Petrella ex rel. N.P. v. Brownback

697 F.3d 1285, 2012 WL 4953107, 2012 U.S. App. LEXIS 21828
CourtCourt of Appeals for the Tenth Circuit
DecidedOctober 18, 2012
DocketNo. 11-3098
StatusPublished
Cited by65 cases

This text of 697 F.3d 1285 (Petrella ex rel. N.P. v. Brownback) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Petrella ex rel. N.P. v. Brownback, 697 F.3d 1285, 2012 WL 4953107, 2012 U.S. App. LEXIS 21828 (10th Cir. 2012).

Opinion

EBEL, Circuit Judge.

In this litigation, Appellants, plaintiffs below, brought an action under 42 U.S.C. § 1983, challenging the statutory scheme by which the state of Kansas funds its public schools. The district court dismissed their suit for lack of standing. Exercising jurisdiction under 28 U.S.C. § 1291, we conclude that the Appellants have standing because their alleged injury — unequal treatment by the state— would be redressed by a favorable decision. Accordingly, we REVERSE.

I. BACKGROUND

A. Kansas School District Finance and Quality Performance Act

The Kansas Constitution requires the Kansas legislature to “make suitable provision for finance of the educational interests of the state.” Kan. Const. art. 6, § 6. In 2005, the Kansas Supreme Court determined that the then-current school finance system (the School District Finance and Quality Performance Act, or “Act”) violated the state constitution because it “failed to make suitable provisions” for funding the public schools. See Montoy v. State, 278 Kan. 769, 120 P.3d 306, 310 (2005) (“Montoy I”) (internal quotation marks omitted).1 Among the Act’s constitutional [1290]*1290shortcomings were an overall underfunding of public education, and a wealth-based disparity in public education funding based on differences in assessed property values from district to district. See id. At the same time, the Kansas Supreme Court upheld the Act against an equal protection challenge, finding that the Act did not violate either the Kansas or United States constitutions on equal protection grounds. See id. at 308.

A few months after Montoy I, the Kansas Legislature passed new legislation that purported to address the Act’s constitutional shortcomings. The Kansas Supreme Court considered the adequacy of that new legislation in Montoy v. State, 279 Kan. 817, 112 P.3d 923 (2005) (“Mon-toy II ”). As pertinent to this appeal, the Montoy II court concluded that the new legislation was still inadequate under the Kansas Constitution, both because it still failed to provide enough funding overall, and because its revisions to how local property taxes would be levied and distributed “exacerbate[d] disparities based on district wealth.” Montoy II, 112 P.3d at 937.

After Montoy II, the Kansas Legislature again amended the Act. This latest iteration of the Act, Kan. Stat. Ann. § 72-6405 et seq., is the subject of the present litigation. The Kansas Supreme Court deemed the current version of the Act sufficient to bring the system into “substantial compliance” with its prior orders. See Montoy v. State, 282 Kan. 9, 138 P.3d 755, 765 (2006) (“Montoy III”).

The Act attempts to ensure equal per-pupil funding across all school districts according to a complex formula. The formula establishes a “Base State Aid Per Pupil” figure, see Kan. Stat. Ann. § 72-6410(b)(1), which is then multiplied by a given district’s adjusted enrollment to determine the “State Financial Aid,” i.e., the minimum funding that district will receive from the state. See id. § 72-6410(a). Adjustments to a district’s actual enrollment numbers are made according to a series of weighting factors, which take into account such things as the number of bilingual or special education students in a given district; the number and percentage of “at-risk” students in the district; whether the district has unusually high or low enrollment; the transportation needs of the district; and whether a district is operating a new facility. See id. §§ 72-6411-72-6415b, 72-6442b. Thus, for example, a district with high numbers of at-risk students, or high numbers of students requiring bus transportation, will have its actual enrollment adjusted upwards, to help it meet the costs associated with those factors.

The Act requires each school district to levy an ad valorem property tax of 20 mills for school finance purposes. Kan. Stat. Ann. § 72-6431. The amount of money raised through this local tax is designated the district’s “Local Effort.” Id. § 72-6410(c). If a district’s Local Effort generates less than the level of State Financial Aid to which the district is entitled under the formula above, the State makes up the difference with “General State Aid.” Id. § 72-6416(b). If on the other hand, a district’s Local Effort equals or exceeds the level of State Financial Aid to which it is entitled, the district receives no General State Aid. Id. Any Local Effort in excess of the State Financial Aid target is remitted to the state and used to cover General State Aid distributions to other districts. Id. § 72-6431(c), (d).

The Act also authorizes districts to adopt a “Local Option Budget” (“LOB”), which permits a district to raise extra money by levying additional property taxes beyond the 20 mill minimum. Id. § 72-6433(b). The LOB is capped, however, at 31% of the district’s State Financial Aid [1291]*1291entitlement. Id. Districts that utilize a LOB are further entitled to “Supplemental General State Aid” based on where the district ranks in terms of assessed property value. Id. § 72-6434. Low-ranking districts receive more Supplemental General State Aid than higher-ranking districts, and the highest-ranking districts receive no Supplemental General State Aid at all. Id.

The LOB cap, in some form, has been part of the scheme since the Act was initially enacted in 1992. Initially the cap was 25%. Kan. Sess. Laws 1992, ch. 280, § 29. In 2005 and 2006, responding to the Kansas Supreme Court’s orders in the Montoy litigation, the legislature increased the cap. Kan. Sess. Laws 2005, ch. 194, § 17; Kan. Sess. Laws 2006, ch. 197, § 19. In holding the Legislature’s first corrective attempt at a funding scheme was still inadequate, the state high court noted that “the legislation’s increase in the LOB cap exacerbates the wealth-based disparities between districts.” Montoy II, 112 P.3d at 934.

B. Procedural Background

Appellants are students, and parents of students, in the Shawnee Mission Unified School District (“SMSD”). They filed this action under 42 U.S.C. § 1983 in the District of Kansas in December 2010, claiming that the LOB cap violated their federal Equal Protection and Due Process rights, as guaranteed by the Fourteenth Amendment to the United States Constitution. Appellants named as Defendants, Appellees here, various state officials, including the Governor, the Attorney General, the Treasurer, the Commissioner of Education, and the Chair and members of the State Board of Education (“Appellees”).

According to Appellants’ complaint below, the LOB cap has caused SMSD to reduce its budget and reduce the educational services it provides.

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697 F.3d 1285, 2012 WL 4953107, 2012 U.S. App. LEXIS 21828, Counsel Stack Legal Research, https://law.counselstack.com/opinion/petrella-ex-rel-np-v-brownback-ca10-2012.