Texas Education Agency and Mike Morath, Commissioner of Education, in His Official Capacity v. American Youthworks, Inc., D/B/A American Youthworks Charter School Honors Academy, Inc., D/B/A Honors Academy And Azleway Inc., D/B/A Azleway Charter School

496 S.W.3d 244
Court of Appeals of Texas·Decided June 10, 2016·No. NO. 03-14-00283-CV, NO. 03-14-00360-CV·Published·Cited by 28 cases

Opinion

OPINION

Jeff Rose, Chief Justice

The 2013 Texas Legislature passed legislation aimed, in part, at strengthening the Commissioner of Education’s authority to revoke the charters of underperforming open-enrollment charter schools and at expediting that revocation process. American YouthWorks Charter School, Honors Academy, and Azleway Charter School (collectively, the Charter Schools) were among the first charter schools against which the Commissioner sought charter revocation under this new legislation. Their charter holders — appellees American YouthWorks, Inc., Honors Academy, Inc., and Azleway, Inc. (collectively, the Charter Holders) — sued appellants the Texas Education Agency (TEA) and Mike Morath, in his official capacity as Commissioner of Education, in Travis County District Court for declaratory and injunctive relief related to the administrative revocation process. The district court issued temporary injunctions enjoining further revocation actions regarding the Charter Schools. Our principal issue in these interlocutory appeals from those injunctions 2 is whether, under a statutory scheme that expressly precludes judicial review of the agency decisions being challenged in the underlying district-court proceeding, the Charter Holders’ pleadings invoke the district court’s inherent right to review those agency decisions. For the reasons explained below, we conclude that their pleadings do not and cannot invoke that inherent right to judicial review and, *248 therefore, the Charter Holders’ claims are barred by sovereign immunity.

I.

BACKGROUND

Before describing the underlying administrative and judicial proceedings leading to this appeal, we will briefly review the legislative history of charter schools in Texas to provide some context for the legislation that is at issue in this case.

A. Charter schools in Texas

Pacing a self-imposed deadline of September 1, 1995, that would result in the repeal of Titles 1 and 2 of the Education Code, 3 and in the wake of a gubernatorial campaign in which then-candidate George W. Bush had emphasized education reform, the 74th Texas Legislature overhauled Texas’s public-school system with extensive changes to the Education Code. 4 To deregulate the education system, for example, the 74th Legislature stripped away several state-mandated rules; limited the role and rule-making powers of the State’s administrative bodies that oversaw public education; gave the governor the power to appoint TEA’S Commissioner; devolved substantial authority to the local level; and, particularly relevant here, authorized state-funded charter schools as an alternative to traditional public-school education. 5

Charter schools are statutorily created public schools that operate under a written document called a charter. 6 The Education Code recognizes three classes of charter schools — home-rule school-district charter schools; campus or campus-program charter schools; and, at issue here, open-enrollment charter schools. 7 Stated generally, a charter explains the charter holder’s and the charter school’s obligations, including what the school will attempt to accomplish, how student performance will be measured, and what levels of achievement the school will attain. 8 As state-funded public schools, charter schools must follow certain state guide *249 lines, but they are afforded a level of regulatory freedom not available to traditional public schools in the name of affording them flexibility to “improve student learning” 9 and “establish different and innovative learning methods” 10 that best fit the needs of their students. For example, open-enrollment charter schools in Texas are, for the most part, exempt from the laws that require public schools to employ certified teachers, follow state-mandated curriculum, limit class size, or follow teacher-salary schedule and teacher-contract requirements. 11 Freed from these strictures, the charter schools are instead supposed to be carefully monitored for “fiscal and academic accountability,” although not in a way that “unduly regulates the instructional methods or pedagogical innovations of charter schools.” 12

In 2001, after charter schools had been part of the public-school system for a few years, the Legislature promulgated laws modifying the structure and operation of open-enrollment charter schools by strengthening regulations regarding their governance and financial oversight and increasing their accountability to the State. 13 This legislation also added provisions regarding charter revision, probation, revocation, denial of renewal, and audits, including making the Commissioner, rather than the State Board of Education, the State official responsible for those actions. 14 It further specified that Chapter 2001 of the Administrative Procedure Act — which establishes, among other things, procedural rules for contested-case hearings and the scope of judicial review of agency action 15 — did not apply to TEA hearings addressing modification, probation, revocation, and renewal of charters. 16

In 2004, following TEA’S scheduled Sunset review, 17 the Sunset Advisory Commission issued a report faulting TEA for its oversight of the charter-school program and recommending that the Legislature address the following problems:

• Without adequate, periodic assessment, some charter schools have gone bankrupt and may have inappropriately used State funds.
• Without recent accountability ratings, TEA cannot evaluate the quality of education at charter schools. 18

The report concluded that children in some charter schools “may be at risk of receiv *250 ing an inadequate education,” and “without effective ways to measure student success, parents and school officials are ill-informed as to instructional quality.” 19 And emphasizing some “notable financial failures of charter schools,” the report expressed serious concerns about TEA’S lack of real ability “to hold charter schools accountable for expending State funds.” 20

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Texas Education Agency and Mike Morath, Commissioner of Education, in His Official Capacity v. American Youthworks, Inc., D/B/A American Youthworks Charter School Honors Academy, Inc., D/B/A Honors Academy And Azleway Inc., D/B/A Azleway Charter School, 496 S.W.3d 244 (Tex. Ct. App. 2016).

496 S.W.3d 244 (Texas Education Agency and Mike Morath, Commissioner of Education, in His Official Capacity v. American Youthworks, Inc., D/B/A American Youthworks Charter School Honors Academy, Inc., D/B/A Honors Academy And Azleway Inc., D/B/A Azleway Charter School) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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