a stipend from the State for a classroom teacher “who is employed by a [local] board and who holds a certificate issued by the National Board for Professional Teaching Standards.”

The General Assembly enacted legislation in 2000 protecting the pension rights of teachers previously employed by the local boards, working for a third party contractor operating a school under the reconstitution regulations.⁷ The statutory provisions specifically reference “an employee of the New Baltimore City Board of School Commissioners or another county board of education” who is “hired by a third-party contractor to work in a school that is reconstituted by order of the Maryland State Board of Education.” § 22-216(a). The statute authorizes public school employees, whether vested or not in the retirement system, who are hired by a private contractor operating a school under state reconstitution, to withdraw their accumulated retirement or pension benefits without penalty, to receive service credit for the time employed with the private contractor, and to purchase up to five years of service credit at the employee rate for the period of employment with a third party contractor in a reconstituted school.

The 1997, 1999 and 2000 legislation demonstrates the General Assembly’s awareness and approval that the State Board would be entering into contracts with private vendors in accordance with the reconstitution regulations. The statutory language directly references schools “subject to a State reconstitution notice” in addition to those schools “identified by the State Board as a reconstitution school, reconstitution-eligible school, or a challenge school.” The language distinguishes between teachers “employed by a [local] board” and those who teach “in a public school identified by the State Board as a reconstitution school” for purposes of stipends and bonuses. The legislation affirmatively makes provisions to protect the pension rights of school teachers employed by third party contractors.

Given the language incorporating the reconstitution regulations and protecting the retirement benefits of those working in reconstituted schools, it is clear that the General Assembly recognized that the employer of a teacher in a public school under State reconstitution may be a private employer, and, thus, it is reasonable to infer legislative ratification of the regulations. As the Circuit Court correctly observed, “the General Assembly has considered and ... countenanced and condoned the [Board’s] authority to enter into a third party contract.” The General Assembly has clearly ratified the reconstitution regulations.

IV.

The Union in its brief before this Court, for the first time in this case, argues that the challenged regulations and the Edison contract violate Article VIII, § 1, of the Maryland Constitution.⁸ The Union, in making such constitutional argument, chiefly relies upon St. Mary’s Industrial School for Boys v. Brown, 45 Md. 310 (1876).

As earlier mentioned, the Union in its Circuit Court complaint emphasized that the “claims in this action are solely a matter of statutory law.” In its complaint, cross-motion for summary judgment, and memoranda filed in the Circuit Court, the Union never raised a constitutional issue. The Circuit Court’s memorandum and its declaratory judgment made no mention of a constitutional issue, as the Union had raised no such issue. The Union’s certiorari petition did not present a constitutional issue.

Maryland Rule 8-131(a) provides as follows:

“Rule 8-131. Scope of review.

(a) Generally. The issues of jurisdiction of the trial court over the subject matter and, unless waived under Rule 2-322, over a person may be raised in and decided by the appellate court whether or not raised in and decided by the trial court. Ordinarily, the appellate court will not decide any other issue unless it plainly appears by the record to have been raised in or decided by the trial court, but the Court may decide such an issue if necessary or desirable to guide the trial court or to avoid the expense and delay of another appeal.”

Since the constitutional issue raised in the Union’s brief was not raised in the trial court, we shall decline to address it. It is particularly important not to address a constitutional issue not raised in the trial court in light of the principle that a court will not unnecessarily decide a constitutional question. Winder v. State, 362 Md. 275, 306-307 n. 18, 765 A.2d 97, 114 n. 18 (2001); Dorsey v. State, 356 Md. 324, 342, 739 A.2d 41, 51 (1999).

Moreover, the case of St. Mary’s Industrial School for Boys v. Brown, supra, relied on by the Union, did not involve any holding under the Maryland Constitution. The Court in that case simply held that a tax and an appropriation, by Baltimore City, giving funds to certain private organizations, were not authorized by the City Charter or by any enactment of the General Assembly. The challenged action in the case at bar was ratified and authorized by the General Assembly.

JUDGMENT AFFIRMED, WITH COSTS.

BELL, C.J., concurs and dissents.

1 . In Board of Education of Prince George’s County v. Waeldner, 298 Md. 354, 360-361, 470 A.2d 332, 335 (1984), this Court described the relationship between the State Board and the local boards:

“The totality of these provisions has been described as a visitatorial power of such comprehensive character as to invest the State Board 'with the last word on any matter concerning educational policy or the administration of the system of public education’.... In Zeitschel, supra, 274 Md. at 81, 332 A.2d 906, we said: '[T]he power of visitation vested in the State Board is one of general control and supervision; it authorizes the State Board to superintend the activities of the local boards of education to keep them within the legitimate sphere of their operations, and whenever a controversy or dispute arises involving educational policy or proper administration of the public school system of the State, the State Board's visitatorial power authorizes it to correct all abuses of authority and to nullify all irregular proceedings.' "

2 . Hereafter, all references to sections of the Maryland Code will be to the Education Article, unless otherwise specified.

3 . COMAR 13A.01.04.02B(8) states:

"(8) Reconstitution.

(a) 'Reconstitution' means changing one or more of a school's:

(i) Administration;

(ii) Staff;

(iii) Organization; or

(iv) Instructional program.

(b) 'Reconstitution' may include contracting with a third party as provided in Regulation .07 of this chapter.”

4 . COMAR 13A.01.04.02B(10) provides:

"(10) 'Third party’ means an entity, public or private, who is not managing the school at the time of a reconstitution decision.”

5 . The New Baltimore City Board of School Commissioners was created by the General Assembly in 1997 as part of a new partnership between Baltimore City and the State "to improve the quality of public education in Baltimore City.” § 4-303(a) of the Education Article.

6 . Section 6-306 of the Education Article provides:

" § 6-306. County grants for national certification.

(a) Definition. — In this section, "county grant for national certification” means an annual grant distributed to a teacher certified by the National Board for Professional Teaching Standards established:

(1) Outside of the collective bargaining process; or

(2) As part of a collective bargaining agreement with the local employee organization.

(b) State budgetary funding. — (1) For fiscal year 2000 and each subsequent fiscal year, the Governor shall include in each year’s operating budget funding for stipends and bonuses provided in this subsection.

(2) A classroom teacher who holds a standard professional certificate or an advanced professional certificate who is employed by a county board and who holds a certificate issued by the National Board for Professional Teaching Standards shall receive a stipend from the State in an amount equal to the county grant for national certification, up to a maximum of $2,000 per qualified teacher.”

(4) A classroom teacher who holds an advanced professional certificate and teaches in a public school identified by the State Board as a reconstitution school, a reconstitution-eligible school, or a challenge school shall receive a stipend from the State in the amount of $2,000 for each year that the teacher performs satisfactorily in the classroom.”

7 . Code (1993, 1997 Repl. Vol, 2000 Supp.), § 22-216 of the State Personnel and Pensions Article provides:

"§ 22-216. Employment by private contractors.

(a) Applicability of section, — This section applies to an individual who is:

(1) a member of the Teachers' Retirement System;

(2) an employee of the New Baltimore City Board of School Commissioners or another county board of education; and

(3) hired by a third party contractor to work in a school that is reconstituted by order of Maryland State Board of Education.

(b) Withdrawal of accumulated contributions. — An individual who is hired by a third party contractor may withdraw the member’s accumulated contributions, within the meaning of § 20-101(b) of this article, at any time while the individual is employed by the third party contractor to work in a school that is reconstituted by order of the Maryland State Board of Education.

(c) Subsequent employment by New Baltimore City Board or other county hoard of education. — An individual who is hired by a third party contractor and subsequently becomes employed by the New Baltimore City Board of School Commissioners or another county board of education at any time while the order of reconstitution is in effect and on termination of the contract with the third party contractor:

(1) is not subject to the provisions of § 22-217 of this subtitle;

(2) shall be reinstated as a member of the Teachers' Retirement System;

(3) shall be entitled to restoration of any service credit to which the individual was entitled before employment by the third party contractor whether or not the individual was vested; and

(4) shall redeposit any of the amounts withdrawn under subsection (b) of this section with regular interest to the date of redeposit or, on retirement, the individual’s retirement allowance shall be reduced by the actuarial equivalent of the accumulated contributions withdrawn with regular interest to the date of retirement.

(d) Purchase of service credit — Conditions.—Except as provided in subsection (e) of this section, at any time before retirement, an individual may purchase service credit for a period of employment by a third party contractor to work in a school that is reconstituted by order of the Maryland State Board of Education if the individual:

(1) completes a claim for the service credit and files it with the Board of Trustees on a form that the Board of Trustees provides; and

(2) pays to the Board of Trustees in a single payment the member contributions the individual would have made for the period of employment for which the service credit is being purchased plus regular interest to the date of payment.

(e) Same — 5 year limit. — An individual may not purchase more than 5 years of service credit for the period of employment by a third party contractor to work in a school that is reconstituted by order of the Maryland State Board of Education.”

8 . Article VIII, § 1, provides as follows:

"Section 1. General Assembly to establish system of free public schools.

The General Assembly, at its First Session after the adoption of this Constitution, shall by Law establish throughout the State a thorough and efficient System of Free Public Schools; and shall provide by taxation, or otherwise, for their maintenance.''