Foreman v. Chester-Upland School District

941 A.2d 108, 2008 Pa. Commw. LEXIS 21

• Court: Commonwealth Court of Pennsylvania
• Decided: January 18, 2008
• Docket: 1754 C.D. 2007, No. 1755 C.D. 2007
• Status: Published

Opinions

OPINION BY

Judge PELLEGRINI.

The Chester-Upland School District (School District) and Chester-Upland School District Empowerment Board of Control (collectively, Empowerment Board), among others,¹ appeals from an order of the Delaware County Court of Common Pleas (trial court) holding that the Empowerment Board did not have the authority under the Education Empowerment Act² to enact Enrollment Resolution A-9 (Enrollment Resolution) to place limits on the number of its students that could attend charter schools.

Chester Community Charter School (CCCS) is a public, non-profit corporation which operates two elementary schools and one charter middle school in the City of Chester, Delaware County, Pennsylvania. The School District is a public school district that is managed and operated by the Empowerment Board pursuant to the Education Empowerment Act.³ On September 1, 1998, the School District issued CCCS a charter pursuant to the Charter School Law.⁴ In February 2001, the charter was renewed for five years. In November 2005, CCCS filed an application for renewal for an additional five years. On February 23, 2006, the School District granted the renewal, but capped the student enrollment. In March 2006, CCCS filed a petition for review with the trial court challenging the cap on enrollment. A stipulated agreement temporarily suspended that proceeding.

On March 8, 2007, the Pennsylvania Department of Education issued a “Declaration Concerning the Reestablishment of Sound Financial Structure in the School District.” In doing so, the Secretary of Education certified that the School District had reestablished a “sound financial structure;” however, the School District still remained an empowerment district under the Education Empowerment Act, and the governing of the School District reverted to the Empowerment Board from the Special Board of Control.⁵ On April 26, 2007, purportedly acting within its authority under Section 693(1) of the Public School Code of 1949,⁶ to cancel or renegotiate any contract to which it was a party, the Empowerment Board approved the Enrollment Resolution placing limits on the number of students that a charter school in the School District could enroll in its school during the 2007-2008 school year to 2,573 students. The Resolution was amended on July 19, 2007, to allow for an additional 150 students due to additional funding provided by the Commonwealth of Pennsylvania.

To challenge the legality of the enrollment resolution, CCCS filed a petition for review with the trial court against the School District and the Empowerment Board arguing that the Empowerment Board’s approval of the enrollment resolution was contrary to the Charter School Law. It did not name the Department of Education or Secretary of Education as respondents. It argued that nothing in the Charter School Law authorized the School District to impose a student enrollment cap, and the enrollment resolution rested on the legally flawed premise that a charter was a contract and the Empowerment Board had the power to cancel or renegotiate charters pursuant to Section 693 of the Public School Code of 1949, 24 P.S. § 6-693. CCCS also filed a complaint seeking a permanent injunction and declaratory relief.⁷

Sharell Foreman (Foreman)⁸ filed a separate petition for review in the nature of an appeal with the trial court on behalf of current or future charter school students requesting it to void the enrollment resolution and declare it unenforceable. The petition named the School District, the Empowerment Board and its individual members as respondents. It did not, however, name the Department of Education or the Secretary of Education as respondents. In her petition, she also argued that nothing in the Charter School Law authorized a school board to impose a student enrollment cap, and the legislative intent of the Charter School Law was clearly to provide all students with their choice of educational institutions, including “schools that operate independently from the existing school district structure.” Section 1702-A of the Charter School Law, 24 P.S. § 17-1702-A. Notably, Foreman did not file an action for declaratory relief or any other civil action, including a complaint.

Widener Partnership Charter School (Widener) filed a petition to intervene in CCCS’ action against the School District and the Empowerment Board which the trial court granted on June 14, 2007. After intervening, Widener filed a separate declaratory judgment action which also did not name the Department of Education or the Secretary of Education as respondents.⁹ Widener argued that the enrollment resolution was in direct violation of the Charter School Law because it froze enrollment at charter schools within the School District. The trial court consolidated the petitions brought by CCCS and Widener with that brought by Foreman for purposes of summary judgment so that the issues common to both actions could be resolved.

All three parties challenging the enrollment resolution submitted a joint motion for summary judgment. They alleged that the enrollment resolution violated the Charter School Law because, inter alia, that law allowed parents to choose whether to send their children to charter schools, and the Education Empowerment Act did not authorize the Empowerment Board to renegotiate their contract because charters were not contracts subject to cancellation or renegotiation. The Empowerment Board also filed a cross-motion contending that the Education Empowerment Act did, in fact, give it the authority to cap student enrollment in charter schools. Denying the Empowerment Board’s cross-motion and Foreman’s motion for summary judgment, the trial court granted summary judgment to CCCS and Widener reasoning that the enrollment resolution was not authorized by the Education Empowerment Act because a charter was not a contract and enjoined the Enforcement Board from enforcing it.¹⁰ This appeal by the School District and Empowerment Board as well as a cross-appeal by Foreman followed.¹¹

I.

The Empowerment Board first contends that the trial court lacked subject matter jurisdiction over this case because the Department of Education and Gerald L. Zahorchak, the Secretary of Education, were indispensable parties to this litigation. It maintains that relief cannot be granted without their participation because “The Department will face great expense reimbursing the District for increased charter school enrollment. It could also be required to expend extraordinary resources on the District in order to keep the District viable and fulfill the Department’s constitutional mandate to provide for the education of the District’s students.” (Empowerment Board’s brief at 23.) Because the Department of Education and the Secretary of Education are indispensable parties and because this court only has jurisdiction over Commonwealth parties, the trial court was without jurisdiction to declare the enrollment resolution null and void.¹²

A Commonwealth agency or official is only an indispensable party to a proceeding if the action “cannot conceivably be concluded with meaningful relief without the sovereign state itself becoming directly involved.” Pennsylvania State Education Association v. Department of Education, 101 Pa.Cmwlth. 497, 516 A.2d 1308, 1310 (1986). A party is indispensable where his rights are so connected with the claims of the litigants that no decree can be made between them without impairing such rights. Sotak v. Nitschke, 303 Pa.Super. 361, 449 A.2d 729 (1982).

While none of the actions of the Secretary or Department of Education are being challenged, the Empowerment Board argues that those Commonwealth parties are indispensable because the Commonwealth may have to provide more financial aid if more students are permitted to attend charter schools. While that may or may not be a collateral eonse-quence of striking any limitation on students attending charter schools, the only issue is whether the Empowerment Board under the Education Empowerment Act has the power to limit enrollment in charter schools. Just because the Commonwealth may or may not be affected, that does not make it an indispensable party to the litigation.

For example, in Pennsylvania State Education Association (PSEA), the PSEA filed a petition to have us invalidate and enjoin two school boards from implementing a tuition agreement between them that was designed to deal with the effects of declining enrollment and diminishing revenue. It also sought to enjoin the Department of Education from making any subsidy payments on behalf of students affected by that tuition agreement, arguing that it was not a proper party and we lacked jurisdiction to decide the controversy. Determining that the Department of Education merely gave advice to the schools and did not approve the changes involved in the instant matter, we stated that “we fail to see how such approval implicates the Department so as to involve it in the instant controversy,” Id., 516 A.2d at 1311, and held that meaningful relief could be afforded without its direct involvement. See also Pennsylvania School Boards Association, Inc. v. Commonwealth Association of School Administrators, 696 A.2d 859 (Pa.Cmwlth.1997).

All that is involved in this case is whether the Empowerment Board has the authority to limit enrollment of students in charter schools. Because we can give meaningful relief — to decide the enrollment resolution’s legality without the Secretary or the Department’s participation— we hold that the trial court properly found that the Department of Education was not an indispensable party to this action.

II.

Even if the trial court had jurisdiction, the Empowerment Board contends that the trial court erred in finding it did not have the power to enact the enrollment resolution limiting the number of charter school students because a charter is nothing more than a contract. It contends that a charter is a contract because it has the basic elements of a contract: the parties reach a mutual understanding; exchange consideration; and delineate the terms of the bargain with sufficient clarity. Weavertown Transport Leasing, Inc. v. Moran, 834 A.2d 1169, 1172 (Pa.Super.2003). Because it is a contract and Chester-Upland is a financially distressed school district, it argues that it has the power under the Education Empowerment Act to “cancel or to renegotiate any contract other than teachers’ contracts to which the board or the school district is a party, if such cancellation or renegotiation of contract will effect needed economies in the operation of the district’s schools.”¹³

In support of this argument, the charter is a contract, it points out that the Department of Education considers the charter a contract in its “Basic Education Circulars” stating that a “Charter is an agreement or contract between the school district and an incorporated entity, known as a charter school.” (Reproduced Record at 51a.) Finally, and most importantly, it relies on Section 1720-A of the Charter School Law, 24 P.S. § 17-1720-A, which provides that the “written charter shall be legally binding on both the local board of school directors of a school district and the charter school’s board of trustees,” and that establishes that a contractual relationship between it and. the charter school exists. (Emphasis added.) For all these reasons, the Empowerment Board contends that because a charter is a contract under the Charter School Law between the School District and the local school board, it had the authority to enact the enrollment resolution.

The relationship between a local school district and a charter school is set forth in the Charter School Law. In enacting that law, the General Assembly stated that its intent in authorizing the establishment of charter schools was to “provide opportunities for teachers, parents, pupils and community members to establish and maintain schools that operate independently from the existing school district structure.” Section 1702-A of the Charter School Law, 24 P.S. § 17-1702-A. In carrying out that intent, the Charter School Law sets forth a specific procedure that those seeking a charter school and the school directors must follow. First, those seeking a charter school must file an application containing detailed information such as the grade or age levels served by the school, the governance structure, its mission and goal, how students’ education progresses and its financial plan. Section 1719-A of the Charter School Law, 24 P.S. § 17-1719-A. Once an application is filed, the school directors are under specific time constraints for the scheduling of public hearings and taking action on the application and are required to approve or deny the application based on criteria listed in the Educational Empowerment Act. If the school directors deny the application, the applicants may appeal to the State Charter School Appeal Board, which based on its own evaluation of the evidence, can grant the charter over the objections of the school district. Section 1721-A of the Charter School Law, 24 P.S. § 17-1721-A.¹⁴ Once the application for the charter is granted, based on the application, a written charter granting the right to establish a charter school for three to five years is prepared subject to reauthorization by the school directors or the State Charter Appeal Board. 24 P.S. § 17-1720-A. The school district is required to pay for the student residing in its district and if it fails to do so, the Secretary of Education is required to deduct the estimated amount from all state payments owed to the school district. Section 1725-A of the Charter School Law, 24 P.S. § 17-1725-A. The monitoring of charter schools is entrusted to local school directors. They are given the authority to terminate or refuse to renew the charter if there are material violations of conditions, standards or procedures in the written charter, failures meet state standards regarding student performance or curriculum or failure to meet generally accepted standards of fiscal management or audit requirements. Section 1729-A of the Charter School Law, 24 P.S. § 17-1729-A.

As can be seen from the statutory scheme laid out above, the relationship between a school district and a charter school is not contractual, but regulatory: school directors are obligated to issue a charter if the applicant satisfies the criteria set forth in the Charter School Law; if school directors deny the application, the State Charter School Appeal Board can reverse that decision, and even that decision can be appealed to us. Once a charter is awarded, the Charter School Law statutorily mandates school district obligations requiring that the school district pay to the charter school the statutorily prescribed amount. While Section 1720-A of the Charter School Law, 24 P.S. § 17-1720-A, does provide, “This written charter shall be legally binding on both the local board of school directors of a school district and the charter school’s board of trustees,” that does not make a charter a contract. It is more like the issuance of a regulatory permit where the state or local government must honor the terms of the permit unless breached by the party receiving the permit. Nowhere in the entire Charter School Law is the term “contract” used to describe the relationship between the charter school and the school board, nor are the terms “offer” and “acceptance” used. Rather, the Charter School Law uses the regulatory terms “application” and “grant” to describe the process of granting a charter school application.

What a charter grants is not a contract that “outsources” public education, but the establishment of schools to provide students with a public education. As our Supreme Court recently explained in Zager v. Chester Community Charter School, — Pa.-, 934 A.2d 1227, 1231 (2007):

Article III § 14 of the Pennsylvania Constitution requires the General Assembly to provide public education to serve the needs of the Commonwealth. “The Constitution of Pennsylvania ... not only recognizes that the cause of education is one of the distinct obligations of the state, but makes of it an indispensable governmental function.” Malone v. Hayden, 329 Pa. 213, 223, 197 A. 344, 352 (1938). The Charter School Law, 24 P.S. § 17-1701-A et. seq., pursuant to which Chester Community Charter School was created, defines a charter school as “an independent public school established and operated under a charter from the local board of school directors and in which students are enrolled or attend.” 24 P.S. § 17-1703-A. The Public School Code, within which the Charter School Law is contained, is intended to “establish a thorough and efficient system of public education, to which every child has a right.” Hazleton Area Sch. Dist. v. Zoning Hearing Bd., 566 Pa. 180, 192, 778 A.2d 1205, 1213 (2001). A stated purpose of charter schools is to “provide parents and pupils with expanded choices in the types of educational opportunities that are available within the public school system.” 24 P.S. § 17-1702-A(5). See also Mosaica Academy Charter Sch. v. Com. Dept. of Ed., 572 Pa. 191, 206, 813 A.2d 813, 822 (2002) (“... the General Assembly was clear in defining a charter school as a public school ... ”); West Chester Area Sch. Dist. v. Collegium Charter Sch., 571 Pa. 503, 507, 812 A.2d 1172, 1174 (2002) (“A charter school is defined under the [Charter School Law] as an independent, nonprofit, public school ... ”). Therefore charter schools, as independent public schools created for the purpose of providing the essential governmental service of education in a constitutionally mandated manner ...

In the context of the Charter School Law then, a charter is not a contract, but a grant of power for the board of directors of that school to establish a school to provide public education to school-age children. Consequently, the Empowerment Board did not have authority pursuant to Section 693(1) of the Public School Code to limit charter school enrollment.¹⁵

Accordingly, the order of the trial court is affirmed.

ORDER

AND NOW, this 18th day of January, 2008, the order of the Delaware County Court of Common Pleas, dated September 4, 2007, is affirmed. The School District and the Empowerment Board’s expedited applications to reinstate supersedeas are denied.

Judge LEAVITT did not participate in the decision in this case.

1 . Also appealing were C. Marc Woolley, Katherine Schultz and Juan Baughn.

2 . Act of March 10, 1949, P.L. 30, 24 P.S. §§ 17-1701-B — 17-1716-B, added by the Act of May 10, 2000, P.L. 44. ■

3 . The School District was initially being managed by a Special Board of Control as a result of the School District’s financial distress as determined in 1994 by the Secretary of Education. Pursuant to Section 1705 — B(h)(l) of the Education Empowerment Act, 24 P.S. § 17-1705-B(h)(l), "A school district under a declaration of distress pursuant to [24 P.S. § 6-692] section 691(a) and certified as an education empowerment district shall be operated by a special board of control established under section 692. A board of control established under this section shall be abolished upon the appointment of a special board of control under section 692.” The Department of Education petitioned to have the Empowerment Board substituted for the Special Board of Control which was granted by order of this Court dated April 16, 2007.

4 .Act of March 10, 1949, P.L. 30, 24 P.S. §§ 17-1701-A' — 17-1751-A, added by the Act of June 19, 1997, P.L. 225.

5 . See nt. 2.

6 . Act of March 10, 1949, P.L. 30, as amended, 24 P.S. § 6-693(1).

7 . The School District and the Empowerment Board filed preliminary objections to CCCS’ declaratory judgment action arguing that it failed to include the Department of Education and the Secretary of Education, which were indispensable parties. The trial court denied their preliminary objections.

8 .Foreman filed individually and on behalf of minors Qu’ran Foreman, Tyonna Burton and Daniel Burton; parent Diamond Palmer, individually and on behalf of minors Day-Quan Brown and Diamond Palmer; and parent Roslyn Hawkins, individually and on behalf of minors William Clark, Dashawn Clark and Camree Hawkins. The minors are either students who are currently attending CCCS, children who either have applied for admission to CCCS or children who plan to apply for admission to CCCS.

9 .The School District and the Empowerment Board also filed preliminary objections to Widener’s declaratory judgment actions. The trial court never issued a ruling on their preliminary objections. The School District and the Empowerment Board filed an answer to Widener's action for declaratory judgment, but then CCCS and Widener withdrew their requests for preliminary injunctions and no decision was ever rendered. CCCS also filed a motion for summary relief which the School District and the Empowerment Board opposed and the trial court denied due to a lack of jurisdiction.

10 . The trial court denied Foreman's motion on procedural grounds stating that she only filed a petition for review and "did not file an action for declaratory relief or any other action at law or equity. Summary judgment was only appropriate in civil actions filed at law or equity. Summary judgment motions were not applicable to petition practice.” (Trial court's October 19, 2007 opinion at 15.)

11 . Our scope of review of the trial court's order denying summary judgment is limited to determining whether the trial court committed an error of law or abused its discretion. Laich v. Bracey, 776 A.2d 1022 (Pa. Cmwlth.2001).

12 . Section 761(a) of the Judicial Code, 42 Pa.C.S. § 761(a), provides that "[t]he Commonwealth Court shall have original jurisdiction of all civil actions or proceedings: (1) Against the Commonwealth government including any officer thereof, acting in his official capacity....”

13 . The Empowerment Board points out that approximately 40% of its approximately 7,000 students attend charter schools for which it must pay their instructional costs. It contends that the outflow of students to charter schools is negatively affecting its financial condition because the School District’s student base is decreasing as students opt for charter schools, and it is necessary to limit that growth if it is to staunch that outflow of funds and thereby achieve financial stability.

14 . See e.g. McKeesport Area School District v. Propel Charter School McKeesport, 888 A.2d 912 (Pa.Cmwlth.2005), where a charter school’s application was denied and the school district was ordered to grant application.

15 . Because we have determined that the School District and the Empowerment Board did not have authority to enact the enrollment resolution, we need not address their remaining issues. For the same reasons, we need not address Foreman's appeal.