the Texas Education Agency and Mike Morath, Commissioner of Education, in His Official Capacity v. Academy of Careers and Technologies, Inc. D/B/A Academy of Careers and Technologies Charter School

Opinion

ACCEPTED 03-15-00528-CV 7458584 THIRD COURT OF APPEALS AUSTIN, TEXAS 10/20/2015 3:01:39 PM JEFFREY D. KYLE CLERK No. 03-15-00528-CV _____________________________ FILED IN 3rd COURT OF APPEALS IN THE COURT OF APPEALS AUSTIN, TEXAS FOR THE THIRD JUDICIAL DISTRICT 10/20/2015 3:01:39 PM _____________________________ JEFFREY D. KYLE Clerk TEXAS EDUCATION AGENCY AND MICHAEL WILLIAMS, COMMISSIONER OF EDUCATION, IN HIS OFFICIAL CAPACITY, Appellants,

VS.

ACADEMY OF CAREERS AND TECHNOLOGIES, INC. D/B/A ACADEMY OF CAREERS AND TECHNOLOGIES CHARTER SCHOOL, Appellee. ______________________________

On Appeal from the 200th Judicial District Court of Travis County, Texas Cause No. D-1-GN-15-002879 ______________________________

BRIEF OF APPELLANTS ______________________________ KEN PAXTON Attorney General of Texas ERIKA M. LAREMONT Texas Bar No. 24013003 CHARLES E. ROY Assistant Attorney General First Assistant Attorney General General Litigation Division P.O. Box 12548, Capitol Station JAMES E. DAVIS Austin, Texas 78711-2548 Deputy Attorney General for Civil (512) 463-2120 (PHONE) Litigation (512) 320-0667 (FAX)

ANGELA COLMENERO ATTORNEYS FOR APPELLANTS Division Chief ORAL ARGUMENT REQUESTED October 20, 2015 IDENTITY OF PARTIES AND COUNSEL

Pursuant to Rule 38.1(a) of the Texas Rules of Appellate Procedure, Appellants herein provides this Court with the following list of parties and the names and addresses of all trial and appellate counsel:

Defendants-Appellants: Texas Education Agency (“TEA”) and Michael L. Williams, in his Official Capacity as the Commissioner of Education

Trial & Appellate Attorney for ERIKA M. LAREMONT Defendants-Appellants: Texas Bar No. 24013003 Assistant Attorneys General Office of the Attorney General General Litigation Division P.O. Box 12548, Capitol Station Austin, TX 78711-2548 PHONE: (512) 463-2120 FAX: (512) 320-0667

Plaintiff-Appellee: Academy of Careers and Technology, Inc., d/b/a Academy of Careers and Technology Charter School

Trial and Appellate Attorneys D. TODD SMITH For Plaintiff-Appellee: Texas Bar No. 00797451 Smith Law Group LLLP 1250 Capital of Texas Highway South T Three Cielo Center, Suite 601 Austin, Texas 78746

STEPHEN M. FOSTER Texas Bar No. 00792511 9013 Magna Carta Loop Austin, Texas 78754 PHONE: (512) 784-4367

ii TABLE OF CONTENTS

IDENTITY OF PARTIES AND COUNSEL ........................................................ ii TABLE OF CONTENTS ...................................................................................... iii INDEX OF AUTHORITIES ................................................................................... v STATEMENT OF THE CASE ............................................................................... 1 STATEMENT REGARDING ORAL ARGUMENT ........................................... 2 ISSUE PRESENTED ............................................................................................... 2 BRIEF OF APPELLANTS ..................................................................................... 3 STATEMENT OF FACTS ...................................................................................... 4 I. 2012 SUNSET ADVISORY COMMISSION AND CHANGES TO TEXAS EDUCATION CODE. .................................................................... 4 II. THE TEXAS EDUCATION CODE PROVIDES FOR A LIMITED APPEAL PROCESS. ................................................................................. 7 A. Appeal of academic and financial accountability ratings. ......................................................................................... 7 B. Appeal of revocation decision. ................................................ 10 III. ACT FAILED TO MEET THE FINACIAL AND/OR ACADEMIC ACCOUNTATIBLITY RATING FOR THREE CONSECUTIVE YEARS. ........................................................................ 11 IV. THE TEXAS EDUCATION CODE MANDATES REVOCATION OF ACT’S CHARTER SCHOOL .......................................................... 14 SUMMARY OF ARGUMENTS........................................................................... 16 ARGUMENT .......................................................................................................... 17 I. STANDARDS OF REVIEW...................................................................... 17 A. Plea to the Jurisdiction ............................................................ 17 B. Temporary Injunction ............................................................. 18 C. Statutory Construction ............................................................ 19 II. ACT HAS FAILED TO IDENTIFY THE VEHICLE IN WHICH IT MAY SEEK JUDICIAL REVIEW........................................................ 19 A. ACT Failed to Identify a Statutory Basis for Judicial Review of TEA’s Accountability Ratings or Decision to Revoke ................................................................................... 21

iii 1. There is no statutory provision which allows this court to review TEA’s rating decisions ................... 21 2. There Is No Statutory Provision Which Allows This Court to Review TEA’s Revocation Decision ....................................................... 21 B. ACT Failed to Demonstrate a Due Process Violation. .................................................................................................... 23 1. ACT does not have a vested right in the charter contract .............................................................. 23 2. ACT failed to alleged a viable procedural- due-process claim ........................................................... 30 3. TEA applied the Texas Education Code neither arbitrarily nor capriciously in connection with ACT’s accountability ratings or revocation ................................................................... 32 C. No Violation of Some Other Constitutional Right ................ 34 1. ACT failed to demonstrate a property interest to substantiate its takings claim ..................................... 34 2. The Texas Education Code does not violate the Open Courts Provision ............................................. 37 III. ACT’S ULTRA VIRES CLAIMS ARE MERITLESS, BARRED BY SOVEREIGN IMMUNITY, AND DO NOT SUPPORT THE DISTRICT COURT’S FINDING THAT ACT WOULD LIKELY SUCCEED ON THE MERITS OF ITS CLAIMS ......................................... 38 A. ACT failed to allege that the Commissioner acted without legal authority or failed to perform a ministerial act ............................................................................. 38 B. ACT is seeking retroactive relief which is unavailable in an ultra vires action .................................................................... 41 IV. ACT FAILED TO DEMONSTRATE THE TRIAL COURT’S JURISDICTION AND, THEREFORE, THE TRIAL COURT ERRED BY DENYING TEA’S PLEA. ..................................................... 43 PRAYER ................................................................................................................. 44 CERTIFICATE OF COMPLIANCE .................................................................. 46 CERTIFICATE OF SERVICE ............................................................................ 46

iv INDEX OF AUTHORITIES

Cases Adler v. Duval County School Bd., 112 F.3d 1475 (11th Cir. 1997) ........................41 Bacon v. Hist. Comm’n, 411 S.W.3d 161 (Tex. App.—Austin 2013, no pet.) ..................................................................................................................20 Bd. of Regents v. Roth, 408 U.S. 564 (1972) .................................................... 23, 24 Byers v. Patterson, 219 S.W.3d 514 (Tex.App.—Tyler 2007, no pet.) ..................32 City of Beaumont v. Bouillion, 896 S.W.2d 143 (Tex. 1995) ..................................41 City of College Station v. Turtle Rock Corp., 680 S.W.2d 802 (Tex. 1984) .....................................................................................................................35 City of Dallas v. Trammel, 101 S.W.2d 1009 (Tex. 1937) ......................................26 City of El Paso v. Heinrich, 284 S.W.3d 366 (Tex. 2009) ................... 38, 39, 41, 42 City of El Paso v. Public Utility Comm'n of Tex., 883 S.W.2d 179 (Tex. 1994) ...........................................................................................................33 City of Elsa v. Gonzalez, 325 S.W.3d 622 (Tex. 2010) ...........................................18 City of Elsa v. M.A.L., 226 S.W.3d 390 (Tex. 2007) ...............................................41 City of Houston v. Carlson, 393 S.W.3d 350 (Tex. App.—Houston [14th Dist.] 2012, no pet.)......................................................................................30 City of Houston v. Northwood Mun. Util. Dist. No. 1, 73 S.W.3d 304 (Tex.App.—Houston [1st Dist.] 2001, pet. denied) ..............................................23 City of Marshall v. City of Uncertain, 206 S.W.3d 97 (Tex. 2006) ........................19 City of Port Arthur v. Southwestern Bell Tel. Co., 13 S.W.3d 841 (Tex.App.—Austin 2000, no pet.)........................................................................37 City of San Antonio v. City of Boerne, 111 S.W.3d 22 (Tex. 2003) ........................19 Coastal Habit Alliance v. Pub. Util. Comm’n, 294 S.W.32d 276 (Tex. App.—Austin 2009, no pet.) ................................................................................31 Combs v. City of Webster, 311 S.W.3d 85 (Tex.App.—Austin 2009, pet. filed)........................................................................................................ 23, 38 Conn. Bd. of Pardons v. Dumschat, 452 U.S. 458 (1981) .......................................23 v Creedmoor–Maha Water Supply Corp. v. Tex. Comm'n on Envtl. Quality, 307 S.W.3d 505 (Tex.App.—Austin 2010, no pet.) ........... 20, 38, 39, 41 Creedmoor-Maha, 307 S.W.3d 505 (Tex. App.—Austin 2010, no pet.) .......................................................................................................... 20, 37, 38 Employees Ret. Sys. v. Jones, 58 S.W.3d 148 (Tex. App.—Austin 2001, no pet.) ........................................................................................................19 Ex parte John M. Abell, 613 S.W.2d 255 (Tex. 1981) ..................................... 24, 27 Fed. Sign v. Tex. S. Univ., 951 S.W.2d 401 (Tex. 1997) .................................. 37, 38 Gerst v. Nixon, 411 S.W.2d 350 n. 8 (Tex. 1966) ...................................................33 Graham Mortg. Corp. v. Hall, 307 S.W.3d 472 (Tex. App.—Dallas 2010, no pet.) ........................................................................................................18 Hawkins v. El Paso First Health Plans, Inc., 214 S.W.3d 709 (Tex. App.—Austin 2007, no pet.) ................................................................................17 Hot Rod Hill Motor Park v. Triolo, 276 S.W.3d 565 (Tex. App.— Waco 2008, no pet.)..............................................................................................18 Houston Belt & Terminal Ry. Co. v. City of Houston, 424 S.W.3d 663 (Tex.App.–Houston [14th Dist.] 2014, pet. filed) .................................................39 In re Gamble, 71 S.W.3d 313 (Tex. 2002) ..............................................................18 Indian Beach Prop. Owners’ Ass’n v. Linden, 222 S.W.3d 682 (Tex. App.—Houston [1st Dist.] 2007, no pet.) .............................................................18 KEM Tex., Ltd. v. Texas Dep't of Transp., No. 03-08-00468-CV, 2009 Tex. App. LEXIS 4894 (Tex. App.—Austin 2009, no pet.) ................................20 Klumb v. Houston Mun. Emp. Pension Sys., 405 S.W.3d 204 (Tex. App.—Houston [1st Dist.] 2013, pet. filed) ................................................... 25, 27 Lazarides v. Farris, 367 S.W.3d 788 (Tex.App.—Houston [14th Dist.] 2012, no pet.) ........................................................................................................42 Lee v. Tex. Workers’ Compensation Comm’n, 272 S.W.3d 806 (Tex.App.—Austin 2008).............................................................................. 24, 26 McAllen Hosps., L.P. v. Suehs, 426 S.W.3d 304 (Tex. App.— Amarillo 2014, no pet.) ................................................................................. 25, 27 Mikeska v. City of Galveston, 451 F.3d 376 (5th Cir. 2006) ....................................32 vi Olim v. Wakinekona, 461 U.S. 238 (1983) ..............................................................24 Paul v. Davis, 424 U.S. 693 (1976) .........................................................................23 Phillips v. Washington Legal Foundation, 524 U.S. 156 (1998) ............................23 Pinnacle Charter Sch. v. Bd. of Regents, 108 A.D.3d 1024, 969 N.Y.S.2d 318 (2013) ............................................................................................28 Pool v. River Bend Ranch, LLC, 346 S.W.3d 853 (Tex. App.—Tyler 2011, pet. denied) .................................................................................................18 Project Reflect, Inc. v. Metro Nashville Bd. of Pub. Educ., 947 F. Supp. 2d 868 (M.D. Tenn. 2013) .................................................................. 28, 29 Project Sch. v. City of Indianapolis, 2012 WL 3114573 (S.D. Ind. July 31, 2012) ........................................................................................................ 28, 30 Railroad Comm’n v. Texas Citizens for a Safe Future & Clean Water, 336 S.W.3d 619 (Tex. 2011) ................................................................................19 Reach Academy for Boys & Girls, Inc. v. Delaware Dept. of Educ., 46 F.Supp.3d 455 (D.Del. 2014) ...............................................................................28 Reich v. Occupational Safety & Health Review Comm’n, 102 F.3d 1200 (11th Cir. 1997) ............................................................................................41 Sch. Dist. of Kansas City v. Williamson, 141 S.W.3d 418 (Mo. Ct. App. 2004) ............................................................................................................28 Scott v. Alphonso Crutch LSC Charter Sch., Inc., 392 S.W.3d 165 (Tex. App.—Austin 2010, pet. denied) (mem. op.) .......................... 23, 25, 27, 28 Seguin v. Bexar Appraisal Dist., 373 S.W.3d 699 (Tex. App.—San Antonio 2012, pet. denied) ............................................................................ 25, 27 Sheffield Devel. Co. v. City of Glenn Heights, 140 S.W.3d 660 (Tex. 2004) .....................................................................................................................35 Simi Inv. Co. v. Harris County, 236 F.3d 240 (5th Cir. 2000) .................................32 Society of Separationists, Inc. v. Herman, 959 F.2d 1283 (5th Cir.), cert. denied, 506 U.S. 866 (1992).........................................................................42 Spring Branch Indep. Sch. Dist. v. Stamos, 695 S.W.2d 556 (Tex.1985) ............................................................................................................23 Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83 (1998) ...................................41 vii Suryanto v. Att'y Gen. of U.S., 398 Fed.Appx. 830 (3rd Cir. 2010) .........................23 Sw. Pharmacy Solutions, Inc. v. Tex. Health & Human Servs. Comm’n, 408 S.W.3d 549 (Tex. App.—Austin 2013, pet. denied) .............. 19, 40 Tarrant County v. Ashmore, 635 S.W.2d 417 (Tex. 1982) .....................................35 Tex. Dep’t of Protective & Regulatory Servs. v. Mega Child Care, Inc., 145 S.W.3d 170 (Tex. 2004) ........................................................... 20, 23, 38 Texas Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217 (Tex. 2004) .....................................................................................................................17 Texas Dep’t of Transp. v. Jones, 8 S.W.3d 636 (Tex. 1999)...................................20 Texas Health Care Info. Council v. Seton Health Plan, Inc., 94 S.W.3d 841 (Tex.App.—Austin 2002, no pet.)....................................................42 Town of Castle Rock v. Gonzales, 545 U.S. 748 (2005) ..........................................24 Triantaphyllis v. Gamble, 93 S.W.3d 398 (Tex. App.—Houston [14th Dist.] 2002, pet. denied) .......................................................................................18 United States v. Or. State Med. Soc’y, 343 U.S. 326 (1952) ...................................41 Univ. of Tex. Med. Sch. v. Than, 901 S.W.2d 926 (Tex. 1995) ...............................31 Walker v. Packer, 827 S.W.2d 833 (Tex. 1992) ......................................................18 Walling v. Metcalfe, 863 S.W.2d 56 (Tex. 1993) ....................................................18 Statutes 19 TEX ADMIN. CODE §157.1183 (2015) .................................................................10 19 TEX. ADMIN. CODE §109.1001 (a)(4) ..................................................................12 19 TEX. ADMIN. CODE §109.1001(a)(1) (2015) .........................................................7 19 TEX. ADMIN. CODE §109.1001(d)(1) (2015) .........................................................8 19 TEX. ADMIN. CODE §109.1002(i)(2) ...................................................................31 19 TEX. ADMIN. CODE §97.101(b) ...........................................................................31 TEX. CIV. PRAC. & REM. CODE §51.014(a)(4).........................................................16 TEX. CIV. PRAC. & REM. CODE §51.014(a)(8) ........................................................16 TEX. CIV. PRAC. & REM. CODE §6.001 ....................................................................16 viii TEX. CONST. ART. I, §13 ..........................................................................................36 TEX. CONST. ART. I, §17 ..........................................................................................34 TEX. EDUC. CODE §12.101 .......................................................................................26 TEX. EDUC. CODE §12.106 .......................................................................................34 TEX. EDUC. CODE §12.107 .......................................................................................35 TEX. EDUC. CODE §12.115 (c-1) ..........................................................................7, 10 TEX. EDUC. CODE §12.115(a) ............................................................................ 15, 26 TEX. EDUC. CODE §12.115(c) .................................................................. 6, 10, 13, 26 TEX. EDUC. CODE §12.115(c)(3) ..............................................................................14 TEX. EDUC. CODE §12.116(a) ...................................................................................13 TEX. EDUC. CODE §12.116(c) ...................................................................................22 TEX. EDUC. CODE §12.116(c)(2) ....................................................................... 14, 15 TEX. EDUC. CODE §12.1161 .............................................................................. 35, 36 TEX. EDUC. CODE §12.128 .......................................................................................34 TEX. EDUC. CODE §12.128(a)(2) ..............................................................................35 TEX. EDUC. CODE §12.128(c) ...................................................................................36 TEX. EDUC. CODE §39.053 .......................................................................................43 TEX. EDUC. CODE §39.054(b) ..................................................................................21 TEX. EDUC. CODE §39.082(g) ..............................................................................8, 31 TEX. EDUC. CODE §39.116(a) .....................................................................................7 TEX. EDUC. CODE §39.116(e) .....................................................................................7 TEX. EDUC. CODE §39.116(f) .....................................................................................7 TEX. EDUC. CODE §39.151 .......................................................................................31 TEX. EDUC. CODE §39.151(b) ....................................................................................9 TEX. EDUC. CODE §39.151(d) ..................................................................................21 TEX. EDUC. CODE §39.151(e) ...............................................................................9, 21 ix TEX. EDUC. CODE §39.152(a) ...................................................................................10 TEX. EDUC. CODE §39.152(c)(3) ....................................................................... 10, 14 TEX. GOV’T CODE §311.021.....................................................................................19 Texas Civil Practive and Remedies Code §51.014(a)(4)...........................................1 Texas Civil Practive and Remedies Code §51.014(a)(8)...........................................1 Rules TEX. R. APP. P. 29.1(b) .............................................................................................16 Tex. R. App. P. 9.4(i)(3) ..........................................................................................45

x STATEMENT OF THE CASE

Nature of the Case: Appellee Academy of Careers and Technology, Inc., d/b/a Academy of Careers and Technology Charter School (“ACT”), is an open-enrollment charter school that sued TEA and the Commissioner of Education (“Commissioner”) challenging the revocation of its charter. ACT alleges, inter alia, that TEA violated its substantive and procedural due process rights, and that the Commissioner acted ultra vires by revoking its charter.

Trial Court: 200th District Court, Travis County, Texas The Honorable Gisela D. Triana

Trial Court The trial court denied Appellants’ plea to the Disposition: jurisdiction and granted Appellee’s Request for Temporary Injunction. CR at 440-41 (order).

Parties Below: Academy of Careers and eTechnologies, Inc., d/b/a Academy of Careers and Technologies Charter School, Plaintiff

Texas Education Agency (“TEA”) and Michael L. Williams, in his Official Capacity as the Commissioner of Education, Defendants

Jurisdiction: Following the trial court’s denial of TEA’s plea to the jurisdiction and grant of ACT’s Request for Temporary Injunction, Appellants bring this appeal pursuant to Texas Civil Practive and Remedies Code §51.014(a)(4) and (8).

1 STATEMENT REGARDING ORAL ARGUMENT

This case is factually similar to Texas Education Agency and Michael

Williams, 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 Two Azleway, Inc. d/b/a/ Azleway Charter School

Nos. 03-14-00283-CV and 03-14-00360-CV, which are currently on appeal before

this Court. Oral Arguments were heard in these cases on September 24, 2015.

This case shares the same subject matter as In Re Academy of Careers and

Technology, Inc., d/b/a Academy of Careers and Technology Charter School, Case

No. 03-15-00570-CV, in which ACT filed a petition for writ of mandamus and

sought emergency relief, which this Court granted and remains in effect.

Because the isues presented to the Court in this case are similar to the issues

presented in the above-referenced cases, Appellants do not believe that oral

argument will materially assist the Court in disposing of this matter. However,

should Appellee request oral arguments which is then granted by this Court,

Appellants request equal time for argument.

ISSUE PRESENTED

1. Whether the district court erred when it denied the Commissioner’s and the Texas Education Agency’s plea to the jurisdiction and when it found that ACT demonstrated a probable right to the relief sought.

2 No. 03-15-00528-CV _____________________________

IN THE COURT OF APPEALS FOR THE THIRD JUDICIAL DISTRICT _____________________________

TEXAS EDUCATION AGENCY AND MICHAEL WILLIAMS, COMMISSIONER OF EDUCATION, IN HIS OFFICIAL CAPACITY, Appellants,

ACADEMY OF CAREERS AND TECHNOLOGIES, INC. D/B/A ACADEMY OF CAREERS AND TECHNOLOGIES CHARTER SCHOOL, Appellee. ______________________________

On Appeal from the 200th Judicial District Court of Travis County, Texas Cause No. D-1-GN-15-002879 ______________________________

BRIEF OF APPELLANTS ______________________________

TO THE HONORABLE COURT OF APPEALS:

For the reasons that follow, Appellants Texas Eduction Agency (“TEA”) and

Commissioner Michael Williams (“Commissioner”, jointly referenced as “TEA” or

“Appellants”) respectfully show why this Court should reverse the trial court’s

September 4, 2015 order, and dismiss this case for lack of jurisdiction or dissolve

the temporary injunctions and remand this case for trial.

3 STATEMENT OF FACTS

I. 2012 SUNSET ADVISORY COMMISSION AND CHANGES TO TEXAS EDUCATION CODE.

The Sunset Advisory Commission (“Sunset Commission”) reviewed the

Texas Education Agency in October 2012, preceding the commencement of the 83rd

Texas Legislature. The Sunset Commission noted that charter schools are public

schools that “operate under decreased state regulation in exchange of increased

accountability for results.” CR at 316. 1 In its review of charter schools, the Sunset

Commission identified the following issue: “TEA lacks a full range of tools to

effectively address poor academic performance and financial mismanagement at

low-performing charter schools.” Id. While many charter schools meet TEA

educational expectations, charter schools experience higher rate of “academically

unacceptable level than school districts.” CR at 317-18. Further, the Sunset

Commission noted that “[c]harter schools receive about 80 percent of their revenues

in state aid, as compared to 41 percent for traditional school districts,” and “[m]any

charter schools also have poor financial performance, underscoring the importance

of oversight of expenditure of state funds.” CR at 118. Significantly, the Sunset

Commission found, “Charter schools have far more accountability problems

requiring assignment of interventions and sanctions, and ultimately, revocation of

the charter. Charter schools represent more than two-thirds, 71 percent, of schools

1 For the convenience of the Court, the clerk’s record will be referenced as, “CR at __” and the reporter’s record will be referenced as, “RR at __.” 4 assigned with sanctions, even though charter schools make up only 17 percent of the

total number of districts and charters.” CR at 318-19. The Sunset Commission

further observed that “TEA lacked authority to revoke a charter for a school that is

imminently insolvent and fails to plan for its student’s education,” leaving students

susceptible to a charter school possibly closing mid-year due to lack of funds. CR

at 320.

Although TEA had the authority to close a charter school and revoke the

charter, the Sunset Commission criticized the process as unworkable, leaving

students to be educated at underperforming charter schools. CR at 319. Of

particular concern was the issue of “protracted litigation” concerning TEA’s ability

to timely revoke a charter and close an underperforming charter school. The report

noted the two to three years it took to close a charter school prior to Sunset review,

leaving students to be educated by an underperforming school. Id.

Based on these findings, the Sunset Commission recommended a change in

statute that required the automatic revocation of a charter for failure to meet basic

academic or financial accountability standards for three years in a row. CR at 326.

It recommended that no appeal be permitted from the revocation determination. Id.

According to the Sunset Commission, such a change in the law would:

Allow the State to more quickly shut down the poorest performing charters, without years of litigation during which time the school remains open. The recommendation would also ensure students do not continue to attend a school lacking a quality education or with

5 serious financial problems that could affect the school and, ultimately, a student’s academic progress.

Id.

The findings of the Sunset Commission demonstrate that there is a compelling

state need to identify and close poor-performing charter schools in order to improve

the choices available to parents and students. Thus, based on the Sunset

Commission’s recommendation, in 2013 Texas Legislature amended section 12.115

of the Texas Education Code to make mandatory the revocation of any open-

enrollment charter school’s charter if the school fails to meet financial and/or

academic performance ratings in certain years. The Commissioner is now required

to revoke a school’s charter if one of three scenarios arises:

(1) the charter holder has been assigned an unacceptable performance rating under Subchapter C, Chapter 39 [of the Education Code] for the three preceding years;

(2) the charter holder has been assigned financial accountability performance rating under Subchapter D, Chapter 39, indicating financial performance lower than satisfactory for the three preceding school years; or

(3) the charter holder has been assigned any combination of the [unacceptable ratings under either subchapter].

TEX. EDUC. CODE §12.115(c).

Chapter 39, Subchapter C (academic performance) ratings allowed for 2009-

2010 and 2010-2011 to be retroactively considered but specifically excluded ratings

6 for 2011-2012.2 Id. §12.115(c-1); see also TEX. EDUC. CODE §39.116(a), (e), and

(f) (allowing Commissioner to suspend academic performance rating during

transition period, but authorizing sanctions during the 2011-12 school year based on

prior year performance ratings). The Subchapter D (financial accountability) ratings

to be considered are those assigned to the school for 2010-2011, 2011-2012, 2012-

2013 and all years subsequent to the 2013 amendment. TEX. EDUC. CODE §12.115

(c-1).

II. THE TEXAS EDUCATION CODE PROVIDES FOR A LIMITED APPEAL PROCESS.

A. Appeal of academic and financial accountability ratings.

Every public school or open-enrollment charter school is required to submit

an audited annual financial report (“AFR”) to TEA. 19 TEX. ADMIN. CODE

§109.1001(a)(1) (2015). This mandate is to ensure that “school districts and charter

schools are spending [taxpayer] money appropriately and within the guidelines

related to purchasing and required expenditures on programs and various other

regulatory matters.” RR at 106: 22-p. 107: 7. The AFR is required to be audited by

an independent certified public accountant (“CPA”). RR at 108: 2-5; RR at 110: 2-

4. The school should prepare the financial statements and the auditor should then

2 This provision was necessary because ratings were essentially “held over” during the 2011-12 school year, so a charter school that earned a failing rating in 2009-10 and 2010-11, could have been treated as having three strikes in 2011-12, but for the express exclusion of ratings for that year from 12.115(c). See TEX. EDUC. CODE §39.116(e) (authorizing the imposition of sanctions during the 2011-12 school year for districts that had unacceptable performance during the prior school year). 7 review that information to ensure its accuracy and “free of material misstatements.”

RR at 108: 6-19; RR, Def. Ex. 1, p. 1. TEA uses the information contained in the

AFR to calculate the school’s financial accountability thus it is crucial that the

information be true and correct. 19 TEX. ADMIN. CODE §109.1001(d)(1) (2015).

To further to goal of access to true and correct information, the Texas

Education Code §39.082(g) states:

Before assigning a final rating under the system, the commissioner shall assign each district or open-enrollment charter school a preliminary rating. A district or school may submit additional information to the commissioner relating to any indicator on which performance was considered unsatisfactory. The commissioner shall consider any additional information submitted by a district or school before assigning a final rating. If the commissioner determines that the additional information negates the concern raised by the indicator on which performance was considered unsatisfactory, the commissioner may not penalize the district or school on the basis of the indicator.

An AFR also includes opinions of the auditor regarding compliance. RR, Def.

Ex. 1, p. 16-17. If the auditor makes comments that are negative or that the school

disputes, the charter school may submit an AFR that is disapproved by the charter

school board. RR at 110: 11-24. Furthermore, should a charter school submit the

data prior to the deadline, it has up until the deadline to make any corrections

necessary. RR at 38: 19-23; 114: 16-22. However, once the deadline passes, the

information submitted by the school becomes final. The appeal process is not

intended to correct mistakes made by the submitting school, but rather to correct

errors made by TEA. RR at 113: 23 - p. 114: 3. Indeed, by the deadline to submit

8 the financial data, the information contained in the AFR has been reviewed by an

independent CPA auditor and verified by the school. RR at 114: 8-10. TEA does

not and cannot second-guess the information provided by school districts and charter

schools. Id. at 114: 11-15.

After a school district or charter school receives its accountability or financial

ratings, it has an opportunity to appeal the ratings to the Commissioner. TEX. EDUC.

CODE § 39.151(a). Should a charter school seek to appeal a financial or academic

rating and notify the Commissioner of such, the Commissioner must appoint a

committee to make recommendations to the Commissioner on any challenge made

to an agency decision. TEX. EDUC. CODE §39.151(b). After considering the

committee’s recommendation, the Commissioner makes a final decision. TEX.

EDUC. CODE §39.151(d). The Commissioner’s decision following any appeal is

final, and the Legislature expressly prohibited any additional appeal from this final

determination in “any other proceeding” if the charter “has had an opportunity to

challenge the decision under [section 31.151]. TEX. EDUC. CODE §39.151(e).

An accountability rating becomes final if a school does not appeal or after

TEA considers the appeal. Once a rating is final, it is not subject to further appeal.

TEX. EDUC. CODE §39.151(e). TEA uses final accountability ratings to make

accreditation decisions. CR at 318 (“Continued poor performance on academic and

financial accountability ratings can lower a district’s or charter’s accreditation

status….”). A school is required to be accredited to operate, so once TEA has final 9 accountability ratings, it can determine which schools may or may not open the next

school year. RR at 114: 22- p. 115: 8.

B. Appeal of revocation decision.

If a charter school earns an unacceptable financial accountability rating or

lower than satisfactory academic accountability rating or any combination of the two

for three consecutive years, the Commissioner must begin proceedings to revoke the

school’s charter. TEX. EDUC. CODE §12.115(c), (c-1). This process begins when

TEA notifies the charter school of its intent to revoke, specifying the reasons for the

revocation decision and explaining that the “charter holder has the right to request

an informal review regarding the Commissioner’s intent to revoke the charter and

appoint a conservator.” CR at 61-64. The notice also states that if the charter school

requests an informal hearing but the Commissioner’s decision to revoke does not

change, that the charter school may appeal the Commissioner’s decision to close a

school to the State Office of Administrative Hearings (“SOAH”). TEX. EDUC. CODE

§39.152(a). The school must file a petition for review and meet certain requirements

for the petition to be granted. 19 TEX ADMIN. CODE §157.1183 (2015). The decision

of the administrative law judge is final and may not be appealed. TEX. EDUC. CODE

§39.152(c)(3).

10 III. ACT FAILED TO MEET THE FINACIAL AND/OR ACADEMIC ACCOUNTATIBLITY RATING FOR THREE CONSECUTIVE YEARS.

Academy of Careers and Technologies Charter School (hereinafter “ACT”)

was originally issued a state charter in 1998. CR at 333-340. In 2012, 2013, and

2014 TEA found that ACT failed to meet the state’s financial accountability

standards. CR 342-349; see also CR 4-5. A passing financial accountability score

is 50. CR at 346-348. ACT scored a 47 in 2012 based on its financial data for the

2010-11 school year. CR at 346. It scored a 45 in 2013 related to financial

information for the 2011-12 school year. CR at 347. In 2014, ACT received a 0

score related to financial information for the 2013-14 school year. CR at 348.

The evidence demonstrated that: (1) ACT, not some third-party, submitted

each of the financial reports at issue to TEA (RR at 37: 11-16); (2) ACT provided

the information that was reviewed by the auditor ACT hired (RR at 37: 7-10); (3)

ACT also was aware that the auditor it hired found deficiencies with ACT’s internal

controls (RR at 40: 5-19); (4) in 2013, prior to submitting the annual financial report

to TEA, ACT was aware that the auditor it hired found “that ACT was failing to

properly recognize fixed assets, loan proceeds and loan disbursements” (RR at 41:

7-13); (5) the auditor noted that ACT “failed to remit federal payroll taxes to the

Internal Revenue Service (IRS)” and that at the time of the 2014 audit, ACT owed

$308,628 (including penalties and interest) for taxes owned for the fourth quarter of

2011, all of 2012 and the first two quarters of 2013 (RR, Def. Ex. 3, p. 11); (6) prior

11 to the submission to TEA, ACT reviewed and approved the each of the disputed

annual financial and compliance reports (RR at 35: 5-17; RR at Def. Ex. 1,

Certification page; 44: 24-p. 45: 6 (“Correct.”)); and (7) ACT accepted responsibility

for the information contained in the annual financial reports once submitted to TEA.

RR at 36: 16- p. 37: 2.

According to Paula Applin, Chairman of the Governing Board of ACT, who

also holds a degree in finance (RR at 19: 3-4; 20:3-7), ACT received a failing score

on its financial accountability rating in 2010-11 due, in part, to ACT’s failure to

properly account for a property loan, an issue identified by the auditor prior to

submission to TEA. RR at 41: 14-20. Indicator 14 asks: Was the charter school’s

administrative cost ratio less than the threshold ratio? ACT received a “0” score on

this indicator in 2012 and 2013 because the administrative costs ACT reported

exceeded the Finaincial Integrity Rating System of Texas (“FIRST”)3 rating

threshold ratio for that indicator.

However, years later, in March 2015 ACT filed an appeal with TEA and for

the first time argued that it accidently included debt services as part of their

administrative costs rather than include it as “debt services” which is a separate

3 “FIRST” is the financial accountability rating system administered by the TEA in accordance with Texas Education Code §39.082 and §39.085. The system provides additional transparency to public education finance and meaningful financial oversight and improvement for school districts (School FIRST) and open-enrollment charter schools (Charter FIRST). See 19 TEX. ADMIN. CODE §109.1001 (a)(4).

12 indicator4 in its 2011 and 2012 AFR. RR at 47: 12-21. ACT believes that it should

be permitted to make the correction which would allow them to receive the full five

(5) points allotted to Indicator 14 which would give them a passing scores on the

2012 and 2013 financial accountability rating. CR at 77.

In 2014, ACT once again failed the financial accountability rating for failing

to disclose that it was in default on a debt, which resulted in an automatic failure.

The issue in 2014 was ACT failure to disclose payroll tax liability. RR, Def. Ex. 3,

p. 18; RR at 52: 20- 536. ACT timely appealed only to present evidence of the tax

liability. RR, Def. Ex. 4. Thus, its appeal was dismissed. However, ACT again

sought to appeal the issue regarding the tax liability with another, albeit untimely,

appeal in March 2015. CR at 112-117.

In 2014, ACT also received a failing academic performance rating. CR at

349. It failed to meet the “post-secondary readiness” index and received an

accountability rating of “Improvement Required.” Id. An “Improvement Required”

rating is “an unacceptable performance rating under the accountability system used

by the Texas Education Agency . . . .” CR at 358, ¶5.

Based on ACT’s failing accountability ratings, TEA issued a notice of

revocation in December 2014 pursuant to Texas Education Code, Section 12.115(c).

ACT requested an informal review of the revocation by TEA. RR at 63; 21-23; see

4 It should be noted that ACT included part of the January 2010 TEA Resource Guide as part of its March 2015 appeal. That guide clearly stated that principal and interest on long-term debt should be included as “debt service.” 13 also TEX. EDUC. CODE §12.116(a). However, TEA reaffirmed the revocation. CR

at 355.

ACT also appealed its revocation to SOAH. RR at 64: 3-5; CR at 361-376.

The Administrative Law Judge (“ALJ”) affirmed ACT’s revocation. CR at 362. The

ALJ’s determination is final and may not be appealed. TEX. EDUC. CODE

§12.116(c)(2).

IV. THE TEXAS EDUCATION CODE MANDATES REVOCATION OF ACT’S CHARTER SCHOOL.

The Commissioner had no discretion but to revoke ACT’s charter, since its

failings in 2012, 2013 and 2014 represented three consecutive years of failure as

defined by Texas Education Code §12.115(c)(3). The Commissioner and TEA

notified ACT of this fact on December 8, 2014. CR at 342-349.

ACT sought an informal hearing regarding the revocation. CR at 5 (3rd full

paragraph). A review was conducted, but the decision to revoke ACT’s charter was

upheld. CR at 355-357. ACT also availed itself of an appeal before SOAH. CR at

5 (4th full paragraph). Because there were no material factual issues in dispute, TEA

filed a Motion for Summary Disposition, which provided the basis for a final

decision and order of SOAH upholding the Commissioner’s decision to revoke

ACT’s charter. CR at 361-376. This decision is not subject to appeal. TEX. EDUC.

CODE §39.152(c)(3).

14 Put simply, in December 2014, ACT failed to meet minimum financial and

academic accountability standards for three consecutive years, the Commissioner of

Education revoked its charter, an action he was required by law to take. See TEX.

EDUC. CODE §12.115(a). ACT availed itself of an informal review by the TEA and

then sought review before the SOAH. On May 21, 2015, the ALJ upheld the

revocation of ACT’s charter. By law, the ALJ’s decision may not be appealed.

Id. §12.116(c)(2).

More than two months after the revocation became final, and seven months

after it received notice of the revocation, ACT sued in district court asserting that

TEA and the Commissioner violated its rights to substantive and procedural due

process, takings, and violation of the open courts provision, in addition to seeking

declaratory relief and a temporary injunction prohibiting the Commissioner from

engaging in various alleged ultra vires actions. CR at 3-20. Specifically, ACT

sought judicial review of the appeals process only as it relates to the accountability

ratings. CR at 3-20. ACT did not challenge the process by which TEA revokes

charters; it only sought to have another chance to submit corrected financial data

related to its failing rating in 2012 and/or 2013.

TEA and the Commissioner (hereinafter “TEA” or “Appellants”) filed a Plea

to the Jurisdiction and an Amended Plea to the Jurisdiction and Repsonse to ACT’s

Request for Temporary Injunction. CR at 293-407. A court hearing on ACT’s

15 temporary injunction was heard on August 13, 2015 (RR at 3) and the court

considered TEA’s Plea by submission. RR at 134.

On August 21, 2015, the Friday before the start of the school year, the trial

court notified the parties of its intent to enter a temporary injunction effectively

prohibiting TEA from taking any action to wind up the failed charter school. CR at

421. The injunction was entered on September 4, 2015, two weeks after the start of

the school year. CR at 440-441. The injunction ordered ACT to remain open;

permits ACT to retain state-owned property for its own use; forces the State to fund

a financially and academically unsuccessful school; and keeps children in a school

that is not delivering a minimally accredited education. Id.

TEA filed an appeal of the temporary injunction and the denial of its Plea to

the Jurisdiction pursuant to TEX. CIV. PRAC. & REM. CODE §§51.014(a)(4) and (8).

The appeal automatically superseded the temporary injunction. TEX. R. APP. P.

29.1(b); TEX. CIV. PRAC. & REM. CODE §6.001.

SUMMARY OF ARGUMENTS

ACT failed to establish jurisdiction for its collateral attack of final

accountability ratings as the basis for revocation of its charter. ACT also failed to

establish a constitutionally-protected property interest which is required for its due

process and takings claims. Likewise, the evidence presented to the trial court

clearly demonstrated that the Commissioner acted pursuant to the statute, which

16 mandated a certain course of action and was, therefore, protected by sovereign

immunity. This defeats ACT’s ultra vires claims.

Like many charter schools before it, ACT’s suit simply seeks to attack final,

non-appealable administrative accountability ratings. This Court has repeatedly held

that such an attack is jurisdictionally barred, and the Uniform Declaratory Judgments

Act cannot be used to make an end-run around the jurisdictional bar. As a result,

ACT failed to show that the trial court had subject-matter jurisdiction to consider

any of its claims, and the trial court erred by denying Appellants’ Plea to the

Juridiction.

ARGUMENT

I. STANDARDS OF REVIEW.

A. Plea to the Jurisdiction.

A plea to the jurisdiction challenges the trial court’s authority to determine

the subject matter of a specific cause of action. Hawkins v. El Paso First Health

Plans, Inc., 214 S.W.3d 709, 716 (Tex. App.—Austin 2007, no pet.). Whether a

court has subject-matter jurisdiction and whether a plaintiff has affirmatively

demonstrated subject-matter jurisdiction are questions of law that are reviewed de

novo. Texas Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex.

2004).

In deciding a plea to the jurisdiction that challenges the pleadings, the

reviewing court determines whether the pleader has alleged facts that affirmatively

17 demonstrate the court's jurisdiction to hear the cause. Id. The pleadings are liberally

construed in the plaintiffs favor. Id. If a plea to the jurisdiction challenges the

existence of jurisdictional facts, the court considers relevant evidence submitted by

the parties when necessary to resolve the jurisdictional issues raised. Id. at 227.

A trial court’s order granting a temporary injunction is reviewed for abuse of

discretion. Walling v. Metcalfe, 863 S.W.2d 56, 57 (Tex. 1993). “A trial court has

no ‘discretion’ in determining what the law is or applying the law to the facts.” See

Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) (orig. proceeding).

Accordingly, questions of law, including whether a trial court has subject matter

jurisdiction, are reviewed de novo. City of Elsa v. Gonzalez, 325 S.W.3d 622, 625

(Tex. 2010).

B. Temporary Injunction.

To obtain a temporary injunction, the applicant must plead and prove: (1) a

cause of action against the defendant; (2) a probable right to the relief sought; and

(3) a probable, imminent, and irreparable injury in the interim. Walling, 863 S.W.2d

at 57. Because an injunction is an equitable remedy, a court must balance the

competing equities at stake. See In re Gamble, 71 S.W.3d 313, 317 (Tex. 2002);

Indian Beach Prop. Owners’ Ass’n v. Linden, 222 S.W.3d 682, 690 (Tex. App.—

Houston [1st Dist.] 2007, no pet.); Pool v. River Bend Ranch, LLC, 346 S.W.3d 853,

860 (Tex. App.—Tyler 2011, pet. denied); Graham Mortg. Corp. v. Hall, 307

S.W.3d 472, 478 (Tex. App.—Dallas 2010, no pet.). Consideration of the equities 18 involves weighing the public interest against the injury to the parties from the grant

or denial of injunctive relief. See Hot Rod Hill Motor Park v. Triolo, 276 S.W.3d

565, 568 (Tex. App.—Waco 2008, no pet.); Triantaphyllis v. Gamble, 93 S.W.3d

398, 401–02 (Tex. App.—Houston [14th Dist.] 2002, pet. denied).

C. Statutory Construction.

An agency’s construction of a statute that it is charged with enforcing is

entitled to serious consideration by reviewing courts so long as that construction is

reasonable and does not contradict the statute’s plain language of the statute.

Railroad Comm’n v. Texas Citizens for a Safe Future & Clean Water, 336 S.W.3d

619 (Tex. 2011); Sw. Pharmacy Solutions, Inc. v. Tex. Health & Human Servs.

Comm’n, 408 S.W.3d 549, 560-62 (Tex. App.—Austin 2013, pet. denied);

Employees Ret. Sys. v. Jones, 58 S.W.3d 148, 151 (Tex. App.—Austin 2001, no

pet.). Additionally, when construing a statute, courts must consider the statute in its

entirety, assume the entire statute is effective, and avoid an absurd result. TEX.

GOV’T CODE §311.021; City of Marshall v. City of Uncertain, 206 S.W.3d 97, 105

(Tex. 2006) (citing City of San Antonio v. City of Boerne, 111 S.W.3d 22, 29 (Tex.

2003)).

II. ACT HAS FAILED TO IDENTIFY THE VEHICLE IN WHICH IT MAY SEEK JUDICIAL REVIEW.

ACT does not believe the Commissioner and TEA should have revoked its

charter because two to three years after-the-fact, it uncovered purported clerical

19 errors to its 2012 and/or 2013 AFR that it attributes to either a third party and/or

TEA. It contends that these errors resulted in two of the four failing accountability

ratings it received from 2012-2014. TEA’s accountability ratings are considered

administrative decisions or action. See Creedmoor–Maha Water Supply Corp. v.

Tex. Comm'n on Envtl. Quality, 307 S.W.3d 505, 524 (Tex.App.—Austin 2010, no

pet.). In Texas there is no inherent right to judicial review of agency orders. Texas

Dep’t of Transp. v. Jones, 8 S.W.3d 636, 638 (Tex. 1999); Bacon v. Hist. Comm’n,

411 S.W.3d 161, 173-74 (Tex. App.—Austin 2013, no pet.) (“One implication of

these principles is that there is no general right to challenge or seek review of a state

agency order or decision in Texas state court; to the contrary, state agency decisions

generally cannot be challenged in court unless the Legislature has enacted a statute

expressly authorizing such review.”); Creedmoor-Maha, 307 S.W.3d 505, 515 (Tex.

App.—Austin 2010, no pet.) (UDJA actions “that seek declaratory or injunctive

relief against agency orders from which the legislature has not granted a right of

judicial review” are barred by state sovereign immunity); KEM Tex., Ltd. v. Texas

Dep't of Transp., No. 03-08-00468-CV, 2009 Tex. App. LEXIS 4894, at *8-18 (Tex.

App.—Austin 2009, no pet.) (challenge to non-appealable agency order barred by

sovereign immunity). A person may obtain judicial review of a final decision issued

after a contested case or if the action adversely affects a vested property right or

otherwise violates a constitutional right. Tex. Dep’t of Protective & Regulatory

Servs. v. Mega Child Care, Inc., 145 S.W.3d 170, 196-98 (Tex. 2004). 20 A. ACT Failed to Identify a Statutory Basis for Judicial Review of TEA’s Accountability Ratings or Decision to Revoke.

1. There is no statutory provision which allows this court to review TEA’s rating decisions.

Chapter 39 of the Texas Education Code, entitled “Public School System

Accountability,” governs the financial and academic performance system used to

review both traditional public schools and charter schools. See TEX. EDUC. CODE

§39.054(b). Section 39.151, however, limits the review of any accountability

determination to review by the Commissioner and expressly exempts the decision

from review by SOAH or a State District Court. See id., at §§39.151(d) & (e). Thus,

there is no statute affording ACT the right to judicial review of its accountability

ratings.

2. There Is No Statutory Provision Which Allows This Court to Review TEA’s Revocation Decision.

Section 12.115(c) of the Texas Education Code provides:

The commissioner shall revoke the charter of an open-enrollment charter school if:

(1) the charter holder has been assigned an unacceptable performance rating under Subchapter C, Chapter 39, for the three preceding years;

(2) the charter holder has been assigned an unacceptable financial accountability rating under Subchapter D, Chapter 39, indicating financial performance lower than satisfactory for the three preceding school years; or

21 (3) the charter holder has been assigned any combination of the ratings described by Subdivision (1) or (2) for the three preceding school years.

The Legislature directed that the Commissioner’s decision to revoke a charter

can be reviewed only by SOAH, and that an ALJ’s review of that charter-revocation

decision is final and unappealable. Section 12.116(c) provides:

A decision by the commissioner to revoke a charter is subject to review by the State Office of Administrative Hearings. Notwithstanding Chapter 2001, Government Code:

(1) the administrative law judge shall uphold a decision by the commissioner to revoke a charter unless the judge finds the decision is arbitrary and capricious or clearly erroneous; and

(2) a decision of the administrative law judge under this subsection is final and may not be appealed.

TEX. EDUC. CODE §12.116(c). Accordingly, the Commissioner’s revocation

decision is final unless it is appealed to SOAH, and the SOAH ALJ’s decision either

upholding or reversing the Commissioner’s decision is unappealable. Thus, ACT

had no right to judicial review of the revocation decision, the district court lacked

jurisdiction over this claim, and the district court clearly erred in denying TEA’s

Plea to the Jurisdiction.

22 B. ACT Failed to Demonstrate a Due Process Violation. 1. ACT does not have a vested right in the charter contract. ACT argues that the statutory procedures related to accountability ratings

employed by TEA violated their substantive and procedural due process rights. CR

at 11-14. ACT must be able to demonstrate that it possessed a vested property right

as the basis of its due process claim. See Combs v. City of Webster, 311 S.W.3d 85,

92 (Tex.App.—Austin 2009, pet. filed) (citing Spring Branch Indep. Sch. Dist. v.

Stamos, 695 S.W.2d 556, 560–62 (Tex.1985); Texas Department of Protective and

Regulatory Services v. Mega Child Care, Inc., 145 S.W.3d at 173; City of Houston

v. Northwood Mun. Util. Dist. No. 1, 73 S.W.3d 304, 311 (Tex.App.—Houston [1st

Dist.] 2001, pet. denied)). ACT cannot establish such an interest.

To have a property interest in a benefit, a person clearly must have more than

an abstract need or desire” and “more than a unilateral expectation of it. He must,

instead, have a legitimate claim of entitlement to” the continuation of the charter.

Bd. of Regents v. Roth, 408 U.S. 564, 577 (1972). Such entitlements are, “‘of course

. . . not created by the Constitution. Rather, they are created and their dimensions

are defined by existing rules or understandings that stem from an independent source

such as state law.’” Paul v. Davis, 424 U.S. 693, 709 (1976) (quoting Roth, supra,

at 577,); see also Phillips v. Washington Legal Foundation, 524 U.S. 156, 164

(1998).

23 Further, a right is “vested” when it has some definitive, rather than potential,

existence. Scott v. Alphonso Crutch LSC Charter Sch., Inc., 392 S.W.3d 165, 170-

71 (Tex. App.—Austin 2010, pet. denied) (mem. op.). As a general matter, “[w]hen

the decision to grant or withhold a benefit is entrusted to the discretion of a

government actor, one has no constitutional property interest in obtaining that

relief.” Suryanto v. Att'y Gen. of U.S., 398 Fed.Appx. 830, 834 (3rd Cir. 2010) (citing

Conn. Bd. of Pardons v. Dumschat, 452 U.S. 458, 464 (1981)). “If the

decisionmaker is not ‘required to base its decisions on objective and defined

criteria,’ but instead ‘can deny the requested relief for any constitutionally

permissible reason or for no reason at all,’ the State has not created a constitutionally

protected . . . interest.” Olim v. Wakinekona, 461 U.S. 238, 249 (1983) (finding no

legitimate claim of entitlement where there were “no standards governing the

administrator’s exercise of his discretion” to transfer an inmate) (citation omitted);

Lee v. Tex. Workers’ Compensation Comm’n, 272 S.W.3d 806, 817 (Tex.App.—

Austin 2008) (citing Olim, 461 U.S. at 249). In other words, there is no protected

property interest where the decision to remove a benefit is left to the “unfettered

discretion” of the government actor. See Roth, 408 U.S. at 566–67 (concluding a

nontenured university professor had no property interest in his position because

“State law . . . clearly leaves the decision whether to rehire a nontenured teacher for

another year to the unfettered discretion of university officials.”); Lee, 272 S.W.3d

817-18. 24 Thus, if the decision to grant the charter is left to the discretion of the

commissioner, no property interest is created by granting the charter. See Town of

Castle Rock v. Gonzales, 545 U.S. 748, 756 (2005) (“Our cases recognize that a

benefit is not a protected entitlement if government officials may grant or deny it in

their discretion.”); see also Ex parte John M. Abell, 613 S.W.2d 255, 262 (Tex. 1981)

(“When the authority granting the right has the power and discretion to take that

right away, it cannot be said to be a vested right”); Seguin v. Bexar Appraisal Dist.,

373 S.W.3d 699, 709 (Tex. App.—San Antonio 2012, pet. denied) (taxpayer did not

have vested property right in disabled-veteran tax exemption that was “legislatively

revocable”); Klumb v. Houston Mun. Emp. Pension Sys., 405 S.W.3d 204, 226 (Tex.

App.—Houston [1st Dist.] 2013, pet. filed) (“[A] pensioner in a statutory pension

plan does not have a vested right to his pension.”); McAllen Hosps., L.P., d/b/a

McAllen Medical Center and d/b/a Edinburg Regional Medical Center and d/b/a

Edinburg Children’s Hospital and d/b/a McAllen Heart Hospital and Fort Duncan

Medical Center, L.P., d/b/a Fort Duncan Regional Medical Center v. Thomas Suehs,

Executive Commissioner of the Texas Health and Human Services Commission,

Douglas Wilson, Inspector 2 General of the Health and Human Services

Commission; Texas Health and Human Services Commission, et al., 426 S.W.3d

304, 313 (Tex. App.—Amarillo 2014, no pet.) (hospitals lack vested property

right/interest in Medicaid reimbursement payments that were “contingent and

potential rather than definitive and unconditional” prior to utilization review); 25 Robert Scott, Commissioner of Education v. Alphonso Crutch LCS Charter Sch.,

Inc., 392 S.W.3d at 170-71 (concluding that, because allocation to which charter

school was entitled for a given time period was subject to change depending on

updated attendance figures during school year, the school’s “interest in a definite

amount” was not vested and “remain[ed] contingent rather than unconditional, and

potential rather than definitive”).

ACT’s mistakenly believes that its interest in the continuation of its charter

contact is sufficient to vest a property interest. CR at 4. However, the expectation

of continuing its charter is not a vested interest, but rather a “mere expectancy

created by the law and liable to be revoked or destroyed by the same authority.” City

of Dallas v. Trammel, 101 S.W.2d 1009, 1012 (Tex. 1937) (quoting John D. Dillon,

Municipal Corporations § 431 (5th Ed. 1911)); see Lee, 272 S.W.3d at 818 (“It is

well established that the legislature, ‘which creates the property interest in the first

place, may also take it away.’”).

The Legislature created charters, and the ability to grant a charter is left

entirely up to the discretion of the Commissioner. TEX. EDUC. CODE §12.101. Thus,

even if a charter school meets all of the statutory requirements, the Commissioner

may still deny the charter. Moreover, notwithstanding section 12.115(c), has

required the Commissioner to revoke a school’s charter when the school materially

violates the terms of the charter, fails fiscal or academic accountability standards,

fails to protect students enrolled in the school, or becomes imminently insolvent. Id. 26 §12.115(a)(1)-(6).5 Moreover, nothing in the statute or in ACT’s charter prohibits

the Legislature from changing those standards, and the Legislature could abolish the

charter-school system entirely if it chose to do so. See Ex parte John M. Abell, 613

S.W.2d at 262 (“When the authority granting the right has the power and discretion

to take that right away, it cannot be said to be a vested right.”); Seguin, 373 S.W.3d

at 709 (taxpayer did not have vested property right in disabled-veteran tax exemption

that was “legislatively revocable”); Klumb, 405 S.W.3d at 226 (“[A] pensioner in a

statutory pension plan does not have a vested right to his pension.”); McAllen Hosps.,

L.P. v. Suehs, 426 S.W.3d at 304 (hospitals lack vested property right/interest in

Medicaid reimbursement payments that were “contingent and potential rather than

definitive and unconditional” prior to utilization review); Robert Scott,

Commissioner of Education v. Alphonso Crutch LCS Charter Sch., Inc., 392 S.W.3d

at 170-71 (concluding that, because allocation to which charter school was entitled

for a given time period was subject to change depending on updated attendance

figures during school year, the school’s “interest in a definite amount” was not

5 ACT’s charter contract mirrors this statutory framework, expressly providing that: the “commissioner in his sole discretion make take any action authorized by Section 39.131, TEC or Chater 29, TEC relating to the charter contract.” See, e.g. CR at 189; and the “Board in its sole discretion may modify, place on probation, revoke or deny timely renew of a charter for cause (“adverse action.”). Id. “Adverse Actions” include (a) a material violation of the terms of the charter listed in paragraphs 2 and 3, including accountability provisions; (b) failure to satisfy generally accepted accounting standards of fiscal management; or (c) failure to comply with an applicable law or rule.” Id. The charter holders agree to these terms, understand their obligations under the contract and the law, and should know that any rights to the charter are conditioned upon the law and satisfaction of the contractual terms.

27 vested and “remain[ed] contingent rather than unconditional, and potential rather

than definitive”).

At present, there is no Texas state case directly dealing with a charter school’s

right to its charter contract,6 but see Robert Scott, Commissioner of Education v.

Alphonso Crutch LCS Charter Sch., Inc., 392 S.W.3d at 170-71, other jurisdictions

have determined that a charter contract does not create a property interest. See Reach

Academy for Boys & Girls, Inc. v. Delaware Dept. of Educ., 46 F.Supp.3d 455, 457

(D.Del. 2014) (“[T]he renewal of Reach’s charter, is not an interest protected by the

Fourteenth Amendment’s Due Process Clause.”); Project Reflect, Inc. v. Metro

Nashville Bd. of Pub. Educ., 947 F. Supp. 2d 868, 878-79 (M.D. Tenn. 2013)

(concluding that a charter school did not have a constitutionally protected interest in

its charter under Tennessee law because the statutory provision governing charter

revocation “uses the language of discretion, not entitlement, and only minimally

conditions that exercise of discretion”); Project Sch. v. City of Indianapolis, 2012

WL 3114573, at *3 (S.D. Ind. July 31, 2012) (concluding that there was no protected

property interest in a charter under Indiana law because “the charter school statute

frames the decision to revoke a charter as a discretionary matter”); Pinnacle Charter

Sch. v. Bd. of Regents, 108 A.D.3d 1024, 969 N.Y.S.2d 318, 320 (2013) (“[T]he

6 Currently pending before this Court is Texas Education Agency and Michael Williams, 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 Two Azleway, Inc. d/b/a/ Azleway Charter School Nos. 03-14-00283-CV and 03-14-00360-CV, in which Appellees assert the same property interest in the charter. 28 New York Charter Schools Act . . . creates no constitutionally protected property

interest in the renewal of a charter. . . .”); State ex rel. Sch. Dist. of Kansas City v.

Williamson, 141 S.W.3d 418, 427 (Mo. Ct. App. 2004) (“[J]ust as a prospective

charter school has no protected property interest at stake regarding an initial charter

application, the school also has no protected property interest under the Charter

Schools Act with regard to renewal of its charter.”).

In Project Reflect, Inc. Smithson Craighead Middle School v. Metropolitan

Nashville Board of Public Education, 947 F.Supp.2d 868, (M.D. Tennessee, 2013),

the Tennessee district court considered whether a charter school sponsor (an entity

similar to a charter holder in Texas) had a protected property interest in continuation

of a charter school. In determining the charter lacked such an interest, the court

noted that:

[T]he statutory language and the charter agreement do not support Plaintiff's claim of a property interest protected by state law. “[A] party cannot possess a property interest in the receipt of a benefit when the state’s decision to award or withhold the benefit is wholly discretionary.” The charter agreement incorporates [the Tennessee Public Charter Schools Act of 2002, recovation or renewal section], which provides that “A public charter school agreement may be revoked or denied renewal by the final chartering authority if the chartering authority determines that the school . . . (2) Received identification as a priority school, as defined by the state’s accountability system.” “The word ‘may’ customarily connotes discretion.”

Id. at 878 (citations omitted). It went on to state:

[T]he Tennessee charter school statute repeatedly declares its purpose and intention to provide the state department of education and local 29 school systems with “options,” “alternative means,” and “flexibility”— hardly the language of a statute creating a property interest. The law constrains this discretion only by requiring the chartering authority to state its reason(s) for revoking the charter. If, as in this case, the revocation occurs because of the school's priority status, no appeal is permitted—again emphasizing state discretion, not the charter holder’s property rights.

Id. at 879 (citations omitted).

Similarly, in Project School v. City of Indianapolis, the district court held that

Indiana’s charter school statue and the facts in the case repudiated the plaintiff

charter school’s argument that it had a protected property interest in its continued

ability to operate a school. No. 1:12-cv-01028-SEB-DKL, 2012 WL 3114573, *3

(S.D. Indiana, July 31, 2012). Because the charter was subject to revocation if

certain conditions were met and because the sponsor was not required to grant a

charter to an organizer to operate a charter school in the first place, the court held

that the charter’s “argument that somehow its existence is a ‘property right’ for

purposes of the Fourteenth Amendment due process is a nonstarter.” Id. at *4. For

all of these same reasons, ACT has failed to identify a vested property interest that

did not receive procedural or substantive due process consideration.

2. ACT failed to alleged a viable procedural-due-process claim.

Even if ACT demonstrated a property interest in its charter, it received all the

process it was due regarding the accountability ratings and revocation. If an order

deprives a person of vested property rights without due process, the order may be

set aside even absent an express provision for judicial review. See City of Houston 30 v. Carlson, 393 S.W.3d 350, 361-62 (Tex. App.—Houston [14th Dist.] 2012, no pet.).

In this case, ACT received notice of its accountability ratings and the revocation

decision along with an opportunity to be heard, which is all that due process requires.

“Procedural due process requires notice and ‘an opportunity to be heard at a

meaningful time and in a meaningful manner.’” Coastal Habit Alliance v. Pub. Util.

Comm’n, 294 S.W.32d 276, 285 (Tex. App.—Austin 2009, no pet.) (quoting Univ.

of Tex. Med. Sch. v. Than, 901 S.W.2d 926, 930 (Tex. 1995)).

What process is due is measured by a flexible standard that depends on the practical requirements of the circumstances. This flexible standard includes three factors: (1) the private interest that will be affected by the official action; (2) the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and (3) the government’s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.

University of Texas Medical School at Houston, John C. Ribble, M.D., and M. David

Low, M.D. v. Allan Than, 901 S.W.2d at 930-31 (citations omitted).

ACT was given notice and an opportunity to appeal each of the three financial

accountability ratings. CR at 350; see also TEX. EDUC. CODE §39.082(g); 19 TEX.

ADMIN. CODE § 109.1002(i)(2) (financial accountability rating appeals). It was also

provided notice and an opportunity to appeal its substandard academic

accountability rating. CR at 358; see also TEX. EDUC. CODE §39.151; 19 TEX.

ADMIN. CODE §97.101(b) (academic accountability rating appeals).

31 ACT was also given notice and an opportunity to appeal the decision to revoke

its charter. CR at 342-349. It requested an informal review which was conducted

by TEA. CR at 355-357. It filed a petition for review to SOAH which upheld TEA’s

decision to revoke. CR at 360-376.

3. TEA applied the Texas Education Code neither arbitrarily nor capriciously in connection with ACT’s accountability ratings or revocation.

A violation of substantive due process occurs only when the government

deprives individuals of constitutionally protected rights by an arbitrary use of its

power. Simi Inv. Co. v. Harris County, 236 F.3d 240, 249 (5th Cir. 2000), cert.

denied, 534 U.S. 1022 (2001). A claimant prevails on a substantive due process

claim by establishing it holds a constitutionally protected property right to which the

Fourteenth Amendment’s due process protection applies and by establishing that the

challenged governmental action is not rationally related to furthering a legitimate

state interest. Byers v. Patterson, 219 S.W.3d 514, 525 (Tex.App.—Tyler 2007, no

pet.) (citing Simi Inv., 236 F.3d at 249-50 and Mikeska v. City of Galveston, 451 F.3d

376, 379 (5th Cir. 2006)). The court must then review the government’s actions

against the deferential “rational basis” test that governs substantive due process

claims. Simi Inv., 236 F.3d at 249.

ACT claims that TEA has created a system of rating review and revocation

that is devoid of a meaningful opportunity for review. CR at 7. It further claims that

the accountability ratings TEA assigned in 2012-2104 were arbitrary because ACT 32 identified the errors it submitted and was not permitted to submit corrected data. Id.

ACT argues, with no supporting evidence, that TEA did this specifically and

arbitrarily to ACT. Id. ACT further claims that the current “mechanism for

evaluating charter schools . . . allows TEA and Commissioner to change standards

after the fact without any regard for a connection with a legitimate government

purpose or rational relationship on a consistent basis.” CR at 14. Again, ACT relied

on the erroneous assumption that the renewal of its charter was automatic or vested

which it is not. Id.

An agency’s decision is arbitrary or results from an abuse of discretion (i.e is

capricious) if the agency: (1) failed to consider a factor the legislature directs it to

consider; (2) considers an irrelevant factor; or (3) weighs only relevant factors that

the legislature directs it to consider but still reaches a completely unreasonable

result. City of El Paso v. Public Utility Comm'n of Tex., 883 S.W.2d 179, 184 (Tex.

1994) (citing Gerst v. Nixon, 411 S.W.2d 350, 360 n. 8 (Tex. 1966)). Though ACT

clearly opposed the results of the accountability ratings it received, it never argued

that the ratings, based on the evidence actually received by TEA, were erroneous. It

simply believes that it should be afforded an opportunity to correct incorrect data

that it supplied years before, in an effort to avoid revocation now.

ACT presented the trial court with no evidence that TEA considered factors

beyond those the legislature directed it to consider: ACT’s financial and academic

performance ratings. ACT presented no evidence that TEA considered a factor that 33 was irrelevant which led to the failing ratings. Finally, ACT failed to present any

evidence that TEA considered the appropriate factors but reached a completely

unreasonable result. In short, there is no evidence that TEA acted arbitrarily or

capriciously when it reviewed the information ACT presented to it to reach the result

that ACT did not meet its financial or academic benchmark for 2012-2014. There is

no evidence that the Commissioner considered anything but the criteria found in the

Texas Education Code when he issued the notice of intent to revoke.

Indeed, a charter school is given numerous opportunities to provide correct

information at or near the time the AFR is due. What ACT seeks to do is appeal

ratings that are 2-3 years old, disrupting the finality of those accountability ratings

as well as the accreditation process. Allowing a charter school to submit untimely

appeals of years-old accountability ratings (specifically at the point of revocation)

frustrates one of the purposes of the 2013 statutory amendments which was to close

down underperforming charter schools efficiently. CR at 319.

C. No Violation of Some Other Constitutional Right.

1. ACT failed to demonstrate a property interest to substantiate its takings claim.

Notwithstanding the fact that ACT failed to demonstrate a property interest in

the continuation of its charter, ACT also claimed a property interest in the property

and funds that it has in its possession which are subject to seizure by TEA as a result

of the charter revocation. CR at 15. Article I, section 17 of the Texas Constitution

34 provides that “[n]o person’s property shall be taken, damaged or destroyed or

applied to public use without adequate compensation being made . . . .” TEX. CONST.,

ART. I, §17. Absent a cognizable property interest, a claimant is not entitled to

compensation under article I, section 17. See Tarrant County v. Ashmore, 635

S.W.2d 417, 422 (Tex. 1982). The takings provision of the Texas Constitution is

comparable to the federal takings clause. See Sheffield Devel. Co. v. City of Glenn

Heights, 140 S.W.3d 660, 669 (Tex. 2004). Both provisions recognize that, while

“all property is held subject to the valid exercise of the police power,” a regulation

may, under some circumstances, constitute a taking requiring compensation. Id. at

670 (quoting City of College Station v. Turtle Rock Corp., 680 S.W.2d 802, 804

(Tex. 1984)).

Texas Education Code §12.128 states that all property purchased or leased

with funds received by the charter holder under TEX. EDUC. CODE §12.106 is

considered to be public property for all purposes under state law and is held in trust

for the students of the open-enrollment charter school. ACT’s contract for its charter

has been revoked, and, by law, a revoked charter school may not continue to operate

under Subchapter D of Texas Education Code Chapter 12 (providing for the

operation of an open-enrollment charter school) and may not continue to receive

funds. See TEX. EDUC. CODE §12.1161

ACT’s year ending August 31, 2011 AFR, ACT clearly listed as state

property: all of its cash, land, buildings and improvements, vehicles and 35 approximately 92% of its furniture and equipment. RR, Def. exh. 1, p. 12; RR at 38:

24 – p. 39: 16. For the year ending August 31, 2012, ACT again listed as state

property: all of its cash, land, buildings and improvements, vehicles and

approximately 92% of its furniture and equipment. RR, Def. exh. 2, p. 12; RR at 46:

23 – p. 47: 11. Again, in the year ending on August 31, 2013, ACT listed all of its

cash, land, buildings and improvements, vehicles and approximately 90% of its

furniture and equipment as being state owned. RR, Def. exh. 3, p. 14. Moreover,

ACT’s 2014 AFR acknowledged that 100% of its land and improvements, building

improvements, vehicles, furniture and equipment were state or federally owned. CR

at 395.

The law is clear: public property may only be used in the operation of a public

school. TEX. EDUC. CODE §12.128(a)(2). Additionally, section 12.107 of the

Education Code clearly provides that funds received by a charter holder pursuant to

section 12.106 are public funds held in trust by the charter holder for the benefits of

students of the open-enrollment charter school. TEX. EDUC. CODE §12.107. Since

ACT may not continue to operate a public school after revocation, pursuant to TEX.

EDUC. CODE §12.1161, ACT must return this state property as directed by the

Commissioner. TEX. EDUC. CODE §12.128(c). In this case, the only property subject

to return to TEA would be the property identified by ACT as being owned by the

state, and any state funds held in trust by the former charter holder that no longer

operates an open-enrollment charter. 36 2. The Texas Education Code does not violate the Open Courts Provision.

ACT claims that the regulations regarding individual ratings violate the Open

Courts provision of the Texas Constitution by not allowing charter schools the

opportunity to seek redress from the courts. CR at 15. The Open Courts Provision

provides that “all courts shall be open, and every person for any injury done him, in

his lands, goods, person or reputation, shall have remedy by due course of law.”

Fed. Sign v. Tex. S. Univ., 951 S.W.2d 401, 410 (Tex. 1997) (quoting TEX. CONST.

ART. I, §13). The Open Courts provision affords three distinct protections. First,

courts must be open and operating. Id. Second, citizens must have access to the

courts unimpeded by unreasonable financial barriers. Id. Finally, the law must

afford meaningful legal remedies to Texas citizens, so the Texas legislature may not

abrogate the right to assert a well-established common-law cause of action. Id. The

Open Courts provision applies only to statutory restrictions of a cognizable common

law cause of action. Id.

However, “there is no common-law cause of action for judicial review of an

agency’s administrative act.” Creedmoor–Maha, 307 S.W.3d at 524 (quoting City

of Port Arthur v. Southwestern Bell Tel. Co., 13 S.W.3d 841, 845 (Tex.App.—Austin

2000, no pet.)). Further, ACT only cites a violation of the Open Courts Provision

with regard to its non-existent property interest in its charter. CR at 15. Finally, and

most importantly, ACT has demonstrated no right to judicial review of TEA’s

37 accountability ratings appeals or revocation decision. Thus, ACT failed to plead a

violation of the Open Courts Provision.

III. ACT’S ULTRA V IRES CLAIMS ARE MERITLESS, BARRED BY SOVEREIGN IMMUNITY, AND DO NOT SUPPORT THE DISTRICT COURT’S FINDING THAT ACT WOULD LIKELY SUCCEED ON THE MERITS OF ITS CLAIMS.

A. ACT failed to allege that the Commissioner acted without legal authority or failed to perform a ministerial act.

To proceed in a suit against State entities and officials, the plaintiff must either

plead and prove a waiver of sovereign immunity or allege that the State official acted

without legal authority, or ultra vires, which is a suit where sovereign immunity is

not implicated because a State official’s illegal or unauthorized actions are not

considered acts of the State. City of El Paso v. Heinrich, 284 S.W.3d 366, 370-72

(Tex. 2009) (citing Fed. Sign v. Tex. S. Univ., 951 S.W.2d 401, 404 (Tex. 1997);

Creedmoor–Maha, 307 S.W.3d at 514; Combs v. City of Webster, 311 S.W.3d 85,

94 (Tex.App.—Austin 2009, pet. denied).

The law distinguishes between suits that implicate sovereign immunity and

those that do not. “[A] suit challenging a specific administrative order implicates

sovereign immunity because it seeks to control state action — it seeks to restrain the

State or its officials in the exercise of discretionary statutory or constitutional

authority.” Creedmoor–Maha, 307 S.W.3d at 515 (citing Texas Dept. of Protective

and Regulatory Services v. Mega Child Care, Inc., 145 S.W. 3d at 198). Conversely,

38 an ultra vires suit must allege that a state actor acted without legal authority.

Heinrich, 284 S.W.3d at 372-73.

“A suit asserting that a government officer acted without legal authority or

seeking to compel him to comply with statutory or constitutional provisions is an

ultra vires suit and is not subject to pleas of governmental immunity. Such a suit, in

effect, does not seek to alter government policy; it seeks to reassert the control of

and enforce existing policy of the governmental entity.” Houston Belt & Terminal

Ry. Co. v. City of Houston, 424 S.W.3d 663, 668 (Tex.App.–Houston [14th Dist.]

2014, pet. filed) (citing Heinrich, 284 S.W.3d at 371–72).

A suit that does not allege that a state actor acted without legal authority,

“implicates sovereign immunity because it seeks to ‘control state action,’ to dictate

the manner in which officers exercise their delegated authority.’” See Heinrich, 284

S.W.3d at 372; Creedmoor–Maha, 307 S.W.3d at 515–16. In other words, unless a

suit alleges that a state official acted without legal authority or failed to perform a

ministerial duty, then the assumption is that the state official acted with

discretionary, legal authority and the suit seeks to control this lawful conduct. See

Creedmoor–Maha, 307 S.W.3d at 515–16.

ACT requested that the trial court enter declarations specifically (i) reversing

the administrative decision of the Commissioner to revoke its charter; and (ii)

challenging TEA’s use of what it considered was incorrect data to calculate ACT’s

39 financial and academic accountability ratings without giving ACT the opportunity

to submit correct information well after the deadline to do so.

The Commissioner did not act ultra vires in revoking ACT charter or by

considering the data originally submitted by ACT to determine ACT’s accountability

ratings considering the plain language of the Texas Education Code and the facts of

this case. The information provided by ACT was reviewed by ACT’s auditor who

specifically noted ACT’s deficiencies. RR at 40: 5-19; RR, Def. Ex. 3, p. 11.

However, instead of addressing those deficiencies, ACT simply reviewed the AFR

and affirmed that the information was true and correct prior to submitting it to TEA.

RR at 35: 5-17; RR at Def. Ex. 1, Certification page; 44: 24-p. 45: 6 (“Correct.”);

Based on this information, TEA determined that ACT was underperforming

financially for three years in a row and also found that ACT needed substantial

improvement of its academic accountability based on its 2013 information. CR at

358, ¶5.

Because ACT had four failing accountability ratings in the last three years,

the Commissioner was mandated to revoke its charter, and the Commissioner,

therefore, acted under such statutory authority in revoking ACT’s charter. See, e.g.

Sw. Pharmacy Solutions, Inc. v. Tex. Health & Human Servs. Comm’n, 408 S.W.3d

549, 561-62 (Tex. App.—Austin 2013, pet. denied) (rejecting ultra vires claim

where agency’s construction of statute was reasonable); see also supra, Statement 40 of Facts, Part I, (Sunset Commission recommending statute be amended to “ensure

students do not continue to attend a school lacking a quality education or with serious

financial problems that could affect the school and, ultimately, a student’s academic

progress.”).

B. ACT is seeking retroactive relief which is unavailable in an ultra vires action.

Sovereign immunity does not generally shield governmental agencies from

suits for equitable relief for a violation of constitutional rights. See Heinrich, 284

S.W.3d at 373 n. 6; City of Elsa v. M.A.L., 226 S.W.3d 390, 392 (Tex. 2007); City

of Beaumont v. Bouillion, 896 S.W.2d 143, 149 (Tex. 1995) (determining that no

private right for damages was permitted for violations of state constitutional rights

and vacating jury award of damages). However, ACT seeks an injunction that

addresses past decisions. CR at 18-20. If the relief sought by ACT effectively seeks

to control the TEA’s or the Commissioner’s lawful, discretionary actions, then

sovereign immunity is still implicated and the trial court erred in denying TEA’s

Plea to the Jurisdiction based on sovereign immunity. Heinrich, 284 S.W.3d at 370-

72; Creedmoor–Maha, 307 S.W.3d at 515.

“Equitable relief is a prospective remedy, intended to prevent future injuries,”

Adler v. Duval County School Bd., 112 F.3d 1475, 1477 (11th Cir. 1997), and for that

reason “[t]he sole function of an action for injunction is to forestall future

violations.” United States v. Or. State Med. Soc’y, 343 U.S. 326, 333 (1952); see

41 also Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 109 (1998) (“Because

respondent alleges only past infractions . . . and not a continuing violation or the

likelihood of a future violation, injunctive relief will not redress its injury.”); Reich

v. Occupational Safety & Health Review Comm’n, 102 F.3d 1200, 1202 (11th Cir.

1997) (“injunctive relief . . . addresses only ongoing or future violations”); Heinrich,

284 S.W.3d at 376 “[A] claimant who successfully proves an ultra vires claim is

entitled to prospective injunctive relief, as measured from the date of injunction.”).

Generally, the purpose of injunctive relief is to halt wrongful acts that are

threatened or in the course of accomplishment, rather than to grant relief against past

actionable wrongs or to prevent the commission of wrongs not imminently

threatened. See Texas Health Care Info. Council v. Seton Health Plan, Inc., 94

S.W.3d 841, 853 (Tex.App.—Austin 2002, no pet.); see also Webb v. Glenbrook

Owners Ass’n, 298 S.W.3d 374, 384 (Tex.App.—Dallas 2009, no pet.) (injunction

not available to “prevent commission of wrongs not imminently threatened.”). A

party seeking injunctive relief preventing alleged ultra vires acts must plead and

prove, among other things, existence of imminent harm, irreparable injury, and

absence of adequate remedy at law. See Lazarides v. Farris, 367 S.W.3d 788, 803

(Tex.App.—Houston [14th Dist.] 2012, no pet.); Texas Health Care Info. Council,

94 S.W.3d at 853. “To obtain equitable relief for past wrongs, a plaintiff must

demonstrate either continuing harm or a real and immediate threat of repeated injury

42 in the future.” Society of Separationists, Inc. v. Herman, 959 F.2d 1283, 1285 (5th

Cir.), cert. denied, 506 U.S. 866 (1992).

ACT specifically sought a declaration regarding factors the Commissioner

used in his accountability assessment which led to the revocation of ACT’s charter.

CR at 18. It sought to have the trial court declare certain factors in ACT’s favor and

then reapply those factors to its final accountability ratings for years prior to suit.

Id. ACT did not request prospective (future-seeking) relief, but rather retrospective

relief, seeking to remedy past harm it alleged that TEA committed against it by not

allowing alleged corrected data to be considered for the 2011, 2012, and 2013

accountability ratings. These forms of requested relief are solely to remedy past

alleged harm, which cannot be granted through an injunction.

IV. ACT FAILED TO DEMONSTRATE THE TRIAL COURT’S JURISDICTION AND, THEREFORE, THE TRIAL COURT ERRED BY DENYING TEA’S PLEA.

The Commissioner revoked ACT’s charter because of academic or financial

substandard performance, or a combination of the two. Substandard academic

performance ratings are issued only when a critical mass of a charter school’s

students are not meeting standards on assessment instruments or are dropping out or

not completing high school. TEX. EDUC. CODE §39.053. Similarly, the Texas

Education Code requires that charter schools be assigned the lowest financial

accountability ratings when they show signs of financial stress or insolvency. Id.

§39.082(f).

43 The Legislature clearly chose to automatically revoke the charters of schools

that fail to meet accountability standards for three years in a row. The Commissioner

complied with the statute, and ACT’s revocation should have been effective on June

30, 2015. CR at 355. ACT sought the temporary injunction to delay the revocations

citing meritless constitutional and ultra vires claims, none of which demonstrated

that the trial court possessed jurisdiction to consider.

PRAYER

For the foregoing reasons, Commissioner Williams and the Texas Education

Agency respectfully request the Court reverse the trial court’s denial of their Plea to

the Jurisdiction and dismiss this case for lack of subject-matter jurisdiction.

Alternatively, Commissioner Williams and the TEA request the Court hold the trial

court’s September 4, 2015 temporary injunction order is void, to dissolve it, and

remand the case to the district court for further proceedings.

44 Respectfully submitted,

KEN PAXTON Attorney General of Texas

CHARLES E. ROY First Assistant Attorney General

JAMES E. DAVIS Deputy Attorney General for Civil Litigation

ANGELA COLMENERO Division Chief

/s/ Erika M. Laremont ERIKA M. LAREMONT Attorney in Charge Texas Bar No. 24013003 Office of the Attorney General General Litigation Division P.O. Box 12548, Capitol Station Austin, TX 78711-2548 PHONE: (512) 475-4196; FAX: (512) 320-0667 Erika.Laremont@texasattorneygeneral.gov

ATTORNEYS FOR APPELLANTS

45 CERTIFICATE OF COMPLIANCE

Pursuant to Tex. R. App. P. 9.4(i)(3), I certify that this brief contains 12,478 words, exclusive of the exempted portions in Tex. R. App. P. 9.4(i)(1).

/s/ Erika M. Laremont ERIKA M. LAREMONT Assistant Attorney General

CERTIFICATE OF SERVICE

I certify that a copy of the above Brief of Appellants was served by certified

mail, return receipt requested, on October 20, 2015 upon the following individuals

at the listed address:

D. Todd Smith State Bar No. 00797451 SMITH LAW GROUP LLLP 1250 Capital of Texas Highway South Three Cielo Center, Suite 601 Austin, Texas 78746

Stephen M. Foster 9013 Magna Carta Loop Austin, Texas 78754 (512) 784-4367

/s/ Erika M. Laremont ERIKA M. LAREMONT Assistant Attorney General

46 No. 03-15-00528-CV _____________________________

IN THE COURT OF APPEALS FOR THE THIRD JUDICIAL DISTRICT _____________________________

TEXAS EDUCATION AGENCY AND MICHAEL WILLIAMS, COMMISSIONER OF EDUCATION, IN HIS OFFICIAL CAPACITY, Appellants,

ACADEMY OF CAREERS AND TECHNOLOGIES, INC. D/B/A ACADEMY OF CAREERS AND TECHNOLOGIES CHARTER SCHOOL, Appellee. ______________________________

On Appeal from the 200th Judicial District Court of Travis County, Texas Cause No. D-1-GN-15-002879 ______________________________

APPENDIX OF APPELLANT ______________________________ APPENDIX

Tab A Amended Defendants’ Plea to the Jurisdiction and Response to Plaintiff’s Request for Temporary Injunction and Exhibits

Tab B Plaintiff’s Response to Defendants’ Plea to the Jurisdiction

Tab C Defendants’ Reply to Plaintiff’s Response to Defendants’ Plea to the Jurisdiction and Response to Plaintiff’s Request for Temporary Injunction

Tab D Order Granting Temporary Injunction and Denying Defendant’s Amended Plea to the Jurisdiction

Tab E-1 Adler v. Duval County School Bd., 112 F.3d 1475, 1477 (11th Cir. 1997)

Tab E-2 Bd. of Regents v. Roth, 408 U.S. 564, 577 (1972)

Tab E-3 Conn. Bd. of Pardons v. Dumschat, 452 U.S. 458, 464 (1981)

Tab E-4 Mikeska v. City of Galveston, 451 F.3d 376, 379 (5th Cir. 2006)

Tab E-5 Olim v. Wakinekona, 461 U.S. 238, 249 (1983)

Tab E-6 Paul v. Davis, 424 U.S. 693, 709 (1976) (quoting Roth, supra, at 577,)

Tab E-7 Phillips v. Washington Legal Foundation, 524 U.S. 156, 164 (1998)

Tab E-8 Pinnacle Charter Sch. v. Bd. of Regents, 108 A.D.3d 1024, 969 N.Y.S.2d 318, 320 (2013)

Tab E-9 Project Reflect, Inc. v. Metro Nashville Bd. of Pub. Educ., 947 F. Supp. 2d 868, 878-79 (M.D. Tenn. 2013)

Tab E-10 Project School v. City of Indianapolis, 2012 WL 3114573, *3 (S.D. Indiana, July 31, 2012)

Tab E-11 Reach Academy for Boys & Girls, Inc. v. Delaware Dept. of Educ., 46 F.Supp.3d 455, 457 (D.Del. 2014) Tab E-12 Reich v. Occupational Safety & Health Review Comm’n, 102 F.3d 1200, 1202 (11th Cir. 1997)

Tab E-13 Simi Inv. Co. v. Harris County, 236 F.3d 240, 249 (5th Cir. 2000), cert. denied, 534 U.S. 1022 (2001).

Tab E-14 Society of Separationists, Inc. v. Herman, 959 F.2d 1283, 1285 (5th Cir.), cert. denied, 506 U.S. 866 (1992).

Tab E-15 Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 109 (1998)

Tab E-16 Suryanto v. Att'y Gen. of U.S., 398 Fed.Appx. 830, 834 (3rd Cir. 2010)

Tab E-17 Town of Castle Rock v. Gonzales, 545 U.S. 748, 756 (2005)

Tab E-18 United States v. Or. State Med. Soc’y, 343 U.S. 326, 333 (1952)

Tab F Tex. Educ. Code § 12.115

Tab G Tex. Educ. Code, Subchapter C

Tab H Tex. Educ. Code, Subchapter D

Tab I Tex. Admin. Code § 97.1001 Amended 8-7-13 (2)

Tab J 19 TEX. ADMIN. CODE §109.1002, amended 10-18-11

Tab K 19 TEX. ADMIN. CODE §109.1002, amended 10-3-13 8/12/2015 3:38:21 PM Velva L. Price District Clerk Travis County CAUSE NO. D-1-GN-15-002879 D-1-GN-15-002879 Jessica Arzola

ACDEMY OF CAREERS AND § IN THE DISTRICT COURT TECHNOLOGIES INC. d/b/a ACADEMY § OF CAREERS AND § TECHNOLOGIES CHARTER SCHOOL, § Plaintiffs, § § v. § 98TH JUDICIAL DISTRICT § TEXAS EDUCATION AGENCY and § MICHAEL WILLIAMS in his Official § Capacity as the Commissioner of § Education, § TRAVIS COUNTY, TEXAS Defendants. §

AMENDED DEFENDANTS' PLEA TO THE JURISDICTION AND RESPONSE TO PLANTIFF'S REQUEST FOR TEMPORARY INJUNCTION

TO THE HONORABLE JUDGE OF THE COURT:

COME NOW Defendants, Texas Education Agency ("TEA") and Michael L. Williams, in

his Official Capacity as the Commissioner ofEducation (individually "Williams" and, collectively

with TEA, the "Defendants"), and file this Amended Plea to the Jurisdiction.

I. BACKGROUND

A. 2012 Sunset Advisory Commission and Changes to Texas Education Code.

The Sunset Advisory Commission ("Commission") reviewed the Texas Education Agency

in October 2012, preceding the commencement of the 83rd Texas Legislature. In its review, the

Commission identified the following issue: "TEA lacks a full range of tools to effectively address

poor academic performance and financial mismanagement at low-performing charter schools."

Ex. 1. In identifying this issue, the Commission noted that "a higher rate of charter schools

performed at an academically unacceptable level than school districts," and that "[ m ]any charter

schools also have poor financial performance, underscoring the importance of oversight of

Tab A 293 expenditure of state funds." !d. at 70-71. Significantly, the Commission found:

Charter schools have far more accountability problems requiring assignment of interventions and sanctions, and ultimately, revocation of the charter. Charter schools represent more than two-thirds, 71 percent, of schools assigned with sanctions, even though charter schools make up only 17 percent of the total number of districts and charters.

!d. at 71-72. Although TEA had the authority to close a charter school and revoke the charter, the

Commission criticized the process as unworkable, leaving students to be educated at

underperforming charter schools. !d. at 72.

Based on these findings, the Commission recommended a change in statute that required

the automatic revocation of a charter for failure to meet basic academic or financial accountability

standards for three years in a row. !d. at 79. It recommended that no appeal be permitted from the

revocation determination. According to the Commission, such a change in the law would "allow

the State to more quickly shut down the poorest performing charters, without years of litigation

during which time the school remains open. The recommendation would also ensure students do

not continue to attend a school lacking a quality education or with serious financial problems that

could affect the school and, ultimately, a student's academic progress." !d. at 79.

Thus, based on the Commission's recommendation, the 83rd Texas Legislature amended

section 12.115 of the Texas Education Code to make mandatory the revocation of any open-

enrollment charter school's charter if the school fails to meet financial and/or academic

performance ratings in certain years. The Commissioner of Education ("Commissioner") is now

required to revoke a school's charter if one of three scenarios arises:

(1) the charter holder has been assigned an unacceptable performance rating under Subchapter C, Chapter 39 [of the Education Code] for the three preceding years;

(2) the charter holder has been assigned financial accountability performance rating under Subchapter D, Chapter 39, indicating financial performance lower than satisfactory for the three preceding school years; or

294 (3) the charter holder has been assigned any combination of the [unacceptable ratings under either subchapter].

TEX. EDUC. CODE§ 12.115(c).

Chapter 39, Subchapter C (academic performance) ratings to be considered are those

assigned to the school for 2009-2010, 2010-2011, and 2012-2013 rating years. !d. § 112.115(c-

1). However, "[f]or the purposes of revocation under Subsection (c)(1), performance during the

2011-2012 school year may not be considered." !d.; see also TEX. EDUC. CODE § 39.116(a) and

(f) (allowing commissioner of education to suspend academic performance rating during transition

period). The Subchapter D ratings to be considered are those assigned to the school for the 2010-

2011, 2011-2012, and 2012-2013 rating years. TEX. EDUC. CODE§ 12.115(c-1).

The findings of the Sunset Advisory Commission demonstrate that there is a compelling

state need to identify and close poor-performing charter schools in order to improve the choices

available to parents and students.

B. The Appeal Process as Defined in the Texas Education Code.

After a school district or charter school receives its accountability or financial ratings, it

has an opportunity to appeal the ratings to the Commissioner of Education. TEX. EDUC. CODE §

39.151(a). Should a charter school seek to appeal a financial or academic rating and notifies the

commissioner of such, the Commissioner must appoint a committee to make recommendations to

the commissioner on any challenge made to an agency decision. TEX. EDUC. CODE §39.151(b).

After considering the committee's recommendation, the Commissioner makes a final decision.

TEX. EDUC. CODE §39.151(d). The commissioner's decision following any appeal is final, and the

Legislature expressly prohibited any additional appeal from this final determination in "any other

proceeding" if the charter "has had an opportunity to challenge the decision under [section 31.151].

TEX. EDUC. CODE §39.151(e).

295 A school district or charter school may also seek redress of the Commissioner's decision

to close a school to the State Office of Administrative Hearings ("SOAH"). TEX. EDUC. CODE§

39.152(a). The school must file a petition for review and include certain requirements for the

petition to be granted. 19 TAC § 156.1183. The decision of the administrative law judge is final

and may not be appealed. TEX. EDUC. CODE §39.152(c)(3). Strikingly absent is any mention of

judicial review of TEA's ratings or decision to revoke a charter.

C. The Texas Education Code Mandates Revocation of Plaintiff's Charter School.

Plaintiff Academy of Careers and Technology, Inc., d/b/a Academy of Careers and

Technology Charter School ("ACT") was originally issued a state charter in 1998. Ex. 2. In 2012,

2013, and 2014 TEA found that ACT failed to meet the state's financial accountability standards.

Ex. 3; Ex. 4; see also Pl. Orig. Petition, pp. 2-3. ACT did not file an appeal to these ratings until

2015. The committee recommended that the appeals be dismissed, and the Commissioner

followed the committee's recommendations. Ex. 5. ACT also failed to meet academic

accountability standards in 2014 and appealed the 2014 academic accountability rating to the

outside appeal committee. Ex. 6. The committee recommended that the appeal be dismissed, and

the Commissioner followed the committee's recommendation. Ex. 6. Under the Texas Education

Code, these decisions are not appealable. TEX. EDUC. CODE §39.151(e).

Commissioner Williams had no discretion but to revoke ACT's charter, since its failings

in 2012, 2013 and 2014 represented three consecutive years of failure as defined by Texas

Education Code§§ 12.115(c)(3) & 12.115(c-1). The TEA notified ACT of this fact on December

8, 2014. Ex. 3.

ACT sought an informal hearing regarding the revocation. Pl. Orig. Petition, p. 3. A

review was conducted, but the decision to revoke ACT's charter was sustained. Ex. 5. It is

296 undisputed that ACT filed a petition for review seeking review of the revocation decision before

the State Office of Administrative Hearings ("SOAH"). Pl. Orig. Petition, p. 3. Because there

were no material factual issues in dispute, TEA filed a Motion for Summary Disposition, which

provided the basis for a final decision and order of SOAH upholding the Commissioner's decision

to revoke ACT's charter. Ex. 7. This decision is not subject to appeal. TEX. EDUC. CODE

D. This Court Lacks Jurisdiction to Consider ACT's Claims.

In its Original Petition for Declaratory Action and For Temporary Restraining Order and

Temporary & Permanent Injunction, ACT's challenge fails to invoke the jurisdiction of this Court.

The Legislature has broad latitude to shape and define the public school system in Texas. As a

part of this discretion, the Legislature is free to have a stringent accountability system, and to even

eliminate the charter system altogether. To this end, the Legislature has designated SOAH as the

sole avenue for any administrative recourse a charter holder may seek in the event it disagrees with

TEA's assessment of its performance in connection with an action to revoke the charter holder's

charter. And, importantly, unlike many other administrative processes before SOAH, the

Legislature has specifically exempted these SOAH proceedings from further review in the State

District Courts, leaving SOAH as the ultimate arbiter of any charter holder's dispute with TEA on

all issues relevant to the instant claims.

II. ARGUMENTS AND AUTHORITIES

A. Plea to the Jurisdiction- The Legal Standard

The Texas Supreme Court has long recognized that sovereign immunity, unless waived,

protects the State of Texas ("State"), its agencies, and its officials from lawsuits for damages,

absent legislative consent to sue the State. Tex. A & M Univ. Sys. v. Koseoglu, 233 S.W.3d 835,

297 844 (Tex. 2007); Tex. Dep 't ofTransp. v. Jones, 8 S.W.3d 636, 638 (Tex. 1999) (per curiam); Fed.

Sign v. Tex. S. Univ., 951 S.W.2d 401, 405 (Tex. 1997). Sovereign immunity embraces two

principles: immunity from suit and immunity from liability. Fed. Sign, 951 S.W.2d at 638 (citing

Missouri Pac. R.R. Co. v. Brownsville Navigation Dist., 453 S.W.2d 812, 813 (Tex.1970)).

Immunity from suit prevents the State from being sued without legislative consent, even if the

States' liability is not disputed. !d. (citing Brownsville Navigation Dist., 453 S.W.2d at 813).

"Immunity from liability protects the State from judgments even if the Legislature has expressly

given consent to the suit." !d. (citing Brownsville Navigation Dist., 453 S.W.2d at 813) (emphasis

omitted).

A party may challenge the trial court's subject matter jurisdiction by filing a plea to the

jurisdiction. See Tex. Dep'tofParks & Wildlifev. Miranda, 133 S.W.3d217, 225-26 (Tex. 2004).

In deciding a plea to the jurisdiction, a court may not weigh the claims' merits, but must consider

only the plaintiff's pleadings and the evidence pertinent to the jurisdictional inquiry. County of

Cameron v. Brown, 80 S.W.3d 549, 555 (Tex. 2002); see also Miranda, 133 S.W.3d at 227. If a

defendant demonstrates that the trial court lacks jurisdiction, the burden shifts to the plaintiff to

establish a fact question on the issue of jurisdiction. Mission Consol. Indep. Sch. Dist. v. Garcia,

372 S.W.3d 629, 635 (Tex. 2012). If the relevant evidence is undisputed and fails to present a fact

question, the trial court should rule on the plea as a matter of law. !d.

Texas courts defer to the legislature to waive immunity from suit because this allows the

legislature to protect its policymaking function. Tex. Natural Res. Conservation Comm 'n v. IT-

Davy, 74 S.W.3d 849, 854 (Tex.2002). Any waiver of immunity must be expressed by clear and

unambiguous language. TEX. Gov'T CODE § 311.034.

298 B. The District Court Lacks Subject Matter Jurisdiction to Review Defendants' Final Decisions Regarding ACT's Financial and Academic Accountability Ratings and SOAH's Final Decision and Order Regarding Revocation.

Through its Original Petition, ACT seeks judicial review of financial and academic ratings

issued by the Commissioner in 2012, 2013, and 2014 as well as SOAR's final decision and order

revoking the Plaintiff's contract for charter. Unless, the Texas Legislature has waived sovereign

immunity, either by statute or legislative resolution, this Court does not have jurisdiction to

consider Plaintiff's claims. Indeed, "[a] person may obtain judicial review of an administrative

action only if a statute provides that right, or the action adversely affects a vested property right or

otherwise violates a constitutional right." Tex. Dep 't of Protective & Regulatory Servs. v. Mega

Child Care, Inc., 145 S.W.3d 170, 173 (Tex. 2004). Such a right must be articulated by the

legislature through "clear and unambiguous language." !d. at 197.

1. There is no statutory provision which allows this Court to review TEA's rating decisions.

Chapter 39 of the Texas Education Code, entitled "Public School System Accountability,"

governs the financial and academic performance system used to review both traditional public

schools and charter schools. See TEX. EDUC. CODE§ 39.054(b). Section 39.151, however, limits

the review of any accountability determination to the Commissioner and expressly exempts the

decision from review by SOAH or a State District Court. See id., at§§ 39.151(d) & (e).

Here, ACT has failed to point to any provision in the Texas Education Code or any other

statutory provision that provides for judicial review of TEA's financial and academic ratings that

form the basis of the decision to revoke. See Burkhalter v. Tx. State Bd. Of Med. Exam 'r, 918

S.W.3d 1, 3 (Tex. App.-Austin 1996)("The right to appeal from an administrative order to the

courts is not a natural or inherent one but is one that may be granted or withheld at the discretion

of the Legislature.").

299 ACT claims that it failed the 2012 and 2013 financial accountability ratings due to "third

party" errors in its annual financial reports. See Pl. Orig. Petition, p. 2. The "third party" in

question is the independent auditor that ACT hired to prepare its annual financial report (AFR).

Ex. 8; see also TEC §44.008. In addition to preparing the report, ACT's Board of Trustees

approved the reports in question, as well as the report that led to the 2014 failed accountability

rating. TEC §44.008(d). While ACT characterizes the failures as "mutual" mistakes, the Agency

relied on the financial information submitted by ACT, who was responsible for submitting correct

data. Id at pp. 2-3.

ACT claims that the TEA rules impermissibly limited the appeal to errors made by TEA

and argues that the statute requires TEA to allow ACT to correct its allegedly erroneous data. Id

at pp. 3-4. However, the statute clearly allows the Commissioner to adopt rules for the review of

the accountability ratings. See TEC §39.151(a) " ... The Commissioner by rule shall provide a

process for a ... open enrollment charter school to challenge an agency decision made under this

chapter relating to an academic or financial accountability rating that affect the ... school."). The

Commissioner reasonably interpreted the term "appeal" to mean an opportunity to challenge the

Agency's rationale and methodology for issuing the rating, rather than an opportunity for ACT to

re-submit data. An appeal is typically limited to the facts under which a decision was made, and

frequently will not allow for additional evidence to be submitted. ACT, therefore, has no

procedural or substantive due process right to re-submit its data.

Finally, while ACT complains that the appeal was limited, ACT cannot and does not allege

that it provided "corrected" financial information in its appeals. ACT did file appeals for all the

accountability ratings at issue. Exs. 4 and 6. However, ACT does not allege that it provided new

financial information in its appeals that the Agency rejected. Moreover, while ACT claims that

300 the audited financial statements it submitted were incorrect, it has not provided new audited

financial statements to substantiate this claim.

2. There is no statutory provision which allows this Court to review TEA's revocation decision.

The commissioner shall revoke the charter of an open-enrollment charter school if:

(1) the charter holder has been assigned an unacceptable performance rating under Subchapter C, Chapter 39, for the three preceding years;

(2) the charter holder has been assigned an unacceptable financial accountability rating under Subchapter D, Chapter 39, indicating financial performance lower than satisfactory for the three preceding school years; or

(3) the charter holder has been assigned any combination of the ratings described by Subdivision (1) or (2) for the three preceding school years.

The Legislature has mandated that the Commissioner's decision to revoke a charter can be

reviewed only by SOAH, and that an ALJ's review of that charter-revocation decision is final and

not subject to appeal. Section 12.116(c) provides:

A decision by the commissioner to revoke a charter is subject to review by the State Office of Administrative Hearings. Notwithstanding Chapter 2001, Government Code:

(1) the administrative law judge shall uphold a decision by the commissioner to revoke a charter unless the judge finds the decision is arbitrary and capricious or clearly erroneous; and

(2) a decision of the administrative law judge under this subsection is final and may not be appealed.

TEX. EDUC. CODE § 12.116(c). Accordingly, the Commissioner's revocation decision is final

unless it is appealed to SOAH, and the SOAH ALJ's decision either upholding or reversing the

Commissioner's decision is not subject to appeal. Because ACT has no right to judicial review of

301 the revocation decision, the district court lacks jurisdiction over this suit. See Texas Dep 't of

Transp. v. Jones, 8 S.W.3d 636, 638 (Tex. 1999); Bacon v. Hist. Comm 'n, 411 S.W.3d 161, 173-

74 (Tex. App.-Austin 2013, no pet.) ("One implication of these principles is that there is no

general right to challenge or seek review of a state agency order or decision in Texas state court;

to the contrary, state agency decisions generally cannot be challenged in court unless the

Legislature has enacted a statute expressly authorizing such review."); Creedmoor-Maha Water

Supply Corp, 307 S.W.3d 505, 515 (Tex. App.-Austin 2010, no pet.) (UDJA actions "that seek

declaratory or injunctive relief against agency orders from which the legislature has not granted a

right of judicial review" are barred by state sovereign immunity.); KEM Tex., Ltd. v. Texas Dep't

of Transp., No. 03-08-00468-CV, 2009 Tex. App. LEXIS 4894, at *8-18 (Tex. App.-Austin

2009, no pet.) (challenge to non-appealable agency order barred by sovereign immunity).

C. ACT Has No Property Interest that Implicates a Due Process Violation.

ACT complains that it did not receive all the process it was due regarding the accountability

ratings. See Pl. Orig. Petition, p. 4. "Due process is implicated when the state or its agents deprive

a person of a protected liberty or property interest." Bd. of Regents v. Roth, 408 U.S. 564, 569

(1972). At issue is whether ACT has a constitutionally-protected property interest in its charter or

its accountability ratings. If a constitutionally-protected property interest is at stake, then the Court

determines what process is sufficient to protect that interest. "To have a property interest in a

benefit, a person clearly must have more than an abstract need or desire" and "more than a

unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it." !d. at

577. Such entitlements are, "'of course ... not created by the Constitution. Rather, they are created

and their dimensions are defined by existing rules or understandings that stem from an independent

source such as state law.'" Paul v. Davis, 424 U.S. 693, 709 (1976) (quoting Roth, supra, at 577,);

302 see also Phillips v. Washington Legal Foundation, 524 U.S. 156, 164 (1998).

Here, ACT asserts its property interest in its charter through the implication that such an

interest was created in 1998 when ACT was granted its charter by the TEA. See Pl. Orig. Pet. at

2. Indeed, the ability to grant a charter is left entirely up to the discretion of the Commissioner.!

The Texas Education Code §12.101 provides, "[T]he commissioner may grant a charter on the

application of an eligible entity for an open-enrollment charter school to operate in a facility of a

commercial or nonprofit entity, an eligible entity or a school district, including a home-rule school

district." (emphasis added). Thus, even if a charter school meets all of the statutory requirements,

the Commissioner may still deny the charter.

However, the statute that granted ACT's charter does not create a constitutionally-

protected property interest. "To determine whether a particular statute creates a constitutionally-

protected property interest, we ask whether the statute or implementing regulations place

'substantive limitations on official discretion."' Lee v. Tex. Workers' Compensation Comm 'n, 272

S.W.3d 806, 817 (Tex.App.-Austin 2008) (citing Olim v. Wakinekona, 461 U.S. 238, 249

( 1983)). If "the legislature leaves final determination of which eligible individuals receive benefits

to the unfettered discretion of administrators, no constitutionally-protected property interests

exists." !d. at 817-18 (citing Roth, 408 U.S. at 567). Thus, if the decision to grant the charter is

left to the discretion of the commissioner, no property interest is, therefore, created by granting the

charter. See Town of Castle Rock v. Gonzales, 545 U.S. 748, 756 (2005) ("Our cases recognize

that a benefit is not a protected entitlement if government officials may grant or deny it in their

discretion."); see also Ex parte Abell, 613 S.W.2d 255, 262 (Tex. 1981) ("When the authority

granting the right has the power and discretion to take that right away, it cannot be said to be a

1 This power was formerly held by the State Board of Education. This authority was transferred to the Commissioner by Senate Bill2 in 2013. Acts 2013, 83rd Leg., ch. 1140 (S.B. 2), §9, effective September 1, 2013.

303 vested right"); Seguin v. Bexar Appraisal Dist., 373 S.W.3d 699, 709 (Tex. App.-San Antonio

2012, pet. denied) (taxpayer did not have vested property right in disabled-veteran tax exemption

that was "legislatively revocable"); Klumb v. Houston Mun. Emp. Pension Sys., 405 S.W.3d 204,

226 (Tex. App.-Houston [1st Dist.] 2013, pet. filed) ("[A] pensioner in a statutory pension plan

does not have a vested right to his pension."); McAllen Hasps., L.P. v. Suehs, 426 S.W.3d 304, 313

(Tex. App.-Amarillo 2014, no pet.) (hospitals lack vested property right/interest in Medicaid

reimbursement payments that were "contingent and potential rather than definitive and

unconditional" prior to utilization review); Scott v. Alphonso Crutch LCS Charter Sch., Inc., 392

S.W.3d 165, 170-71 (Tex. App.-Austin 2010, pet. denied) (concluding that, because allocation

to which charter school was entitled for a given time period was subject to change depending on

updated attendance figures during school year, the school's "interest in a definite amount" was not

vested and "remain[ ed] contingent rather than unconditional, and potential rather than definitive").

Additionally, although there is no Texas case directly dealing with a charter school's right

to its charter contract, there are two out-of-state federal district court cases that directly address

the issue. See University of Tex. Med. Sch. v. Than, 901 S.W.2d 926, 929 (Tex.1995) (citing

Mellinger v. City of Houston, 68 Tex. 37, 3 S.W. 249, 252-53 (1887) (following contemporary

federal due process interpretations of procedural due process issues). In Project Reflect, Inc.

Smithson Craighead Middle School v. Metropolitan Nashville Board of Public Education, the

Tennessee district court considered whether a charter school sponsor (an entity similar to a charter

holder in Texas) had a protected property interest in continuation of a charter school. 947

F.Supp.2d 868, (M.D. Tennessee, 2013). In determining the charter lacked such an interest, the

court noted that:

the statutory language and the charter agreement do not support Plaintiffs claim of a property interest protected by state law. "[A] party cannot possess a property

304 interest in the receipt of a benefit when the state's decision to award or withhold the benefit is wholly discretionary." The charter agreement incorporates Tenn. Code Ann. § 49-13-122(a), which provides that "A public charter school agreement may be revoked or denied renewal by the final chartering authority if the chartering authority determines that the school ... (2) Received identification as a priority school, as defined by the state's accountability system." "The word 'may' customarily connotes discretion."

!d. at 878 (citations omitted). It went on to state:

the Tennessee charter school statute repeatedly declares its purpose and intention to provide the state department of education and local school systems with "options," "alternative means," and "flexibility"-hardly the language of a statute creating a property interest. The law constrains this discretion only by requiring the chartering authority to state its reason( s) for revoking the charter. If, as in this case, the revocation occurs because of the school's priority status, no appeal is permitted-again emphasizing state discretion, not the charter holder's property rights.

!d. at 879 (citations omitted).

Similarly, in Project School v. City of Indianapolis, the district court held that Indiana's

charter school statue and the facts in the case repudiated the plaintiff charter school's argument

that it had a protected property interest in its continued ability to operate a school. No. 1: 12-cv-

01028-SEB-DKL, 2012 WL 3114573, *3 (S.D. Indiana, July 31, 2012). Because the charter was

subject to revocation if certain conditions were met and because the sponsor was not required to

grant a charter to an organizer to operate a charter school in the first place, the court held that the

charter's "argument that somehow its existence is a 'property right' for purposes of the Fourteenth

Amendment due process is a nonstarter." !d. at *4.

ACT has, therefore, failed to identify a property interest that did not receive procedural or

substantive due process consideration.

D. ACT's Takings Claim Fails Because it Only Possesses State and Federal Property.

ACT claims that it has a property interest in the property and funds that it has in its

possesswn. See Pl. Orig. Pet. at 8. TEX. EDUC. CODE § 12.128 states that all property purchased or

305 leased with funds received by the charter holder under TEX. EDUC. CODE§ 12.106 are considered

to be public property for all purposes under state law and is held in trust for the students of the

open-enrollment charter school. ACT's contract for charter has been revoked, and TEX. EDUC.

CODE §12.1161 states that a revoked charter school may not continue to operate under Subchapter

D of Texas Education Code Chapter 12 (providing for the operation of an open-enrollment charter

school) and may not continue to receive funds.

ACT's last Annual Financial Report acknowledges that all of the assets held by ACT are

either state property or federal property. Ex. 8. This public property may only be used in the

operation of a public school. TEX. EDUC. CODE§ 12.128(a)(2). Since ACT may not continue to

operate a public school after revocation, pursuant to TEX. EDUC. CODE §12.1161, ACT must

return this state property as directed by the Commissioner. TEX. EDUC. CODE§ 12.128(c).

E. The Commissioner's Discretion in not Overbroad.

ACT argues that the entire statutory scheme is overbroad. While the statutory scheme

grants the Commissioner discretion in the issuance of ratings and making a revocation decision,

the statute provides safeguards. For accountability determinations, there is a right to challenge

before a committee composed entirely of non-TEA employees. TEC §39.151(b). For revocation

decisions, there is a right to challenge such decisions through a SOAH substantial evidence review.

TEC §12.116(c).

F. ACT Failed to Properly Plead a Violation of the Open Courts Provision.

The Open Courts provision of the Texas Constitution provides that "all courts shall be

open, and every person for any injury done him, in his lands, goods, person or reputation, shall

have remedy by due course oflaw." Fed. Sign v. Tex. S. Univ., 951 S.W.2d 401,410 (Tex. 1997)

(quoting TEX. CONST. ART. I,§ 13). The Open Courts provision affords three distinct protections.

306 First, courts must be open and operating. !d. Second, citizens must have access to the courts

unimpeded by unreasonable financial barriers. !d. Finally, the law must afford meaningful legal

remedies to Texas citizens, so the Texas legislature may not abrogate the right to assert a well-

established common law cause of action. !d. The Open Courts provision applies only to statutory

restrictions of a cognizable common law cause of action. !d.

First, "there is no common-law cause of action for judicial rev1ew of an agency's

administrative act." Creedmoor-Maha Water Supply Corp. v. Tex. Comm'n on Envtl. Quality, 307

S.W.3d 505, 524 (Tex.App.-Austin 2010, no pet.) (quoting City of Port Arthur v. Southwestern

Bell Tel. Co., 13 S.W.3d 841, 845 (Tex.App.-Austin 2000, no pet.)). Second, ACT only cites a

violation of the Open Courts Provision with regard to its non-existent property interest in its

charter. Pl. Orig. Petition, pp. 13. Finally, and most importantly, ACT has demonstrated no right

to judicial review of Defendants' accountability ratings appeals or revocation decision. Thus, ACT

failed to plead a violation of the Open Courts Provision.

G. Commissioner Williams Did Not Act Ultra Vires, and is, Therefore, Entitled To Sovereign Immunity.

1. ACT failed to allege that Commissioner Williams acted without legal authority or failed to perform a ministerial act.

To proceed in a suit against State entities and officials, the plaintiff must either plead and

prove a waiver of sovereign immunity or allege that the State official acted without legal authority,

or ultra vires, which is a suit where sovereign immunity is not implicated because a State official's

illegal or unauthorized actions are not considered acts of the State. City of El Paso v. Heinrich,

284 S.W.3d 366,370-72 (Tex. 2009) (citing Fed. Sign v. Tex. S. Univ., 951 S.W.2d 401,404 (Tex.

1997); Creedmoor-Maha Water Supply Corp. v. Tex. Comm'n on Envtl. Quality, 307 S.W.3d 505,

514 (Tex.App.-Austin 2010, no pet.); Combs v. City ofWebster, 311 S.W.3d 85,94 (Tex.App.-

307 Austin 2009, pet. denied).

The law distinguishes between suits that implicate sovereign immunity and those that do

not. "[A] suit challenging a specific administrative order implicates sovereign immunity because

it seeks to control state action - it seeks to restrain the State or its officials in the exercise of

discretionary statutory or constitutional authority. " Creedmoor-Maha, 307 S. W .3d at 515 (citing

Tex. Dep 't of Protective & Regulatory Servs. v. Maga Child Care, Inc., 145 S.W. 3d 170, 198

(Tex. 2004)). Conversely, an ultra vires suit must allege that a state actor acted without legal

authority. Heinrich, 284 S.W.3d at 372-73. "A suit asserting that a government officer acted

without legal authority or seeking to compel him to comply with statutory or constitutional

provisions is an ultra vires suit and is not subject to pleas of governmental immunity. Such a suit,

in effect, does not seek to alter government policy; it seeks to reassert the control of and enforce

existing policy of the governmental entity." Houston Belt & Terminal Ry. Co. v. City ofHouston,

424 S.W.3d 663, 668 (Tex.App.-Houston [141h Dist.] 2014, pet. filed) (citing Heinrich, 284

S.W.3d at 371-72). A suit that does not allege that a state actor acted without legal authority,

"implicates sovereign immunity because it seeks to 'control state action,' to dictate the manner in

which officers exercise their delegated authority."' See Heinrich, 284 S.W.3d at 372; Creedmoor-

Maha, 307 S.W.3d at 515-16. In other words, unless a suit alleges that a state official acted

without legal authority or failed to perform a ministerial duty, then the assumption is that the state

official acted with discretionary, legal authority and the suit seeks to control this lawful conduct.

See Creedmoor-Maha, 307 S.W.3d at 515-16.

ACT's seeks this Court to enter declarations specifically challenging the administrative

decision of Commissioner Williams to use prior-year data for calculation of the following year's

accountability ratings. See Pl. Orig. Petition, p. 9. The Commissioner did not act ultra vires in

308 using prior-year data for the following year's accountability because to do otherwise would yield

the absurd result of requiring consideration of a school-year rating for revocation purposes while

simultaneously prohibiting it. See, e.g., Jose Carreas, MD., P.A. v. Marroquin, 339 S.W.3d 68,

73 (Tex. 2011) ("We ... interpret statutes to avoid an absurd result."). ACT's claim is particularly

weak in light of the judicial deference given to an agency's reasonable interpretation of a statute it

is charged with enforcing. See, e.g. Sw. Pharmacy Solutions, Inc. v. Tex. Health & Human Servs.

Comm 'n, 408 S.W.3d 549, 561-62 (Tex. App.-Austin 2013, pet. denied) (rejecting ultra vires

claim where agency's construction of statute was reasonable). Finally, ACT's interpretation would

frustrate the legislative intent behind section 12.115(c-1) by delaying another year the issuance of

performance ratings. See Hunter v. Fort Worth Capital Corp., 620 S.W.2d 547, 552 (Tex.1981)

(courts should not insert words in a statute except to give effect to clear legislative intent); see

supra, Statement of Facts, Part I, (Sunset Commission recommending statute be amended to

"ensure students do not continue to attend a school lacking a quality education or with serious

financial problems that could affect the school and, ultimately, a student's academic progress.");

l.CR.343.

2. ACT is seeking retroactive relief which is unavailable in an ultra vires action.

Sovereign immunity does not generally shield governmental agencies from suits for

equitable relieffor a violation of constitutional rights. See Heinrich, 284 S.W.3d at 373 n. 6; City

of Elsa v. MA.L., 226 S.W.3d 390, 392 (Tex. 2007); City of Beaumont v. Bouillion, 896 S.W.2d

143, 149 (Tex. 1995) (determining that no private right for damages was permitted for violations

of state constitutional rights and vacating jury award of damages). However, ACT seeks an

injunction that addresses past decisions. Pl. Orig. Petition, pp. 13-15. If the relief sought by ACT

effectively seeks to control the TEA's or Commissioner Williams' lawful, discretionary actions,

309 then sovereign immunity is still implicated. Heinrich, 284 S.W.3d at 370-72; Creedmoor-Maha,

307 S.W.3d at 515.

"Equitable relief is a prospective remedy, intended to prevent future injuries," Adler v.

Duval County School Bd., 112 F.3d 1475, 1477 (11th Cir. 1997), and for that reason "[t]he sole

function of an action for injunction is to forestall future violations." United States v. Or. State

Med. Soc y, 343 U.S. 326, 333 (1952); see also Steel Co. v. Citizens for a Better Env 't, 523 U.S.

83, 109 (1998) ("Because respondent alleges only past infractions ... and not a continuing

violation or the likelihood of a future violation, injunctive relief will not redress its injury."); Reich

v. Occupational Safety & Health Review Comm 'n, 102 F.3d 1200, 1202 (11th Cir. 1997)

("injunctive relief ... addresses only ongoing or future violations"); Heinrich, 284 S.W.3d at 376

"[A] claimant who successfully proves an ultra vires claim is entitled to prospective injunctive

relief, as measured from the date of injunction.").

Generally, the purpose of injunctive relief is to halt wrongful acts that are threatened or in

the course of accomplishment, rather than to grant relief against past actionable wrongs or to

prevent the commission of wrongs not imminently threatened. See Texas Health Care Info.

Council v. Seton Health Plan, Inc., 94 S.W.3d 841, 853 (Tex.App.-Austin 2002, no pet.); see

also Webb v. Glenbrook Owners Ass 'n, 298 S.W.3d 374, 384 (Tex.App.-Dallas 2009, no pet.)

(injunction not available to "prevent commission of wrongs not imminently threatened."). A party

seeking injunctive relief preventing alleged ultra vires acts must plead and prove, among other

things, existence of imminent harm, irreparable injury, and absence of adequate remedy at law.

See Lazarides v. Farris, 367 S.W.3d 788, 803 (Tex.App.-Houston [14th Dist.] 2012, no pet.);

Texas Health Care Info. Council, 94 S.W.3d at 853. "To obtain equitable relief for past wrongs,

a plaintiff must demonstrate either continuing harm or a real and immediate threat of repeated

310 injury in the future." Society of Separationists, Inc. v. Herman, 959 F.2d 1283, 1285 (5th Cir.),

cert. denied, 506 U.S. 866 (1992).

ACT specifically seeks a declaration regarding factors Commissioner Williams used to in

his accountability assessment which led to the revocation of ACT's charter. Pl. Orig Pet. p. 16. It

seeks to have the Court declare certain factors in ACT's favor and then reapply those factors to its

accountability ratings. !d. ACT's requests are not prospective (future-seeking) in nature, but

rather, are retrospective, seeking to remedy past harm. These forms of requested relief are solely

to remedy past alleged harm, which cannot be sought through an injunction.

H. This Court Lacks Jurisdiction to Hear Any of ACT's Claims

1. ACT has no appeal as of right to a state district court.

For the reasons outlined above, ACT is limited in any challenge to the decisions raised in

this case to, at most, a proceeding before SOAH. This is the extent of ACT's right to appeal. In

fact, ACT did seek appeal of many of the granular complaints listed in its Original Petition. For

those issues, ACT's appellate rights began and ended with the appeals committee, and there is no

further right to appeal to this Court or elsewhere. ACT had a right to appeal the revocation decision

to SOAH, an appeal that it pursued and lost, and it, was therefore, provided with all of the

procedural due process to which it was entitled.

2. ACT has no constitutional interest beyond those defined by the contractual and statutory scheme for charter schools.

ACT wishes to collaterally attack many decisions of TEA, up to and including the

revocation decision in this Court. However, as outlined above, ACT has no constitutionally

protected interest that would warrant review by a District Court. The Legislature has broad

discretion to require charter schools to meet any set of performance criteria it wishes to set. It is

entirely up to a charter school to either comply with those requirements or forfeit its charter. There

311 is no third option to ask a Court to forgive any charter school from the obligations imposed upon

the charter school by the state. Indeed, the Texas statutory scheme that governs charter schools is

subject to amendment and could be replaced or deleted entirely.

3. The appointment of a conservator is not ripe/no legal injury.

ACT argues that the appointment of a conservator constitutes a taking of ACT's property

without due process. Pl. Orig. Petition, p. 16. ACT also argues the TEC §12.128 is

unconstitutional. Pl. Orig. Petition, p. 17. However, ACT's own financial report acknowledges

that all the property in the possession of ACT is either state or federal property, therefore there is

no takings issue for the court to adjudicate. Ex. 8.

4. Charter schools, as governmental entities, cannot sue the state for constitutional violations.

That ACT is considered a governmental entity, which cannot acquire vested rights against

the State, further precludes its arguments. Accordingly ACT cannot bypass the statutory bar on

judicial review of revocation decisions by claiming a constitutional violation. LTTS Charter

School v. C2 Construction, 342 S.W.3d 73, 76 (Tex. 2011).

5. The "high risk" designation of ACT by TEA is not a subject for relief in state court.

ACT has requested that the court prohibit TEA from continuing to apply a "high risk"

designation to ACT's federal grant reimbursement requests. See Pl. Orig. Petition, p. 15. This

requests fails for two reasons: 1) the designation has already been made and, is therefore, not

subject to prohibitory injunctive relief; and 2) ACT has not been denied federal funds, which would

entail offering procedural due process; instead, ACT must simply meet additional requirements to

receive federal grant fund reimbursements. Ex. 9. ACT, is not, therefore, entitled to any relief

regarding the "high risk" designation.

312 PRAYER

WHEREFORE, PREMISES CONSIDERED, Defendants pray that Plaintiff take nothing

by its suit that all costs be taxed and adjudged against Plaintiff, and that Defendants be granted

such other and further relief to which they may be justly entitled.

Respectfully submitted,

ANGELA V. COLMENERO Division Chief- General Litigation

/s/ EvlM;;vlvl. L(MI'~ ERIKA M. LAREMONT State Bar No. 24013003 Assistant Attorney General General Litigation Division Post Office Box 12548, Capitol Station Austin, Texas 78711-2548 512-463-2120 (Telephone) 512-320-0667 (Facsimile) erika.l aremont(fi{texasattomeygencral. gov ATTORNEYS FOR DEFENDANTS

313 CERTIFICATE OF SERVICE

I hereby certify that on August 12, 2015, the foregoing document was delivered by telephonic document transfer to the following:

Stephen M. Foster 90 13 Magna Carta Loop Austin, Texas 78754 (512) 784-4367 Attorneys for Plaintiff

/s/ EvlM;;vlvl. L(MI'~ ERIKA M. LAREMONT

314 SuNSET ADVISORY COMMISSION

STAFF REPORT

Texas Education Agency

OcTOBER 2 0 12

ACT Ex. 1-Su nset 315 Sunset Advisory Commission October 2012

ISSUE 7 TEA Lacks a Full Range of Tools to Effectively Address Poor Academic Performance and Financial Mismanagement at Low-Performing Charter Schools.

Background Charter schools are public schools meant to improve student learning, allow for teacher innovation, and increase the number of quality education choices for families. Charters operate under decreased state regulation in exchange for increased accountability for results. While charter schools do not have a local tax base, they receive state funding for operations, just like traditional school districts, but not for facilities. In the 2011-2012 school year, charter schools educated about 155,000 students, or roughly 3 percent ofTexas students, and expended state funds totaling approximately $938 million.

Statute provides for four types of charter schools: open-enrollment charters, campus charters, home- rule school district charters, and college, university, or junior college charters. 1 This issue focuses solely on open-enrollment charters, because they are regulated byTEA. 2

Statute authorizes the State Board of Education (SBOE) to grant an open-enrollment charter to an applicant that meets financial, governance, and operational standards adopted by the Commissioner. 3 TEA just adopted these standards, effective for the next group - or generation - of charters, in 2013. Most open-enrollment charters are self-governed 501(c)(3) nonprofit organizations with an appointed board to oversee operations of the charter school. State law caps the number of charters at 215, but existing charter holders may expand the number of campuses they operate without getting a new charter and affecting this cap. 4 As of September 2012,201 charters are in effect, representing 549 campuses.

• State oversight. After SBOE grants a charter, TEA regulates charter schools, including a charter renewal process, amendment and expansion process, and monitoring financial and academic performance through accountability ratings. TEA may apply interventions and sanctions to those charters that fail to meet academic or financial accountability standards, or that violate certain provisions oflaw or rule through two enforcement processes in separate chapters of the Education Code. Chapter 12 governs charter schools and requirements for charter contracts, and Chapter 39 governs TEA's academic and financial accountability requirements, including intervention and sanction authority, for both districts and charters.

• Sanction authority. The charter school statute, Chapter 12, authorizes TEA to revoke a charter, after a process for a full contested case hearing at the State Office of Administrative Hearings (SOAH), if the charter holder:

commits a material violation of the charter, including failure to satisfY accountability provisions prescribed by the charter;

fails to satisfY generally accepted accounting standards of fiscal management;

Texas Education Agency Staff Report Issue 7 69 316 October 2012 Sunset Advisory Commission

fails to protect the health, safety, or welfare of the students enrolled at the school; or

fails to comply with a law or rule. 5

The accountability statute, Chapter 39, provides TEA with a range of interventions and sanctions for application to both districts and charters, including appointment of a monitor, conservator, or board of managers. 6 A charter holder can challenge certain decisions of the Commissioner, including closure, under the accountability statute through a formal record review process at the agency, which is subject to review by SOAH, under a substantial evidence standard of review. 7 If the Commissioner orders the charter closed under the accountability statute, the charter is automatically revoked. 8 Neither chapter's enforcement process provides for a judicial appeal of the Commissioner's final decision.

Findings Statute frees charter schools from certain state restrictions in exchange for an expectation of higher, more innovative, performance. The Legislature has an expectation that charter schools will satisf}r performance standards, particularly academic performance, and that expanded autonomy through freedom from certain state restrictions that apply to traditional school districts will enable charter schools to achieve high performance in innovative ways. Because charter contracts are subject to certain limitations, such as compliance with academic and financial accountability standards, charter schools essentially operate on performance contracts. Appendix C Charter schools provides more detail on which state restrictions apply to charter schools and essentially which do not. operate on performance The Legislature's performance expectation is reflected in TEA's approach to contracts. school closure. The Legislature created charter schools to be vehicles for innovation and to offer families choices in educational settings. However, traditional districts serve as the school oflast resort for students. If a charter school closes, students may be displaced, but are still afforded an education by attending their local school district. If a school district closes, students likely do not have another local education option, and could be required to travel some distance to another district, at additional cost. In the past 15 years, TEA has shut down 48 charters, but has closed only four traditional districts. 9

While many charter schools perform well, poor performance by some charter schools threatens provision of a quality education for their students. Many charter schools clearly meet the Legislature's expectations for innovation and success. In fact, in 2011, 8.5 percent of charters received exemplary academic ratings, as compared to only 4.4 percent of school districts. However, as can be seen in the bar chart on the following page, Academic Accountability Ratings for Charters and Districts, a higher rate of charter schools performed at an academically unacceptable level than school

Texas Education Agency Staff Report 70 Issue 7 317 Sunset Advisory Commission October 2012

Academic Accountability Ratings for Charters and Districts 2011 Academically Academically Exemplary Recognized Acceptable Unacceptable 60

gJ 40 01 .l9 5j 30 ~ &. 20

districts. Of the 1,029 districts and 199 charters rated, a higher percentage of charters- 17.6 percent versus 4. 9 percent- were academically unacceptable in 2011. Charters receive Many individual charter school campuses have also demonstrated poor 80 percent of academic performance for years. Appendix D shows the number of years their funding individual charter campuses, by generation, have been ranked academically from the State, unacceptable, including four charter campuses that have been ranked compared to academically unacceptable for 10 or more years. 10 41 percent for traditional Many charter schools also have poor financial performance, underscoring schools. the importance of oversight for expenditure of state funds. Charter schools receive about 80 percent of their revenues in state aid, as compared to 41 percent for traditional school districtsY Beginning in 2012, TEA expanded the FIRST financial accountability ratings for charter schools from three to 19 indicators, consistent with the indicators used to rank districts, minus one indicator related to facilities. The bar Failing Financial chart, Failing Financial Accountability Ratings, illustrates Accountability Ratings that 13.1 percent of charter schools failed TEA's financial 2012 accountability system in 2012, significantly higher than the 20 2 percent of districts. 15 Continued poor performance on academic and financial 01 ,§ accountability ratings can lower a district's or charter's ·n; u.. accreditation status or lead to a series of interventions and 'E 10 sanctions, including TEA appointment of a monitor or ~ Q)

conservator. Charter schools have far more accountability fl. 5 problems requiring assignment of interventions and sanctions and, ultimately, revocation of the charter. Charter schools represent more than two-thirds, 71 percent, of Charters Districts schools with assigned sanctions, even though charter

Texas Education Agency Staff Report Issue 7 71 318 October 2012 Sunset Advisory Commission

schools make up only 17 percent of the total number of districts and charters. In the last three years, TEA has revoked or not renewed 10 charters, and accepted the surrender of five others in lieu of enforcement action. Charters represent 71 TEA cannot act quickly to revoke a charter for chronic poor percent of performance, placing student education at risk. schools with Because charter schools are expected to meet performance standards in sanctions, but exchange for greater autonomy, demonstrated records of continuous poor only 1 7 percent performance should not warrant the State spending significant time and of all schools. resources to shut these charters down. Revocation of these charters should occur more quickly to protect students from an inadequate education. Despite the many instances of poor performance and interventions and sanctions among charter schools, TEA cannot act quickly, particularly in circumstances warranting revocation, to address charter schools that have failed to improve over time or through intermediate sanctions. The table, Academically Unacceptable Charters Academically Unacceptable Charters and Districts for and Districts for Consecutive Years Consecutive Years, shows that more charter schools have 2010-2011 School Year unacceptable academic performance over consecutive Years Academically years than traditional school districts. Unacceptable Charters Districts While the agency has statutory authority to close a 3 Years 5 1 charter school and revoke the charter, TEA's actions are subject to protracted litigation, unlike with traditional 2 Years 5 2 school districts, because a charter is considered a legal 1 Year 25 47 contract or property right. Revocation of a charter under the charter school statute typically takes two to three years, on top of several years of poor performance, during which time a charter school remains open. While TEA's ability to revoke a charter under the accountability statute can move more quickly, it is not always workable, does not address health, safety, or welfare violations, and does not grant TEA the ability to suspend funding and operations. In one case, TEA has been working to revoke a charter for 12 years. A long revocation process leaves In one case, students to be educated at underperforming charter schools. TEA has been working to Beyond the practical challenges of winding down a school's operations, TEA revoke a charter typically faces opposition to revocation on several fronts. Students and their for 12 years. families often have an emotional attachment to their school or fear that closure reflects poorly on their decision to attend the school; teachers and school employees have professional or financial stakes in the operation of their school; and opposition from elected officials can create high political costs for the agency. TEA is unlikely to hear vocal support for school closure or revocation, as parents dissatisfied with the charter have likely already left the school to pursue other education options.

Protracted hearings and litigation can also result in closure of a charter school during the middle of the school year, which can displace teachers, students, and their families. Further, poor-performing charter schools threaten the

Texas Education Agency Staff Report 72 Issue 7 319 Sunset Advisory Commission October 2012

reputation of the many high-performing charter schools, and, because of the statutory cap on the number of charters the State may issue, limit opportunities for new charter schools that may perform well. Poor-performing TEA lacks authority to intervene when a charter fails to address charters threaten its imminent financial insolvency. the reputation ofthe many TEA lacks authority to revoke a charter for a school that is imminently high-performing insolvent and fails to plan for its students' education. If a charter school opens charters. in the fall and then runs out of funds, it could then be forced to shut down mid-year, with instruction and students' forward academic progress halted; teachers not paid or losing their jobs; teachers, students, and their families displaced to other schools; and student records not completed or transferred to new schools. However, TEA has no statutory authority to prevent such a situation.

In one recent example, TEA suspended an imminently insolvent charter's operations and prevented it from opening for school this fall. However, TEA based its actions on the charter's failure to submit its annual financial report - a material violation of its charter - and not on the charter's inability to show a positive cash flow to continue its operations. In 2012, TEA identified 20 charter schools with circumstances that could lead to insolvency. Of the charters TEA revoked in the last three years, six of the 10 were likely imminently insolvent, in addition to demonstrating other problems that led to revocation.

As currently structured, charter renewal is not an effective oversight tool. While TEA reviews a charter's performance after five years to determine whether it should be renewed for up to 10 years, the agency's process fails to accomplish the purpose of standard renewal processes. In practice, the process leaves charters pending in renewal for years until TEA can justif}r either revocation or renewal. In other regulatory agencies, renewal processes exist to ensure a regulated entity continues to meet standards for operation. TEA has no Renewal processes provide an alternative to the sanctioning process when an process to close a entity no longer meets standards for continued operation. poor-performing While TEA has statutory authority to deny renewal of a charter, statute charter short combines the basis for all adverse actions, including denying renewal and of revocation. revocation, under the same provision. 12 The agency has interpreted this statutory grouping to mean that TEA must set the same performance standards and meet the same burden of proof for both actions: denying renewal and revoking the charter. Because TEA cannot always meet this high standard, especially for charters with intermittent poor performance, TEA generally no longer attempts to deny renewal of a charter. As a result, the agency has no process to shut down a poor performing charter short of revocation.

Texas Education Agency Staff Report Issue 7 73 320 October 2012 Sunset Advisory Commission

Non -renewal and revocation should not have the same performance standard; the tools should be used for two separate purposes. Revocation should be used when a charter's performance is so poor, or a violation is so egregious, that the situation puts students' education at risk and a charter school should be shut down during its authorized term. Non-renewal should occur when a charter's performance record is not bad enough to stop operations mid-term, but ongoing deficiencies do not warrant renewal of a charter for another term. Similarly, while the State must prove its case for revocation of a charter, for renewal, the burden is typically on the regulated entity, the charter holder in this case, to prove why its charter should be renewed. Because statute does not distinguish the basis for revocation from denying renewal, this burden is reversed onto the State, instead of the charter holder, to prove why a charter's Some charters authority to operate should not be renewed. have been pending in While the process reauthorizes strong Outstanding performers, it holds weak performers in a Charter Renewals renewal for nine years. perpetual state of pending renewal until the Years Left Number of agency can justif}r the higher standards for either Pending Charters renewal or revocation. For example, if a charter 1 16 has a few years of poor academic or financial ratings, or has a monitor or conservator in 2 5 place, TEA may delay renewal of a charter until 3 1 performance either improves or deteriorates further. As a result, charters may linger in a 4 3 state of pending renewal for years. The chart, 5 0 Outstanding Charter Renewals, illustrates that 6 3 some charters have been pending in renewal for up to nine years. Without more flexibility 7 5 in setting performance standards for renewal, 8 0 TEA also cannot offer an incentive or benefit 9 4 to charters exceeding performance standards.

While a charter can continue to operate while it is waiting for renewal, the uncertainty of the charter's status can still affect its operations. For example, Without more charter schools report that it is difficult to access loans for new facilities while flexibility, TEA their charter is left pending in the renewal process. cannot offer an incentive to charters to exceed Certain statutory provisions limit the agency's ability to scale performance sanctions to the nature of the violation. standards. The charter school statute provides too little discretion for certain sanctions, and too much for others, restricting TEA's flexibility to apply sanctions appropriate to the violation. Criteria for applying sanctions should be clear, objective, and scaled to the nature of the violation. Similar to renewal, as discussed in the previous finding, TEA's interpretation of its sanction authority in the charter statute also makes the use of modification and probation meaningless. TEA must meet the same burden of proof to modif}r

Texas Education Agency Staff Report 74 Issue 7 321 Sunset Advisory Commission October 2012

or probate a charter as for revocation. As such, TEA lacks the flexibility to use these lesser sanctions for less egregious violationsY

Requirements in the charter school statute similarly limit the agency's discretion in applying sanctions for health and safety violations. If TEA finds that a charter fails to protect the health and safety of its students, TEA may suspend its operations. Statute requires that TEA hold a hearing within three days of the suspension, after which TEA must either cease its suspension or seek revocation of the charter. 14 Other intermediate sanctions in the accountability statute would, in most cases, allow the agency to more TEA lacks the appropriately address a charter school's deficiencies and still ensure the health flexibility to and safety of students without seeking revocation of the charter. use less severe Conversely, the charter school statute specifies that adverse action by the sanctions for Commissioner be based on the best interest of the school's students, any less egregious previous violations, and the severity of those violationsY The subjective violations. criterion of acting in the best interest of students does not provide either TEA or charter holders clear guidance on a threshold for applying sanctions and could exclude sanctions for some clear statutory violations. For example, if a school performs acceptably academically, but has clear financial management violations, a charter holder could argue that certain sanctions, including closure, are not in the best interests of students, despite the violations. The best interest of a school's students is a valuable principle that should be considered in guiding actions ofboth the charter and the agency. However, the inclusion of such a subjective criterion in determining appropriate sanctions is not a standard practice of other regulatory entities, as it can lead to inconsistent and unfair application of sanctions.

Differences between the agency's rules and its practice create unclear performance expectations for charter schools. While TEA's rules provide for revocation or denial of renewal for failure to meet certain performance standards, in practice, TEA's policies are more lenient than its rules. The agency does not typically revoke or deny renewal of a charter for failure to meet performance standards in rule. For example, TEA's rules provide for revocation after two consecutive years of unsatisfactory, or unacceptable, academic performance, but TEA's matrix guiding accreditation sanctions, used for both districts and charters, does not provide for revocation until after four years of unacceptable academic performance. 16 The inconsistency between rule and practice results in uncertainty regarding the level of performance charters must maintain for renewal or to avoid sanctions or interventions. TEA may also have difficulty ensuring its decisions, and perception of its decisions, are fair, consistent, and transparent.

Agency practices that are inconsistent with, and more lenient than, agency rules reflect TEA's cautious approach to seeking revocation of a charter. While TEA regularly applies interventions and sanctions to poor performing charters, TEA waits and builds strong cases before pursuing revocation

Texas Education Agency Staff Report Issue 7 75 322 October 2012 Sunset Advisory Commission

instead of taking more immediate action to revoke based on serious violations or chronic poor performance. As a result of the agency not taking more immediate action to revoke a charter, a high number of charters remain pending in renewal and with interventions and sanctions over long periods of time.

TEA lacks authority to address inadequate oversight by the governing board of a charter. Short of revoking the charter, TEA does not have any tools to address inadequate oversight by a charter holder board, especially when it results in performance or operational problems. Charter schools' freedom from certain state restrictions requires strong oversight to ensure charter schools operate consistent with their charters and missions to achieve acceptable performance. Unlike traditional school boards of trustees, which TEA can require to hold new school board elections with use of a board of managers, TEA lacks a Regular charter similar tool to address appointed charter holder governing boards that fail to board oversight remedy operational and accountability concerns for the school. is critical to ensuring In several examples, after a TEA-appointed conservator and board of a school's managers addressed a charter school's concerns, TEA had to turn the school's accountability. oversight back over to the exact same people who failed to ensure the school met accountability standards in the first place. TEA also regularly encounters situations at charter schools in which the governing boards fail to meet regularly or cannot reach a quorum. Without regular board oversight, even routine activities like approval of the school's budget and annual financial report can negatively affect a charter school's accountability ratings. These situations increase the likelihood of continued operational and performance problems. Without appropriate enforcement tools to strengthen the leadership and oversight capacity of a charter school's governing board, TEA's only remedy is to seek revocation of the charter.

Statutory provisions related to nepotism at charter schools are confusing, and allowance of this practice is an exception among publicly funded entities. State law prohibits officers or members of a board of the State, or a district, precinct, school district or other political subdivision of the State, from appointing or employing a person directly or indirectly compensated with public funds if the person is closely related within certain degrees of blood kinship or marriageY Statute exempts charter schools from standard restrictions on nepotism as long as the school remains academically acceptable for two of the last three years. When a charter fails to meet the academic standard set in law for nepotism, TEA requires a charter school to change its organizational structure to eliminate direct reporting or supervision of family members within the third degree of consanguinity and second degree of affinity. The chart on the following page, Consanguinity and Affinity Relationships, defines these relationships.

Texas Education Agency Staff Report 76 Issue 7 323 Sunset Advisory Commission October 2012

Consanguinity and Affinity Relationships

Great-grandchildren

3rd Degree Aunt Uncle

Sister Brother Niece Nephew

CONSANGUINITY Great- Great- (Related by blood) grandmother grandfather

Spouse's Spouse's AFFINITY Great- Great- (Related by marriage) grandmother grandfather Degree Spouse Children Spouse's Spouse's Niece Sister-in-law 2nd Brother-in-law Nephew Degree

Spouse's Spouse's Aunt Uncle 3rd Degree Spouse's Great-grandchildren

Note: A spouse of an individual listed in the consanguinity portion of the chart is related to the individual to the same degree by affinity.

• Allowance of nepotism is uncommon. While nepotism does not always lead to problems in Potential Effects of Nepotism an organization, state law prohibits nepotism Nepotism can give the appearance of, or result in, in governmental or publicly funded entities the following. because of the inherent conflicts of interests • Conflicts of interest the practice can present, detailed further in the • Misuse of office textbox, Potential Effects of Nepotism. While • Preferential treatment or patronage charter schools are predominantly publicly funded, averaging 94 percent funded with state • Bad morale or resentment among other or federal funds in fiscal year 2011, statute employees, including potential discrimination claims provides charter schools with an exception to laws prohibiting nepotism. Thus, some charters • Employees who are not qualified or lack appropriate training or expertise for their still use family extensively in the school's positions operations and oversight. One charter school reported eight family members, including • Undermining of public trust - the public may perceive that actions of the organization a sibling, a daughter, and several nieces and are not always in the best interest of the nephews of the same individual employed as community or students staff at the school.

Texas Education Agency Staff Report Issue 7 77 324 October 2012 Sunset Advisory Commission

• Confusing standards. Separate from nepotism provlSlons, board members are required to abstain from voting on contracts or other items if they are related to a person within the third degree of consanguinity or affinity. While this conflict of interest provision applies within the third degree of affinity, nepotism requirements apply within the second degree of affinity if a charter does not meet academic standards for the exception. Differing standards for conflict of interest and nepotism laws can be confusing to both charter schools and the public.

• Risk to public funds. Confusion over which standards or exceptions apply in which circumstances can lead to violations of law and create a culture where preferential treatment occurs more frequently. Public funds are most at risk from this confusion, which can lead to contracting or conflict of interest violations. In such cases, the State cannot ensure competitive bidding requirements are met or arms-length transactions ensure efficient use of public funds. Charter schools sometimes pay disproportionately large salaries or have substantial financial contracts with family members. One charter school with just over 450 students pays its superintendent and board president $214,000; his wife, the personnel director, $164,000; his brother, the assistant superintendent, $175,000, and a daughter, a principal, $60,000. As a comparison, superintendent salaries in similarly sized districts range from $73,000 to $99,000. 18

• Current nepotism provision is hard to enforce. While intended to target low-performing charters, TEA cannot enforce provisions allowing exceptions to standard nepotism prohibitions. TEA does not have the resources to monitor this practice at every charter school, and even when TEA investigates complaints,it cannot be sure that forced reorganizations to prohibit direct reporting relationships change the actual practices or culture of a charter school. The agency finds that nepotism is present, often when prohibited, in most charter revocation cases. In fact, of the 10 charters revoked in the past three years, only two self-reported nepotism, but TEA found nepotism present in six others. Although TEA has started collecting self-reported data on nepotism, TEA is unaware of the Some charters true number of schools with nepotism present. have substantial contracts with • Governing board conflicts of interest. While statute requires family members governing board members to abstain from votes in which a conflict or staff. of interest is presented, this provision is also not enforceable by TEA. Statute also prohibits family members from making up a quorum on the governing board. Despite these statutory provisions to prevent self-dealing and substantial contracts with family members, TEA finds occurrences of these practices regularly during investigations or through reports from assigned monitors or conservators. For example, one charter school superintendent, who is also the governing board president, contracts with herself for transportation services for more than $900,000 for only 778 students.

Texas Education Agency Staff Report 78 Issue 7 325 Sunset Advisory Commission October 2012

Allowing family members and relatives to serve on a charter holder board together to direct the operation and oversight of publicly funded charter schools can present difficult situations in which the interests of family members and their own financial interests can be pitted against the best interests of the students. Governing board members have a strong influence over appointments to, and removal from, the board. The prevalence of several family members on a board can make it difficult for the governing board to maintain independence in its decision making for the charter. Strong oversight at the governance level, especially given the greater levels of autonomy, is essential to ensure charter schools achieve acceptable performance and act in the best interest of students.

Recommendations Change in Statute 7.1 Require revocation of a charter for failure to meet basic academic or financial accountability standards for three years in a row. This recommendation would require the Commissioner to revoke a charter without an agency hearing, if:

• for three consecutive years, the charter fails to satisfY academic accountability standards; or

• for three consecutive years, the charter fails to satisfY financial accountability standards.

If a charter meets either of the above-listed criteria, the Commissioner would order closure of all campuses under the charter and revoke the charter. A charter would not be able to appeal the Commissioner's revocation order through either an agency review or contested case hearing at SOAH. However, a charter could contest the current year's rating under existing processes for academic or financial rating appeals. 19

TEA would be required to issue academic and financial accountability ratings by June 15 for those charters in jeopardy of triggering automatic revocation based on academic or financial performance. This date would allow time for a charter subject to automatic revocation to appeal its rating, and to provide as much notice as possible to the charter, students and their families, and teachers, that the school will not open the next school year, while also providing the agency a limited amount of time to collect and evaluate data needed to issue the ratings. TEA should evaluate its current financial and academic appeal processes and make any rule changes necessary to accommodate earlier ratings and appeals for charters in jeopardy of automatic revocation by June 1, 2014. As a result, TEA could automatically revoke a charter based on three consecutive years of poor academic or financial performance after the issuance of ratings in summer 2014.

Mandatory revocation of charters demonstrating continuing poor performance would allow the State to more quickly shut down the poorest performing charters, without years of litigation during which time the school remains open. The recommendation would also ensure students do not continue to attend a school lacking a quality education or with serious financial problems that could affect the school and, ultimately, a student's academic progress. Clear statutory authority to revoke a charter after chronic poor performance will speed up the charter revocation process by removing agency discretion and local politics from the decision, as well as clearly demonstrate the Legislature's expectation for high performance.

Texas Education Agency Staff Report Issue 7 79 326 October 2012 Sunset Advisory Commission

7.2 Authorize the Commissioner to suspend operations and pursue revocation of an imminently insolvent charter to ensure it does not open without sufficient funding to complete the term. This recommendation would authorize the Commissioner to suspend the operations of all campuses under a charter on an effective date that would prevent the charter from opening for a new school year or term, and pursue revocation if the Commissioner determines the charter is imminently insolvent and does not have sufficient funding to complete the next school year. This recommendation would require the agency to define, in rule, conditions under which a charter would be considered imminently insolvent. TEA would be required to adopt these rules by March 1, 2014.

A charter would be entitled to challenge the suspension of its operations through a hearing at TEA, similar to the process the agency currently provides for health, safety, and welfare issues. TEA would be required to hold a hearing at the agency within 10 days of its suspension order. Mter the suspension hearing, if the Commissioner still determines the charter is imminently insolvent and cannot make it through the next school year, the Commissioner would order revocation of the charter. The Commissioner's order could be appealed to SOAH as a contested case hearing in the same manner as an appeal of any other order of the Commissioner under Chapter 12, except that the charter's operations would remain suspended pending the outcome of the appeal. Consistent with current processes, a charter could not appeal the Commissioner's final decision following the SOAH hearing.

This recommendation would allow the Commissioner to prevent a charter from opening for the next school year when the Commissioner believes the charter is at high risk of shutting down in the middle of the school year or term and displacing students, as well as placing state funds at risk. As is TEA's current practice, ifTEA were to discover a charter's imminent insolvency in the middle of a school year, TEA would work with the charter to help it complete the school year or term, or help the charter deal with actual insolvency as it occurs.

7.3 Set eight-year terms for charters and restructure the renewal process to ensure failure to meet basic standards for accountability can lead to nonrenewal. This recommendation would specif}r in statute that the initial and renewal term for a charter is eight years, at the end of which authority to operate a charter school would expire unless renewed by TEA. A longer, eight-year authorization term for initial and renewal terms would provide consistency in term lengths, and implementation of an automatic revocation process in Recommendation 7.1 should provide a mechanism for TEA to address the poorest performing charters that consistently fail accountability requirements. Charter holders would apply for renewal in advance of the eight-year expiration, under terms and timelines adopted by TEA in rule. TEA would be required to issue a decision on renewal of a charter before the expiration of the charter.

For charters with a proven record ofhigh academic and financial performance, with no interventions or sanctions, TEA would provide the charter greater autonomy through a streamlined review and renewal process. TEA would be required to adopt clear standards for eligibility for this streamlined renewal in rule. For all other charters, TEA would examine the extent to which the charter has met academic, financial, and governance standards, as well as the extent to which the charter school has operated in compliance with its charter. TEA would be required to adopt in rule clear academic, financial, governance, or any other standards for renewal. TEA would have authority to ask for any additional information it deems necessary to determine whether a charter should be renewed. IfTEA does not renew a charter, TEA would be authorized to impose conditions or requirements for improvement

Texas Education Agency Staff Report 80 Issue 7 327 Sunset Advisory Commission October 2012

during a one-year probationary period. If a charter fails to meet TEA conditions or standards within the one-year period, TEA must deny renewal of the charter.

IfTEA does not renew a charter, the charter holder would be entitled to a contested case hearing at SOAH, under the framework outlined in the charter school statute. A charter school may stay open until the Commissioner makes a final decision to close and not renew the charter. If litigation results in final decision in the middle of a school year, existing statutory provisions allowing a charter that is not renewed to complete the school year would continue to apply. TEA would be required to adopt rules by September 1, 2014.

7.4 Provide for objective criteria and flexibility in applying sanctions to charter schools. This recommendation would separate authority to deny renewal, revoke, probate, or modif}r a charter, and require the agency to establish separate performance standards or violations warranting each sanction. This recommendation would also change the bases for taking adverse action against a charter under the charter school statute to remove the subjective requirement to take action in the best interest of the school's students, and replace it with the following objective criteria:

• the charter's history of violations or performance on accountability systems;

• the severity of the charter's previous violations or poor performance on accountability systems;

• efforts by the charter to correct the violations or poor performance on accountability systems; and

• actions the Commissioner deems necessary to deter future violations or poor performance.

Statute would maintain the best interest of the school's students as a general principle, but it would no longer be a criterion for determining sanctions.

This recommendation would also grant TEA additional flexibility in applying sanctions for health and safety violations. Mter the agency holds a hearing, it would no longer be required to either cease its suspension or revoke the charter. Instead, TEA could apply any of the sanctions listed in the accountability statute, such as requiring professional services or appointment of a monitor or conservator.

7.5 Authorize TEA to reconstitute the governing board of a charter holder. This recommendation would authorize the Commissioner to reconstitute the governing board of a charter holder if the Commissioner finds that the board is not providing adequate oversight of a charter school and other intermediate sanctions have not been effective in remedying the problems. The Commissioner would make all appointments to the new charter holder board, in accordance with terms and other provisions of the charter holder's bylaws. Before making appointments to the charter holder board, TEA would be required to gather local input from community members and parents. The Commissioner should consider appropriate expertise and credentials for appointment to the board, such as financial expertise, whether the person lives in the charter district, or if the person is an educator. This recommendation would allow TEA to re-appoint current members of the charter holder board.

If the charter holder board also oversees other enterprises of the nonprofit, this recommendation would authorize TEA to require the charter holder to create a new, single-purpose 501(c)(3) organization to oversee the charter school. TEA would appoint the members of that board and transfer the charter to that separate nonprofit. The charter holder would also have the option of surrendering the charter in

Texas Education Agency Staff Report Issue 7 81 328 October 2012 Sunset Advisory Commission

lieu of reconstitution. None of the authority that would be granted to TEA in this recommendation would supersede the Attorney General's authority over charitable organizations. Reconstituting a charter holder's board to be composed of qualified and interested board members would provide TEA with a tool to strengthen oversight of a charter, in lieu of seeking the charter's revocation. TEA would be required to adopt rules by September 1, 2014.

7.6 Apply standard prohibitions on nepotism to all charter schools. This recommendation would remove the statutory exception to the prohibition on nepotism for charter schools with acceptable academic performance for two of the last three years. As a publicly funded entity, all restrictions, requirements, and prohibitions of Chapter 573 of the Government Code, such as prohibitions on the appointment, employment, or confirmation of employees within the third degree of consanguinity and second degree of affinity, would apply to all members of the charter holder board or employees of a charter school.

This recommendation would also change the provision related to conflicts of interest for members of the charter holder board to the second degree of affinity, from the third degree of affinity, to be consistent with the nepotism requirements and reduce confusion on the part of charter schools.

7.7 Prohibit family members from serving on a charter holder board together. Under this approach, persons related to each other within the third degree of consanguinity and second degree of affinity would be prohibited from serving on a charter holder board at the same time. A charter holder would have two years from the effective date of this recommendation to replace any persons serving on a charter holder board to comply with this recommendation. This recommendation would ensure the charter holder board is free from situations in which the interests of family members on the board may conflict with the best interest of students.

Management Action 7.8 TEA should revise its practices for applying interventions and sanctions to clarify expectations and ensure appropriate and timely action against poor performing charters. This recommendation would direct the agency to revise its policies or practices for applying enforcement actions to be consistent with requirements or performance standards in rule for non -renewal, revocation, or other interventions and sanctions. TEA should ensure its rules for taking enforcement action set clear performance expectations and that the agency acts in accordance with those rules. TEA should use its full range of remedies in a timely manner to ensure charter schools meet accountability and performance expectations and provide a quality education for students. TEA would be required to adopt rules by September 1, 2014.

Fiscal Implication These recommendations should not result in additional costs to the State. While TEA would need to devote staff time to develop the changes to rules required by these recommendations, no new staff would be required.

Texas Education Agency Staff Report 82 Issue 7 329 Sunset Advisory Commission October 2012

Chapter 12, Texas Education Code.

2 College and university charters are also regulated by TEA, and subject to most of the same rules as open-enrollment charters. However, college and university charters are granted under a different subchapter, and do not count against the statutory cap on open-enrollment charters.

3 Section 12.101(b), Texas Education Code.

4 Ibid.

5 Section 12.115, Texas Education Code.

6 Subchapter E, Chapter 39, Texas Education Code.

7 Section 39.152, Texas Education Code; 19 T.A.C. Sections 97.1037 and 157.1151.

Section 39.104(c), Texas Education Code.

9 In the last 15 years, TEA revoked or denied renewal of 27 charters, and charter holders surrendered 21 charters in lieu of enforcement action.

10 Following the 2010-2011 school year, TEA revoked one of these four charters and another charter was surrendered in lieu of revocation.

11 Texas Education Agency, Snapshot 2011 Summary Tables, accessed August 31, 2012, http:!/ritter. tea. state. tx.us/perfreport/ snapshot/20 11/state.html.

12 Section 12.115, Texas Education Code.

13 Ibid.

14 Section 12.1162, Texas Education Code.

15 Section 12.115(b), Texas Education Code.

16 19 T.A.C. Section 100.1022(b)(1); Texas Education Agency, Accreditation Status Matrix, accessed October 2, 2012, http://www.tea.state. tx. us/index2. aspx?id=214 7 494 532&menu_id=214 7483 702.

17 Chapter 573, Texas Government Code.

18 The Texas Tribune, Interactive: How Much Does Your Superintendent Make?, accessed September 17,2012, http://www.texastribune.org/ library/data/texas-superintendent-salaries-2011/.

19 Section 39.151, Texas Education Code.

Texas Education Agency Staff Report Issue 7 83 330 October 2012 Sunset Advisory Commission

Texas Education Agency Staff Report 84 Issue 7 331 Sunset Staff Review of the Texas Education Agency

Report Prepared By

Karen Latta, Project Manager

Erick Fajardo Sarah Kirlde Amy Trost Skylar Wilk Cee Hartley

Ginny McKay, Project Supervisor

Ken Levine Director

Sunset Advisory Commission

Location Mail Robert E. Johnson Bldg., 6th Floor PO Box 13066 1501 North Congress Avenue Austin, TX 78711 Austin, TX 78701 Website Email www.sunset.state. tx.us sunset@sunset.state. tx.us

Phone (512) 463-1300

332 ----------------------------------·----------- -----------------

. ,; . . ~ : ::·

1. Definitions. As used in this contract "Charter" means the open-enrollment charter, as provided by Subchapter D. Chapter 12, Texas Education Code (TEC). granted by this contract "Charter school" means the open-enrollment charter schooL Chartemolder agrees to operate as provided in this contract. The charter school is a Texas public school. "Agency" means the Texas Education Agency.

2. The Charter. This contract grants to Charterholder an open-enrollment charter under Subchapter D. Chapter 12, TEC. The tenns of the charter include: (a) this contract; (b} applicable law; (c) Request for Application #701-98-016; (d) any condition, amendment. modification, revision or other change to the charter adopted or ratified by the Board; (e) all statements, assurances, commitments and representations made by Charterholder in its application for charter, attachments or related documents, to the extent consistent with (a) through (d); and (f) assurance by Chartemolder, evidenced by execution of this contract, that no false information was submitted to the Agency or the Board by Chartemolder, its agents or employees in support of its application for charter, .

3. Authority Granted by Charter. The charter authorizes Charterholder to operate a charter school subject to the terms of the charter. Action inconsistent with the terms of the charter shall constitute a material violation of the charter.

4. Alienation of Charter. The charter may not be assigned, encumbered, pledged or in any way alienated for the benefit of creditors or otherwise. Chartemolder may not delegate, assign, subcontract or otherwise alienate any of its rights or responsibilities under the charter. Any attempt to do so shall be null and void and of no force or effect; provided, however, that Charterholder may contract at fair market value for services necessary to carry out policies adopted by Charterholder or the governing body of the charter school.

5. Tenn ~ Ch,rter. The charter shall be in effect from October ZJ:'f!' , 1998 through July 31, 2003, unless renewed or terminated. 183

333 Ex. 2-Charter Contract CONTRACT

6. Renewal of Charter. On timely application by Charterho!der in a manner prescribed by the Board, the charter may be renewed for an additional period determined by the Board. The charter may be renewed only by written amendment approved by vote of the Board and property executed by its chair.

7. Revision by Agreement. The terms of the charter may be revised with the consent of Charterholder by written amendment approved by vote of the Board. The commissioner of education ("the commissioner") may revise the charter on a provisional basis during an interim between Board meetings; however, such action shall expire unless ratified by the Board at its next regular meeting. Nothing in this paragraph limits the authority of the Board or the commissioner to act in accordance with other provisions of this contract.

8. Open Enrollment. Admission and enrollment of students shall be open to any person who resides within the geographic boundaries stated in the charter and who is eligible for admission based on l~riteria identified in the charter. Total enrollment shall not exceed~ students. The charter school's admission policy shall prohibit discrimination on the basis of sex, national origin, ethnicity, religion, disability, academic or athletic ability, or the district the student would otherwise attend. Students who reside outside the geographic boundaries stated in the charter shan not be admitted to the charter school until an eligible applicants who reside within the boundaries have been enrolled.

9. Public Education Grant Students. Charterholder shall adopt an express policy providing for the admission of, and shall admit under such policy, students eligible for a public education grant, including those students who reside outside the geographic area identified in the charter application, under Subchapter G, Chapter 29, TEC.

10. Non-discrimination. The educational program of the charter school shall be nonsectarian, and shalf not discriminate against any student or employee on the basis of race, creed, sex, national origin, religion, disability or need for special education services.

11. Children with Disabilities. The charter school is a "local educational agency" as defmed by federal law. Charterholder must comply with the Individuals with Disabilities Education Act (IDEA), 20 U.S.C. §1401, et seq., and implementing regulations; Section 504 of the Rehabilitation Act of 1973 ("Section 504"), 29 U.S.C.§794, and implementing regulations; Title II of the Americans with Disabilities Act, 42 U.S.C. §12131-12165, and implementing regulations; Chapter 29, TEC, and implementing rules; and the many court cases applying these laws. For example: 184

334 -------------------------------------------- CONTRACT

(a) Child Find. Charterholder must adopt and implement policies and practices that affirmatively seek out, identify, locate, and evaluate children with disabilities enrolled in the charter school or contacting the charter school regarding enrollment, and must develop and implement a practical method to detennine which children with disabilities are currently receiving needed special education and related services. For each eligible child, Chartemolder must develop and offer an individualized education plan appropriate to the needs of that student

(b) Free AQQropriate Pub!ic Education. Charterholder must provide a free appropriate public education to all childre-n with disabilities otherwise eligible to enroll in the charter schooL If the program, staff or facilities of the charter school are not capable of meeting the needs of a particular child, Charterholder must implement changes necessary to accommodate the child at the charter schooL If reasonable accommodations would be insufficient to enable the child to benefit from the charter school's program, Chartemolder must, at its own expense, place the child at an appropriate school.

(c) Services to Expelled Students. Chartemolder must continue to provide a free appropriate public education to a child with disabilities even after expeHing or suspending the child for valid disciplinary reasons. This obligation to serve the child continues until the end of the school year.

(d) Monitoring. The charter school's implementation of the laws governing education of children with disabilities will be monitored for compliance by the United States Department of Education, Office of Special Education Programs; the United States Department of Education, Office of Civil Rights; the Texas Education Agency; and others. This monitoring activity includes responding to complaints, random on-site inspections and other investigations by the enforcing agencies, and will result in corrective actions imposed on Charterholder by these agencies for all discrepancies found.

{e) Due Process Hearings. The charter school's implementation of the laws governing education of children with disabilities will, in addition, be subject to court supervision via litigation against Charterholder brought by individuals affected by the actions of the charter school. The cost of this litigation can be substantial.

Notice: These are only a few of the charter school's legal responsibilities in this area, included here for illustrative purposes only.

12. Student Perfonnance and Accountabllity. Charterholder shall satisfy Subchapters 8, C, D, and G of Chapter 39 of the TEC, and related agency rules, as well as the student perfonnance accountability criteria stated in its application for charter. Charterholder shall annually provide in a manner and form defined by the commissioner a written evaluation of the charter school's compliance with the statements, assurances,

335 CONTRACT

commitments and representations made by Charterholder in its application for a charter, attachments, and related documents.

13. Criminal Historv. Chartemolder shan take prompt and appropriate measures if Charterhofder or the charter school, or any of their employees or agents, obtains infonnation that an employee or volunteer of the charter school or an employee, officer, or board member of a management company contracting with the charter school has a reported criminal history that bears directly on the duties and responsibitities of the employee, volunteer, or management company at the school. Charterholder further represents that the Board and the agency shall be notified immediately of such information and the measures taken.

14. ReQorting Child Abuse or Neglect. Charterholder shall adopt and disseminate to all charter school staff and volunteers a policy goveming child abuse reports required by Chapter 261, Texas Family Code. The policy shall require that employees, volunteers or agents of Charterholder or the charter school report child abuse or neglect directly to an appropriate entity listed in Chapter 261, Texas Family Code.

15. Notice to District. Charterholder shall notify the school district in which the student resides within three business days of any action expelling or withdrawing a student from the charter school.

16. School Year. Charterholder shall adopt a school year with fixed beginning and ending dates.

H 'I ...

17. Fiscal Year. Charterho!der shall adopt a fiscal year beginning September 1 and ending August 31.

18. Financial Accounting. Unless otherwise notified by the agency, Charterholder shall comply fully with generally accepted accounting principles ("GAAP") and the Financial Accountability System Resource Guide, Bulletin 679 or its successor ("Bulletin 679u) published by the agency in the management and operation of the charter school.

19. Federal Requirements. Failure to comply w\th Internal Revenue Service withholding regulations shall constitute a material violation of the charter.

20. Workers' Compensation. Charterholder shaH extend workers· compensation benefits to charter school employees by (1) becoming a self-insurer; (2) providing insurance under a workers· compensation insurance policy; or (3) entering into an agreement with other entities providing for self-insurance.

21. Annual Audit Charterholder shalf at its own expense have the financial and programmatic operations of the charter school audited annually by a certified public accountant holding a permit from the Texas State Board of

336 ---------------------- -·-·-·-·-··-·------··-·-···

CONTRACT

Public Accountancy. Charterholder shall file a copy of the annual audit report, approved by Charterholder, with the agency not later than the 120th day after the end of the fiscal year for which the audit was made. The audit must comply with Generally Accepted Auditing Standards and must include an audit of the accuracy of the fiscal information provided by the charter school through PEIMS. Financial statements in the audit must comply with Government Auditing Standards and the Office of Management and Budget Circular 133.

22. Attendance Accounting. To the extent required by the commrss1oner, Charterholder shall comply with the •student Attendance Accounting Handbook· published by the Agency; provided, however, that Charterholder shall report attendance data to the agency at six-week intervals or as directed by the agency.

23. Foundation School Program. . Distribution of funds to the charter school under Section 12.106, TEC, is contingent upon charterholder's compliance with the terms of the charter. Charterholder is ineligible to receive Foundation School Program funds prior to execution of this contract by the board. Within 30 days of receiving notice of overallocation and request for refund under Section 42.258, TEC, Charterhotder shall transmit to the agency an amount equal to the requested refund. If Charterho!der fails to make the requested refund, the agency may recover the overallocation by any means permitted by law, including but not limited to the process set forth in Section 42.258, TEC.

24. Tuition and Fees. Charterholder shall not charge tuition and shall not charge a fee except that it may charge a fee listed in Subsection 11.158(a), TEC.

25. Assets of Charter. Charterholder shall not apply, hold, credit, transfer or otherwise make use of funds, assets or resources of the charter school for any purpose other than operation of the charter school described in the charter.

26. Indebtedness of Charter. Charterholder shall not incur a debt, secure an obligation, extend credit, or otherwise make use of the credit or assets of the charter school for any purpose other than operation of the charter school described in the charter.

27. Interested Transactions. All financial transactions between the charter school and (a) Charterholder; (b) an officer, director, or employee of Charterholder or of the charter school; or {c) a person or entity having partial or complete control over Charterholder or the charter school shall be separately and clearly reflected in the accounting, auditing, budgeting, reporting, and record keeping systems of the charter schooL Charterholder shall not transfer any asset of the charter or incur any debt except in retum for goods or services provided for the benefit of the charter school at fair market value. 187

337 CONTRACT

28. Non-Charter Activities. Charterholder shall keep separate and distinct accounting, auditing, budgeting, reporting, and record keeping systems for the management and operation of the charter schooL Any business activities of Charterholder not directly related to the management and operation of the charter school shall be kept in separate and distinct accounting, auditing, budgeting, reporting, and record keeping systems from those reflecting activities under the charter. Any commingling of charter and non-charter business in these systems shall be a material violation of the charter.

29. Non-Profrt Status.- Charterholder shall take and refrain from all acts necessary to be and remain in good standing as an 9rganization exempt from taxation under Section 501 (c)(3), Internal Revenue Code. If Charterholder is incorporated, it shall in addition comply with all applicable laws governing its corporate status. Failure to comply with this paragraph is a material violation of the charter, and the Board may act on the violation even if the Internal Revenue Service, Secretary of State, or other body with jurisdiction has failed to act.

30. Records Retention and Management. Charterholder shall implement a records management system that conforms to the system required of school districts under the Local Government Records Act, Section 201.001 et seq., Local Government Code, and rules adopted thereunder; provided, however, that records subject to audit shall be retained and available for audit for a period of not less than five (5) years from the latter of the date of tennination or renewal of the charter.

31. PEIMS Reporting. Charterhotder shall report timely and accurate information to the Public Education Information Management System (PEIMS), as required by the commissioner.

32. Conflict of Interest. Charterholder shall comply with any applicable prohibition, restriction or requirement relating to conflicts of interest. If an officer or board member of Charterholder or of the charter school has a substantial interest, within the meaning of Chapter 171, Local Government Code, in a transaction, such interest shall be disclosed in pubtic session at a duly called meeting of the governing body prior to any action on the transaction.

33. Disclosure of Campaign Contributions. Charterholder shall adopt policies that will ensure compliance with the disclosure requirements of State Board of Education Operating Rule 4.3 or its successor.

34. Indemnification. Charterholder shall hold the Board and agency harmless from and shall indemnify the Board and agency against any and all claims, demands, and causes of action of whatever kind or nature asserted by any third party and occurring or in any way incident to, arising

338 ------------------------------------------------------------------------------------- .. CONTRACT

out of, or in connection with wrongful acts of Charterholder, its agents, employees, and subcontractors.

35. Failure to Operate. Charterholder shall operate the charter school for the full school term as described in the charter application in each year of the charter contract. Charterholder may not suspend operation for longer than 21 days without a revision to its charter, adopted by the Board, stating that the charter school is dormant and setting forth the date on which operations shall resume and any applicable conditions. Suspension of operations in violation of this paragraph shall constitute abandonment of this contract and of the charter.

36. Charter School Facility. Charterho!der shatl have and maintain throughout the term of the charter a lease agreement, title or other legal instrument granting to Charterholder the right to occupy and use one or more facilities suitable for use as the charter school facitities described by the charter. During any period of dormancy granted by the Board, this requirement may be waived by the Board. Facilities occupied and used as charter school facilities shall comply with all applicable laws, including, but not llmited to, the Texas Architectural Barriers Act, Article 9102, Vernon's Texas Civil Statutes.

37. Agency Investigations. The commissioner may in his sound discretion direct the agency to conduct investigations of the charter school to determine compliance with the terms of the charter or as authorized in Sections 39.074 and 39.075, Subchapter D, Chapter 39, TEC or other Jaw. Charterholder, its employees and agents shall fully cooperate w1th such investigations. Failure to timely comply wlth reasonable requests for access to sites, personnel, documents or things is a material violation of the charter.

38. Commissioner Authoritv. The commissioner in his sole discretion may take any action authorized by Section 39.131, TEC or Chapter 29, TEC relating to the charter school. Such action is not "adverse action" as used in this contract. Charterholder. its employees and agents shall fully cooperate with such actions. Failure to timely comply with any action authorized by Section 39.131, TEC or Chapter 29, TEC is a material violation of the charter.

39. Adverse Action. The Board in its sole discretion may modify, place on probation, revoke or deny timely renewal of the charter for cause ("adverse action"). Each of the following shall be cause for adverse action on the charter: (a) any material violation of the terms of the charter listed in paragraphs 2, 3, and 20; (b) failure to satisfy generally accepted accounting standards of fiscal management; or (c) failure to comply with an applicable law or rule.

339 COl\T'fRACT

40. Entire Agreement This contract, including all referenced attachments and terms incorporated by reference, contains the entire agreement of the parties. All prior representations, understandings and discussions are merged into, superseded by and canceled by this contract.

41. Severability. lf any provision of this contract is determined by a court or other tribunal to be unenforceable or invalid for any reason, the remainder of the contract shall remain in full force and effect, so as to give effect to the intent of the parties to the extent valid and enforceable.

42. Conditions of Contract Execution .of this contract by the Board is conditioned on full and timely compliance by Charterholder with: (a} the terms, required assurances and conditions of Request for Application #701-97-028; (b} applicable law; and (c) all ·commitments and representations made in Charterholder's application and any supporting documents (to the extent such commitments and representations are consistent with the terms of this contract).

43. No Waiver of Breach. No assent, express or implied, to any breach of any of the covenants or agreements herein shall waive any succeeding or other breach.

44. Venue. Any suit arising under this contract shaH be brought in Travis County, Texas.

45. Governing law. In any suit arising under this contract. Texas law shatl apply.

46. Authority. By executing this contract. Charterholder represents that it is an "eligible entity" within the meaning of Section 12.101 (a). TEC. Charterholder shall immediately notify the Board of any legal change in its status which would disqualify it from holding the charter, of any violation of the terms and conditions of this contract, or of any change in the chief operating officer of the charter school or Charterholder. Charterholder further represents that the person signing this contract has been properly delegated authority to do so.

Entered into this at:. # day of , 1998.

Texas State Board of Education

~~ 190

340 TEA Texas Education Agency

1701 NorthCongressAvenue • Austin,Texas78701-1494 • 512463-9734 • 512463-9838FAX • tea.texas.gov Michael Williams Commissioner

STATE OF TEXAS § § COUNTY OF TRAVIS §

CERTIFIED RECORDS OF THE TEXAS EDUCATION AGENCY

I, Mo Brantley, a custodian of official records of the Texas Education Agency, after causing

a search to be made of such records, do hereby certify that the following documents are true and

correct copies of the documents from the Agency's files:

• Commissioner's December 8, 2014, Notice oflntent to Revoke Open-Enrollment

Charter sent to the Academy of Careers and Technologies. (8 pages)

IN TESTIMONY THEREOF, I have signed my name officially and caused to be

impressed hereon the Seal of the Texas Education Agency at my office in the city of Austin, Travis

County, Texas, this j]_ day ofMarch, 2015.

MOBRANTLEY CUSTODIAN OF RECORDS, TEXAS EDUCATION AGENCY, OFFICE OF COMPLAINTS, INVESTIGATIONS & ENFORCEMENT

341 Ex. 3-Notice of Intent to Revoke Texas Education Agency

Michael Williams Commissioner

015-816

NOTICE OF INTENT TO REVOKE OPEN-ENROLLMENT CHARTER

December 8, 2014

Via Certified Mail

Tonja Nelson, Superintendent Academy of Careers and Technologies Charter School PO Box 681 866 San Antonio, Texas 78268

Paula Applin, Board President Academy of Careers and Technologies Inc. PO Box 681866 San Antonio, Texas 78268

RE: Open-Enrollment Charter Held by Academy of Careers and Technologies Inc.

Dear Dr. Nelson and Ms. Applin:

This is to notify you that I, as Commissioner of Education, am revoking the open- enrollment contract for charter held by Academy of Careers and Technologies Inc. (hereinafter referred to as the ucharter holder") for the Academy of Careers and Technologies Charter School pursuant to Texas Education Code (TEC) §12.115(c).

I. Revocation under TEC §12.115(c)

On or about September 1, 1998, a charter contract creating the open-enrollment charter school that is the subject of this action was entered into by Academy of Careers and Technologies lnc. 1 and the State Board of Education (SBOE). During the 83rd legislative session, TEC §12.115 was amended to include a statutory provision for the revocation of charters that fail to meet academic or financial accountability performance ratings for the three preceding school years, or any combination thereof. Charters failing to meet the specified criteria are subject to mandatory revocation of their charter. The specific school years that must be considered in reaching any revocation decision are also listed. TEC §12.115(c).

1 Subsequent to the execution of the charter contract, the charter holder's name has changed to the name referenced in this document. 342 The commissioner shall revoke the charter of an open-enrollment charter school if: 1) the charter holder has been assigned an unacceptable performance rating under Subchapter C, Chapter 39, for the three preceding school years; 2) the charter holder has been assigned a financial accountability performance rating under Subchapter D, Chapter 39, indicating financial performance lower than satisfactory for the three preceding school years; or 3) the charter holder has been assigned any combination of the rating described by Subdivision (1) or (2) for the three preceding school years.

For revocation actions initiated following the issuance of the 2013-14 academic and financial accountabllity ratings, the three preceding academic accountability ratings that shall be considered are the 2010-2011, 2012-2013, and 2013-14 academic accountability ratings. 2 The three preceding financial accountability ratings that shall be considered are the 2011-2012, 2012- 2013, and 2013-14 financial accountability ratings. TEC §12.115(c-1 ).

Specifically, Academy of Careers and Technologies Charter School was assigned the following ratings:

• 2011-2012 financial accountability rating of "Substandard Achievement" (Exhibit A};

• 2012-2013 financial accountability rating of "Substandard Achievement" (Exhibit B);

• 2013-2014 financial accountability rating of "Substandard Achievement" (Exhibit C); and

• 2013-2014 academic accountability rating of "Improvement Required" (Exhibit D).

All rights to appeal the ratings identified above have been waived or exhausted, and these ratings are now final and not appealable. TEC §39.151 (d). Accordingly, pursuant to TEC 12.115(c), the charter held by Academy of Careers and Technologies Inc. is subject to mandatory revocation.

11. Appointment of a Conservator

Further, I am assigning a conservator, pursuant to TEC §39.1 02(a)(7) and 19 Texas Administrative Code (TAC) §§ 97.1057, 97.1059 and 97.1073, due to the on-going and long- standing deficiencies and because such intervention is necessary to prevent substantial or imminent harm to the welfare of the charter school's students or to the public interest. I am appointing Richard Clifford to the Academy of Careers and Technologies Charter School to serve as a Texas Education Agency (TEA) conservator.

As a TEA conservator, Richard Clifford's role will include, but is not limited to, the following:

• Overseeing the financial management and governance of the charter school to ensure the charter school complies with state and federal law; • Attending board meetings, including executive session, and directing the board as necessary to address the findings in the Final Report required by TAC §100.1052(a); and • Overseeing all close-out activities of the charter school.

Please note that the appointment of Richard Clifford does not relieve the charter school and its governing board of the responsibility to, at all times, operate the charter school in

2 No academic accountability ratings were issued for the 2011-12 school year due to the transition from the TAKS test to the STAAR test, and performance from that academic year is not considered for purposes ofrevocation under TEC §12.115(c)(1 ). TEC §12.115(c-1 ). 343 compliance with all applicable statutes and rules. The agency reserves the right to implement all available interventions and sanctions under TEC, Chapters 39, and Title 19, TAC, Chapters 97, to address the current, or any future, deficiencies identified for Academy of Careers and Technologies Charter School.

Agency staff will be present at the next meeting of the charter school's governing board to introduce Richard Clifford to the members of the board. The cost of the conservator's services will be paid by the charter school in accordance with TEC §39.11 0. The conservator's fee shall be $85 per hour plus necessary travel expenses not to exceed the state per diem rate. Failure to make timely payments to the conservator may result in appropriate amounts being deducted from the charter school's Foundation School Program (FSP) funds.

Ill. Opportunity for Informal Review and Hearing

This is your Notice of my intent, as Commissioner of Education, to revoke the open- enrollment charter contract held by Academy of Careers and Technologies Inc. and to appoint a conservator. As set forth in 19 TAC §157.1123, the charter holder has the right to request an informal review regarding the Commissioner's intent to revoke the charter and to appoint a conservator. However, this informal review shall be provided only if the charter holder submits a written request for informal review not later than January 12, 2015. 19 TAC §157.1123(b). Written information may be submitted by the required deadline for requesting an informal review. 19 TAC §157.1123(c). If no informal review is requested by the deadline, a final decision may be issued without informal review. 19 TAC §157.1123(d).

Failure to submit a request by January 12, 2015 shall result in waiver of any right to a hearing on the proposed revocation of the open-enrollment charter.

If you submit a timely request and I do not change my decision regarding the revocation during the informal review, this issue will be sent to the State Office of Administrative Hearings for a hearing pursuant to TEC §12.116. Any hearing provided shall be limited to the specific findings and/or recommendations detailed in this correspondence. Under TEC §12.116(c), the administrative law judge must uphold my decision unless the judge finds the decision arbitrary and capricious or clearly erroneous. The decision of the administrative law is final and may not be appealed.

Any written response or other correspondence pertaining to this Notice must be sent to:

Eric Marin, Legal Counsel Texas Education Agency 1701 North Congress Avenue Suite 2-150 Austin, Texas 78701-1494

344 Sincerely,

MW/cc

Enclosures

cc: Dr. Ronald L. Beard, Executive Director, Region 20, Education Service Center Lizzette Gonzalez Reynolds, Chief Deputy Commissioner, TEA Michael Berry, Deputy Commissioner, Policy and Programs, TEA Alice McAfee, Associate Commissioner, Complaints, Investigations, and Enforcement, TEA Lisa Dawn-Fisher, Associate Commissioner, School Finance, TEA Sally Partridge, Associate Commissioner, Accreditation and School Improvement, TEA Nora Hancock, Associate Commissioner, Grants and Federal Fiscal Compliance, TEA Von Byer, General Counsel, TEA Heather Mauze, Director, Charter Schools, TEA Chris Cowan, Director, Enforcement Coordination, TEA Ron Rowell, Director, Governance, TEA Eric Marin, Legal Counsel Richard Clifford, Conservator

345 11/17/2014 Charter School Status Detail

*~~~~~cw User: Public User Role: Public Rating Year: t 2011-2012 •] CON: [o15816 •] [S._s_e_le~c~t_A_n_O_p_t_io_n~-~-~·····=··:~. . ·"'"'··-·~~1 ~-~el~ I 1 • f Home 1 Ex1t

2011-2012 Ratings Based on School Year 2010-2011 Data- Charter School Status Detail

Charter School Status Detail Indicator Detail Summary Determination of Ratings

Size-Dependent Indicators

Name: ACADEMY OF CAREERS AND TECHNOLOGIES Publication Level 0: 6/19/2012 CHARTER SCHOOL(015816) 4:03:28 PM

Status: FAILED Publication Levell: 8/7/2012 9:16:36 AM

Rating: Substandard Achievement Publication Level 2: 9/20/2012 8:29:51 AM

Charter School Score: 47

Passing Score: 50 Last Updated: 6/19/2012 4:03:28 PM

Options

Audit Home Page: School Financial Audits I Send comments or suggestions to schoolaudlts@tea.state.tx.us The Texas Education Agency 1701 North Congress Avenue· Austin, Texas, 78701 · (512) 463-9095 Copyright© Texas Education Agencv {TEA) 2007-2012

This website is best viewed in Internet Explorer 6.0 and above. CSSF 1.1.0.15

hltps://pryor .lea.state.tx.usrrea.C SSF .Web/Form s/D islriciStatusDetail.aspx 346 1/2 Exhibit A 11/17/2014 Charter School Status Detail

> Charter School .. School FIRST Financlallntqtity Rating System oCTem

User: Public User Role: Public Rating Year: \2012-2013 "\CON: I 015816 "l!..._s~~e_l_e_ct_~_·_n_O~p_t_io_n_ _ _ ___,.""'H,...,·~=~=-:""'J ~ 1

2012-2013 Ratings Based on School Year 2011-2012 Data - Charter School Status Detail

Charter School Status Detail Indicator Detail Summary Determination of Ratings

Name: ACADEMY OF CAREERS AND TECHNOLOGIES Publication Level 0: 6/20/2013 CHARTER SCHOOL(015816) 10:42:58 AM

Publication Level 1: 9/12/2013 Status: FAILED 6:37:32 PM

Publication Level 2: 9/12/2013 Rating: Substandard Achievement 5:37:32 PM

Charter School Score: 45

Last Updated: 9/12/2013 Passing Score: 50 5:37:32 PM

Audit Home Page: School Financial Audits I Send comments or suggestions to schoolaudlts@tea.state.tx.us The Texas Education Agency 1701 North Congress Avenue· Austin, Texas, 78701 · (512) 463-9095 Copyright© Texas Education Agency (TEA) 2007-2012

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https ://pryor .lea.state.lx .usrrea.C SSF .WebJForms/DistrictStatus Detai l.aspx Exhibit 8 3471/2 11/17/2014 Charter School Status Detail

..J~, Charter School; School FIRST ~ FinanciaJ Integrity Rating System of Texas User: Public User Role: Public Rating Year: 12013-2014 ,.] CON: [ 015816 ~] ,_[s_e_l_ec~t_A_._n_O~p_t~io_n_ _~-~~~,-~~,.,...,~ l Home

2013-2014 Ratings Based on School Year 2012-2013 Data - Charter School Status Detail

Charter School Status Detail Indicator Detail Summary Determination of Ratings

Name: ACADEMY OF CAREERS AND TECHNOLOGIES Publication Level 0: 6/17/2014 CHARTER SCHOOL(015816) 8:14:23 AM

Publication Level 1: 9/5/2014 Status: FAILED 3:56:38 PM

Publication Level 2: 9/5/2014 Rating: Substandard Achievement 3:58:47 PM

Charter School Score: 0

Last Updated: 9/5/2014 3:58:47 Passing Score: 50 PM

Audit Home Page: School Financial Audits 1 Send comments or suggestions to schoolaudits@tea.state.tx.us The Texas Education Agency 1701 North Congress Avenue· Austin 1 Texas, 78701 · (512) 463M9095 Copyright© Texas Education Agency (TEA) 2007-2012

This website is best viewed In Internet Explorer 6.0 and above. CSSF 1.1.0.15

https://pryor .tea.state.tx.usffea.CSSF .Web/Form s/DlstrictStatus Detai l.aspx Exhibit C 3481/2 TEXAS EDUCATION AGENCY 2014 Accountability Summary ACADEMY OF CAREERS AND TECHNOLOGIE (015816)

Met Standards on Did Not Meet Standards on -Student Achievement -Postsecondary Readiness

- Closing Performance Gaps

1,-,jox 3 Index~

Student 0>$1 ... Po>mecorldary At;t~evomolll Perlonnance Gaps Road~ {T~~I San•SS) (Taf'llol S.:oro • 31) {T~ot s.:ore • 57)

Points Maximum Index Index Earned Points Score Number and Percent of Indicators Met 1 - Student Achievement 64 96 67 Performance Rates 4 out of 6 = 67% 2- Student Progress N/A N/A N/A 3 -Closing Performance Gaps 259 BOO 32 Participation Rates o outof4 = 0% 4 - Postsecondary Readiness Graduation Rates 0 out of 2 = 0% STMR Score 7.6 Graduation Rate Score 16.9 Met Federal Limits on Alternative Assessments 0 out of 1 = 0% Graduation Plan Score 18.8 Postsecond;uy Indicator Score 5.0 48 Total 4 out of 13 =31%

For further information about this report, please see the Performance Reporting Division web site at http:l/rltter.tea.state.tx.us!perfreport/account/201411ndex.html

TEA Division of Performance Reporting Page 1 Exhibit D 349 TEA's Motion for Summury Disposition TEA v. Academy of Careers und Technologies Inc. SOAII Docket No. 701~15·2748

AFFIDAVIT OF DR. LISA DAWN-FISHER 1. My name is Dr. Lisa Dawn~Fisher. ram over the age of 18, of sound mind, and able to make this affidavit. I have personal knowledge of the .facts stated in this atndavit.

2. I am employed by the Texas Education Agency as the Chief School Finance Officer.

3. l have examined the exhibits attached to the letter dated December 8, 2014, sent by the Texas Commissioner of Education to Academy of Careers and Technologies Inc.

4. Exhibits A. B, and C show that Academy of Careers and Technologies Charter School (charter school) was assigned ratings of"Substandard Achievement" for the 2011-2012, 2012~2013~ and 2013-2014 school years.

5. Ratings of"Substandard Achievement" in the 2011-2012, 2012-2013. and 2013-2014 school years constitute lower than satisfactory performance ratings under the accountability system used by the Texas Education Agency to implement Subchapter D, Chapter 39, of the Texas Education Code.

6. The charter school was provided with notice and an opportunity to appeal its 2011 ~2012, 2012-2013, and 2013-2014 financial performance ratings. lt appealed each of the three ratings, and each appeal was denied. No further appeal is available, and these ratings are now finaL

S\VOfu~ TO AND SUBSCRIBED before me, on this the \Urh_ day ofMarch, 2015, by Dr. Lisa Dawn-Fisher.

~\ru -~ Notary Public's Signature

350 Ex. 4-Affidavit of LDF 11/1712014 Charter School Status Detail

-~ Charter School "School ARST

User: Public User Role: Public "I coN: Io1ss16 T] ,_r;_e_l_e_ct_A_n_o_p_ti_o_n______,=f.t~o=·~""·:J="~-m:~~ 1 Rating Year: [2o11-2012

2011-2012 Ratings Based on School Year 2010-2011 Data- Charter School Status DetaH

Charter Schoof Status Detail Indicator Detail Summary Determination of Ratings

Name: ACADEMY OF CAREERS AND TECHNOLOGIES Publication Level 0: 6/19/2012 CHARTER SCHOOL(015816) 4:03:28 PM

Publication level 1: 8/7/2012 Status: FAILED 9:16:36 AM

Publication Level 2: 9/20/2012 Rating: Substandard Achievement 8:29:51 AM

Last Updated: 6/19/2012 4:03:28 PM

Audit Home Page: School Financial Audits I Send comments or suggestions to schoolaudits@tea.state.tx.us The Texas Education Agency 1701 North Congress Avenue· Austin, Texas, 78701 · (512) 463-9095 Copyright© Texas Education Agency (TEA) 2007-2012

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https:J/pryor .tea.state. tx .us.rrea. C SSF .Wet:liF orm s/D istrictStalusDetail.aspx 1/2 Exhibit A 351 11/17/2014 Charter School Status Detai I

· Charter School ; School FIRST F1.011lCW Integrity Rmng System ofTa:as

User: Public User Role: Public Rating Year: !2012-2013 v CD N: I 015816 v] J !. .s_e_l_e_ct_A_n_O_p~ti_o_n . _ _ _ _----,-===-~ j-,,.,.....,...,;..~ I Home

2012-2013 Ratings Based on Schoo! Year 2011-2012 Data- Charter School Status Detail

Charter School Status Detail Indicator Detail Summary Determination of Ratings

Name: ACADEMY OF CAREERS AND TECHNOLOGIES Publication Level 0: 6/20/2013 CHARTER SCHOOL(015816) 10:42:58 AM

Publication Level 2: 9/12/2013 Rating: Substandard Achievement 6:37:32 PM

l Passing Score: _s_o__ Last Updated: 6:37:32 PM 9/12/2013

Audit Home Page: School Financial Audits 1 Send comments or suggestions to schoolaudfts(a)tea.state.tx.us The Texas Education Agency 1701 North Congress Avenue· Austin, Texas, 78701 · (512) 463-9095 Copyright© Texas Education Agency (TEA} 2007-2012

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t1tlps:J/pryor .tea.stale.tx .LJS!Tea.C SSF .W cbiF orms/DfstrictStatusDetaif .as px Exhibit B 1/2

352 11/17/2014 Charter School Status Detail

'" Cbaner School.-School FIRST Fin:mcW Integrity hting Systrm ofTCJW

User: Public User Role: Public Rating Year: 12013-2014 .., I CDN:! 015816 "!] s_e_l_e_c_t_A_n_O_p_ti_o_n_ _ _ _ ._! ....._,,~.. ~. .~..,...,.,-!~.1.1 . !:'_e_l?__ I Home _l Exit

2013-2014 Ratings Based on School Year 2012-2013 Data -Charter School Status Detail

Charter School Status Detail Indicator Detail Summary Determination of Ratings

Name: ACADEMY OF CAREERS AND TECHNOLOGIES Publication level 0: 6/17/2014 CHARTER SCHOOL(015816) 8:14:23 AM

Publication level 2: 9/5/2014 Rating: Substandard Achievement 3:58:47 PM

~sing Sco'e' 50 Last Updated: PM 9/5!2014 3:ss:47 1

.J Options

Audit Home Page: School Financial Audits f Send comments or suggestlons to schoolaudits@tea.state.tx.us The Texas Education Agency 1701 North Congress Avenue· Austin, Texas, 78701 · (512) 463-9095 Copyright (C) Texas Education Agency (TEA) 2007-2012

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https ://pryor .tea.stale.tx.usfTea CSSF .Web/Form s/Distri ciS latus Delail.aspx =xhibit C 1/2

353 7EA Texas Education Agency

1701 NorthCongressAvenue • Austin,Texas78701-1494 • 512463-9734 • 512463-9838FAX • tea.texas.gov Michael Williams Commissioner

I, Mo Brantley, a custodian of official records of the Texas Education Agency, after causing

a search to be made of such records, do hereby certify that the following documents are true and

correct copies of the documents from the Agency's files:

• Commissioner's February 19,2015, letter sent to Academy of Careers and

Technologies regarding the informal review decision. (3 pages)

IN TESTIMONY THEREOF, I have signed my name officially and caused to be

impressed hereon the Seal of the Texas Education Agency at my office in the city of Austin, Travis

County, Texas, this j]_ day of March, 2015.

MOB NTLEY CUSTODIAN OF RECO S, TEXAS EDUCATION AGENCY, OFFICE OF COMPLAINTS, INVESTIGATIONS & ENFORCEMENT

354 Ex. 5-IR Decision 015-816

February 19, 2015

Tonja Nelson, Superintendent Academy of Careers and Technologies Charter School PO Box 681866 San Antonio .• Texas 78268

Paula Applin, Board President Academy of Careers and Technologies Inc. PO Box 681866 San Antonio, Texas 78268

RE: Open-EnroUment Charter Held by Academy of Careers and Technologies, Inc.

I, as Commissioner of Education, have received your response to the Texas Education Agency's {TEA) December 8, 2014 1 notice of intent to revoke the open enrollment charter held by Academy of Careers and Technologies, lnc. I have conducted an informal review of your response and determined that the TEA will proceed with the revocation of the contract for the charter effective August 21, 2015, with school operations to cease no later than June 30, 2015. Pursuant to 19 Texas Administrative Code (TAG) §157. 1183, a petition for review of this decision must be received no later than March 6, 2015.

tf a petition for review complying with the requirements contained in 19 TAC § 157.1183 (attached) is received by the deadline, it wm be forwarded to the State Office of Administrative Hearings (SOAH) for a hearing pursuant to §12. i 16(c) of the Texas Education Code (TEC). A petition for review pursuant to 19 TAC § 157.1183 requires the following:

( 1) The petition for review sha!llnclude a copy of the challenged decision and any attachments or exhibits to the decision.

{2) The petition for review shalf concisely state, in numbered paragraphs:

355 (A} if aUeglng the decision was arbitrary or capricious, each finding, inference, conclusion, or decision affected and the specific facts supporting a conclusion that each was so affected;

{B) if alleging the decision was clearly erroneous, each finding, inference, conclusion, or decision affected and the specific facts supporting a conclusion that each was so affected; and

(C) for each violation, error, or defect alleged under subparagraphs {A) and (B) of this paragraph, the substantial rights of the school district or charter school that were prejudiced by such violation, error, or defect

(3) A petition for review shall further contain:

(A) a concise statement of the relief sought by the petitioner, and

(B) the name, mailing address, telephone number, and facsimile number of the petitioner's representative.

(4} A request for relief in a review under this division may not be made orally or as part of the record at a prehearing conference or hearing.

If the petition for review does not meet the requirements of 19 TAC § 157.1183, the petition for review wm be dismissed without further review and without referral to SOAH.

The charter holder also requested an informal review of the December 8, 2014, conservator appointment and, after review, I have determined that the appointment should remain in effect No further review of the appointment is available under the TEC or applicable rules.

Any written response or other correspondence pertaining to this notice must be sent to:

Eric Marin, legal Counsel Texas Education Agency 1701 North Congress Avenue Suite 2-150 Austin, Texas 78701-1494

Mich ! Williams Co lssioner of Education

Enc!osures

356 cc: Dr. Ronald L Beard, Executive Director, Region 20, Education Service Center Uzzette Gonzalez Reynolds, Chief Deputy Commissioner, TEA Michael Berry, Deputy Commissioner, Policy and Programs, TEA Alice McAfee, Associate Commissioner, Complaints, trwestigations, and Enforcement, TEA Usa Dawn-Fisher, Associate Commissioner, School Finance, TEA Sally Partridge, Associate Commissioner, Accreditation and School Improvement, TEA Nora Hancock, Associate Commissioner, Grants and Federal Fiscal Compliance, TEA Von Byer, General Counsel, TEA Christopher Jones, Senior Legal Counsel, TEA Eric Marin, Legal Counsel, TEA Heather Mauze, Director, Charter Schools, TEA Chris Cowan, Director, Enforcement Coordination, TEA Ron Rowell, Director, Governance, TEA Richard Clifford, Conservator

357 TEA's Motion for Summary Disposition TEA v. Academy of Careers and Technologies Inc. SOAH Docket No. 701·15-2748

AFFIDAVIT OF SHANNON HOUSSON

1. My name is Shannon Housson. I am over the age of 18, of sound mind, and able to make this affidavit. I have personal knowledge ofthe facts stated in this affidavit.

2. I am employed by the Texas Education Agency as the director of the Division of Performance Reporting.

3. I have examined the exhibits attached to the letter dated December 8, 2014, sent by the Texas Commissioner of Education to Academy of Careers and Technologies Inc.

4. Exhibit D shows that Academy of Careers and Technologies Charter School (charter school) was assigned a rating of"lmprovement Required'' in the 2013-2014 school year.

5. A rating of"Improvement Required" in the 2013-2014 school year is an unacceptable performance rating under the accountability system used by the Texas Education Agency to implement Subchapter C, Chapter 39, of the Texas Education Code.

6. The charter school was provided with notice and an opportunity to appeal its 2013-2014 academic performance rating. The charter school filed an appeal, and the appeal was denied. No further appeal is available, and this rating is now final.

.hbo~ Shannon Housson

SWORN TO AND SUBSCRIBED before me, on this the { U~day ofMarch, 2015, c

by Shannon Housson.

~i~~ Notary Public's Signature

358 Ex. 6- SH Affidavit TEXAS EDUCATION AGENCY 2014 Accountability Summary ACADEMY OF CAREERS AND TECHNOLOGIE (015816)

Met Standards on Did Not Meet Standards on - Student Achievement - Postsecondary Readiness

Stud~t Student Cllilno; P~ea;rAlrJ Ad'levemerl Ptoge.ss Perfcnnam~ G.a~ Ae&d~ (T>~I~•SS) (Tarcet Scet.e • 31} {Target Score • 57)

Points Maximum Index Earned Points Number and Percent of Indicators Met Index Score 1 - Student Achievement 64 96 67 Performance Rates 4 out of 6 = 57% 2 - Student Progress N/A N/A N/A 3- Closing Performance Gaps 259 800 32 Participation Rates 0 out of4 =0% 4- Postsecondary Readiness Graduation Rates 0 out of 2 =0% STAAR Score 7.6 Graduation Rate Score 16.9 Met Federal Limits on Graduation Plan Score 18.8 Alternative Assessments 0 out of 1 =0% Postsecondary Indicator Score 5.0 48 Totar 4outof13=31%

For funhcr information about this report. please see the Performance Reporting Di\~sion web site at hnp:/Jritter.tea.state.tx.us!perfreportiaccount!20141inde.x.html

TEA Division of Performance Reporting Page 1 Exhibit D 359 STATE OF TEXAS § CERTIFICATION OF OFFICIAL § RECORD OF THE STATE OFFICE COUNTY OF TRAVIS § OF ADMINISTRATIVE HEARJNGS

I, Susan Gage, I am of sound mind, capable of making this affidavit, and personally acquainted with the facts herein stated. The State Office of Administrative Hearings (SOAH) has delegated to me the authority to serve as custodian of records and documents referred to below.

Pursuant to this authority, I have attached hereto true and correct copy of the fOllowing:

Docket No. XXX-XX-XXXX; In the Matter ofTexas Education Agency vs Academy of Careers and Technologies, Inc. d/b/a Academy of Careers and Technologies Charter School

* Copy of Decision and Order

Records are kept in the regular course of business by SOAH. It was in the regular course of business for an employee or representative ofSOAH, with knowledge ofthe act or event, to make the record or to transmit information thereof to be included in such record; and the record. was made at or the near the time or reasonably soon thereafter. The records attached hereto are exact duplicates of the documents on file with SOAH.

IN WITNESS WHEREOF, I have executed this certificate under the official seal of the State Office of Administrative Hearings this 4th day of August, 2015, in the city of Austin, Travis County, Texas.

360 Ex. 7-SOAH Decision and Order Cathleen Parsley Chief Administrative Law Judge May 21,2015

Christopher Jones VIA INTERAGENCY Texas Education Agency Charter School Division 1701 Congress Avenue, 2nd Floor Austin, Texas 7870 l

RE: SOAH Docket No. 701-15~2748; Tcxns Education Agency v. Academy of Careers and Technologies, J.nc. d/b/a Academy of Cm·ecrs and Technologies Charter S~·hool

Dear Mr. Jones:

Enclosed please find the Decision and Order on Summary Disposition in the above- referenced case.

Sincerely,

~~ ~ 'oi.- Sharon Cloninger Administrative Law Judge

SCilh Enclosure (Certified Evidenliary Record and Case File CD) xc: Eric ,\>Iarin, A~slstnnt Counsel, Texas Education Agency, 1701 N. Congress Ave., 2nd Floor, Austin, TX 7870 I • VIA INTERAGENCY Stephen M. Foster, Attorney, 9013 Mngna Curwl.Mp, Austin,TX 78754 ·VIA IU~GIJLAR MAIL

300 W. 151h Street, Suite 502, Austin, Texas 78701 I P.O. Box 13025, Austin, Texas 78711-3025 512.475.4993 (Main} 512.475.3445 (Docl<:eting) 512.322.2061 (Fax) w ww .soah.sta te. tx .us

361 SOAH DOCKET NO. 70.1-15-2748

TEXAS EDUCATION AGENCY, § BEFORE THE STATE OFFICE Petitioner § § v. § OF § ACADEMY OF CAREERS AND § TECHNOLOGIES INC. D!BfA § ACADEMY OF CAREERS AND § TECHNOLOGIES CHARTER § SCHOOL, § Hespondent § ADMINISTRATIVE HEARINGS

DECISION AND ORDER ON SUMMARY DISPOSITION

Academy of Careers and Technologies Inc. d/b/a Academy of Careers and Technologies Charter School (Respondent) challenges the decision by the Commissioner of the Texas Education Agency (TEA) to revoke its charter. The Administrative Law Judge (AU) finds the Commissioner's decision was not arbitrary and capricious, or clearly erroneous. The Commissioner's decision to revoke Respondent's charter is upheld.

I. JURISDlCTION, PROCEDURAL HISTORY, AND NOTICE

The parties do not dispute that the State Office of Administrative Hearings (SOAH} has jurisdiction over this case. Jurisdiction is addressed in the Findings of Fact and Conclusions of Law sections of this Decision without further discussion here.

On December 8, 20 I4. the Commissioner provided Respondent with writlcn notice of his decision to revoke its charter pursuant to Texas Education Code § 12.1l5(c) and of Respondent's oppm1unity to submit a written request by January 12, 2015, for an informal review of the decision. 1 Respondent apparently requested an informal review. 2 On February 19, 2015, the Commissioner notified Respondent that he had conducted an informal review and determined

1 TEA Exhibit I. 2 Respondent's request for an infonnal revieW is not in evidence:.

362 SOAH DOCKET NO. 701·15~2748 DECISION AND ORDEil PAGR2

that TEA would proceed with the revocation. 3 The February 19,2015 nolification also informed Respondent of its right to submit a petition for review by March 6. 2015, to be forwarded to SOAH for a hearing. Respondent apparentJy timely submitted u petition for review4 and the case was referred to SOAH on March 10,2015.

On March 12, 2015, TEA staff (Staff) sent Respondcni notice that a hearing would be held before a SOAH AL.lto review the Commissioner's decision. The hearing notice contained a statement of the time, place!, and nature of the hearing; a statement of the legal authority and jurisdiction under which the hearing was to be held; a reference to the particular sections of the statutes and rules involved; and a short. plain statement of the matters asserted.$ The notice complit!d with SOAH's hearing notice rule~ 6

On March IS, 2015, TEA staff !ilcd a Motion f~)r Summury Disposition (Motion); and sent a copy of the Motion to Respondent's counsel of record via facsimile. Respondent did no1 respond to the Motion within 14 days ofreceipt.s On AprH 14, 2015, the ALJ issued Order No. I granting the Motion, finding there are no genuine issues of material tact and that TEA is entitled to a decision in its favor as a matter oflaw. 9 Because the Motion was granted, lhe hearing on the merits scheduled to be held on April20, 2015, was canceled.

On April 17, 2015, Respondent filed u Motion for Rehearing. The A!.J granted the Motion for Rehearing on April 21, 2015, setting aside Order No. J and giving Respondent until May 6, 2015, to respond to the Motion. Respondent responded (Respondent's Response) on May 6, 2015. After reconsidering the Motion and Respondent's Response, the AU granted the Motion on May 11, 2015.

~ TEA Exhibit 2. 4 Respondent's pctilion fiw review ls nor in evidence, 5 The hearing netic~; is nol in evidence but wus Jlled with SOAI-1 on March 12, 20 15. ~ J Tex. Admin. Code§ 155.40l(a). 1 See I Tex. Admin. Code§ 155.10J(c){3). 8 See I Tex. Admin. Code§ 155.505(c). 9 Sea I Tex. Admin. Code§ 155.505.

363 SOAH DOCKET NO. 701~15~2748 DECISION AND ORDER PAGE3

II. AJ>PLICABLE LAW

A. Standard of Ucvicw

Section 12.1 16 of the Texas Education Code states in relevant pan:

(c) A decision by the commissioner to revoke a charter is subject to review by the State Office of Administrative 'Hearings. Notwithstanding Chapter 2001, Government Code: 10

(I) the administrative law judge shall uphold a decision by the commissioner to revoke a charter unless the judge finds the decision is arbitrary and capricious or clearly en·oneous .... 11

An agency's decision can be arbitrary and capricious if the agency:

• failed to consider legally relevant factors,'~

• considered a legally iJTelevanl n1ctor, f)

• failed to follow its own rules or regulations, 14

• denied a respondent due process and thereby prejudiced its substantial rights, 15 or

considered only le~ally relevant factors but still reached a complett::ly unreasonable result 1 '

* Government Code ch, 200 I docs not apply to a procedure that is reln!ed to a revocation under Texas Education C

364 SOAH DOCKET NO. XXX-XX-XXXX DECISION AND ORDER PAGE4

B. Standards for Rcvocatjon

Section 12.115 ofthe Texas Education Code was amr:nded, effective September 1,2013, to add the following subsections:

(c) The commissioner shall revoke the charter of an open-enrollment charter school if:

( 1) the charter holder has been a'>signed an unacceptable perfonnance rating under Subchapter C, Chapter 39, for the three preceding school years;

(2) the charter holder has been a.<;signed a financial accountability performance rating under Subchapter D, Chapter 39, indicating financial performance lower than satisfactory for the three preceding school years; or

(3) the charter holder has been assigned any combination of the ratings described by Subdivision {1) or (2) for the three preceding school years. 17

(c-1) For purposes of revocation under Subsection (c)(l ), performance during the 2011-2012 school year may not be considered. For purposes of revocation under Subsection (c)( I), the initiallhrce school years for which performance ratings under Subchapter C, Chapter 39, shall be considered are the 2009-2010, 2010-2011, and 2012-2013 school years. For purposes of revocation under Subsection {c)(2), the initial three school years for which financial accountabllity performance ratings under Subchapter D, Chapter 39, .shall be considered an: the 2010-2011,201 l-2012, and 2012- 2013 school years. This subsection expires September 1, 2016.

C. Scope of Review

The scope of the AU's review does not include consideration of whether the academic or financial accountability performance ratings determinations underlying a revocation decision by the Commissioner are arbitrary and capricious, or erroneous. Instead, the ALJ is tasked with

11 The rules regarding TEA's accountability and pe1·t(Jt11lance m01monng are ar 19 Texas Administrative Code ch. 97. The rul~s rcgal'ding TEA'$ financial accountability rating system Hre lll 19 Texas Administrative Code§§ 109.101- 105,

365 SOAH DOCKET NO. 701-JS-2748 DECISION AND ORDER PAGES

considering whctllCr the Commissioner's actual decision to revoke was arbitrary and capricious. or erroneous.

When a charter school disagrees with a perfom1ancc rating, Lhe rating is subject to review by the Commissioner. Pursuant to Texas Education Code § 39.151 (a), the Commissioner by rule shal1 provide a process for an open-enrollment charter school to chaJicnge an agency decision relating to an academic pcrforn1ance or financial accountability pcrfomu:mce rating that allects the s~.:hool. Texas Education Code§ 39.151(b) requires that ntles be promulgated to provide for the Commissioner to appoint a committee, which may not include a TEA employee, to make recommendations to him regarding a school's challenge. The Commissioner may limit a challenge to a written submission of any issue identified by the school challenging the academic perfonnance or financial accountability perfom1ancc ra.ting. 18 The Commissioner shall make a final decision regarding the academic performance or financial accountability performance rating after considering the committee's rccommendation. 19

The Commissioner's decision following an informal review of a chalJenge to a performance rating may not be appealed under any law.Z0 Jn addition, a school may not challenge a TEA decision relating to an academic pcrfo1mance or financial accountability performance raring in another proceeding if the school has had an opportunity to challenge the decision under Texas Education Code § 39.151. 21 Respondent had an opportunity, pursuant to Texas Education Code § 39.151, to challenge the performunce ratings underlying the revocation decision. All rights to appeal the performance ratings have been waived or exhausted and these ratings are now tina! and not appea1able. 22

1 ~ Tex. !:::due. Code§ 39. !51 (c). l!l Tex. Educ. Code§ 39. I 5 I (d). 211 Tex. Educ. Code§ 39.151 (d); s;;e also 19 Tex. Admin. Code §§ 157.1121 (5), .1 123. 11 Tex. Educ. Code§ 39.151 (e). 12 TEA Exhibits 3 and 4; 19 Tex. Admin. Cod~:: §* 157.1121 (5), . 1123.

366 SOAH DOCKET NO. 701~15-2748 DECISION AND ORDER .PAGE 6

D. Burden of Proof, Decision Due Date, and Finality of AL.J's Decision

Staff bears the initial burden of proving the charter must be revoked. Once Staff establishes its primafacie c<1se the burden shifts to the charter school to prove that the revocation decision is arbitrary and capricious, or clearly crroneous. 23

In all cases in which the case is docketed at SOA11 ptior to March 15, the AU must issue a decision by May 3 I of that same year?~ The AU's decision in this matter is tina! and may not be appcnled? 5

III. REVOCATION IS BASED ONLY ON LEGALLY RELEVANT FACTS

f.'or the three school years preceding the Commissioner's December 2014 decision to revoke Respondent's charter, the Commissioner assigned Respondent the following performance ratings:

• a 2011-2012 financial accountability performance rating of "Substandard Achievement"; 26

• a 2012-2013 financial accountability pcrtormance rati.ng of "Substandard Achievcmenf';27

• a 2013-2014 financial accountability pe1fom1ance rating of "Substandard Achievemcnl";28 and

• a 2013-2014 academic performance rating of"fmprovement Rcquired." 29

23 Cltyaf£/Pasov PubticUtil. Comm'n,883S.W.2d !79, 184(Tcx.l994). 24 19Tex.Admin.Code§ 157.1!86(1). ~ 5 19 Tex. Admilt Code§§ 157.11 84(h), .1188. 6 ' TEA Exhibit I, Attachment A; TF.A Exhibit J. 27 TEA Exhibit I, Attllchment B; TEA Exhibit 3. !~ TEA Exhibit I, Allachment C; TEA Exhibit J. 1 ~ TEA Exhibit 1, Attachment D; TEA Exhibit4.

367 SOAH DOCKET NO. XXX-XX-XXXX OF.CISJON AND ORDF.R

The Commissioner provided Respondent with notice and an opportunity to appeal each of these ratings. 30 Respondent's appeals of its 2011-2012, 2012-2013, and 2013-2014 flmmcial accountability performance ratings were denied.l 1 Respondent's appeal it'i 2013-2014 academic pertormance rating was den.ied. 32 Based on these perfonnancc ratings for the three preceding school years, the Commissioner decided to revoke Respondent's charter, as set out in his December 8, 2014 notification to Re$pondent.·33

Under Texas Education Code § 12.1 15(c), Respondent's pertormance ratings for the three preceding school years were legally relevant factors that the Commissioner was requirccl w consider when he decided to revoke Respondent's charter. The statute does not require or allow the Commissioner to consider any other factor. There is no evidence that the Commissioner considered anything other than Respondeni's pert(>rmance ratings in deciding to revoke Respondent's charter. BecaL1se the stature provides that the Commissioner "shall revoke the charter'' if the holder's performance ratings are below specified levels (and Respondent's ratings were below those levels), the statute gives the Commissioner no authority to exercise his discretion and not revoke the charter.

The ALJ concludes that, in revoking Respondent's charter, the Commissioner followed th~ legally applicable substantive law, considered all legally relevant £actors, and did not consider legally irrelevant factors.

IV. SOAH HAS NO JmUSDICTION TO REVIEW THE UNDERLYING RATINGS

A. Respondent':; Evidence and Argument

Respondent states UUlt technical errors and erroneously entered data resulted in its unacceptable and lower than satisfactory ratings. Respondent requests that the teclmical errors

Ja TEA Exhibit I. 11 TEA Exhibit 3. 12 TEA Exhibit 4. Jl TEA El

368 SOAH DOCKET NO. 701-15-27-18 DI£CISION AND ORDER PAGE 8

and the erroneously entered data be corrected !o show Respondent has met ·•standard Achievement" criteria for the ratings at issue, with the result thut its chuner cannot he rcvokt:d.-"~

Respondent argues that it should be permitted to have tbe financial acc.ountabi1ity ratings corrected as allowed by law, so as not to retlect third-party technical errors or the like. Respondent contends that third-party auditor errors for both the 2010-20 ll and 2011-2012 scbool years have resulted in "Substandard Achievement'' ratings. Respondent states that if given the opportunity for correction per 19 Texas Administrative Code§ 109.l003(c) or Texas Education Code § 157.1187, the ratings would be changed to "Satisfactory" for both years. 35

In addition, Respondent represents that the 2013-2014 financial accountability rating is in error. Respondent complains that pursuanl to the requirement of Texas Education Code § 39.151 (a) and the "unlawtl.tl appeal limitations" of 19 Texas Administrative Code§ 109.1002(i)(2), TEA must revise Respondent's rating because it is based on an arbitrary and capricious interpretation of what constitutes a default on a debt.

Respondent contends that the 2013-2014 academic performance rating of<'lmprovement Required" is clearly erroneous due loa technical error.

B. ALJ's Analysis and Conclusion

Revocation is mandatory pursuant to Texas Education Code § 12.115 when pe1·formancc ratings are properly finalized as unacceptable or below satisfactory for three consecutive school years. An open-enrollment charter school may not appeal a performance rating in another proceeding, including in a hearing before SOAH. if it has had an opportunity to do so under Texas Education Code § 39. 151. 3() Respondent did, in tact. have an opportunity to appeal its perfonnance ratings under Texas Education Code § 39.151. 17 Respondent's. appeals of its

3 ~ Respondent's Response at I: see Respont.lent Exhibits I rhrough 5. >S Respondent's Response at 2. The 2010-2011 pertormnnce rating is not for (lOC of the three preceding. school years upon which the Commissioner's revocation decision was based. 6 ) Tex. Educ. Code § 39.151 (e). 17 TEA Exhibits 3 nnd 4,

369 SOAH DOCI(ET NO. XXX-XX-XXXX DECISION AND ORDER PAGE9

unacceplable and lower than satisfactory performance ratings were denied. 38 Upon receiving the Commissioner's December 8, 2014 Nerice of Intent to Revuke Open-Enrollment Charter, Respondent requested an infmmal review. The Commissioner did not change his dc1ermination as a result of the infom1nl n::vicw. 39 The Commissioner's linal decision setting the pert't1rmancc ratings may not be appealed under any law .40

Thus, the scope of the ALl's review does not include consideration of whelher the financial and academic perfom1ance ratings underlying the Commissioner's revocation decision were arbitrary and capricious, or clearly cn·oneous. Insread, the AU is limited to determining whether the Commissioner's revocation decision is arbitrary and capricious, or clearly erroneous.41 Therefore, !he AU cannot consider Respondent's assertions regarding the correctness of it.:; academic perfonnance or financial accountability perfom1ance ratings.

V. RESt>ONDENT WAS PROVIDED OUR PROCESS

One of the ways in which the Commissioner's revocation decision could be found to be arbitrary and capricinu~ is if Respondent was not providcd due process. However, the Al..l finds Respondent was provided due process.

Subsections (a) and (b) of Section 12.116 ofthc Texas Education Code state:

(a) The commissioner shall adopt an informal procedure to he used for revoking the charter of an open-enrollment charter school . . . as authorized by Section 12. 115.

(b) Chapter 2001. Government Code, does not apply to a procedure that. is related to a revocation ... under this subchapter.

t~ TEA Exhibits 2, 3, and 4. J') TEA £x;hibit 2. ~ 0 Tcx Educ. Code § 39.151 (d), T~x. 41 Educ Code§ 12.ll6(c)(l).

370 SOAB DOCKET NO. 701~15-2748 DEClSION AND OJWER PACF. 10

Given these statmes, the Commissioner was not required to follow a formal procedure to revoke Respondent's charter. Instead, he was required to follow an unspecified informal procedure.

Despite the statutory requirement to use an informal process. the Commissioner provided Respondent with the ba'iic elements of due process-notice and an opportunity to be heard at a meaningful time and in u meaningfuJ manncr.12-beforc the Commissioner revoked Respondent's charter. On December 8, 2014, the Commissioner provided Respondent with written notice of his decision to revoke its charter, setting out the factual and legal bases for that decision. 4J rn that same letter, the Commissioner notitled Respondent of the opportunity for an informal review of that decisioi1 by submitting a written request, by January 12, 2015, that contained specific responses to each of the findings that led the Commissioner to decide to revoke its charter. 4-l Respondent appan::ntly requested an infonm1l r_eview of the Commissioner's decision. On February 19, 2015, the Commissioner notified Respondent of his decision to proceed with the revocation. 45

The ALJ concludes thai the Commissioner followed the applicable procedural law, provided the Respondent with due process, and did not prejudice Respondent's substantial rights before deciding to revoke its charter.

VL REVOCA TJON IS NOT A COMJ>LETELY UNREASONABLE RESULT

Even if an agency considered only legally relevant factors, its decision would be an abuse of discretion if it reached a completely unreasonable resuiL 46 A decision might be c.ompletely unreasonable if it is inconsistent with a prior decision or order of the agency related to the same

~ 2 University ofTe:r:os Med ,)'ch. a/ HousJrm \1. Than, 90 r s. W.2d 926, 930 (Tex. 1995) (citing Mathe;vs V. Eldridgl!, 424 U.S. 319, 313, 96 S. Ct. 893, 902,47 L. Ed. 2d 18 (I 976)}; House

-1S TEA Exhibit~- ~6 Cil)' ~/ Ell'a.w v Public Uti/ Cmnm 'n, BIG S. W,2d 179, 184 (T~:x. 1994} (citing G~trsl v. Nixon, 411 S. W.2J 350, 360 n.8 (!'ex. 1966)).

371 SOAH DOCKET NO. XXX-XX-XXXX DECISION AND ORDER PAGF: 11

law, the same parties, or other parties with the same legal issues and substantially the same fncts. 41 It is a delicate task to decide that an agency acted arbitrarily despite the fact that [t purported to have weighed all the relevant factors and only the relevant factors. Because the balance is so delicate, striking the decision should be avoided unless the agency has clearly acted unreasonably, and thereby abused its discretion.~ 8

There is no evidence that the Commissioner's decision to revoke Respondent's charter is inconsistent with the way he has treated Respondent or others ln the past when revoking charters under Section 12.115(c) of the Texas Education Code. The AL.l concludes that the Commissioner's decision lO revoke Respondent's charter was not a completely unrca<;onnblc result.

Vll. THE DECISION WAS NOT CLEARI.. Y ERRONEOUS

'l11e Texas Supreme Court has defined the "clearly erroneous" standard as follows: "A finding is considered clearly erroneous when the reviewing body 'is lett \.Vith the definite and 49 film conviction that a mistake has been committed. "' The evidence does not leave the ALJ with a definite and firm conviction that the Commissioner committed a mistake in revoking the charter. Therefore. the Commissioner's decision was not clearly erroneous.

VIII.. FINDINGS OF FACT

1. On September I, 1998, a charter contract creating the open~enrollrnent charter school that is the subject of this action was entered inEo by the Academy of Careers and Technologies Inc. d/b/a Academy of Careers and Technologies Charter School (Respondent) and the State Board of Education.

41 City of El Paso v, El Paso Efec. Ca., 851 S.W.2d 896, 901 (Tex. App. ·-Austin 1993. writ denied}~ Austin Chevrolet, !trc. v. Mowr Vehicle /3d. & Motor Vehicte Div. of" Texas Dep 't of Transp., 212 S. W.3d 425, 438 (Tex. App.-Austin 2006, pet. denied); AEP Texas N. Co. v. Pwh/ic Uti!. Cmnm 'n, 297 S. W.3d 435, 450 (Tex. App.-Austin 2009, pet. denied); see also Ronald L. Real, I Tttxas .4dministrativtt flruclictt and Procedure~ 9.3.7, at 9-76 to 9-77 (20 12). ~~ Or!I"SI v Nixon, 411 S.W.2d 350,360 n. 8 (Tex. 1966). 49 Nuntt~r Indus Fad/itie.r, Inc. v. Texas NaJural Res. Comerwrrion Comm 'n, 910 S, W.2d 96 (Tex. App.---Austin i 995, wrir denied) (citing UnU~td Swtes v US. Gypslltn Co., 333 U.S. 364, 395, 68 S, Ct. 525. 92 L Ed. 746 (I 948)).

372 SOAII DOCKET NO. XXX-XX-XXXX l)ECISIO~ AND ORDER PAGE 12

2. Respondent received a combination of unacceptable academic performance and lower than satisfactory financial accountability performance ratings from the Texas Education Agency (TEA) for three consecutive school years. Specifically, Respondent received:

{a) a 2011-20 t 2 financial accountability performance rating of "Substandard Achievement";

(b) a 2012-2013 financial accountability performance rating of "Sub!:ltandard Achievement~"

(c) a 2013-2014 financial accountability performance rating of "Substandard Achievement;,; and

(d) a 2013-2014 academic performance rating of"lmprovemcnt Required."

3. Respondent's appeals of its 2011-2012, 2012-2013, and 2013-2014 financial accountability performance ratings were denied.

4. Respondent's appeal ofits 20 l3-20 14 academic performance rating was denied.

5. On December 8, 2014, TEA's Commissioner provided Respondent with notice of his decision to revoke Respondent's charter because of the unacceptable and lower than satisl:actory perfmmance ratings. The Commissioner's notice advised Respondent of its opportunity to request an informal review of the Commissioner's intent to revoke the charter.

6. Respondent requested an inFormal review by the January 12, 2015 deadline.

7. On February \9, 20 l 5, the Commissioner notified Respondent that his revocation decision had not changed as a result of the informal review and advised Respondent of its right to submit a petiLion for review of the decision by Marth 6, 2015.

8. Respondent submitted a petition for review and, on Mnrch I 0, 2015, TEA referred the case tu the State Office of Administrative Hearings (SOAH) tf.)l' review of the revocation decision.

9. On March 12, 2015. TEA sta1T (Slafl) !ient Respondent notice that a hearing would be held belore a SOAH Admit1istrativc Law .fttdgc (AU) to review the Commissioner's decision. "l11e hearing notice contained a statement of the time, place, and nature of the hearing; a statement of the legal authority and jurisdiction under which the hearing was to be held; a reference to the particular sections of the statutes and ntles involved; and a short, plain statement of the matters asserted.

10. On March 18, 2015, StatT nJcd a Motion for Summary Disposition (Motion).

11. Respondent did not file a timely response to the Motion.

373 SOAH DOCKET NO. XXX-XX-XXXX DECISION AND ORDER PAGE 13

12. The Motion wa5 granted in Order No. l on Apri! 14, 2015, and the hearing schedtJled 10 be held on April 20, 2015, was canceled.

13. On Aprill7, 2015, Respondent filed a Motion tor Rchcaling. The Motion tor Rehearing was granted on April 21. ::w 15, setting aside Order No. I and giving Respondent unlil May 6, 2015, to respond to the Motion.

14. Respondent filed a response (Respondent's Response) on May 6, 2015.

15. After considering the Motion and Respondent's Response, the Administrative Law Judge granted the Motion on May II, 20 I 5.

IX. CONCLUSIONS OF LAW

1. TEA has jurisdiction over this proceeding. Tex. Educ. Code ch. t 2.

2. SOAH has jurisdiction to review the Commissioner's revocation decision and to issue a final decision and order. Tex. Educ. Code§ 12.ll6(c).

3, Chapter 2001 of the Government Code does not apply to this proceeding. Tex. Educ. Code§ 12.116(b).

4. The hearing notice complied with SOAH's hearing notice rule. I Tex. Admm. Code§ 155.40 l (a).

5. Pursuant lo 1 Texas Administrative Code § 155.505(a), the ALJ may issue a final decision on all or part of a contested case without an evidentiary hearing if the evidence shows there is no genuine issue as to any matcdal fact and that a party is entitled to a decision in its favor as a matter o.f law.

6. There are no genuine issues of material fact, and TEl\ is entitled to a decision in its favor as a mutter of law, l Tex. Admin_ Code* 155.505.

7. The Commissioner must revoke the charter of a school that fails to meet academic or financial accountability perfmmance ratings, or any combination thereof, for the lhree preceding school years. Tex. Educ. Code§ l2.115(c).

8. A financial accountability perfonnance rating of "Substandard Achievement" is lower than satisfactory. Tex. Educ. Code, Chapter 39, Subchapter D; Tex. Educ. Code§ 12.115(c)(2); 19 Tex. Admin. Code § I 09.1002.

9. An academic perli:mnancc rating ol' '·Improvement Required" is unacceptable. Tex. Educ. Code, Chapter 39, Subchapter C; Tc:x. Educ. Code§ 12.1 15(c)(l); 19 Tex.. Admin. Code ch. 97.

374 SOAH DOCKET NO, 701-15-274R DECISION AND ORDER PAGE 14

I 0. All rights to appeal the unacceptable and lower than satisfactory ratings have been waived or exhausted by Respondent and these ratings are now Jinal and not appealable. Tex. Educ, Code§ 39,151(d); 19 Tex. Admin. Code§§ 157.1 121(5), .J 123.

ll. Respondent may not challenge TEA's determinations relating to academic or financial accountability pc1i'ormancc ratings in <\nether proceeding, including in a hearing before SOAH, bec;:mse Respondent had un opportunity lo appeal the determinations. Tex. Educ. Code § 39,151 (c).

12. Respondent's receipt of a combination of unacceptable and lower than satisfactory perfonnance ratings for three consecutive school years mandates the revocation of Respondent's charter. Tex. Educ. Code§ l2.115(c)(3), (c-1).

13, An ALJ must uphold the Commissioner's revocation decision unless it is arbitrary and capricious, or clearly erroneous. Tex. Educ. Code§ 12.1 Hi(c)(l); 19 Tex. Admin. Code § 157.1184.

14. An agency's decision can be arbitrary and caprici0\.15 if the agency failed to consider all legally relevan.t factors or considered a legally irre!cvnnl factor. City of El Pasu v. Public Uti!. Comm 'n, 883 S. W.2d 179, 184 (Tex. l994); see also Texas Dep 't of Ins. v, Stale Farm Lloyds, 260 S. W .3d 233, 245-46 (Tex. App.-Austin 2008, no pet.); Public U!il. Comm 'n v. South Plains Elec. Co-op. fnc., 63 5 S. W.2d 954, 957 (Tex. App.-Austin 1982, writ ref'd n.r.e.),

15. The Commissioner did not fail to consider all legally relevant factors and did not consider a Jcgnlly irrelevant factor when reaching his revocation decision. Tex. Educ. Code§ 12.ll5(c)(3), (c-1).

16. An agency's decision can be arbitrary and capricious if the agency failed to follow its own rules or regulations. quzce of Pub. Uti/. Counsel v. Public Uti!. Comm 'n, 185 S.W.3d 555, 564 (Tex. App.-Austin 2006, pet. denied); PotPer Res. Group, Inc. v, Public Uti/. Comm 'n, 73 S. W.3d 354, 358 (Tex. App.-Austin 2002, pet. denied).

17. In arriving at his decision to revoke Respondent's charter, the Commissioner did not fail to follow TEA's own rules or regulations. Tex. Educ. Code§§ 12.1l5(c)(3), (c-1), 39.151; l9Tex. Admin. Code§§ 157.1121(5), 157.1123.

18. An agency's decision ·can be arbitrary and capricious if it Jcnics due process to u respondent and ther~by prejudices a respondent's substantial l'ights. Texas Health Facilities Comm 'n v. Charter Medicai-Dalkts, Inc., 665 S. W.2d 466, 454 (Tex. 1984).

19. Respondent has been afforded due process throughout the rcvoc.:ation decision course or action. Tex. Educ. Code § 12.115(a), (b): 19 Tex. Admin. Code §§ 157.1121 (5), .1123.

375 SOAH DOCKET NO. 701·15-2748 DECISION AND ORDER PAGE 15

20. An agency's decision can be arbitrary and capricious if the agcm;y considers only legally relevant factors but still reaches a completely unreasonable result. City of El Paso v. Public Uti!. Comm ·n, 8RJ S.W.2d 179, 184 (Tex. 1994) (citing Gerst v. Nixon, 41 l S. W.2d 350, 360 n.S (Tex.1966)).

21. 'The Commissioner did not reach a completely unreasonahlc result in arriving at the revocation decision.

22. A finding is considered clearly erroneous when the reviewing body is left with Lhe definite and firm conviction that a mistake has been committed. Hunter Indus. Facilifies v. Texas Natural Res. Conser val ion Comm 'n, 910 S. W.2d 96, 104 (Tex. t\pp.-Austin 1995, writ denied) (citing Uniwd StaTt::s v. United SUlle.r Gypsum Co., 333 U.S. 364, 39j, 92 L. Ed. 746, 68 S. Ct. 525 (1948)).

23. The AU is not left with the definile and firm conviction. Lha! the Commissioner has committed a mistake in reaching his decision to revoke Respondent's charter.

24. The Commissioner's decision to revoke Respondent's chaner was not arbitrary and capricious, or clearly erroneous, and it must be upheld by the ALJ. Tex. Educ. Code§ 12.! J6(c)(l); 19 Tex. Admin. Code§ 157.1184.

ORDER

Respondent was assigned the specific per1brmancc ratings requmng mandatory revocation, and the revocation is not arbitrary and capricious, or c.learly erroneous. Tex. Educ. Code §§ 12.115(c), 12.ll6(c)(l). Therefore, the Commissioner's decision to revoke Respondent's charter is upheld.

SIGNED May 21,2015.

{HJ\R{)Jii CLONINGER ADMINISTRATIVE LAW JUDGE STATE OFFICE OF ADMINTSTRA TIVE HEARINGS

376 TEA Texas Education Agency

1701 NorthCongressAvenue • Austin,Texas78701-1494 • 512463-9734 • 512463-9838FAX • tea.texas.gov Michael Williams Commissioner

STATE OF TEXAS. § § COUNTY OF TRAVIS §

I, Montgomery Meitler, a custodian of official records of the Texas Education Agency,

after causing a search to be made of such records, do hereby certify that the following documents

are true and correct copies of the documents from the Agency's files:

• Academy of Careers and Technologies, Inc. Annual Financial Report for the year

ended August 31, 20 14 (26 pages)

IN TESTIMONY THEREOF, I have signed my name officially and caused to be

impressed hereon the Seal of the Texas Education Agency at my office in the city of Austin, Travis

County, Texas, this ~ay of August, 2015.

~· \!1.'\L MON~ MEITLER CUSTODIAN OF RECORDS, TEXAS EDUCATION AGENCY, OFFICE OF LEGAL SERVICES

377 8-ACT 2013-2014 AFR ACADEMY OF CAREERS & TECHNOLOGIES, INC.

ANNUAL FINANCIAL REPORT

FOR THE YEAR ENDED

AUGUST 31, 2014

378 TABLE OF CONTENTS

CERTIFICATE OF BOARD ..................................................................................................................... 1

INDEPENDENT AUDITOR'S REPORT ................................................................................................ 2

GENERAL-PURPOSE FINANCIAL STATEMENTS ........................................................................... 4

STATEMENT OF FINANCIAL POSITION ........................................................................................... 5 STATEMENT OF ACTIVITIES .............................................................................................................. 6 STATEMENT OF CASH FLOWS .......................................................................................................... 7 NOTES TO FINANCIAL STATEMENTS .............................................................................................. 8

SUPPLEMENTARY INFORMATION .................................................................................................. 14

SCHEDULE OF EXPENSES ................................................................................................................. 15 SCHEDULE OF CAPITAL ASSETS .................................................................................................... 16 BUDGETARY COMPARISON SCHEDULE ....................................................................................... 17 NOTES TO THE BUDGETARY COMPARISON SCHEDULE .......................................................... 18

COMPLIANCE AND INTERNAL CONTROL .................................................................................... 19

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS ...................................................................................................................................... 20 SCHEDULE OF FINDINGS AND QUESTIONED COSTS ................................................................ 22

379 ACADEMY OF CAREERS AND TECHNOl,OGffiS, INC. l<"'EDERA.L EMPLOYER IDENTIFICATION NUMBER: 74-3016@35 BEXAR COUNTY DISTRICT NlJMBER 01§..816

380 SHAREHOLDER);

an Certi!ied Pubik Accountants

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors Academy of Careers and Technologies, Inc. San Antonio, Texas

Report on the Financial Statements

We have audited the accompanying financial statements of Academy of Careers and Technologies, Inc., which comprise the statement of financial position as of August 31, 2014, and the related statements of activities and cash flows for the year then ended, and the related notes to the financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

94J West Phone; 2 W-658~6229 • Fax; 2 HH159~ 7611 •Email: 2 381 Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Academy of Careers and Technologies, Inc. as of August 31, 2014, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter

The accompanying financial statements have been prepared assuming that the entity will continue as a going concern. As discussed in Note 11 to the financial statements, the entity received a notice from the Texas Education Agency indicating their intent to revoke the entity's charter, raising substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 11. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.

Other Matter

Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The supplementary information is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.

Other Reporting Requirements Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 31, 2014 on our consideration of Academy of Careers and Technologies, Inc.'s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Academy of Careers and Technologies, Inc.'s internal control over financial reporting and compliance.

Armstrong, Vaughan & Associates, P.C.

December 31, 2014

3 382 GENERAL-PURPOSE FINANCIAL STATEMENTS

4 383 ACADEMY OF CAREERS AND TECHNOLOGIES, INC. STATEMENT OF FINANCIAL POSITION AUGUST 31,2014

ASSETS Current Assets: Cash and Cash Equivalents $ 192,056 Due from Texas Education Agency 70,766 Total Current Assets 262,822

Property and Equipment, net 1,766,080

TOTAL ASSETS $ 2,028,902

LIABILITIFS AND NET ASSETS Current Liabilities: Accounts Payable $ 26,457 Payroll Deductions and Witholdings 236,612 Accrued Wages 56,453 Due to Texas Education Agency 259,719 Current Maturities ofNotes Payable 69,442 Total Current Liabilities 648,683

Long-Term Liabilities: Notes Payable Net of Current Portion 889,456 Total Liabilities 1,538,139

Net Assets: Unrestricted 401,856 Temporarily Restricted 88,907 Total Net Assets 490,763

TOTAL LIABILITIFS AND NET ASSETS $ 2,028,902

The accompanying notes are an integral part of this financial statement. 5 384 ACADEMY OF CAREERS AND TECHNOLOGIES, INC. STATEMENT OF ACTIVITIES FOR THE YEAR ENDED AUGUST 31,2014

Temporarily Unrestricted Restricted Totals REVENUE 5740 Other Local Sources $ 26,971 $ $ 26,971 5750 Local Enterprising Revenues 10,294 10,294 5760 Local Intermediate Sources 459 459 5810 State Foundation School Program 1,743,118 1,743,118 5820 Other State Revenues 14,230 14,230 5920 Federal Revenue Passed through TEA 302,734 302,734 5930 Federal Revenues from Other Sources 62,742 62,742 37,724 2,122,824 2,160,548 Net Assets Released from Restrictions 2,033,917 (2,033,917) TOTAL REVENUE 2,071,641 88,907 2,160,548

EXPENSFS 11 Instruction 603,250 603,250 12 Instructional Resources 36,619 36,619 13 Curriculum Development and Instructional Staff Development 111,977 111,977 23 School Leadership 145,938 145,938 31 Guidance, Counseling and Evaluation Services 81,515 81,515 34 Student Transportation 6,746 6,746 35 Food Services 181,629 181,629 36 Extracurricular Activities 19,549 19,549 41 General Administration 212,708 212,708 51 Facilities Maintenance 355,302 355,302 52 Security and Monitoring 96,728 96,728 53 Data Processing 107,509 107,509 71 Debt Service 74,447 74,447 81 Fund Raising 2,380 2,380 TOTAL EXPENSFS 2,036,297 2,036,297

CHANGE IN NET ASSEfS 35,344 88,907 124,251

NEf AS SEfS -BEGINNING OF YEAR 420,486 383,575 804,061 Prior Period Adjustment (53,974) (383,575) (437,549)

NEf ASSEfS- END OF YEAR $ 401,856 $ 88,907 $ 490,763

The accompanying notes are an integral part of this financial statement. 6 385 ACADEMY OF CAREERS AND TECHNOLOGIES, INC. STATEMENT OF CASH FLOWS FOR THE YEAR ENDED AUGUST 31,2014

CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIFS Payments Received from State and Federal Agencies $ 1,985,527 Payments Received from Local Sources 37,723 Cash Paid to Suppliers for Goods and Services (638,660) Cash Paid to Employees for Services (1 ,286,307) Cash Paid for Interest (74,447) NET CASH PROVIDED BY OPERATING ACTIVITIFS 23,836

CASH FLOWS PROVIDED (USED) BYINVES TING ACTIVITIFS Maturity of Certificate ofDeposit 7,000 NET CASH PROVIDED BYINVES TING ACTIVITIFS 7,000

CASH FLOWS PROVIDED (USED) BY~ANCINGACTIVITIFS Principal Payments on Notes Payable (63,144) NET CASH PROVIDED BY~ANCING ACTIVITIFS (63,144)

NET INCREASE (DECREASE) IN CASH (32,308)

CASH AT BEGINNING YEAR 224,364

CASHATENDOFYEAR $ 192,056

RECONCILIATION OF CHANGE IN NEf ASSEfS TO NEf CASH PROVIDED (USED) BY OPERATING ACTIVITIFS Increase (Decrease) in Net Assets $ 124,251 Adjustments: Depreciation 124,467 (Increase) Decrease in Current Assets: Due from Texas Education Agency (14,379) Other Receivables 50 Increase (Decrease) in Liabilities: Accounts Payable 1,995 Other Current Liabilities (19,325) Payroll Deductions and Witholdings (83,184) Accrued Wages 12,929 Due to Texas Education Agency (122,968) NET CASH PROVIDED (USED) BY OPERATING ACTIVITIFS $ 23,836

The accompanying notes are an integral part of this financial statement. 7 386 ACADEMY OF CAREERS AND TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS AUGUST 31,2014

NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The general-purpose financial statements of Academy of Careers and Technologies, Inc. (the Corporation) were prepared in conformity with accounting principles generally accepted in the United States. The Financial Accounting Standards Board is the accepted standard setting body for establishing not-for-profit accounting and financial reporting principles.

Reporting Entity

The corporation is a not-for-profit organization incorporated in the State of Texas in 1997 and exempt from federal income taxes pursuant to Section 501(c)(3) of the Internal Revenue Code. The corporation is governed by a Board of Directors selected pursuant to the bylaws of the Corporation and has the authority to make decisions, appoint the chief executive officer of the Corporation, and significantly influence operations. The Board of Directors has the primary accountability for the fiscal affairs of the Corporation.

In October 1998, the State Board of Education of the State of Texas granted the Corporation an open- enrollment charter pursuant to Chapter 12 of the Texas Education Code. Pursuant to the program described in the charter application approved by the State Board of Education and the terms of the applicable Contract ofCharter, Academy of Careers and Technologies, Inc. was opened. Academy of Careers and Technologies, Inc. was organized to provide educational services to students in grades 9 through 12, focusing on career and technical training.

Since the Corporation received funding from local, state, and federal government sources, it must comply with the requirements of the entities providing those funds.

Basis ofAccounting and Presentation

The accompanying general-purpose financial statements have been prepared using the accrual basis of accounting in accordance with generally accepted accounting principles. Accordingly, revenues are recognized when earned and expenses are recognized when they are incurred.

Net assets and revenues, expenses, gains, and losses are classified based on the existence and nature or absence of donor-imposed restrictions. Accordingly, net assets of the organization and changes therein are classified and reported as follows:

Unrestricted Net Assets- net assets that are not subject to donor-imposed stipulations.

Temporarily Restricted Net Assets- net assets subject to donor-imposed stipulations that may or will be met either by actions of the Corporation and/or passage of time.

Permanently Restricted Net Assets- net assets required to be maintained in perpetuity with only the income to be used for the charter school's activities due to donor-imposed restrictions.

8 387 ACADEMY OF CAREERS AND TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS (CONT.) AUGUST 31,2014

NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

Use ofEstimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Contributions

The Corporation accounts for contributions as unrestricted, temporarily restricted, or permanently restricted support depending on the existence or nature of any donor restrictions.

Support that is restricted by the donor is reported as an increase in temporarily restricted or permanently restricted net assets in the reporting period in which the support is recognized. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions.

Cash and Cash Equivalents

For financial statement purposes, the Corporation considers all highly liquid investment instruments with an original maturity of three months or less to be cash.

Capital Assets

Capital assets, which include leasehold improvements, playgrounds, furniture and equipment, vehicles, and other personal property, are reported in the general-purpose and specific-purpose financial statements. Capital assets are defined by the Corporation as assets with an individual cost of more than $1,000. Such assets are recorded at historical cost and are depreciated over their estimated useful lives using the straight- line method of depreciation. Expenditures for additions, major renewals and betterments are capitalized, and maintenance and repairs are charged to expense as incurred. Donations of assets are recorded as direct additions to net assets at fair value at the date of donation, which is then treated as cost.

Income Taxes

The Corporation is a not-for-profit organization exempt from federal income taxes pursuant to Section 501(c)3 of the Internal Revenue Code, except to the extent it has unrelated business income. As such, no provision for income taxes has been made in the financial statements. The Corporation generally is no longer subject to income tax examination by Federal authorities for years prior to August 31, 2011.

Subsequent Events

Subsequent events were considered through December 31, 2014, which is the date the financial statements were available to be issued.

9 388 ACADEMY OF CAREERS AND TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS (CONT.) AUGUST 31,2014

NOTE 2 -- DUE FROM/TO THE TEXAS EDUCATION AGENCY

The Corporation receives the majority of its funding from the Texas Education Agency (TEA). At year end, the Corporation has receivables from TEA and overpayments from TEA formula grants. In addition, the Foundation School Program funding is distributed beginning September 1 of each year, while the school year starts in late August. The corporation accrued a portion of the next year's funding related to the days in August. Amounts due from the Texas Education Agency at August 31, 2014 consisted of the following:

Foundation School Program Accrual $ 63,693 Textbook Allotment Reimbursements 6,367 Pass-through Federal Revenues 706 Foundation School Program Overpayments (259,719) Net Due from (to) the State $ (188,953)

NOTE 3 --CAPITAL ASSETS

Capital assets at August 31, 2014 were as follows:

Land and Land Improvements $ 191,549 Buildings and Improvements 1,862,711 Equipment, Furniture & Fixtures 62,688 Vehicles 107,145 Total Property and Equipment 2,224,093 Less: Accumulated Depreciation (458,013) Property and Equipment - Net $ 1,766,080

Capital assets acquired with public funds received by the Corporation for the operation of Academy of Careers and Technologies, Inc. constitute public property pursuant to Charter 12 of the Texas Education Code. These assets are specifically identified on the Schedule of Capital Assets in the Supplementary Information. Depreciation expense for the year ending August 31, 2014 was $124,467.

NOTE 4 -- NOTES PAYABLE

The Corporation agreed to a note payable in January 2012 to purchase land and related improvements for its campus. The note bears interest at 7.41 %, requires monthly payments of$10,329 and matures December 14, 2025. The note is secured by a first lien on the Corporation's real property.

The Corporation agreed to a note payable in November 2011 to purchase vehicles. The note bears interest at 5.326%, requires monthly payments of $1,094 and matures November 2016. The note is secured by title to two of the Corporation's vehicles. Balance Balance Due in 9/1/13 Additions Retirements 8/31/14 One Year Real Property Note $ 983,038 $ $ (51,844) $ 931,194 $ 56,850 Vehicle Note 39004 (1123002 27704 12,592 $ 1,022,042 $ $ (63,144) $ 958,898 $ 69,442

10 389 ACADEMY OF CAREERS AND TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS (CONT.) AUGUST 31,2014

NOTE 4 --NOTES PAYABLE (CONT.)

Requirements to service these notes payable are as follows:

Fiscal year ending August 31, Princieal Interest Total 2015 $ 68,790 $ 68,283 $ 137,073 2016 73,800 63,273 137,073 2017 69,073 58,073 127,146 2018 70,954 52,992 123,946 2019 76,394 47,552 123,946 2020-2024 479,338 140,392 619,730 2025-2026 120,549 4,955 125,504 $ 958,898 $ 435,520 $ 1,394,418

NOTE 5-- PENSION PLAN OBLIGATIONS

All employees of the Corporation employed for one-half or more of the standard work load, and who are not exempted from membership under Texas Government Code, Title I, Subtitle C Section 822.002, are required to participate in the Teacher Retirement System of Texas (the "System"), a multiple-employer public employee retirement system ("PERS"). It is a cost-sharing PERS with one exception- all risks and costs are not shared by the Corporation, but are the liability of the State of Texas. By statute, the State contributes to the retirement system an amount equal to the current authorized rate times the aggregate annual compensation of all members of the retirement system during the fiscal year. The payments made by the State on behalf of the Corporation are not reflected in the accompanying financial statements.

The System provides service retirement and disability retirement benefits, and death benefits to plan members and beneficiaries. The System operates under the authority of provisions contained primarily under the provisions of Texas Constitution, Article XVI, 67 and Texas Government Code, Title 8, Public Retirement Systems, Subtitle C, Teacher Retirement System of Texas, which is subject to amendment by the Texas Legislature. The System also administers proportional retirement benefits and service credit transfer under Texas Government Code, Title 8 Chapter 803 and Chapter 805, respectively.

Normal retirement age for an unreduced standard annuity is 65 with five or more years of service, or any combination of age and service totaling 80, with at least five years of membership service credit. Members are entitled to early age service retirement when total of age and service is less than 80 and the following conditions are met: At least age 55 with five or more years of service credit or below age 50 with 30 or more years of service credit. The System's annual financial report and other required disclosure information are available by writing the Teacher Retirement System of Texas, 1000 Red River, Austin, Texas 78701-2698 or by calling (800) 877-0123.

Funding Policy- Under provision in State law, plan members are required to contribute 6.4% of their annual covered salary and the State contributes an amount equal to 6.8% of the Corporation's covered payroll, except for employees paid from federal and private grants and for that portion of salary exceeding the state minimum salary established under Section 21, Texas Education Code, as determined by a statutory formula involving the price differential index and other factors. The Corporation's employees' required contributions to the System for the year ending August 31, 2014 were $63,494. The Corporation contributed amounts for new members of$1,145 for the year ending August 31, 2014.

11 390 ACADEMY OF CAREERS AND TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS (CONT.) AUGUST 31,2014

NOTE 6 -- RETIREE HEALTH PLAN

The Corporation contributes to the Texas Public School Retired Employees Group Insurance Program (TRS- Care), a cost sharing multiple-employer defined benefit post employment health care plan administered by the System. TRS-Care provides health care coverage for certain persons (and their dependents) who retired under the System. The statutory authority for the program is Texas Insurance Code, Chapter 1575. Section 1575.052 grants the TRS Board of Trustees the authority to establish and amend basic and optional group insurance coverage for participants. The System issues a publicly available financial report that includes financial statements and required supplementary information for TRS-Care. That report may be obtained by visiting the TRS Web site at www.trs.state.tx.us under the TRS Publications heading, by calling the TRS Communications Department at 1-800-2263-8778, or by writing to the Communications Department of the Teacher Retirement System of Texas at 1000 Red River Street, Austin, Texas 78701.

Contribution requirements are not actuarially determined but are legally established each biennium by the Texas Legislature, Texas Insurance Code, Sections 1575.202, 203 and 204 establish state, active employee and public school contributions, respectively. Funding for free basic coverage is provided by the program based upon public school payroll. Per Texas Insurance Code, Chapter 1575, the public school contribution may not be less than 0.25% or greater than 0.75% of the salary of each active employee of the public school. Funding for optional coverage is provided by those participants selecting the optional coverage. For the year ending August 31, 2014, employees contributed $6,448 and the Corporation contributed $5,456.

NOTE 7 -- HEALTH CARE COVERAGE

During the year ended August 31, 2014, employees of Corporation were covered by TRS Active Care health insurance (the Plan). The Corporation contributed $59 per week per employee to the Plan. Employees, at their option, authorized payroll withholdings to pay contributions or premiums for dependents.

NOTE 8 -- TEMPORARILY RESTRICTED NET ASSETS

Temporarily restricted net assets at August 31, 2014 represents unspent foundation school program revenues that are restricted for the operation of the open-enrollment charter school.

NOTE 9 -- COMMITMENTS AND CONTINGENCIES

The charter school receives funds through state and federal programs that are governed by various statutes and regulations. State program funding is based primarily on student attendance data submitted to the Texas Education Agency and is subject to audit and adjustment. Expenses charged to federal programs are subject to audit and adjustment by the grantor agency. The programs administered by the charter school have complex compliance requirements, and should state or federal auditors discover areas of noncompliance, charter school funds may be subject to refund if so determined by the Texas Education Agency or the grantor agency.

NOTE 10-- LITIGATION

The Corporation is subject to various claims and litigation that have arisen in the course of its operations. Management and legal counsel are of the opinion that the Corporation's liability in these cases, if decided adversely to the Corporation, will not have a material effect on the Corporation's financial position.

12 391 ACADEMY OF CAREERS AND TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS (CONT.) AUGUST 31,2014

NOTE 11 --UNCERTAIN CHARTER STATUS

In December 2014, the Corporation was notified by the Texas Education Agency (TEA) that TEA intends to revoke the charter of the Corporation at the end of the 2014/2015 school year (June 20 15) for accountability and financial ratings. The Corporation is appealing the decision based on inaccurate methods of determining these ratings.

If the appeal is unsuccessful, the Charter will lose its state accreditation status and the current state and federal funding, representing the majority of the Corporation's revenues. In addition, loss of the state accreditation would cause the Corporation's real property note to go into default. The State also has the authority to recover any assets of the Charter that were purchased with state funds.

NOTE 12 --PRIOR PERIOD ADJUSTMENT

In the prior year, accruals for payables, and payroll related liabilities were understated. In addition, an adjustment to the foundation school program allotment was not recorded. A prior period adjustment has been recorded to correct these issues as follows:

Beginning Net Assets, Previously Reported $ 804,061 Understated Liability for Foundation School Program Overpayments (382,687) Understated Accounts Payable (8,544) Understated Accrued Wages (28,244) Understated Payroll Deductions and Witholdings (18,074) Beginning Net Assets, Restated $ 366,512

13 392 SUPPLEMENTARY INFORMATION

14 393 ACADEMY OF CAREERS AND TECHNOLOGIES, INC. SCHEDULE OF EXPENSES FOR THE YEAR ENDED AUGUST 31,2014

EXPENSES 6100 Payroll $ 1,216,052 6200 Professional and Contracted Services 388,004 6300 Supplies and Materials 201,877 6400 Other Operating Costs 155,917 6500 Debt Related Costs 74,447 Total Expenses $ 2,036,297

15 394 ACADEMY OF CAREERS AND TECHNOLOGIES, INC. SCHEDULE OF CAPITAL ASSETS AUGUST 31,2014

Local State Federal 1510 Land and hnprovements $ $ 191,549 $ 1520 Building Improvements 1,862,711 1531 Vehicles 62,688 1539 Furniture and Equipment 96,295 10,850 Total Capital Assets $ $ 2,213,243 $ 10,850

16 395 ACADEMY OF CAREERS AND TECHNOLOGIES, INC. BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED AUGUST 31,2014

Actual Budgeted Amounts Amounts Variance from Original Final (Budgetary) Final Budget REVENUE 5740 Other Local Sources $ 30,450 $ 30,450 $ 26,971 $ (3,479) 5750 Local Enterprising Revenues 1,500 1,500 10,294 8,794 5760 Local Intermediate Sources 459 459 5810 State Foundation School Program 1,972,533 1,685,000 1,743,118 58,118 5820 Other State Revenues 115,000 14,230 (100,770) 5920 Federal Revenue Passed through TEA 139,667 360,000 302,734 (57,266) 5930 Federal Revenues from Other Sources 62,742 62,742 TOTAL REVENUE 2,144,150 2,191,950 2,160,548 (31,402)

EXPENSFS 11 Ins tmction 730,065 930,678 603,250 327,428 12 Ins tmctional Resources 36,619 (36,619) 13 Curriculum Development and Ins tmctional Staff Development 85,500 85,500 111,977 (26,477) 21 Ins tmctional Leaders hip 52,200 23 School Leadership 87,453 139,653 145,938 (6,285) 31 Guidance, Counseling and Evaluation Services 88,500 88,500 81,515 6,985 33 Health Services 250 250 34 Student Transportation 10,000 10,000 6,746 3,254 35 Food Services 81,930 125,000 181,629 (56,629) 36 Extracurricular Activities 15,000 15,000 19,549 (4,549) 41 GeneralAdministration 192,179 185,000 212,708 (27,708) 51 Facilities Maintenance 216,000 168,446 230,835 (62,389) 52 Security and Monitoring 5,200 85,000 96,728 (11,728) 53 Data Processing 133,547 133,547 107,509 26,038 71 Debt Service 74,447 (74,447) 81 Fund Raising 5,000 2,380 2,620 TOTAL EXPENSFS 1,697,574 1,971,574 1,911,830 59,744

CHANGE IN BUDGEfARYNEf ASSEfS $ 446,576 $ 220,376 $ 248,718 $ 28,342

17 396 ACADEMY OF CAREERS AND TECHNOLOGIES, INC. NOTES TO THE BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED AUGUST 31,2014

BUDGETARY PERSPECTIVE DIFFERENCES

The Corporation does not budget for depreciation expense. Amounts needed to reconcile to the basic financial statements are as follows:

Reconciliation to Change in Net Assets Change in Budgetary Net Assets 248,718 Perspective Differences: Unbudgeted Depreciation (124,467) Change in Net Assets (All Funds, GAAP Basis) $ 124,251

VARIANCES BETWEEN FINAL BUDGET AND ACTUAL EXPENSES

The following functions exceeded their final budgeted amount by more than 10% and $10,000:

12 Instructional Resources A position was added after the original budget.

13 Curriculum Development and Instructional Staff Development Additional training and resources were needed.

35 Food Service Unexpected funding. Original budget did not include Summer Feeding Program.

41 General Administration Professional services needed to be increased from original budget. Coding should have included $20,000 for additional management tasks performed to ensure compliance.

51 Facilities Maintenance Budget had some items miscoded in function 11 that should have been recorded in function 51.

52 Security and Monitoring Additional professional services and equipment needed to ensure the security of the campus.

71 Debt Service Coding error in the budget.

18 397 COMPLIANCE AND INTERNAL CONTROL

19 398 SilAREllOLl)ERS: CPA CPA Certlf)ed Public Accountants Phil S.

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

To the Board of Directors Academy of Careers and Technologies, Inc. San Antonio, Texas

We have audited in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States, the financial statements of Academy of Careers and Technologies, Inc., which comprise the statement of financial position as of August 31, 2014, and the related statements of activities and cash flows for the year then ended, and the related notes to the financial statements and have issued our report thereon dated December 31, 2014.

Internal Control over Financial Reporting

In planning and performing our audit of the financial statements, we considered Academy of Careers and Technologies, Inc.'s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Academy of Careers and Technologies, Inc.'s internal control. Accordingly, we do not express an opinion on the effectiveness of Academy of Careers and Technologies, Inc.'s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. We did identify certain deficiencies in internal control, described in the accompanying schedule of findings and questioned costs, that we consider to be significant deficiencies: 2014-1, 2014-2 and 2014-3.

941 \!Vcsr Suite 101 .. Universal Phone: 2Hl·65lH<229" Fax: 210-659-7611 20 399 Compliance and Other Matters

As part of obtaining reasonable assurance about whether Academy of Careers and Technologies, Inc.'s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

We noted certain matters that we have reported to the management of Academy of Careers and Technologies, Inc. in a separate letter dated December 31, 2014.

Purpose of This Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

21 400 ACADEMY OF CAREERS AND TECHNOLOGIES, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED AUGUST 31,2014

FINDING 2014-1 --Foundation School Program Revenue Recognition

TYPE OF FINDING-- Significant Deficiency in Internal Controls over Financial Reporting

Criteria: The Corporation should have procedures in place to ensure revenue received from the Texas Education Agency is recognized in the period for which it is allotted. This would include reviewing allotment adjustments subsequent to year end but before the report is issued to capture any significant adjustments.

Condition: On September 10, 2013, a large downward adjustment was made to the foundation school program allotment for the 2012-2013 school year. This adjustment was not accounted for in the August 31, 2013 financial statements.

Cause: Management did not have controls in place to monitor allotment adjustments after year end and effectively communicate those adjustments to the individuals responsible for preparing the financial statements.

Effect: Allotment adjustments to the Foundation School Program are not recorded in the correct period.

Recommendation: The Corporation should adopt some procedures to review allotment changes after year end, communicate them to appropriate individuals, and ensure they are accounted for in the appropriate period.

Management's Corrective Action Plan: Beginning in February 2015, the Finance Coordinator will review payment ledgers periodically and ensure any significant adjustments to allotments are captured timely and in the correct reporting period.

22 401 ACADEMY OF CAREERS AND TECHNOLOGIES, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONT.) FOR THE YEAR ENDED AUGUST 31,2014

FINDING 2014-2 --Review of Bank Reconciliations

TYPE OF FINDING-- Significant Deficiency in Internal Controls over Financial Reporting

Criteria: The Corporation should review bank reconciliations thoroughly to identify errors and other adjustments that may lead to inaccurately reporting cash and other balances on the financial statements.

Condition: A review of the August 2014 bank reconciliation noted several electronic payments that had not cleared the bank as well as a couple of duplicate deposits. A significant adjustment as a result of audit procedures was needed to correct cash, payroll liabilities and revenues.

Cause: Management has accurately and timely reconciled the bank statements. However, a thorough review of outstanding items was not performed.

Effect: Erroneous items on the bank reconciliation were not detected and corrected, leading to several misstated items on the financial statements.

Recommendation: The Corporation should assign an appropriate individual to review bank reconciliations monthly and reasearch uncleared items, especially journal entries, deposits and checks over 30 days old.

Management's Corrective Action Plan: Beginning in February 2015, the Finance Coordinator will review uncleared items on the bank reconciliation monthly for any errors or other items that require additional action.

23 402 ACADEMY OF CAREERS AND TECHNOLOGIES, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONT.) FOR THE YEAR ENDED AUGUST 31,2014

FINDING 2014-3 --Ineffective Budgetary Controls

TYPE OF FINDING-- Significant Deficiency in Internal Controls over Financial Reporting

Criteria: The Corporation's Board of Directors should annually adopt a budget that serves as a guide for management to conduct operations. The budget should be recorded in the accounting software to enable management and the Board to review budget to actual comparisons periodically during the year. In addition, the budget should be sufficiently detailed to ensure management acts within the guidelines set out by the Board.

Condition: The budget was not sufficiently detailed to serve as a control over management's actions. In addition, the budget was not recorded in the accounting software and actual results varied significantly from the budget.

Cause: The Board of Directors and management did not place a significant importance on the budget and did not use it as an internal control mechanism.

Effect: The budget was an ineffective internal control, because management and the Board of Directors were unable to review budget to actual data during the year.

Recommendation: The Corporation should record the budget in the accounting software and monitor compliance with that budget regularly. The budget should be detailed enough to give management direction that is in line with the Board's intentions. The budget can and should be an important part of the Corporation's internal controls.

Management's Corrective Action Plan: In February 2015, the Finance Coordinator will ensure the budget is entered into Quickbooks and budget to actual reports will be provided for Board review periodically (at least quarterly).

24 403 ~· . :. -_ ·: . . . . TEA Texas Education Agency

1701 NorthCongressAvenue • Austin,Texas78701-1494 • 512463-9734 • 512463-9838FAX • tea.texas.gov Michael Williams Commissioner

I, Montgomery Meitler, a custodian of official records of the Texas Education Agency,

after causing a search to be made of such records, do hereby certify that the following documents

are true and correct copies of the documents from the Agency's files:

• March 4, 2015, Official Notice to Academy of Careers and Technologies

regarding High Risk Designation. (3 pages)

IN TESTIMONY THEREOFt I have signed my name officially and caused to be

impressed hereon the Seal of the Texas Education Agency at my office in the city of Austin, Travis

County, Texas, this ~day of August, 2015.

404 9- ACT High Risk Designation Certified Mail Return Receipt Requested

Immediate Attention Required March 4, 2015

Tonja Nelson, Superintendent Academy of Careers and Technologies Charter School P.O. Box 681866 San Antonio, Texas 78268

Re: Designation as a high-risk grantee

Dear Ms. Nelson:

This letter serves as official notice that Academy of Careers and Technologies Charter School has been designated as a high-risk grantee by the Texas Education Agency. This designation is being made, pursuant to Title 34 of the Code of Federal Regulations (CFR), §80.12, because your charter school has received a notice of revocation from TEA, and because TEA's decision to revoke your school's charter has been upheld following an informal review.

TEA is authorized to designate a grantee as high risk, and to impose special conditions upon that grantee, by 34 CFR, §80.12.

Your charter school agreed to comply with the federal fiscal grant requirements given in each grant application your charter school submitted to TEA in order to receive federal funds. Please consult the General and Fiscal Guidelines and the General Provisions and Assurances that apply to TEA grants and are published online at tea.texas.gov/Finance__and_Grants/Administering_a_Grant.aspx.

TEA is required to monitor the activities of federal grant subrecipients to ensure that federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements, and to ensure that performance goals are achieved. This requirement is given in Office of Management and Budget (OMB) Circular A-133, Subpart D, §_.400(d)(3) and in 34 CFR §80.40(a). TEA is also required to uphold its administrative responsibilities by ensuring that subreciprents are in compliance with applicable statutes and regulations. This requirement is given in 34 CFR §76. 770.

Special Conditions Effective immediately, TEA is imposing the following special conditions upon each of your charter school's federal grants administered through TEA. Your charter school

1. wm not be able to draw down its funds automatically using TEA's expenditure reporting system (ER). 2. Must provide supporting documentation to TEA to support each reimbursement request. 3. Must ensure that each reimbursement request is for funds that have already been obligated and recorded in the general ledger.

405 4. Must submit all unreimbursed expenditures to TEA at least once each month for each federal grant, or notify TEA if you do not have expenditures for a given month. 5. Must attend a training session with TEA, in Austin, about how to comply with the special conditions. We will notify you of the date of the tralning session. You may use federal grant funds to cover travel costs as long as the costs are allowable, reasonable, necessary, and allocable under the federal grant used. You must also have adequate documentation when requesting reimbursement for the travel costs.

You are also encouraged to obtain technical assistance from your regional education service center to help you comply with these special conditions.

Supporting Documentation We will send you an email that will provide detailed information about the kind of supporting documentation you must submit for each reimbursement request. In general, your charter school must submit current and up~to-date copies of general ledgers and, if applicable, payroll journals. TEA will only accept general ledgers and payrotl journals that comply with the foHowing requirements:

1. The mandatory account code structure and accounting requirements given in Module 11 , Special Supplement to Financial Accounting and Reporting, Nonprofit Charter School Chart of Accounts, of TEA's Financial Accountability System Resource Guide (FASRG). 2. Generally accepted accounting principles (GAAP). 3. Fund accounting in accordance with 34 CFR §80.20.

TEA will not accept any substitutes for a general ledger, such as check registers, profit and loss statements, trial balances, or other limited accounting reports generated from accounting software applications and spreadsheets created with Microsoft Excel. Information about acceptable general ledgers is available online at tea.texas.gov/Finance_and_Grants/Grants/Federai_Fiscat_Monitoring/ Minimum_Required_Eiements_for_General_Ledgers_and_Payroll_Journals/.

Once the submitted ledgers have been reviewed, TEA will select certain TRANSACTIONS FOR MORE DETAILED REVIEW. FOR THESE TRANSACTIONS, TEA WILL REQUEST THAT YOU SUBMIT ADDITIONAL SUPPORTING DOCUMENTATION SUCH AS, BUT NOT LIMITED TO, COPIES OF CONTRACTS, EXPENSE REIMBURSEMENT vouchers, payment authorization forms, invoices, receipts, travel vouchers, job descriptions, and time and effort records. (Please be sure to submit only copies to TEA and to retaln the original documents.)

So that TEA can communicate directly with the person responsible for gathering the required documentation, please send the name of the appropriate contact person to the Division of Federal Fiscal Monitoring at FFM_Monitoringrevrew@tea.texas.gov.

Reimbursement After reviewing the selected transactions, TEA will reimburse your charter schoor for only those costs determined to be adequately documented and allowable under the applicable grant program.

Duration of Special Conditions The special conditions will remain in place until, and only if, TEA determines otherwise. You will be notified by letter if and when TEA no longer designates your charter school as a high-risk grantee.

As stated above, the special conditions will apply to all of your charter school's federal grants. While the high-risk grantee designation is in ptace, the special conditions will also apply to any new federal grant programs for which TEA may issue a Notice of Grant Award. TEA also reserves the right not to award a discretionary grant to a high-risk grantee.

CON: 015816 2 406 Your charter school may request reconsideration of the special conditions by writing to Uzzette C. Gonzalez Reynolds, Chief Deputy Commissioner. The written request must state the reasons why your charter school believes that the special conditions are not warranted.

Consequences of failing to Comply Failure to comply with the imposed special conditions in a timely and adequate manner can result in TEA taking enforcement actions against your charter school. TEA is authorized by Title 34 of the Code of Federal Regulations (CFR), §80.43 to take one or more of the following enforcement actions related to federal grants as appropriate:

• Temporarily withhold cash payments pending correction of the deficiency or more severe enforcement action. • Disallow all or part of the cost of an activity or action not in compliance. • Wholly or partly suspend or terminate the current award. • Withhold further awards for the program. • Take other remedies that may be legally available.

Other TEA Monitoring Please note that in addition to the monitoring imposed as part of your charter school's designation as a high-risk grantee, TEA reserves the right to review your charter school at any time through its other grant monitoring processes.

TEA Contact Information Throughout the duration of the special conditions, you may communicate with staff in the Division of Federal Fiscal Monitoring at FFM_Monitoringreview@tea.texas.gov

Should you have any questions related to these matters, please contact Jose de Ia Garza in the Division of Federal Fiscal Monitoring at (512) 463-9918.

;1i)A4 ~t~,...._",~-- Nora Ibanez Hancock, EdD Associate Commissioner Office for Grants and Federal Fiscal Compliance

cc: Uzzette C. Gonzalez Reynolds, Chief Deputy Michael Berry, Deputy Commissioner, Office for Policy and Programs Shirley Beaulieu, Chief Financial Officer Von Byer, General Counsel, Legal Services Division Chris Jones, Senior Counsel, Legal Services Division Eric Marin, Attorney, Legal Services Division Cory Green, Chief Grants Administrator Mark Hernandez, Director, Division of Federal Fiscal Monitoring Yolanda Cantu, Senior Director, Division of Grants Administration Heather Mauze, Director, Division of Charter Schools Paula Applin, President, Academy of Careers and Technologies Inc. Richard Clifford, Conservator

CON: 015816

407 8/21/2015 2:37:26 PM Velva L. Price District Clerk Travis County Cause No. D-1-GN-15-002879 D-1-GN-15-002879 Terri Juarez ACADEMYOFCAREERSAND § IN THE DISTRICT COURT TECNOLOGIES INC. D/B/A ACADEMY § OF CAREERS AND TECHNOLOGIES § CHARTERSCH004 § Plaintif~ § 200th JUDICIAL DISTRICT § v. § § TEXAS EDUCATION AGENCY and § MICHAEL WILLIAMS § in his Official Capacity as the § Commissioner of Education Defendants, § § § TRAVIS COUNTY, TEXAS

PLAINTIFF'S RESPONSE TO DEFENDANTS' PLEA TO 1HE JURISDICTION

COMES NOW ACADEMY OF CAREERS AND TECHNOLOGIES, INC. (hereinafter referred to as ''Plaintiff' and/or "ACT") and files this it's Plaintiff's Response to Defendants' Plea to the Jurisdiction shows the court as follows:

ProcetJural Due Prncess

ACT has a property interest in its charter and has since 1998. As a result, it cannot be

deprived of that property right without due process. The non~profit owns personal and real

property over which the lEA cannot take without just compensation and due process, but that is

what they are actually attempting to do. As a result, before negative action can be taken which

affects the charter contract, procedural and substantive due process must be provided ACT has a

property interest in not only its charter, but in the property and funds it currently has in its possession

which is used for school operations and function. Additionally, the TEA is attempting to take personal and real property owned by the non-profit which were purchased, in p~ with funds other

than TEA payments without paying for such property or providing an opportunity to explain why

such property is not subject to seizure. Under the guise of§ 12.128, the TEA is simply stating that if l)Page

Tab B 422 ACT use any state funds to paid for the property, it can seize the property outright. Such is a taking

and violation of ACT constitutional rights.

ACT has received a notice the TEA has assigned a conservator to come in and seize funds and

property. His name is Dr. Clifford. Because the TEA intends to close ACT, ~e intent ofthe

conservator is to shut down the school and seize funds and property held by ACT. This process

would conclude before any determination can be made in this case and is a threatened but regulatory

certain conclusion given the mandatory nature of Tex. Educ. Code Ann. § 12.115. As a result, such

seizme constitutes a taking. The takings are intentional and forceful seizures of ACT assets as well

as the arbitrary cancellation of its contract.

The Texas Education Code §12.128 states any property which is utilized by using funds

provided to a charter-school automatically becomes the property of the state. The non-profit

which runs ACT also has other ventures, including federally funded summer programs. Under

§12.128, the TEA and Commissioner, through an assigned conservator, could attempt to seize

the property owned by the non-profit and purchased with other funds. That deprives the non-

profit of its property interest without just compensation or due process of law. The assignment

of a conservator as noted in correspondence from the TEA dated on or about June 1, 2015 make

it clear the TEA intends to take funds and property, (i.e. ACT vehicles and real property) even

that which does not belong to the state or ACT. As a result, §12.128 is unconstitutional.

It is well-settled that a district court has jurisdiction to review an administrative agency

order in two circumstances only: (1}the plaintifrs pleaded claim comes within a valid statute that

assigns jurisdiction to the court; or (b) the plaintiff's pleaded claim is that the agency order deprived

the plaintiff of property without due course of law, a claim lying within the court's original or

constitutional jurisdiction. See Stone v. Texas Liquor Control Bd, 417 S.W.2d 385, 385-86

(Tex.I967); Southwest Airlines Co. v. Texas High-Speed Rail Authority, 867 S.W.2d 154, 157

21Page

423 (Tex. App.-Austin 1993, writ denied). So even if a statute does not provide a mechanism for

judicial review, such review must exist if the agency's system deprives a person of a property

interest without due process of law. The Texas Constitution is self-enacting, and thus provide the

right to bring an action against the government for violations of the provisions without the need

for legislative consent or a waiver of sovereign immunity. Nueces County v. Ferguson, 91 S.W.3d

205, 217 (Tex. App.-Corpus Christi 2002, no pet)(citing Steele v. City of Houston, 603 S.W.2d

786, 791 (Tex.1980)).

ACT asserts the TEA system in place does just that and should be ripe for district court

review. First, the Commissioner is ignoring certain statutes and applying others. This selective

choice of which laws to follow results in an unconstitutional application of the system. Second,

certain sections of the regulatory system are designed to deprive a contract charter holder of

their rights and avoid any meaningful review whatsoever. Third, at least one statute is

unconstitutional on its face and its threatened application by.means ofbeing in the system violated

ACT's constitutional rights.

Lewis v. Metropolitan Savings and Loan Association-a Texas Supreme Court case holding· that an administrative decision fails for arbitrariness if it does not comply with state procedural due process demonstrates both the federal and state requirements for due process. 550 S.W.2d 11, 16 (Tex.1977). In Lewis, the Commissioner contended that the administrative decision could not be considered arbitrary if it was supported by substantial evidence, so any procedural irregularities were irrelevant as long as substantial evidence existed to support his decision. /d at 13.13 the Supreme Court recognized that there can be evidence in the administrative record that qualifies as substantial, yet the parties may have also been denied due process and the rudiments of fair play in the conduct of the proceeding. ld at 13-14. Accordingly, the Court concluded and held that "amitrary action of an administrative agency cannot stand [regardless of whether there is substantial evidence supporting the agency's decision]. There is arbitrariness where the treatment accorded parties in the administrative process denies them due process of law." ld at 16.

3IPage

424 ACT also asserts that the statutory and regulatory system in place surrounding issuing strikes

against a charter-school and closing them, when applied as a whole, deprives ACT of any judicial

review to protect its property interest. Tex. Educ. Code §12.116 provides that the Commissioner

shall adopt an informal procedure for revoking a charter but that the Administrative Procedures Act

in Chapter 2001 of the Texas Government Code does not apply to the procedure. The State Office of

Administrative Hearings (SOAH) may review a decision of the Commissioner to revoke a charter,

but that is notwithstanding the procedural safeguards set up in Chapter 2001. Tex. Educ. Code

§12.116 (c). A SOAHjudge can only disagree with a charter revocation if the acts of the

Commissioner are arbitrary and capricious, however, any decision by SOAH is final and cannot be

appealed. Tex. Educ. Code§ 12.116. In other words, a decision to revoke a charter and take a

property interest in a charter contract avoids judicial review. In fact, the Commissioner has taken that

exact stance in prior litigation asserting the courts have no power to review a revocation or any

aspect ofit.Jn re Texas Educ. Agency, 441 S.W.3d 747 (2014). Additionally, any appeal on an

accountability rating cannot be appealed under Tex. Educ. Code §7.057 "or other law'' which means

it cannot be appealed at all. Tex. Educ. Code §39.151 (d). The ability to challenge a TEA rule under

Chapter 2001 is also specifically prohibited since the TEA takes the position §200 1.038 does not

apply to accountability ratings. Such a statute is unconstitutional on its face and certainly has been

applied in an unconstitutional manner to ACT.

The TEA and Commissioner have made very clear they do not want to allow any appeal of

the factual determinations or application standards. There is no way to appeal an accountability

rating each year to anyone other than the Commissioner and he will only allow an appeal of a data

and calculation error made by TEA and its designees nothing more.

The Commissioner's rule regarding appeals is extremely limited and narrow, far beyond what

Is authorized by the statute (Texas Education Code 39.151). See Chapter 7 of 2014 Accountability

41Page

425 Manual, p. 69 adopted by 19TAC §97.1001. It states "he state ~ccountability appeals process is

limited to rare cases where a data or calculation error is attributable to the testing contractor or the

Texas Education Agency (TEA)."

However narrow in scope, Plaintiff does not refute the fact because this is all Plaintiff seeks,

sought and needs to succeed in removing itself from having its charter revoked due to third-

party auditor error. Plaintifrs timeliness of establishing error should not be the bar to its

remedy especially prior to revocation. TEA has given its designees allowances for data and

calculation errors, however not the entity which carries out the governmental purpose of public

education that it oversees.

Further, lEA's process denies any meaningful way to appeal individual year determinations

and precludes any judicial review of a closure. Texas District Court is the only viable judicial review

for the Plaintiff since TEA has protectively taken itself out ofChapter 2001 ofthe Texas Government

Code (Administrative Procedures Act) and provided charter holders with the meaningless course to

SOAH which has its hands tied in these matters.

This point is made evident in ALJ Sharon Cloninger's Decision and Order on Summary

Judgment; May 21, 2015.

"An open-enrollment charter school may not appeal a performance rating in another

proceeding. including in a hearing before SOAH, if it has had an opportunity to do so under Texas

Education Code Chapter 39.151. Respondent did, in fact, have an opportunity to appeal its

performance ratings under Texas Education Code Chapter 39.151. Respondent's appeal of its

unacceptable and lower than satisfactory performance ratings were denied. Upon receiving the

Commissioner's December 8, 2014 Notice of Intent to Revoke Open-Enrollment Charter,

Respondent requested an informal review. The Commissioner's final decision did not change his

SIPage

426 determination as a result of the informal review. The Commissioner's final decision setting the

performance ratings may not be appealed under any law.

Thus, the scope of the AU's review does not include consideration of whether the financial

and academic performance ratings underlying the Commissioner's revocation decision were

arbitrary and capricious, or clearly erroneous. Instead, the AU is limited to determining whether

the Commissioner's revocation decision is arbitrary and capricious, or clearly erroneous. Therefore,

the ALJ cannot consider Respondent's assertions regarding the correctness of its academic

performance or financial accountability performance ratings."

Plaintiff is left with no real trier-of-fact in its case because the Commissioner is truly "judge,

juzy and executioner'' and the ALJ merely a pro forma extension of a fraudulent appeals system

heavily-weighted for the agency which neither takes into consideration the education and welfare of

the students of Texas, in particular, those who are 'at-risk" nor the high-performing charter

institutions.

Substantive Due Process

A violation of substantive due process occurs when the government deprives individuals of

constitutionally protected rights by an arbitrary use ofits power. Byers v. Patterson, 219 S.W.3d

514, 525 (Tex. App.-Tyler 2007, no pet.). A claimant prevails on a substantive due process claim by

establishing it holds a constitutionally protected property right to which the Fourteenth Amendment's

due process protection applies and by establishing that the challenged governmental action is not

rationally related to furthering a legitimate state interest Id

ACT holds a contiact which is renewed unless it fails to meet standards for financial and

academic .accountability. The mechanism in place at the moment amowtts to nothing more than the

TEA and Commissioner retroactively changing regulations in order to force strikes with no meaningful &I Page

427 way to oppose them. Such amounts to a violation of substantive due process.

Under the guise of §12.128, the TEA is simply stating that if ACT paid a mortgage to the

bank, it can seize ACT's property outright. lEA claims that funds used for anYthing by ACT given

to it by TEA belongs to TEA. ACT asserts lEA actually paid for services to provide public education

and services to students and not creating an interest in real or personal property. If this were the case,

ACT would receive "facilities funding" from TEA which ACT does not and TEA would also have

the ability to contract with lending institutions to acquire real property and be on a deed which it

cannot Therefore, TEA merely has a contract for services claim in which it has sought to tenninate

with its charter revocation without due process and should have no real or personal property interest

of any kind using a back-handed methodology to avoid a taking in this matter. Additionally, because

ACT's 501(c)3 is still financially and legally obligated to the lender, TEA's directives to return its

property to the lender because it is State property would create a chilling effect for lenders and those

entities seeking to enter into a contract to seiVe the interest of public education. This chilling effect

would be present even when payments continue to be made and the ability to maintain the contract

initially entered into can be disrupted at any time by a non-vested, disinterested party to the contract.

The charter holders whether or not seen as the same entity as the charter school after real or

personal property has been acquired must maintain its due process rights in their property to

reasonably administer contractual certainty of terms between the lender and borrower. Again, ACT

asserts TEA's perceived ability to disrupt contractual agreements even through statute is overbroad

and should end when seiVices for public education terminates.

As a result, the court has jurisdiction to hear this type of case and the plea should be denied.

71Page

428 Pranr

Plaintiff prays this court deny the Defendants' Plea to the Jurisdiction, retain jurisdiction in

this case and allow the Plaintiff to prosecute its claims. In the alternative, Plaintiff prays it have the

ability to amend its pleadings since the Defendants' arguments do not affirmatively negate all

jurisdiction. Plaintiff prays for such further relief as it may show i1self justly entitled

Stephen M. Foster Attorney for the Plaintiff 9013 Magna Carta Loop Austin, TX 78754 512-784-43

Step n M. Foster Texas Bar No:00792511 stephenmfosterlaw@gmail.com

II Page

429 8/20/2015 4:45:37 PM Velva L. Price District Clerk Travis County CAUSE NO. D-1-GN-15-002879 D-1-GN-15-002879 Tamara Franklin

ACDEMY OF CAREERS AND § IN THE DISTRICT COURT TECHNOLOGIES INC. d/b/a ACADEMY § OFCAREERSAND § TECHNOLOGIES CHARTER SCHOOL, § Plaintiffs, § § v. § 98TH JUDICIAL DISTRICT § TEXAS EDUCATION AGENCY and § MICHAEL WILLIAMS in his Official § Capacity as the Commissioner of § Education, § TRAVIS COUNTY, TEXAS Defendants. §

DEFENDANTS' REPLY TO PLAINTIFF'S RESPONSE TO DEFENDANTS' PLEA TO THE JURISDICTION AND RESPONSE TO PLANTIFF'S REQUEST FOR TEMPORARY INJUNCTION

COME NOW Defendants, Texas Education Agency ("TEA") and Michael L. Williams, in

his Official Capacity as the Commissioner ofEducation (individually "Williams" and, collectively

with TEA, the "Defendants"), and file this Reply to Plaintiff's Response to its Amended Plea to

the Jurisdiction.

I.

ACT's due process claims assume a property interest in the charter that was created when

TEA granted it its charter. ACT is wrong in this assumption and presented this Court with no

evidence or authority supporting their contention that a charter creates a constitutionally-protected

property interest. A property interest entitled to procedural due process under the Due Process

Clause is created and defined not by the Constitution, but rather by "existing rules or

understandings that stem from an independent source such as state law-rules or understandings

that secure certain benefits and that support claims of entitlement to those benefits." Board of

Tab C 408 Regents ofState Calls. v. Roth, 408 U.S. 564, 577 (1972). "To have a property interest in a benefit,

a person clearly must have more than an abstract need or desire for it. He must have more than a

unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it." !d.

As a general matter, "[w]hen the decision to grant or withhold a benefit is entrusted to the

discretion of a government actor, one has no constitutional property interest in obtaining that

relief." Suryanto v. Att'y Gen. of US., 398 Fed.Appx. 830, 834 (3rd Cir. 2010) (citing Conn. Bd.

ofPardons v. Dumschat, 452 U.S. 458, 464 (1981)). "Ifthe decision maker is not 'required to base

its decisions on objective and defined criteria,' but instead 'can deny the requested relief for any

constitutionally permissible reason or for no reason at all,' the State has not created a

constitutionally protected ... interest." Olim v. Wakinekona, 461 U.S. 238,249 (1983) (finding no

legitimate claim of entitlement where there were "no standards governing the administrator's

exercise ofhis discretion" to transfer an inmate) (citation omitted). In other words, there is no

protected property interest where the decision to remove a benefit is left to the "unfettered

discretion" of the government actor. See Roth, 408 U.S. at 566-67 (concluding a nontenured

university professor had no property interest in his position because "State law ... clearly leaves

the decision whether to rehire a nontenured teacher for another year to the unfettered discretion of

university officials.").

Likewise, the undisputed evidence demonstrates that the ability to grant a charter is left

entirely up to the discretion ofthe Commissioner. The Texas Education Code §12.101 provides,

"[T]he commissioner may grant a charter on the application of an eligible entity for an open-

enrollment charter school to operate in a facility of a commercial or nonprofit entity, an eligible

entity or a school district, including a home-rule school district." (emphasis added). Thus, even if

a charter school meets all of the statutory requirements, the Commissioner may still deny the

409 charter. Thus, when "the legislature leaves final determination of which eligible individuals

receive benefits to the unfettered discretion of administrators, no constitutionally-protected

property interests exists." Lee v. Tex. Workers' Compensation Comm 'n, 272 S.W.3d 806, 817-18

(Tex.App.-Austin 2008) (citing Roth, 408 U.S. at 567).

Other than to reiterate that ACT has a property interest in its charter, ACT has failed to demonstrate

how a property interest is created by the charter or respond to TEA's arguments and authorities on

this point. If the decision to grant the charter is left to the discretion of the commissioner, no

property interest is, therefore, created by granting the charter. In In reNew Maurice J Moyer

Acad., Inc., C.A. No. 10398-CB,- A.3d --,slip op. at 39-42 (Del.Ch.Ct. Jan. 9, 2015), the

court, reviewing a charter-school revocation in which a non-profit corporation sought to argue due

process violations, found that the charter-holder had no constitutionally-protected property interest

in school charter because decision to revoke was discretionary and without substantive limitations.

See also Reach Academy for Boys and Girls, Inc. v. Delaware Department of Education, 46

F.Supp.3d 455, 2014 WL 2445804 (D.Del.2014), modifying 8 F.Supp.3d 574 (D.Del.2014).

Because TEA established that the Commissioner has discretion to grant a charter, the interest was

never guaranteed or vested and therefore, may not be the basis of a substantive or procedural due

process challenge.

II.

The evidence presented during the August 13, 2015 hearing, clearly demonstrated that the

real property in question was solely owned by TEA. The annual financial documentation

submitted by ACT to TEA established exactly who ACT believed the owner of the land, buildings

and equipment to be- the State, or TEA. Because the property is wholly-owned by the state, ACT

failed to establish the prima facie elements of a takings claim.

410 III.

Finally, Defendants attached hereto Exhibit A, which is an affidavit of Dr. Lisa Dawn-

Fisher. ACT presented the court with its Exhibit 5 during the hearing on its Temporary Injunction

on August 13, 2015. After the hearing, and after Defendants had an opportunity to review this

exhibit in detail, it has come to Defendants attention that this is not a document issued by TEA and

does not qualify as an admission by party-opponent or a business record. This exhibit, which was

not provided to TEA prior to the hearing, appeared to be admissible, but it is not and should not

be considered as evidence that the Court considers when ruling on ACT's Temporary Injunction

or Defendants' Plea to the Jurisdiction.

WHEREFORE, PREMISES CONSIDERED, Defendants pray that this Court deny

Plaintiff's Request for Temporary Injunction and grant Defendants' Plea to the Jurisdiction, that

Plaintiff takes nothing by its suit that all costs be taxed and adjudged against Plaintiff, and that

Defendants be granted such other and further relief to which they may be justly entitled.

411 Respectfully submitted,

/s/ Evlkcvlvl. L(MI"~ ERIKA M. LAREMONT State Bar No. 24013003 Assistant Attorney General General Litigation Division Post Office Box 12548, Capitol Station Austin, Texas 78711-2548 512-463-2120 (Telephone) 512-320-0667 (Facsimile) erika.laremont@texasattorneygeneral. gov ATTORNEYS FOR DEFENDANTS

412 CERTIFICATE OF SERVICE

I hereby certify that on August 20, 2015, the foregoing document was delivered by electronic mail to the following:

Stephen M. Foster 9013 Magna Carta Loop Austin, Texas 78754 (512) 784-4367 stephenfosterlaw@gmail.com

Attorneys for Plaintiff

/s/ Evlkcvlvl. L(MI'~ ERIKA M. LAREMONT

413 EXHIBIT A

414 CAUSE NO. D-1-GN-15-002879

ACDEMY OF CAREERS AND § IN THE DISTRICT COURT TECHNOLOGIES INC. d!b/a ACADEMY § OF CAREERS AND § TECHNOLOGIES CHARTER SCHOOL, § Plaintiffs, § § v. § 200TH JUDICIAL DISTRICT § TEXAS EDUCATION AGENCY and § MICHAEL WILLIAMS in his Official § Capacity as the Commissioner of Education, § Defendants. § TRAVIS COUNTY, TEXAS §

AFFIDAVIT OF DR. LISA DAWN-FISHER

1. My name is Dr. Lisa Dawn-Fisher. I am over the age of 18, of sound mind, and able to make this affidavit. I have personal knowledge of the facts stated in this affidavit.

2. I am employed by the Texas Education Agency as the Chief School Finance Officer.

3. I have examined the document attached to this affidavit and labeled as Exhibit 1. This document is entitled "2014-15 Ratings based on Fiscal Year 2014 Data- Charter School Status Detail. )l

4. This document is in a form that makes it appear to be a rating issued by TEA. However, this document was not prepared by the Texas Education Agency. The Agency did not issue any financial accountability ratings for charter schools who have received a final order of revocation, including the Academy of Careers and Technology.

5. The document presented varies from the TEA-issued reports in several ways. The document presented has a column labeled "Updated" that was blank. The TEA-issued ratings contain the date and time updated each indicator was last updated. Further, the score entered for "Indicator 5" was "3." For indicator 5, TEA will only assign scores of 0, 2, 4, 6, 8, or 10. TEA would not have assigned the score of"3" for indicator "5" as reflected in the document presented at the hearing held on August 13, 2015.

415 SWORN TO AND SUBSCRIBED before me, on this the/2 o¥-::-day of August, 2015, by Dr. Lisa Dawn-Fisher.

[SEAL}

~Ucn.t S.oJ- ~-~ Notary Public's Signature

416 Exhibit 1

417 ...___charter School Status Detail Page I of2

.:L.- Clmm . J\. RazlddJMqdq~~arr- User: Public User Role: Public Ratlng Year: CDN:~ .. 2014-2015 Ratings Based on Fiscal Year 2014 Data- Ch~rter School Status Detail

Charter School Status Detail Indicator Detail Summary Determination of Ratings

IACADEMY OF CAREERS AND TECHNOLOGIES CHARTER ~CHOOL(015816) Status Indicator Indicator Description Updated Score Num Wi:i tb~ J:.Q!Dr!l!lt!l1: 5!DD!.Iiill tl!liUI~i!l il!lrJ !;;QE!lllllii!Dt:!il (gg!;!C; (AFRl ii!DQ ~bi!!:Y:c s;b2!:lltlmmdii!l di!tll 5:!.11:Hnltt!ad t2 ~~ 20 p tl 1 Q[ b!i{Q£~ tM M2~!l1:CDb!:t 2:Z !lt JiiDYia!J: ze rJ~dllo~ YES !:lt::~Qding 20 ttl~ ~ha!:!Slc g;hJ;~Qi':i. f!!i~l y~r !i:Qi;l dSlm gf June 30 or Auaust 31 I? c

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419 PRF30010 PEIMS EDIT+ REPORTS DATA REVIEW wednesday 02/11/2015 12:"' v 5.2.1 worksheet for calculating Administrative cost Ratio Page 1 of:.. 2014-2015 Midyear collection, Resubmission For Fiscal vear 2014 Filename: M201S015816 unallocated oi strict: 015816 - ACADEMY OF CAREERS AND TECHNOLOGIES CHARTER SCHOOL

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-1 -1 ·------r::::~i~i~i;t~iitv~:E~~~:~~i~:tiiFd~::::·---------------- ··'r---~s~7!'!3!'!!1~."!!3'!!'9~4 :-···-i::nrQ·nm-ent-'t'AoA'J"·--T·.sr.;,;aa:;.cri r·---i{f;6oo·ancf"ai:iove···-~---o:Iifi5":1 : 5,000 to 9,999 0.1250 : ·0-2583 : 1,000 to 4.999 0.1401 : : sao to 999 o.1561 : !Administrative : Less than 500 0. 2654 : rr=ost Ratio (A/B) :* Sparsity Adjustment 0. 3614 ! t• - value . -- ----·- --- -- ----------- ... - ............................. ~ • -'"' ......... -.---- ..' summary (C) Dis:trict ADA 1.78 (F) District Adm1nistrat1ve cost (A) $188,921 (D) District Band . Less than 500 (G) Administrative cost standard (E x B) $194,112 (E) Distrjct Standard 0.2654 (H) under/(Over) (G - A) $5,191 I • (I) Under/(Over) Percent (H I G) 2.7% MEETS the administrative cost standard * sparsity Adjustment value denotes a wide area district (by miles) that receives additional funding for being documented as sparse. Sparsity AdJustment value assignments ·are documented by the TEA Research and EvaluatiQn Department. ·

/ 420

Note: Fiscal Year refers to the fiscal period ended June.JOth or August·3lst DC BK15247 PG326

NO. D-1-GN-15-002879

ACADEMY OF CAREERS AND § IN THE DISTRICT COURT TECHNOLOGIES, INC. d/b/a ACADEMY § OF CAREERS AND TECHNOLOGIES § CHARTERSCHOOL § § Plaintiff, § § v. § OF TRAVIS COUNTY, TEXAS § TEXAS EDUCATION AGENCY and § MICHAEL WILLIAMS in His Official § Capacity as the Commissioner of Education § § Defendants. § 200TH JUDICIAL DISTRICT

ORDER GRANTING TEMPORARY INJUNCTION

CAME ON FOR CONSIDERATION Plaintiffs Motion for Temporary Injunction. After

considering the motion, the responses on file, the authorities cited, all admissible evidence, and

the arguments of counsel, the Court FINDS as follows:

1. Defendants Texas Education Agency and Michael Williams, in His Official

Capacity as the Commissioner of Education ("Defendants") intend to revoke the charter of

Plaintiff Academy of Careers and Technologies, Inc. d/b/a Academy of Careers and

Technologies Charter School, take over its bank accounts and real property, and close the school

down.

2. Plaintiff will suffer irreparable harm if Defendants are not enjoined from revoking

Plaintiffs charter.

3. Defendants will suffer no harm from a delay in their efforts to revoke Plaintiffs

charter.

Tab D 440 DC BK15247 PG327

4. This case presents important constitutional issues, including but not limited to the

procedural due process required in manner of the charter revocation pursuant to Mathews v.

Eldridge, 424 U.S. 319 (1976), and whether Defendants are constitutionally taking Plaintiffs

private property in violation of the Fourteenth Amendment. These issues should be considered

carefully and thoughtfully after a full trial on the merits.

5. Absent a temporary injunction, Plaintiff has no adequate remedy at law.

Accordingly, the Court GRANTS Plaintiffs Motion for Temporary Injunction.

The Court ORDERS, ADJUDGES, AND DECREES that Defendants Texas Education

Agency and Michael Williams, in His Official Capacity as the Commissioner of Education, and

Defendants' agents, servants, attorneys, employees, representatives, and any person or party in

concert or participation with them, are PROHIBITED and ENJOINED from taking any further

action to revoke Plaintiffs charter, take over Plaintiffs bank accounts and real property, or shut

Plaintiffs school down until such time as this Court may conduct a full trial on the merits.

It is FURTHER ORDERED that final trial to determine whether this temporary

injunction should be made permanent is set for February 1, 2016 at 9:00 o'clock a.m.

Applicant shall post a bond in the amount of $2,500.00.

Based upon the Court's findings that constitutional rights are involved, for which there

would be no sovereign immunity from suit over a suit to determine those constitutional rights,

the Court denies the Defendants' plea to the jurisdiction.

SIGNED on this 3._~ay of September, 2015 at "Zo o'clock ..p_.m.

The Honorable Gisela D. Triana Judge Presiding

441 112 F.3d 1475 Vining, Senior District Judge, sitting by designation, filed United States Court of Appeals, opinion concurring in part and dissenting in part. Eleventh Circuit.

Karen ADLER, individually, and as Next Friend of the Minor, Leslie Adler, and all others similarly situated, Laura Jaffa, individually and all others West Headnotes (3) similarly situated, Robin Zion, individually and all others similarly situated, Robin Rand, individually and as Next Friend of the minor, Doug Rand, and [1] Civil Rights all others, similarly situated, Education Plaintiffs–Appellants, Declaratory Judgment v. Education DUVAL COUNTY SCHOOL BOARD, Larry Zenke, in his official capacity as Superintendent of the High school students’ claims for declaratory and Duval County Public School District, Don Buckley, injunctive relief seeking to prevent school board in his official capacity as member of the Duval from allowing student prayers at future County School Board, Stan Jordan, in his official graduation ceremonies were moot, where capacity as member of the Duval County School students had already graduated from high school Board, Nancy Corwin, in her official capacity as and where parents who had other children who member of the Duval County School Board, et al., would graduate from high school in future were Defendants–Appellees, not described as plaintiffs, no theories had ever Student Coalition for Free Speech, American been advanced to support individual action by Jewish Congress, Amici, either parent, and no allegations were made in Sharon Green, as parent and next friend of complaint regarding existence of other children. Jennifer Green, minor child, and Joshua Green, U.S.C.A. Const. Art. 3, § 2, cl. 1. minor child, Linda Muhlbauer, as parent and next friend of Mandy Muhlbauer, minor child, and Mark Muhlbauer, minor child, Linda Gaston, 23 Cases that cite this headnote parent and next friend of Matthew Gaston, minor child, Rhonda Sellers, parent and next friend of Steven Sellers, minor child, et al., Intervenors–Defendants. [2] Civil Rights No. 94–2638. | May 6, 1997. Education Declaratory Judgment Education Graduating high school students and parents brought § 1983 action alleging that school district policy permitting High school students’ claims for declaratory and school prayer at graduation ceremony violated First injunctive relief seeking to prevent school board Amendment prohibition against the establishment of from allowing student prayers at future religion by state. The United States District Court for the graduation ceremonies did not fall within Middle District of Florida, No. 93-833–CIV-J–10, Wm. exception to mootness doctrine for injury that is Terrell Hodges, J., 851 F.Supp. 446, granted summary capable of repetition, yet evading review, where judgment to school district. Students and parents complaining students had graduated from high appealed. The Court of Appeals, Tjoflat, Circuit Judge, school, so there was no reasonable expectation held that: (1) students’ claims for declaratory and that they would be subjected to same injury injunctive relief seeking to prevent school board from again. U.S.C.A. Const. Art. 3, § 2, cl. 1; allowing student prayers at future graduation ceremonies U.S.C.A. Const.Amend 1. were moot, and (2) students waived damages claims on appeal. 71 Cases that cite this headnote Affirmed in part, vacated and remanded in part.

Tab E-1 Before TJOFLAT and COX, Circuit Judges, and VINING*, Senior District Judge.

Opinion [3] Federal Courts Specification of errors; points and arguments TJOFLAT, Circuit Judge:

High school students bringing § 1983 action seeking damages arising out of alleged violation Appellants are four former high school students1 in the of establishment clause caused by student prayer Duval County, Florida, school system who brought this at graduation ceremonies waived damages action under 42 U.S.C. § 1983 (1994), alleging that a claims on appeal where their briefs offered no Duval County school policy permitting student-initiated connection between damages and student prayer at high school graduation ceremonies (the prayer, offered no indication as to any of “policy”) violated their rights under the First and circumstances surrounding graduation prayer, Fourteenth Amendments.2 They named as defendants the failed to even allege that student prayer was Duval County School Board, the Board’s members in delivered during graduation ceremony at high their official capacity, the Duval County School District, school, and omitted to enumerate specific relief and Dalton Epting, the principal of Mandarin Senior High sought. 42 U.S.C.A. § 1983; F.R.A.P.Rule School (“Mandarin”), in his official capacity. These 28(a)(3, 4, 6, 7), 28 U.S.C.A. defendants are all appellees in the present appeal. The remaining appellees are a group of parents who intervened as defendants to assert their children’s free 12 Cases that cite this headnote exercise rights to have prayers at graduation.

I. Attorneys and Law Firms Appellants Adler, Laura Jaffa, and Robin Zion filed a D. Gray Thomas, William J. Sheppard, Sheppard & two-count complaint on June 2, 1993. Count one alleged White, P.A., Jacksonville, FL, for Plaintiffs–Appellants. that the policy constitutes an establishment of religion. Count two alleged that the policy infringes on the Jessica Smith, Washington, DC, for amicus National appellants’ free exercise of religion. They asked for Pearl. equitable relief in the form of a judgment declaring the policy unconstitutional and enjoining the School Board Marc D. Stern, New York City, for amicus American from permitting prayers at high school graduation Jewish Congress & National Jewish Community ceremonies. They also sought money damages. Relations Advisory Counsel. On June 7, 1993, appellants Adler, Jaffa, and Zion Stephen M. Durden, Jacksonville, FL, for graduated from Mandarin, one of the schools in the Duval Defendants–Appellees. County system. On June 10, 1993, they amended their complaint to include, inter alia, a request that the court Frederick H. Nelson, Mathew D. Staver, Orlando, FL, for certify their action as a class action. They amended their Intervenors–Defendants–Appellees Sharon Green, et al. complaint a second time on November 1, 1993, to add Mitchell A. Stone, Jacksonville, FL, Jay A. Sekulow, appellant Rand, a *1477 student at another school in the Washington, DC, for American Jewish Congress (amicus Duval County system, as a plaintiff.3 in District Court). The plaintiffs, defendants, and defendant-intervenors filed Steven T. McFarland, Center for Law & Religious cross-motions for summary judgment on March 3, 1994. Freedom, Annandale, VA, for amicus Christian Legal On May 4, 1994, the district court denied the appellants’ Society. motion and granted the appellees’ motions. In its dispositive memorandum opinion and order, the court Appeal from the United States District Court for the found the policy constitutional and entered final judgment Middle District of Florida. for the appellees. Adler, 851 F.Supp. at 456. Appellants filed their notice of appeal on May 9, 1994. Frequently, a plaintiff will seek both forms of relief in the same cause of action when challenging a defendant’s Appellant Rand subsequently graduated in June 1994. course of conduct that began before the initiation of the Because all four appellants have graduated, we find that lawsuit and is likely to continue in the future. The to the extent they seek declaratory and injunctive relief, plaintiff requests money damages to redress injuries their case is moot. The only justiciable controversy in this caused by the defendant’s past conduct and seeks case is the appellants’ claim for money damages. We equitable relief to prevent the defendant’s future conduct affirm the district court’s grant of summary judgment for from causing future injury. the appellees on this claim, but we do so without reviewing the merits of the district court’s constitutional When the threat of future harm dissipates, the plaintiff’s analysis. claims for equitable relief become moot because the plaintiff no longer needs protection from future injury. This is precisely what happened in this case. [2] Appellants argue that, despite their graduation from II. high school, their claims for declaratory and injunctive [1] relief are not moot because the original injury is “capable We begin by noting that appellants’ claims for of repetition, yet evading review.” See Southern Pac. declaratory and injunctive relief are moot. All appellants Terminal Co. v. Interstate Commerce Comm’n, 219 U.S. have graduated, and none are threatened with harm from 498, 515, 31 S.Ct. 279, 283, 55 L.Ed. 310 (1911). This possible prayers in future Duval County graduation exception to the mootness doctrine is narrow. ceremonies. In short, the appellants have no legally cognizable need for relief declaring the policy [I]n the absence of a class action, the “capable of unconstitutional and preventing the School Board from repetition, yet evading review” doctrine [is] limited to allowing prayers at future graduations. the situation where *1478 two elements combine[ ]: (1) the challenged action [is] in its duration too short to be Article III of the Constitution limits the jurisdiction of the fully litigated prior to its cessation or expiration, and federal courts to the consideration of certain “Cases” and (2) there [is] a reasonable expectation that the same “Controversies.” U.S. Const. art. III, § 2. The doctrine of complaining party [will] be subjected to the same mootness is derived from this limitation because an action action again. that is moot cannot be characterized as an active case or controversy. See Church of Scientology Flag Serv. Org. v. Weinstein v. Bradford, 423 U.S. 147, 149, 96 S.Ct. 347, City of Clearwater, 777 F.2d 598, 604 (11th Cir.1985), 349, 46 L.Ed.2d 350 (1975) (per curiam). This case does cert. denied, 476 U.S. 1116, 106 S.Ct. 1973, 90 L.Ed.2d not satisfy the second element. Because the complaining 656 (1986). “[A] case is moot when the issues presented students have graduated from high school, there is no are no longer ‘live’ or the parties lack a legally cognizable reasonable expectation that they will be subjected to the interest in the outcome.” Powell v. McCormack, 395 U.S. same injury again. See DeFunis v. Odegaard, 416 U.S. 486, 496, 89 S.Ct. 1944, 1951, 23 L.Ed.2d 491 (1969). 312, 319–20, 94 S.Ct. 1704, 1707, 40 L.Ed.2d 164 (1974) Any decision on the merits of a moot case would be an (finding challenge to law school admission policy moot impermissible advisory opinion. See Church of because petitioner “will never again be required to run the Scientology Flag Serv. Org., 777 F.2d at 604 (citing Hall gauntlet of the Law School’s admission process”). v. Beals, 396 U.S. 45, 48, 90 S.Ct. 200, 201–02, 24 L.Ed.2d 214 (1969) (per curiam)). Appellants contend, however, that two of the named plaintiffs, Karen Adler and Robin Rand, are parents of To apply the doctrine of mootness to this case, we must other children who will graduate sometime in the future distinguish the appellants’ claims for equitable relief from from high schools in Duval County and may be subjected their claim for money damages. Although neither the to the same injury. In the complaint, however, the caption appellants nor the district court treated the appellants’ notwithstanding, neither parent is described as a plaintiff claim for damages as distinct from their claims for and no theories have ever been advanced to support an equitable relief, these claims are distinct by nature. individual action by either parent, nor were any Equitable relief is a prospective remedy, intended to allegations made in the complaint regarding the existence prevent future injuries. In contrast, a claim for money of other children. The former students are the only damages looks back in time and is intended to redress a plaintiffs before us,4 and as to them, any claim for past injury. equitable relief is clearly moot. See Sapp v. Renfroe, 511 F.2d 172, 176 (5th Cir.1975) (holding constitutional challenge to graduation requirement brought by student 439, 445, 108 S.Ct. 1319, 1323, 99 L.Ed.2d 534 (1988) who then graduated moot);5 Laurenzo v. Mississippi High (“A fundamental and longstanding principle of judicial Sch. Activities Ass’n, 662 F.2d 1117, 1120 (5th Cir. Unit restraint requires that courts avoid reaching constitutional A Dec.1981) (holding constitutional challenge to questions in advance of the necessity of deciding them.”). student-transfer rule brought by student who then graduated moot despite argument that student’s parent The only issue the appellants raise on appeal is whether had other children who might suffer same injury).6 the district court erred in holding the policy constitutional. While the constitutionality of the policy may have been Because any claim for equitable relief has been rendered central to the now moot issue of whether equitable relief moot by the appellants’ graduations, we must vacate the is warranted to prevent the policy from being district court’s grant of summary judgment to the implemented at future graduations, it does not dispose of appellees on the appellants’ claims for declaratory and the issue of whether the appellants should be awarded injunctive relief and remand the case to the district court money damages for being subjected to the prayer at their with instructions to dismiss those claims. See, e.g., Lewis graduation. In other words, any claim for damages does v. Continental Bank Corp., 494 U.S. 472, 482, 110 S.Ct. not depend on the constitutionality of the policy in the 1249, 1256, 108 L.Ed.2d 400 (1990). Having disposed of abstract or as applied in other Duval County schools. the appellants’ claims for equitable relief, we are left with Even if the policy is unconstitutional, the defendants their claim for money damages, which we now address. might not be liable if, for example, they did not implement the policy at the ceremony in question or if the prayer would have been delivered without the policy. On the other hand, if the district court was correct in finding the policy constitutional, defendant Epting, Mandarin’s III. principal, might nonetheless be liable if he implemented [3] the policy in an unconstitutional manner.9 Because the appellants’ claim for money damages does not depend on any threat of future harm, this claim The constitutionality of the policy, therefore, has little remains a live controversy. See Havens Realty Corp. v. independent relevance to the appellants’ damages claim. Coleman, 455 U.S. 363, 371, 102 S.Ct. 1114, 1120, 71 Whether they *1480 are entitled to damages depends L.Ed.2d 214 (1982) (“Given respondents’ continued entirely on the circumstances under which the prayer was active pursuit of monetary relief, this case remains delivered at their graduation ceremony. In order to ‘definite and concrete, touching the legal relations of prevail, the appellants must have some theory connecting parties having adverse legal interests.’ ”) (quoting Aetna the individual defendants to the prayer. Life Ins. Co. v. Haworth, 300 U.S. 227, 240–41, 57 S.Ct. 461, 464, 81 L.Ed. 617 (1937)). For these reasons, even if we were to find fault with the district court’s constitutional analysis of the policy, this We accordingly turn our focus to the basis for the conclusion by itself would not answer the question of appellants’ claim for damages. The complaint alleges that whether the court erred in granting the appellees summary a “senior class chaplain” delivered a prayer at the June 7, judgment on the damages claim. The appellants offer no 1993, Mandarin graduation ceremony at which appellants other grounds in their briefs for finding trial court error. *1479 Adler, Jaffa, and Zion graduated.7 The only past injury for which the appellants could seek redress is being After considering the appellants’ briefs and oral subjected to this prayer at their graduation ceremony.8 To argument, we are convinced that they either fail to prove that the appellees caused this injury, the appellants understand the basis for their damages claim or do not alleged in their complaint that the prayer was “a direct seriously seek damages.10 They have offered us no consequence” of the school’s policy. In their answer, the connection between the prayer and their damages claim; appellees admitted that a student said the prayer, but their briefs offer no indication as to any of the denied that the prayer was a consequence of the policy. circumstances surrounding the Mandarin graduation prayer. They failed to argue that the prayer was a “direct The district court based its decision to grant the appellees’ consequence” of the policy, or any other theory motion for summary judgment on its conclusion that the connecting the defendants’ actions to the Mandarin policy was not unconstitutional. Because we find that the prayer. Their briefs do not even include the allegation district court’s order must be affirmed regardless of the made in their complaint that a prayer was delivered at constitutionality of the policy, we abstain from ruling on Mandarin. this controversial constitutional question. See Lyng v. Northwest Indian Cemetery Protective Ass’n, 485 U.S. If they had desired to preserve their damages claim on appellee is entitled to rely on the content of an appeal, they should have included all this information in appellant’s brief for the scope of the issues appealed.” their initial brief pursuant to the rules of appellate procedure. See Fed. R.App. P. 28(a)(3), (4), (6), Id. at 373–74 n. 3 (quoting Pignons S.A. de Mecanique v. (requiring appellant to include in initial brief “[a] Polaroid Corp., 701 F.2d 1, 3 (1st Cir.1983)). statement of the issues presented for review”; a statement “indicat[ing] briefly the nature of the case” followed by For all these reasons, we hold that they have waived their “a statement of the facts relevant to the issues presented damages claim on appeal.12 See, e.g., Braun v. Soldier of for review”; an argument “contain[ing] the contentions of Fortune Magazine, 968 F.2d 1110, 1121 n. 13 (11th the appellant on the issues presented”). Most telling of all, Cir.1992) (refusing to review issue not raised and argued is their request for relief. Fed. R.App. P. 28(a)(7) requires in appellant’s initial brief), cert. denied, 506 U.S. 1071, appellants to include in their initial brief a “short 113 S.Ct. 1028, 122 L.Ed.2d 173 (1993). We therefore conclusion stating the precise relief sought.” In their brief, affirm the district court’s order to the extent it denied the the appellants only ask us to reverse the district court and appellants’ motion for summary judgment and granted the remand the case “with directions for entry of summary appellees’ motions for summary judgment on the judgment and declaratory relief.” They do not ask us to appellants’ damages claim. direct the district court on remand to award money damages or to hold any kind of further proceedings on their damages claim. See Frank v. United States, 78 F.3d 815, 832–34 (2d Cir.1996) (holding issue waived because cross-appellant failed to request appropriate relief, even IV. though cross-appellant had stated the issue and attempted For the foregoing reasons, we VACATE the district to incorporate argument before district court), petition for court’s order granting the appellees summary judgment cert. filed, 64 U.S.L.W. 2600 (U.S. June 13, 1996)(No. on the appellants’ claims for declaratory and injunctive 95-2006) . relief and REMAND the case with instructions that the district court dismiss those claims. We AFFIRM the In fact, the only references to their claim for damages district court’s denial of the appellants’ motion for were two cursory statements, one in their initial brief and summary judgment and its grant of summary judgment one at oral argument. Their brief indicated that they for the appellees on the appellants’ damages claim. initiated the lawsuit “seeking declaratory and injunctive relief, as well as damages,” but never again mentioned It is SO ORDERED. their damages claim or its underlying legal theory. After contending at oral argument that their case fit within the “capable of repetition, yet evading review” exception to the mootness doctrine discussed above, appellants suggested in passing that their case was not moot because VINING, Senior District Judge, concurring in part and the complaint contained a prayer for money damages.11 dissenting in part:

We cannot agree with Judge Vining’s conclusion that this While I concur in the majority’s conclusion that the cursory treatment is sufficient to preserve their damages appellants’ requests for injunctive and declaratory relief claim on appeal. Without the benefit of developed are moot, I cannot agree with its finding that the argument from both sides regarding the propriety of the appellants have waived their claim for money damages. district court’s grant of summary judgment on the Accordingly, I respectfully dissent from Part III of the damages claim, we cannot effectively review that majority opinion. decision. For us to rule on this issue would deny the appellees the opportunity to argue that they were not As the majority observes, the appellants specifically legally responsible for the prayer delivered at the alleged in their complaint that a member of the senior appellants’ graduation. As we noted in Federal Savings & class delivered a prayer at the June 7, 1993, Mandarin Loan Ins. Corp. v. Haralson, 813 F.2d 370 (11th Senior High School graduation exercises at which Cir.1987): appellants Adler, Jaffa, and Zion graduated. Consistent with this allegation and their request for money damages, *1481 The waiver rule requires that the appellant state the appellants also alleged that the prayer was a direct and address argument to the issues the appellant desires consequence of the Duval County School District policy to have reviewed by this Court in the appellant’s initial at issue in this case.1 brief because “[i]n preparing briefs and arguments, an facts of this case, the appellants were not entitled to *1482 On May 4, 1994, the district court granted the money damages, or injunctive or declaratory relief for appellees’ motion for summary judgment, concluding that that matter, absent a finding that the subject policy was the Duval County School District policy was not unconstitutional.6 *1483 Consistent with the district unconstitutional. The district court neither discussed nor court’s ruling, the appellants, therefore, properly focused analyzed the appellants’ claim for money damages in its upon the alleged errors committed by the district court in memorandum opinion and order.2 Instead, after its constitutional analysis. Under these circumstances, I dismissing all of the appellants’ constitutional challenges am not aware of any legal theories, principles of equity, or to the instant policy, the district court entered final appellate rules, including those cited by the majority, that judgment for the appellees. It never, explicitly or support the majority’s waiver position. implicitly, addressed, in any substantive fashion, the appellants’ damages claim.3 Since I conclude that the appellants sufficiently raised their claim for money damages in their complaint, Despite the uncontroverted fact that the district court properly alleged that such damages were the direct never addressed or analyzed the appellants’ claim for consequence of an unconstitutional policy, and properly money damages in its memorandum opinion and order, and adequately challenged in their appellate briefs and the majority concludes that the appellants’ failure to during oral argument the only issue actually addressed “fully brief” their money damages claim on appeal and decided by the district court, I cannot agree that the constitutes a waiver of that claim.4 Because I find that the appellants have waived their claim for money damages on appellants properly and adequately briefed and argued on appeal. Consequently, I would reach the merits of the appeal the only issue actually addressed and decided by constitutional arguments raised in this case and would, if the district court, i.e., the constitutionality of the instant necessary, remand the matter to the district court for a policy, I disagree with the majority’s decision.5 hearing on all relevant factual and legal issues relating to the appellants’ claim for money damages.7 As the district court implicitly recognized, it was absolutely unnecessary for it to engage in any analysis of the appellants’ claim for money damages after it determined that the instant policy was not All Citations unconstitutional. The district court properly expressed no opinion regarding the propriety of the appellants’ money 112 F.3d 1475, 37 Fed.R.Serv.3d 824, 118 Ed. Law Rep. damages claim subsequent to holding that the policy at 39, 10 Fla. L. Weekly Fed. C 890 issue survived constitutional scrutiny because, under the

Footnotes

* Honorable Robert L. Vining, Jr., Senior U.S. District Judge for the Northern District of Georgia, sitting by designation.

1 Two appellants, Leslie Adler and Doug Rand, were minors when the complaint was filed and brought their claims through their mothers, Karen Adler and Robin Rand. The complaint makes it clear that Karen Adler and Robin Rand are parties in name only and it is the students whose interests are at stake. We therefore refer to the four students as the “appellants” and to Leslie Adler and Doug Rand as “Adler” and “Rand,” respectively.

2 The factual and procedural background of this case is set out more fully in the published memorandum opinion and order of the district court. See Adler v. Duval County Sch. Bd., 851 F.Supp. 446 (M.D.Fla.1994).

3 This second amended complaint is the complaint before us; we refer to it as “the complaint.”

4 The appellants originally sought to represent a class of similarly situated students who would graduate in the future, but they failed timely to move the district court for class certification pursuant to local court rules. The district court denied the appellants leave to file a motion for class certification out of time. The appellants do not challenge this ruling.

5 In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981) (en banc), this court adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to October 1, 1981.

6 Although decisions from Unit A of the former Fifth Circuit handed down after September 30, 1981, are not binding precedent, we find the reasoning in Laurenzo persuasive. See Stein v. Reynolds Sec., Inc., 667 F.2d 33, 34 (11th Cir.1982) (adopting as binding precedent all decisions of Unit B of former Fifth Circuit handed down after September 30, 1981, but recognizing persuasive authority of non-binding Unit A decisions).

7 The parties agree that a student delivered the following message: First and foremost, we give thanks to our parents for providing the love and support that we have too many times taken for granted. We thank our teachers for challenging our minds and inspiring us to greater achievement. And finally to our special friends who are present today, we thank you for sharing our joy. We, as a class, are entering a new chapter in our lives. As we enter this new time, there will be many decisions to be made, decisions that will shape our future. We ask for divine guidance, strength, and a burning desire to move ahead and succeed. In God’s name we pray. Amen. We assume without deciding that this message constitutes a religious prayer for First Amendment purposes. See DeSpain v. DeKalb County Community Sch. Dist. 428, 255 F.Supp. 655, 655–56 (N.D.Ill.1966) (finding verse “We thank you for the flowers so sweet; /We thank you for the food we eat; / We thank you for the birds that sing; /We thank you for everything” did not constitute prayer for First Amendment purposes), rev’d, 384 F.2d 836 (7th Cir.1967) (finding same verse did constitute prayer), cert. denied, 390 U.S. 906, 88 S.Ct. 815, 19 L.Ed.2d 873 (1968); see also Engel v. Vitale, 370 U.S. 421, 424, 82 S.Ct. 1261, 1264, 8 L.Ed.2d 601 (1962) (describing prayer as “solemn avowal of divine faith and supplication for the blessings of the Almighty”).

8 Appellant Rand did not graduate at this ceremony. Because he graduated after the district court entered final judgment, he has no claim for money damages in this case. Summary judgment in favor of the appellees on Rand’s claim was thus proper and is affirmed. In the rest of this part of the opinion, we use the term “appellants” to refer only to appellants Adler, Jaffa, and Zion.

9 For example, the district court based its conclusion that the policy did not violate the Constitution under the test enunciated in Lemon v. Kurtzman, 403 U.S. 602, 91 S.Ct. 2105, 29 L.Ed.2d 745 (1971), in part on its finding that the policy did not have the primary effect of advancing religion because it did “not mandate, require, or direct that religious expression or prayer occur at any graduation ceremony.” Adler, 851 F.Supp. at 453. Similarly, it held that the policy was not unconstitutional under Lee v. Weisman, 505 U.S. 577, 112 S.Ct. 2649, 120 L.Ed.2d 467 (1992), because the policy did “not solicit or mandate invocations or benedictions.” Adler, 851 F.Supp. at 456. Assuming that both these conclusions are correct, Epting still might be liable for a constitutional tort under either of these tests if he “mandate [d], require[d], or direct[ed] that” the prayer be delivered at the Mandarin gradation.

10 In support of the latter conclusion, we note that appellants agreed with the district court’s assertion at a pretrial hearing that their “prayer for injunctive relief ... is 99 percent of this litigation.”

11 They first argued that their case was not moot in their reply brief. In that brief, however, the only argument they made was that their case was “capable of repetition, yet evading review.” They made no mention of their claim for damages.

12 Judge Vining suggests that the proper disposition of this case is to reach the merits of the district court’s ruling and, if we were to find it erroneous, remand the case for further proceedings on the damages claim. Such a disposition is logically appealing, but does not take into account the significance of the appellants’ failure on appeal to (1) articulate any theory connecting the actions of the appellees to a cognizable injury suffered by the appellants, (2) discuss any facts relevant to the Mandarin graduation ceremony, other than the existence of the policy, or (3) request that we remand the case with directions that the district court either award money damages or, at the very least, conduct further proceedings to determine whether damages are warranted. These glaring omissions clearly demonstrate that the appellants have not advanced their damages claim on appeal. Perhaps the appellants did state a valid damages claim in their complaint, and the evidence available to them may very well support that claim. Had the appellants perceived that any claim for injunctive relief based solely on the policy was moot, we have little doubt that they would have fully briefed their damages claim on appeal. In the absence of plain error, however, it is not our place as an appellate court to second guess the litigants before us and grant them relief they did not request, pursuant to legal theories they did not outline, based on facts they did not relate. See Fed. R.App. P. 28(a); Head Start Family Educ. Program, Inc. v. Cooperative Educ. Serv. Agency 11, 46 F.3d 629, 635 (7th Cir.1995) (noting that an appellate “court has no duty to research and construct legal arguments available to a party”); Golden Pacific Bancorp v. Clarke, 837 F.2d 509, 513 (D.C.Cir.) (“[Appellate courts] do not sit as self-directed boards of legal inquiry and research, but essentially as arbiters of legal questions presented and argued by the parties.”), cert. denied, 488 U.S. 890, 109 S.Ct. 223, 102 L.Ed.2d 213 (1988). We recognize that we have discretion to overlook technical noncompliance with Rule 28(a) and can even decide issues sua sponte. These courses of action are only appropriate in rare circumstances to avoid manifest injustice. See Frank, 78 F.3d at 833. We find, however, that this case does not present sufficiently compelling reasons for us to exercise that discretion. 1 The appellants’ complaint is replete with additional specific and particularized allegations that outline other instances in which senior class representatives delivered religious messages at other Duval County high school commencement ceremonies. Moreover, the appellants specifically allege that these prayers were delivered as a result of the subject school district policy.

2 In fact, the district court referenced the appellants’ claim for money damages only once in its twenty-two page memorandum opinion and order. In its introduction, the court, after observing that the appellants sought injunctive relief, noted that they “also sought declaratory relief and damages.” R4–123–2. This was the district court’s sole reference to the appellants’ money damages claim. The district court thereafter extensively analyzed the constitutional issues presented in this case without ever addressing, even in the most perfunctory fashion, the appellants’ money damages claim.

3 I am not implying that the district court erred by failing to analyze the appellants’ claim for money damages. Once the district court ruled that the subject policy was not unconstitutional, it was unnecessary for the court to consider the appellants’ claim for monetary damages. Indeed, any discussion by the district court of money damages at that point would have been dicta.

4 Although the appellants may have agreed with the district court’s assertion at the pretrial hearing that their prayer for injunctive relief was ninety-nine percent of the relief sought in this matter, such a concurrence provides no persuasive support for the proposition that the appellants waived their claim for money damages on appeal or that they did not seriously seek monetary damages. To the extent that the majority states otherwise, I do not concur.

5 Although the appellants did not discuss in great detail during oral argument the evidence supporting their money damages claim, they did, as the majority notes, reference and acknowledge the existence of such a claim.

6 While the constitutionality of the instant policy is not dispositive of the appellants’ money damages claim, the appellants’ claim for money damages, like their requests for injunctive and declaratory relief, clearly does depend upon the constitutionality of the subject policy. I disagree with the majority’s assertion to the contrary. The appellants’ only claim for money damages relates to the prayer delivered at the Mandarin graduation. As I have previously explained, the appellants specifically alleged in their complaint that this prayer was given as a direct result of the policy at issue in this case. The appellants did not allege in their complaint, or assert at any time in the course of this litigation, that any individual defendant acted unconstitutionally, except when acting pursuant to the purportedly unconstitutional Duval County School District policy. For example, the appellants did not allege in their complaint that the Mandarin principal, Dalton Epting, acted independently, rather than pursuant to the policy at issue, when he permitted the senior class representative to deliver the prayer at the Mandarin graduation ceremony. The majority’s suggestion that Epting might be liable if he independently mandated, required, or directed that a prayer be given appears only in the majority opinion. The appellants have never advanced this theory of liability, and there are no factual allegations in their complaint to support such a theory. Thus, consistent with the appellants’ allegations in their complaint, the claim for money damages does depend directly upon the constitutionality of the subject policy.

7 I am cognizant of the fact that the constitutionality of the instant policy is not dispositive of the issue of money damages. Even if this court were to find that the subject policy is unconstitutional, the appellants would not automatically be entitled to money damages. Rather, the appellants would still be required to prove, as they alleged in their complaint, that the prayer delivered at the Mandarin graduation was given as a result of the subject policy. If this court were to conclude that the instant policy is unconstitutional, the appellees, contrary to the majority’s assertion otherwise, would have an ample opportunity to “argue that they were not legally responsible for the prayer delivered at the appellants’ graduation.” If this court concluded that the subject policy did not survive constitutional scrutiny, the court would then remand the damages issue to the district court. On remand, both the appellants and appellees would have the opportunity to argue the merits of the appellants’ damages claim. After reviewing all of the relevant evidence and hearing arguments from the appellants and appellees, the district court would thereafter determine whether the appellants were entitled to the money damages that they have requested.

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works. Board of Regents of State Colleges v. Roth, 408 U.S. 564 (1972) 92 S.Ct. 2701, 33 L.Ed.2d 548, 1 IER Cases 23

For concurring opinion of Mr. Chief Justice Burger, see KeyCite Yellow Flag - Negative Treatment 92 S.Ct. 2717. Not Followed as Dicta Brito v. Diamond, S.D.N.Y., June 26, 1992 For dissenting opinion of Mr. Justice Brennan in which 92 S.Ct. 2701 Mr. Justice Douglas joined, see 92 S.Ct. 2717. Supreme Court of the United States Mr. Justice Powell took no part in decision of case. The BOARD OF REGENTS OF STATE COLLEGES et al., Petitioners, v. David F. ROTH, etc. West Headnotes (10) No. 71—162. | Argued Jan. 18, 1972. | Decided June 29, 1972. [1] Constitutional Law Action by assistant professor at state university, who had Rights, Interests, Benefits, or Privileges no tenure rights to continued employment and who was Involved in General informed that he would not be rehired after first academic Constitutional Law year, alleging that decision not to rehire him infringed his Notice and Hearing Fourteenth Amendment rights. The United States District Court for the Western District of Wisconsin, 310 F.Supp. Requirements of procedural due process apply 972, granted summary judgment for assistant professor on only to deprivation of interests encompassed by procedural issue, ordering university officials to provide Fourteenth Amendment’s protection of liberty him with reasons and a hearing, and appeal was taken. and property, and when protected interests are The Court of Appeals, 446 F.2d 806, affirmed the partial implicated the right to some kind of prior summary judgment, and certiorari was granted. The hearing is paramount. U.S.C.A.Const. Amend. Supreme Court, Mr. Justice Stewart, held that where state 14. did not make any charge against assistant professor that might seriously damage his standing and associations in 2984 Cases that cite this headnote his community and there was no suggestion that state imposed on him a stigma or other disability that foreclosed his freedom to take advantage of other employment opportunities, he was not deprived of ‘liberty’ protected by the Fourteenth Amendment when he [2] Constitutional Law simply was not rehired in the job but remained as free as Rights, Interests, Benefits, or Privileges before to seek another. The Court further held that where Involved in General terms of appointment of assistant professor secured absolutely no interest in reemployment for the next year To determine whether due process requirements and there was no state statute or university rule or policy apply in the first place, court must look not to that secured his interest in reemployment or that created the “weight” but to the nature of the interest at any legitimate claim to it, he did not have a property stake and must look to see if the interest is interest protected by Fourteenth Amendment that was within the Fourteenth Amendment’s protection sufficient to require university authorities to give him a of liberty and property. U.S.C.A.Const. Amend. hearing when they declined to renew his contract of 14. employment.

Judgment of Court of Appeals reversed and case 1607 Cases that cite this headnote remanded.

Mr. Justice Douglas filed a dissenting opinion. [3] Mr. Justice Marshall filed a dissenting opinion. Constitutional Law Liberties and liberty interests

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Tab E-2 Board of Regents of State Colleges v. Roth, 408 U.S. 564 (1972) 92 S.Ct. 2701, 33 L.Ed.2d 548, 1 IER Cases 23

Constitutional Law state imposed on him a stigma or other disability Property Rights and Interests that foreclosed his freedom to take advantage of other employment opportunities, he was not Property interests protected by procedural due deprived of “liberty” protected by the process extend well beyond actual ownership of Fourteenth Amendment when he simply was not real estate, chattels or money, and due process rehired but remained as free as before to seek protection is required for deprivations of liberty another. U.S.C.A.Const. Amend. 14; W.S.A. beyond the sort of formal constraints imposed 37.31(1). by the criminal process. U.S.C.A.Const. Amend. 14. 1378 Cases that cite this headnote

665 Cases that cite this headnote

[7] Constitutional Law Benefits, rights and interests in [4] Constitutional Law Reputation; defamation Fourteenth Amendment’s procedural protection of property is a safeguard of security of interests Where a person’s good name, reputation, honor that a person has already acquired in specific or integrity is at stake because of what the benefits. U.S.C.A.Const. Amend. 14. government is doing to him, notice and an opportunity to be heard are essential. U.S.C.A.Const. Amend. 14. 411 Cases that cite this headnote

623 Cases that cite this headnote [8] Constitutional Law Benefits, rights and interests in Constitutional Law [5] Notice and Hearing Constitutional Law Employees To have a property interest in a benefit, a person Whatever may be a teacher’s right of free must have more than an abstract need or desire speech, interest in holding a teaching job at a for it or a unilateral expectation of it, and he state university, simpliciter, is not itself a free must have a legitimate claim of entitlement to it, speech interest. it is a purpose of ancient institution of property to protect those claims upon which people rely in their daily lives, reliance that must not be 33 Cases that cite this headnote arbitrarily undermined, and it is a purpose of the constitutional right to a hearing to provide an opportunity for a person to vindicate those claims. U.S.C.A.Const. Amend. 14. [6] Constitutional Law Reputational interests, protection and 3340 Cases that cite this headnote deprivation of

Where state in declining to rehire assistant professor at state university, who had no tenure [9] rights to continued employment, did not make Constitutional Law any charge against him that might seriously Source of right or interest damage his standing and associations in his Constitutional Law community and there was no suggestion that Benefits, rights and interests in © 2015 Thomson Reuters. No claim to original U.S. Government Works. 2 Board of Regents of State Colleges v. Roth, 408 U.S. 564 (1972) 92 S.Ct. 2701, 33 L.Ed.2d 548, 1 IER Cases 23

nontenured teacher, and no standards were specified for Property interests are not created by the reemployment. Respondent brought this action claiming Constitution; rather, they are created and their deprivation of his Fourteenth Amendment rights, alleging dimensions are defined by existing rules or infringement of (1) his free speech right because the true understandings that stem from an independent reason for his nonretention was his criticism of the source such as state law, rules or understandings university administration, and (2) his procedural due that secure certain benefits and that support process right because of the university’s failure to advise claims of entitlement to those benefits. him of the reason for its decision. The District Court U.S.C.A.Const. Amend. 14. granted summary judgment for the respondent on the procedural issue. The Court of Appeals affirmed. Held: The Fourteenth Amendment does not require opportunity 3687 Cases that cite this headnote for a hearing prior to the nonrenewal of a nontenured state teacher’s contract, unless he can show that the nonrenewal deprived him of an interest in ‘liberty’ or that he had a ‘property’ interest in continued employment, [10] despite the lack of tenure or a formal contract. Here the Constitutional Law nonretention of respondent, absent any charges against Tenure him or stigma or disability foreclosing other employment, is not tantamount to a deprivation of ‘liberty,’ and the Where terms of appointment of assistant terms of respondent’s employment accorded him no professor at state university, who had no tenure ‘property’ interest protected by procedural due process. rights to continued employment and who was The courts below therefore erred in granting summary informed that he would not be rehired after first judgment for the respondent on the procedural due academic year, secured absolutely no interest in process issue. Pp. 2705—2710. reemployment for the next year and there was no state statute or university rule or policy that 446 F.2d 806, reversed and remanded. secured his interest in reemployment or that created any legitimate claim to it, he did not have a property interest protected by Fourteenth Attorneys and Law Firms Amendment that was sufficient to require university authorities to give him a hearing *565 Charles A. Bleck, Asst. Atty. Gen., Madison, Wis., when they declined to renew his contract of for petitioners. employment. U.S.C.A.Const. Amend. 14; W.S.A. 37.31(1). Steven H. Steinglass, Milwaukee, Wis., for respondent.

Opinion 2837 Cases that cite this headnote *566 Mr. Justice STEWART delivered the opinion of the Court.

**2702 Syllabus* In 1968 the respondent, David Roth, was hired for his first *564 Respondent, hired for a fixed term of one academic teaching job as assistant professor of political science at year to teach at a state **2703 university, was informed Wisconsin State University-Oshkosh. He was hired for a without explanation that he would not be rehired for the fixed term of one academic year. The notice of his faculty ensuing year. A statute provided that all state university appointment specified that his employment would begin teachers would be employed initially on probation and on September 1, 1968, and would end on June 30, 1969.1 that only after four years’ continuous service would The respondent completed that term. But he was informed teachers achieve permanent employment ‘during that he would not be rehired for the next academic year. efficiency and good behavior,’ with procedural protection against separation. University rules gave a nontenured The respondent had no tenure rights to continued teacher ‘dismissed’ before the end of the year some employment. Under Wisconsin statutory law a state opportunity for review of the ‘dismissal,’ but provided university teacher can acquire tenure as a ‘permanent’ that no reason need be given for nonretention of a employee only after four years of year-to-year employment. Having acquired tenure, a teacher is entitled © 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 Board of Regents of State Colleges v. Roth, 408 U.S. 564 (1972) 92 S.Ct. 2701, 33 L.Ed.2d 548, 1 IER Cases 23

to continued employment ‘during efficiency and good on the University’s decision not to rehire him for another behavior.’ A relatively new teacher without tenure, year.6 We hold that he did not. however, is under Wisconsin law entitled to nothing **2704 beyond his one-year appointment.2 There are no statutory *567 or administrative standards defining eligibility for re-employment. State law thus clearly I leaves the decision whether to rehire a nontenured teacher [1] for another year to the unfettered discretion of university The requirements of procedural due process apply only officials. to the deprivation of interests encompassed by the The procedural protection afforded a Wisconsin State Fourteenth Amendment’s protection of liberty and University teacher before he is separated from the property. When protected interests are implicated, the University corresponds to his job security. As a matter of right *570 to some kind of prior hearing is paramount.7 statutory law, a tenured teacher cannot be ‘discharged But the range of interests protected by procedural due except for cause upon written charges’ and pursuant to process is not infinite. certain procedures.3 A nontenured teacher, similarly, is [2] protected to some extent during his one-year term. Rules The District Court decided that procedural due process promulgated by the Board of Regents provide that a guarantees apply in this case by assessing and balancing nontenured teacher ‘dismissed’ before the end of the year the weights of the particular interests involved. It may have some opportunity for review of the ‘dismissal.’ concluded that the respondent’s interest in re-employment But the Rules provide no real protection for a nontenured at Wisconsin State University-Oshkosh outweighed the teacher who simply is not re-employed for the next year. University’s interest in denying him re-employment He must be informed by February 1 ‘concerning retention summarily. 310 F.Supp., at 977—979. Undeniably, the or non-retention for the ensuing year.’ But ‘no reason for respondent’s re-employment prospects were of major non-retention need be given. No review or appeal is concern to him—concern that we surely cannot say was provided in such case.’4 insignificant. And a weighing process has long been a part of any determination of the form of hearing required in *568 In conformance with these Rules, the President of particular situations by procedural due process.8 But, to Wisconsin State University-Oshkosh informed the determine whether *571 due **2706 process requirements respondent before February 1, 1969, that he would not be apply in the first place, we must look not to the ‘weight’ rehired for the 1969—1970 academic year. He gave the but to the nature of the interest at stake. See Morrissey v. respondent no reason for the decision and no opportunity Brewer, 408 U.S. 471, at 481, 92 S.Ct. 2593, at 2600, 33 to challenge it at any sort of hearing. L.Ed.2d 484. We must look to see if the interest is within the Fourteenth Amendment’s protection of liberty and The respondent then brought this action in Federal property. District Court alleging that the decision not to rehire him [3] for the next year infringed his Fourteenth Amendment ‘Liberty’ and ‘property’ are broad and majestic terms. rights. He attacked the decision both in substance and They are among the ‘(g)reat (constitutional) concepts . . . procedure. First, he alleged that the true reason for the purposely left to gather meaning from experience. . . . decision was to punish him for certain statements critical (T)hey relate to the whole domain of social and economic of the University administration, and that it therefore fact, and the statesmen who founded this Nation knew too violated his right to freedom of speech.5 **2705 *569 well that only a stagnant society remains unchanged.’ Second, he alleged that the failure of University officials National Mutual Ins. Co. v. Tidewater Transfer Co., 337 to give him notice of any reason for nonretention and an U.S. 582, 646, 69 S.Ct. 1173, 1195, 93 L.Ed. 1556 opportunity for a hearing violated his right to procedural (Frankfurter, J., dissenting). For that reason, the Court has due process of law. fully and finally rejected the wooden distinction between ‘rights’ and ‘privileges’ that once seemed to govern the The District Court granted summary judgment for the applicability of procedural due process rights.9 The Court respondent on the procedural issue, ordering the has also made clear that the property interests protected University officials to provide him with reasons and a by *572 procedural due process extend well beyond hearing. 310 F.Supp. 972. The Court of Appeals, with one actual ownership of real estate, chattels, or money.10 By judge dissenting, affirmed this partial summary judgment. the same token, the Court has required due process 446 F.2d 806. We granted certiorari. 404 U.S. 909, 92 protection for deprivations of liberty beyond the sort of S.Ct. 227, 30 L.Ed.2d 181. The only question presented to formal constraints imposed by the criminal process.11 us at this stage in the case is whether the respondent had a constitutional right to a statement of reasons and a hearing © 2015 Thomson Reuters. No claim to original U.S. Government Works. 4 Board of Regents of State Colleges v. Roth, 408 U.S. 564 (1972) 92 S.Ct. 2701, 33 L.Ed.2d 548, 1 IER Cases 23

Yet, while the Court has eschewed rigid or formalistic the charge before University officials.12 In the present limitations on the protection of procedural due process, it case, however, there is no suggestion whatever that the has at the same time observed certain boundaries. For the respondent’s ‘good name, reputation, honor, or integrity’ words ‘liberty’ and ‘property’ in the Due Process Clause is at stake. of the Fourteenth Amendment must be given some meaning. Similarly, there is no suggestion that the State, in declining to re-employ the respondent, imposed on him a stigma or other disability that foreclosed his freedom to take advantage of other employment opportunities. The II State, for example, did not invoke any regulations to bar the respondent from all other public employment in state universities. Had it done so, this, again, would *574 be a ‘While this court has not attempted to define with different case. For ‘(t)o be deprived not only of present exactness the liberty . . . guaranteed (by the Fourteenth government employment but of future opportunity for it Amendment), the term has received much consideration certainly is no small injury . . ..’ Joint Anti-Fascist and some of the included things have been definitely Refugee Committee v. McGrath, supra, 341 U.S. at 185, stated. Without doubt, it denotes not merely **2707 71 S.Ct. at 655 (Jackson, J., concurring). See Truax v. freedom from bodily restraint but also the right of the Raich, 239 U.S. 33, 41, 36 S.Ct. 7, 10, 60 L.Ed. 131. The individual to contract, to engage in any of the common Court has held, for example, that a State, in regulating occupations of life, to acquire useful knowledge, to eligibility for a type of professional employment, cannot marry, establish a home and bring up children, to worship foreclose a range of opportunities ‘in a manner . . . that God according to the dictates of his own conscience, and contravene(s) . . . Due Process,’ Schware v. Board of Bar generally to enjoy those privileges long recognized . . . as Examiners, 353 U.S. 232, 238, 77 S.Ct. 752, 756, 1 essential to the orderly pursuit of happiness by free men.’ L.Ed.2d 796, and, specifically, in a manner that denies the Meyer v. Nebraska, 262 U.S. 390, 399, 43 S.Ct. 625, 626, right to a full prior hearing. Willner v. Committee on 67 L.Ed. 1042. In a Constitution for a free people, there Character, 373 U.S. 96, 103, 83 S.Ct. 1175, 1180, 10 can be no doubt that the meaning of ‘liberty’ must be L.Ed.2d 224. See Cafeteria Workers v. McElroy, supra, broad indeed. See, e.g., Bolling v. Sharpe, 347 U.S. 497, 367 U.S. at 898, 81 S.Ct. at 1750. In the present case, 499—500, 74 S.Ct. 693, 694, 98 L.Ed. 884; Stanley v. however, this principle does not come into play.13 Illinois, 405 U.S. 645, 92 S.Ct. 1208, 31 L.Ed.2d 551. **2708 [5] To be sure, the respondent has alleged that the *573 There might be cases in which a State refused to nonrenewal of his contract was based on his exercise of re-employ a person under such circumstances that his right to freedom of speech. But this allegation is not interests in liberty would be implicated. But this is not now before us. The District Court stayed proceedings on such a case. this issue, and the respondent has yet to prove that *575 [4] The State, in declining to rehire the respondent, did not the decision not to rehire him was, in fact, based on his make any charge against him that might seriously damage free speech activities.14 his standing and associations in his community. It did not [6] base the nonrenewal of his contract on a charge, for Hence, on the record before us, all that clearly appears example, that he had been guilty of dishonesty, or is that the respondent was not rehired for one year at one immorality. Had it done so, this would be a different case. university. It stretches the concept too far to suggest that a For ‘(w)here a person’s good name, reputation, honor, or person is deprived of ‘liberty’ when he simply is not integrity is at stake because of what the government is rehired in one job but remains as free as before to seek doing to him, notice and an opportunity to be heard are another. Cafeteria Workers v. McElroy, supra, 367 U.S. at essential.’ Wisconsin v. Constantineau, 400 U.S. 433, 895—896, 81 S.Ct. at 1748—1749, 6 L.Ed.2d 1230. 437, 91 S.Ct. 507, 510, 27 L.Ed.2d 515; Wieman v. Updegraff, 344 U.S. 183, 191, 73 S.Ct. 215, 219, 97 L.Ed. 216; Joint Anti- Fascist Refugee Committee v. McGrath, 341 U.S. 123, 71 S.Ct. 624, 95 L.Ed. 817; United States v. *576 III Lovett, 328 U.S. 303, 316—317, 66 S.Ct. 1073, 1079, 90 L.Ed. 1252; Peters v. Hobby, 349 U.S. 331, 352, 75 S.Ct. [7] The Fourteenth Amendment’s procedural protection of 790, 801, 99 L.Ed. 1129 (Douglas, J., concurring). See property is a safeguard of the security of interests that a Cafeteria & Restaurant Workers v. MeElroy, 367 U.S. person has already acquired in specific benefits. These 886, 898, 81 S.Ct. 1743, 1750, 6 L.Ed.2d 1230. In such a interests—property interests—may take many forms. case, due process would accord an opportunity to refute

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Thus, the Court has held that a person receiving welfare Those terms secured his interest in employment up to benefits under statutory and administrative standards June 30, 1969. But the important fact in this case is that defining eligibility for them has an interest in continued they specifically provided that the respondent’s receipt of those benefits that is safeguarded by procedural employment was to terminate on June 30. They did not due process. Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. provide for contract renewal absent ‘sufficient cause.’ 1011, 25 L.Ed.2d 287.15 **2709 See Flemming v. Nestor, Indeed, they made no provision for renewal whatsoever. 363 U.S. 603, 611, 80 S.Ct. 1367, 1373, 4 L.Ed.2d 1435. **2710 [10] Thus, the terms of the respondent’s Similarly, in the area of public employment, the Court has appointment secured absolutely no interest in held that a public college professor dismissed from an re-employment for the next year. They supported office held under tenure provisions, Slochower v. Board absolutely no possible claim of entitlement to of Education, 350 U.S. 551, 76 S.Ct. 637, 100 L.Ed. 692, re-employment. Nor, significantly, was there any state and college professors and *577 staff members dismissed statute or University rule or policy that secured his during the terms of their contracts, Wieman v. Updegraff, interest in re-employment or that created any legitimate 344 U.S. 183, 73 S.Ct. 215, 97 L.Ed. 216, have interests claim to it.16 In these circumstances, the respondent surely in continued employment that are safeguarded by due had an abstract concern in being rehired, but he did not process. Only last year, the Court held that this principle have a property interest sufficient to require the ‘proscribing summary dismissal from public employment University authorities to give him a hearing when they without hearing or inquiry required by due process’ also declined to renew his contract of employment. applied to a teacher recently hired without tenure or a formal contract, but nonetheless with a clearly implied promise of continued employment. Connell v. Higginbotham, 403 U.S. 207, 208, 91 S.Ct. 1772, 1773, 29 L.Ed.2d 418. IV [8] Certain attributes of ‘property’ interests protected by procedural due process emerge from these decisions. To Our analysis of the respondent’s constitutional rights in have a property interest in a benefit, a person clearly must this case in no way indicates a view that an opportunity have more than an abstract need or desire for it. He must for a hearing or a statement of reasons for nonretention have more than a unilateral expectation of it. He must, would, or would not, be appropriate or wise in public instead, have a legitimate claim of entitlement to it. It is a *579 colleges and universities.17 For it is a written purpose of the ancient institution of property to protect Constitution that we apply. Our role is confined to those claims upon which people rely in their daily lives, interpretation of that Constitution. reliance that must not be arbitrarily undermined. It is a purpose of the constitutional right to a hearing to provide We must conclude that the summary judgment for the an opportunity for a person to vendicate those claims. respondent should not have been granted, since the [9] respondent has not shown that he was deprived of liberty Property interests, of course, are not created by the or property protected by the Fourteenth Amendment. The Constitution. Rather they are created and their dimensions judgment of the Court of Appeals, accordingly, is are defined by existing rules or understandings that stem reversed and the case is remanded for further proceedings from an independent source such as state law—rules or consistent with this opinion. It is so ordered. Reversed understandings that secure certain benefits and that and remanded. support claims of entitlement to those benefits. Thus, the welfare recipients in Goldberg v. Kelly, supra, had a claim of entitlement to welfare payments that was grounded in the statute defining eligibility for them. The Mr. Justice POWELL took no part in the decision of this recipients had not yet shown that they were, in fact, case. within the statutory terms of eligibility. But we held that they had a right to a hearing at which they might attempt to do so. Mr. Justice DOUGLAS, dissenting. *578 Just as the welfare recipients’ ‘property’ interest in welfare payments was created and defined by statutory terms, so the respondent’s ‘property’ interest in Respondent Roth, like Sindermann in the companion case, had no tenure under Wisconsin law and, unlike employment at Wisconsin State University-Oshkosh was Sindermann, he had had only one year of teaching at created and defined by the terms of his appointment. © 2015 Thomson Reuters. No claim to original U.S. Government Works. 6 Board of Regents of State Colleges v. Roth, 408 U.S. 564 (1972) 92 S.Ct. 2701, 33 L.Ed.2d 548, 1 IER Cases 23

Wisconsin State University-Oshkosh—where during true of private schools, if through the device of financing 1968—1969 he had been Assistant Professor of Political or other umbilical cords they become instrumentalities of Science and International Studies. Though Roth was rated the State. Mr. Justice Frankfurther stated the by the faculty as an excellent teacher, he had publicly constitutional theory in Sweezy v. New Hampshire, 354 criticized the administration for suspending an entire U.S. 234, 261—262, 77 S.Ct. 1203, 1217, 1 L.Ed.2d 1311 group of 94 black students without determining individual (concurring in result): guilt. He also criticized the university’s regime as being ‘Progress in the natural sciences is not authoritarian and autocratic. He used his classroom to remotely confined to findings made in discuss what was being done about the *580 black the laboratory. Insights into the episode; and one day, instead of meeting his class, he mysteries of nature are born of went to the meeting of the Board of Regents. hypothesis and speculation. The more so is this true in the pursuit of In this case, as in Sindermann, an action was started in understanding in the groping Federal District Court under 42 U.S.C. s 19831 claiming endeavors of what are called the in part that the decision of the school authorities not to social sciences, the concern of which rehire was in retaliation for his expression of opinion. The is man and society. The problems that District Court, in partially granting Roth’s motion for are the respective preoccupations of summary judgment, held that the Fourteenth Amendment anthropology, economics, law, required the university to give a hearing **2711 to psychology, sociology and related teachers whose contracts were not to be renewed and to areas of scholarship are merely give reasons for its action. 310 F.Supp. 972, 983. The departmentalized dealing, by way of Court of Appeals affirmed. 446 F.2d 806. manageable division of analysis, with interpenetrating aspects of holistic Professor Will Herberg, of Drew University, in writing of perplexities. For society’s good—if ‘academic freedom’ recently said: understanding be an essential need of ‘(I)t is sometimes conceived as a basic constitutional right society—inquires into these problems, guaranteed and protected under the First Amendment. speculations about them, stimulation in others of reflection upon them, ‘But, of course, this is not the case. Whereas a man’s right must be left as unfettered *582 as to speak out on this or that may be guaranteed and possible. Political power must abstain protected, he can have no imaginable human or from intrusion into this activity of constitutional right to remain a member of a university freedom, pursued in the interest of faculty. Clearly, the right to academic freedom is an wise government and the people’s acquired one, yet an acquired right of such value to well-being, except for reasons that are society that in the minds of many it has verged upon the exigent and obviously compelling.’ constitutional.’

Washington Sunday Star, Jan. 23, 1972, B-3, col. 1. We repeated that warning in Keyishian v. Board of Regents, 385 U.S. 589, 603, 87 S.Ct. 675, 683, 17 *581 There may not be a constitutional right to continued L.Ed.2d 629: employment if private schools and colleges are involved. ‘Our Nation is deeply committed to But Prof. Herberg’s view is not correct when public safeguarding academic freedom, schools move against faculty members. For the First which is of transcendent value to all Amendment, applicable to the States by reason of the of us and not merely to the teachers Fourteenth Amendment, protects the individual against concerned. That freedom is therefore state action when it comes to freedom of speech and of a special concern of the First press and the related freedoms guaranteed by the First Amendment, which does not tolerate Amendment; and the Fourteenth protects ‘liberty’ and laws that cast a pall of orthodoxy over ‘property’ as stated by the Court in Sindermann. the classroom.’

No more direct assault on academic freedom can be imagined than for the school authorities to be allowed to When a violation of First Amendment rights is alleged, discharge a teacher because of his or her philosophical, the reasons for dismissal or for nonrenewal of an political, or ideological beliefs. The same may well be employment contract must be examined to see if the © 2015 Thomson Reuters. No claim to original U.S. Government Works. 7 Board of Regents of State Colleges v. Roth, 408 U.S. 564 (1972) 92 S.Ct. 2701, 33 L.Ed.2d 548, 1 IER Cases 23

reasons given are only a cloak for activity or attitudes Ass’n v. Douds, 339 U.S. 382, 402, 70 S.Ct. 674, 685, 94 protected by the Constitution. A statutory analogy is L.Ed. 925, that freedom of speech was abridged when the present under the National Labor Relations Act, 29 U.S.C. only restraint on its exercise was withdrawal of the s 151 et seq. While discharges of employees for ‘cause’ privilege to invoke the facilities of the National Labor are **2712 permissible (Fibreboard Paper Products Corp. Relations Board. In Wieman v. Updegraff, 344 U.S. 183, v. NLRB, 379 U.S. 203, 217, 85 S.Ct. 398, 406, 13 73 S.Ct. 215, 97 L.Ed. 216, we held that an applicant L.Ed.2d 233), discharges because of an employee’s union could not be denied the opportunity *584 for public activities are banned by s 8(a)(3), 29 U.S.C. s 158(c)(3). employment because he had exercised his First So the search is to ascertain whether the stated ground Amendment rights. And in Speiser v. Randall, 357 U.S. was the real one or only a pretext. See J. P. Stevens & Co. 513, 78 S.Ct. 1332, 2 L.Ed.2d 1460, we held that a denial v. NLRB, 380 F.2d 292, 300 (2 Cir.). of a tax exemption unless one gave up his First Amendment rights was an abridgment of Fourteenth In the case of teachers whose contracts are not renewed, Amendment rights. tenure is not the critical issue. In the Sweezy case, the teacher, whose First Amendment rights we honored, had As we held in Speiser v. Randall, supra, when a State no tenure but was only a guest lecturer. In the Keyishian proposes to deny a privilege to one who it alleges has case, one of the petitioners (Keyishian himself) had only a engaged in unprotected speech, Due Process requires that ‘one-year-term contract’ that was not renewed. 385 U.S., the State bear the burden of proving that the speech was at 592, 87 S.Ct., at 678. In Shelton v. Tucker, 364 U.S. not protected. ‘(T)he ‘protection of the individual against 479, 81 S.Ct. 247, 5 L.Ed.2d 231, one of the petitioners arbitrary action’ . . . (is) the very essence of due process,’ was *583 a teacher whose ‘contract for the ensuing school Slochower v. Board of Higher Education, 350 U.S. 551, year was not renewed’ (id., at 483, 81 S.Ct., at 249) and 559, 76 S.Ct. 637, 641, 100 L.Ed. 692, but where the two others who refused to comply were advised that it State is allowed to act secretly behind closed doors and made ‘impossible their re-employment as teachers for the without any notice to those who are affected by its following school year.’ Id., at 484, 81 S.Ct., at 250. The actions, there is no check against the possibility of such oath required in Keyishian and the affidavit listing ‘arbitrary action.’ memberships required in Shelton were both, in our view, in violation of First Amendment rights. Those cases mean **2713 Moreover, where ‘important interests’ of the that conditioning renewal of a teacher’s contract upon citizen are implicated (Bell v. Burson, 402 U.S. 535, 539, surrender of First Amendment rights is beyond the power 91 S.Ct. 1586, 1589, 29 L.Ed.2d 90) they are not to be of a State. denied or taken away without due process. Ibid. Bell v. Burson involved a driver’s license. But also included are There is sometimes a conflict between a claim for First disqualification for unemployment compensation Amendment protection and the need for orderly (Sherbert v. Verner, 374 U.S. 398, 83 S.Ct. 1790, 10 administration of the school ststem, as we noted in L.Ed.2d 965), discharge from public employment Pickering v. Board of Education, 391 U.S. 563, 569, 88 (Slochower v. Board of Education, supra), denial of tax S.Ct. 1731, 1735, 20 L.Ed.2d 811. That is one reason why exemption (Speiser v. Randall, supra), and withdrawal of summary judgments in this class of cases are seldom welfare benefits (Goldberg v. Kelly, 397 U.S. 254, 90 appropriate. Another reason is that careful factfinding is S.Ct. 1011, 25 L.Ed.2d 287). And see Wisconsin v. often necessary to know whether the given reason for Constantineau, 400 U.S. 433, 91 S.Ct. 507, 27 L.Ed.2d nonrenewal of a teacher’s contract is the real reason or a 515. We should now add that nonrenewal of a teacher’s feigned one. contract, whether or not he has tenure, is an entitlement of the same importance and dignity. It is said that since teaching in a public school is a privilege, the State can grant it or withhold it on Cafeteria & Restaurant Workers v. McElroy, 367 U.S. conditions. We have, however, rejected that thesis in 886, 81 S.Ct. 1743, 6 L.Ed.2d 1230, is not opposed. It numerous cases, e.g., Graham v. Richardson, 403 U.S. held that a cook employed in a cafeteria in a military 365, 374, 91 S.Ct. 1848, 1853, 29 L.Ed.2d 534. See Van installation was not entitled to a hearing prior *585 to the Alstyne, The Demise of the Right-Privilege Distinction in withdrawal of her access to the facility. Her employer was Constitutional Law, 81 Harv.L.Rev. 1439 (1968). In prepared to employ her at another of its restaurants, the Hannegan v. Esquire, Inc., 327 U.S. 146, 156, 66 S.Ct. withdrawal was not likely to injure her reputation, and her 456, 461, 90 L.Ed. 586, we said that Congress may not by employment opportunities elsewhere were not impaired. withdrawal of mailing privileges place limitations on The Court held that the very limited individual interest in freedom of speech which it could not do constitutionally this one job did not outweigh the Government’s authority if done directly. We said in American Communications over an important federal military establishment. © 2015 Thomson Reuters. No claim to original U.S. Government Works. 8 Board of Regents of State Colleges v. Roth, 408 U.S. 564 (1972) 92 S.Ct. 2701, 33 L.Ed.2d 548, 1 IER Cases 23

Nonrenewal of a teacher’s contract is tantamount in effect Court of Appeals in Sindermann v. Perry, 430 F.2d 939 to a dismissal and the consequences may be enormous. (CA5): Nonrenewal can be a blemish that turns into a permanent ‘School-constituted review bodies are the most scar and effectively limits any chance the teacher has of appropriate forums for initially determining issues of this being rehired as a teacher, at least in his State. type, both for the convenience of the parties and in order to bring academic expertise to bear in resolving the nice If this nonrenewal implicated the First Amendment, then issues of administrative discipline, teacher competence Roth was deprived of constitutional rights because his and school policy, which so frequently must be balanced employment was conditioned on a surrender of First in reaching a proper determination.’ Id., at 944—945. Amendment rights; and, apart from the First Amendment, he was denied due process when he received no notice and hearing of the adverse action contemplated against That is a permissible course for district courts to take, him. Without a statement of the reasons for the discharge though it does not relieve them of the final determination and an opportunity to rebut those reasons—both of which *587 whether nonrenewal of the teacher’s contract was in were refused by petitioners—there is no means short of a retaliation for the exercise of First Amendment rights or a lawsuit to safeguard the right not to be discharged for the denial of due process. exercise of First Amendment guarantees. Accordingly I would affirm the judgment of the Court of The District Court held, 310 F.Supp., at 979—980: Appeals. ‘Substantive constitutional protection for a university professor against non-retention in violation of his First Mr. Justice MARSHALL, dissenting. Amendment rights or arbitrary Respondent was hired as an assistant professor of political non-retention is useless without science at Wisconsin State University-Oshkosh for the procedural safeguards. I hold that 1968—1969 academic year. During the course of that minimal procedural due process year he was told that he would not be rehired for the next includes a statement of the reasons academic term, but he was never told why. In this case, he why the university intends not to asserts that the Due Process Clause of the Fourteenth retain the professor, notice of a Amendment to the United States Constitution entitled him hearing at which he may respond to to a statement of reasons and a hearing on the the stated reasons, and a hearing if the University’s decision not to rehire him for another year.1 professor appears at the appointed This claim was sustained by the District Court, which *586 time and place. At such a granted respondent summary judgment, 310 F.Supp. 972, hearing the professor must have a and by the Court of Appeals which affirmed the judgment reasonable opportunity to submit of the District Court. 446 F.2d 806. This Court today evidence relevant to the stated reverses the judgment of the Court of Appeals and rejects reasons. The burden of going forward respondent’s claim. I dissent. and the burden of proof rests with the professor. Only if he makes a While I agree with Part I of the Court’s opinion, setting reasonable showing that the stated forth the proper framework for consideration of the issue reasons are wholly inappropriate as a presented, and also with those portions of Parts II and III basis for decision or that they are of the Court’s opinion that assert that a public employee is wholly without basis in fact would the entitled to procedural due process whenever a State university administration become stigmatizes him by denying employment, or injures his obliged to show that the stated future employment prospects severely, or whenever the reasons are not inappropriate or that State deprives him of a property *588 interest. I would go they have a basis in fact.’ further than the Court does in defining the terms ‘liberty’ and ‘property.’ It was that procedure that the Court of Appeals approved. The prior decisions of this Court, discussed at length in 446 F.2d, at 809—810. The Court of Appeals also the opinion of the Court, establish a principle that is as concluded that though the s 1983 action was pending in obvious as it is compelling—i.e., federal and state court, the court should stay its hand until the academic governments and governmental agencies are restrained by procedures **2714 had been completed.1a As stated by the the Constitution from acting arbitrarily with respect

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employment opportunities that they either offer or control. Mr. Justice Douglas has written that: Hence, it is now firmly established that whether or not a ‘It is not without significance that most of the provisions private employer is free to act capriciously or of the Bill of Rights are procedural. It is procedure that unreasonably with respect to employment practices, at spells much of the difference between rule by law and least absent statutory2 or contractual3 controls, a rule by whim or caprice. Steadfast adherence to strict government employer is different. The government may procedural safeguards is our main assurance that there only act fairly and reasonably. will be equal justice under law.’ Joint Anti-Fascist Refugee Committee v. McGrath, supra, 341 U.S., at 179, **2715 This Court has long maintained that ‘the right to 71 S.Ct., at 652 (concurring opinion). work for a living in the common occupations of the community is of the very essence of the personal freedom and opportunity that it was the purpose of the And Mr. Justice Frankfurter has said that ‘(t)he history of (Fourteenth) Amendment to secure.’ Truax v. Raich, 239 American freedom is, in no small measure, the *590 U.S. 33, 41, 36 S.Ct. 7, 10, 60 L.Ed. 131 (1915) (Hughes, history of procedure.’ Malinski v. New York, 324 U.S. J.). See also Meyer v. Nebraska, 262 U.S. 390, 399, 43 401, 414, 65 S.Ct. 781, 787, 89 L.Ed. 1029 (1945) S.Ct. 625, 626, 67 L.Ed. 1042 (1923). It has also (separate opinion). With respect to occupations controlled established that the fact that an employee has no contract by the government, one lower court has said that ‘(t)he guaranteeing work for a specific future period does not public has the right to expect its officers . . . to make mean that as the result of action by the government he adjudications on the basis of merit. The first step toward may be ‘discharged at any time, for any reason or for no insuring that these expectations are realized is to require reason.’ Truax v. Raich, supra, 239 U.S., at 38, 36 S.Ct., adherence to the standards of due process; absolute and at 9. uncontrolled discretion invites abuse.’ Hornsby v. Allen, 326 F.2d 605, 610 (CA5 1964). In my view, every citizen who applies for a government job is entitled to it unless the government can establish We have often noted that procedural due process means some reason for denying the employment. This is the many different things in the numerous contexts in which ‘property’ right that I believe is protected by the it applies. See, e.g., Goldberg v. Kelly, 397 U.S. 254, 90 Fourteenth Amendment and that cannot be denied S.Ct. 1011, 25 L.Ed.2d 287 (1970); Bell v. Burson, 402 ‘without due process of law.’ And it is also liberty— *589 U.S. 535, 91 S.Ct. 1586, 29 L.Ed.2d 90 (1971). Prior liberty to work—which is the ‘very essence of the decisions have held that an applicant for admission to personal freedom and opportunity’ secured by the practice as an attorney before the United States Board of Fourteenth Amendment. Tax Appeals may not be rejected without a statement of reasons **2716 and a chance for a hearing on disputed This Court has often had occasion to note that the denial issues of fact;4 that a tenured teacher could not be of public employment is a serious blow to any citizen. summarily dismissed without notice of the reasons and a See, e.g., Joint Anti-Fascist Refugee Committee v. hearing;5 that an applicant for admission to a state bar McGrath, 341 U.S. 123, 185, 71 S.Ct. 624, 655, 95 L.Ed. could not be denied the opportunity to practice law 817 (1951) (Jackson, J., concurring); United States v. without notice of the reasons for the rejection of his Lovett, 328 U.S. 303, 316—317, 66 S.Ct. 1073, 1079, 90 application and a hearing;6 and even that a substitute L.Ed. 1252 (1946). Thus, when an application for public teacher who had been employed only two months could employment is denied or the contract of a government not be dismissed merely because she refused to take a employee is not renewed, the government must say why, loyalty oath without an inquiry into the specific facts of for it is only when the reasons underlying government her case and a hearing on those in dispute.7 I would follow action are known that citizens feel secure and protected these cases and hold that respondent was denied due against arbitrary government action. process when his contract was not renewed and he was not informed of the reasons and given an opportunity to Employment is one of the greatest, if not the greatest, respond. benefits that governments offer in modern-day life. When something as valuable as the opportunity to work is at *591 It may be argued that to provide procedural due stake, the government may not reward some citizens and process to all public employees or prospective employees not others without demonstrating that its actions are fair would place an intolerable burden on the machinery of and equitable. And it is procedural due process that is our government. Cf. Goldberg v. Kelly, supra. The short fundamental guarantee of fairness, our protection against answer to that argument is that it is not burdensome to arbitrary, capricious, and unreasonable government give reasons when reasons exist. Whenever an application action. for employment is denied, an employee is discharged, or a © 2015 Thomson Reuters. No claim to original U.S. Government Works. 10 Board of Regents of State Colleges v. Roth, 408 U.S. 564 (1972) 92 S.Ct. 2701, 33 L.Ed.2d 548, 1 IER Cases 23

decision not to rehire an employee is made, there should 83 S.Ct. 1246, 1262, 10 L.Ed.2d 389 (1963). When the be some reason for the decision. It can scarcely be argued government knows it may have to justify its decisions that government would be crippled by a requirement that with sound reasons, its conduct is likely to be more the reason be communicated to the person most directly cautious, careful, and correct. affected by the government’s action. Professor Gellhorn put the argument well: Where there are numerous applicants for jobs, it is likely ‘In my judgment, there is no basic division of interest that few will choose to demand reasons for not being between the citizenry on the one hand and officialdom on hired. But, if the demand for reasons is exceptionally the other. Both should be interested equally in the quest great, summary procedures can be devised that would for procedural safeguards. I echo the late Justice Jackson provide fair and adequate information to all persons. As in saying: ‘Let it not be overlooked that due process of long as the government has a good reason for its actions it law is not for the sole benefit of an accused. It is the best need not fear disclosure. It is only where the government insurance for the Government itself against those blunders acts improperly that procedural due process is truly which leave lasting stains on a system of burdensome. And that is precisely when it is most justice’—blunders which are **2717 likely to occur when necessary. reasons need not be given and when the reasonableness and indeed legality of judgments need not be subjected to It might also be argued that to require a hearing and a any appraisal other than one’s own. . . .’ Summary of statement of reasons is to require a useless act, because a Colloquy on Administrative Law, 6 J. Soc. Pub. Teachers government bent on denying employment to one or more of Law, 70, 73 (1961). persons will do so regardless of the procedural hurdles that are placed in its path. Perhaps this is so, but a requirement of procedural regularity at least renders Accordingly, I dissent. arbitrary action more difficult. Moreover, proper procedures will surely eliminate some of the arbitrariness that results, not from malice, but from innocent error. All Citations ‘Experience teaches . . . that the affording of procedural safeguards, which by their nature serve to illuminate the 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548, 1 IER underlying facts, in itself often operates to prevent Cases 23 erroneous decisions on the merits *592 from occurring.’ Silver v. New York Stock Exchange, 373 U.S. 341, 366,

* The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337, 26 S.Ct. 282, 287, 50 L.Ed. 499.

1 The respondent had no contract of employment. Rather, his formal notice of appointment was the equivalent of an employment contract. The notice of his appointment provided that: ‘David F. Roth is hereby appointed to the faculty of the Wisconsin State University Position number 0262. (Location:) Oshkosh as (Rank:) Assistant Professor of (Department:) Political Science this (Date:) first day of (Month:) September (Year:) 1968.’ The notice went on to specify that the respondent’s ‘appointment basis’ was for the ‘academic year.’ And it provided that ‘(r)egulations governing tenure are in accord with Chapter 37.31, Wisconsin Statutes. The employment of any staff member for an academic year shall not be for a term beyond June 30th of the fiscal year in which the appointment is made.’ See n. 2, infra.

2 Wis.Stat. s 37.31(1) (1967), in force at the time, provided in pertinent part that: ‘All teachers in any state university shall initially be employed on probation. The employment shall be permanent, during efficiency and good behavior after 4 years of continuous service in the state university system as a teacher.’

3 Wis.Stat. s 37.31(1) further provided that: ‘No teacher who has become permanently employed as herein provided shall be discharged except for cause upon written charges. Within 30 days of receiving the written charges, such teacher may appeal the discharge by a written notice to the president of the board of regents of state colleges. The board shall cause the charges to be investigated, hear the case and provide such teacher with a written statement as to their decision.’

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4 The Rules, promulgated by the Board of Regents in 1967, provide: ‘RULE I—February first is established throughout the State University system as the deadline for written notification of non-tenured faculty concerning retention or non-retention for the ensuing year. The President of each University shall give such notice each year on or before this date.’ ‘RULE II—During the time a faculty member is on probation, no reason for non-retention need be given. No review or appeal is provided in such case. ‘RULE III—‘Dismissal’ as opposed to ‘Non-Retention’ means termination of responsibilities during an academic year. When a non-tenure faculty member is dismissed he has no right under Wisconsin Statutes to a review of his case or to appeal. The President may, however, in his discretion, grant a request for a review within the institution, either by a faculty committee or by the President, or both. Any such review would be informal in nature and would be advisory only. ‘RULE IV—When a non-tenure faculty member is dismissed he may request a review by or hearing before the Board of Regents. Each such request will be considered separately and the Board will, in its discretion, grant or deny same in each individual case.’

5 While the respondent alleged that he was not rehired because of his exercise of free speech, the petitioners insisted that the non-retention decision was based on other, constitutionally valid grounds. The District Court came to no conclusion whatever regarding the true reason for the University President’s decision. ‘In the present case,’ it stated, ‘it appears that a determination as to the actual bases of (the) decision must await amplification of the facts at trial. . . . Summary judgment is inappropriate.’ 310 F.Supp. 972, 982.

6 The courts that have had to decide whether a nontenured public employee has a right to a statement of reasons or a hearing upon nonrenewal of his contract have come to varying conclusions. Some have held that neither procedural safeguard is required. E.g., Orr v. Trinter, 444 F.2d 128 (CA6); Jones v. Hopper, 410 F.2d 1323 (CA10); Freeman v. Gould Special School District, 405 F.2d 1153 (CA8). At least one court has held that there is a right to a statement of reasons but not a hearing. Drown v. Portsmouth School District, 435 F.2d 1182 (CA1). And another has held that both requirements depend on whether the employee has an ‘expectancy’ of continued employment. Ferguson v. Thomas, 430 F.2d 852, 856 (CA5).

7 Before a person is deprived of a protected interest, he must be afforded opportunity for some kind of a hearing, ‘except for extraordinary situations where some valid governmental interest is at stake that justifies postponing the hearing until after the event.’ Boddie v. Connecticut, 401 U.S. 371, 379, 91 S.Ct. 780, 786, 28 L.Ed.2d 113. ‘While ‘(m)any controversies have raged about . . . the Due Process Clause,’ . . . it is fundamental that except in emergency situations (and this is not one) due process requires that when a State seeks to terminate (a protected) interest . . ., it must afford ‘notice and opportunity for hearing appropriate to the nature of the case’ before the termination becomes effective.’ Bell v. Burson, 402 U.S. 535, 542, 91 S.Ct. 1586, 1591, 29 L.Ed.2d 90. For the rare and extraordinary situations in which we have held that deprivation of a protected interest need not be preceded by opportunity for some kind of hearing, see, e.g., Central Union Trust Co. v. Garvan, 254 U.S. 554, 566, 41 S.Ct. 214, 215, 65 L.Ed. 403; Phillips v. Commissioner of Internal Revenue, 283 U.S. 589, 597, 51 S.Ct. 608, 611, 75 L.Ed. 1289; Ewing v. Mytinger & Casselberry, Inc., 339 U.S. 594, 70 S.Ct. 870, 94 L.Ed. 1088.

8 ‘The formality and procedural requisites for the hearing can vary, depending upon the importance of the interests involved and the nature of the subsequent proceedings.’ Boddie v. Connecticut, supra, 401 U.S., at 378, 91 S.Ct., at 786. See, e.g., Goldberg v. Kelly, 397 U.S. 254, 263, 90 S.Ct. 1011, 1018, 25 L.Ed.2d 287; Hannah v. Larche, 363 U.S. 420, 80 S.Ct. 1502, 4 L.Ed.2d 1307. The constitutional requirement of opportunity for some form of hearing before deprivation of a protected interest, of course, does not depend upon such a narrow balancing process. See n. 7, supra.

9 In a leading case decided many years ago, the Court of Appeals for the District of Columbia Circuit held that public employment in general was a ‘privilege,’ not a ‘right,’ and that procedural due process guarantees therefore were inapplicable. Bailey v. Richardson, 86 U.S.App.D.C. 248, 182 F.2d 46, aff’d by an equally divided Court, 341 U.S. 918, 71 S.Ct. 669, 95 L.Ed. 1352. The basis of this holding has been thoroughly undermined in the ensuing years. For, as Mr. Justice Blackmun wrote for the Court only last year, ‘this Court now has rejected the concept that constitutional rights turn upon whether a governmental benefit is characterized as a ‘right’ or as a ‘privilege.“ Graham v. Richardson, 403 U.S. 365, 374, 91 S.Ct. 1848, 1853, 29 L.Ed.2d 534. See, e.g., Morrissey v. Brewer, supra, 408 U.S., at 482, 92 S.Ct., at 2600; Bell v. Burson, supra, 402 U.S., at 539, 91 S.Ct., at 1589; Goldberg v. Kelly, supra, 397 U.S., at 262, 90 S.Ct., at 1017; Shapiro v. Thompson, 394 U.S. 618, 627 n. 6, 89 S.Ct. 1322, 1329, 22 L.Ed.2d 600; Pickering v. Board of Education, 391 U.S. 563, 568, 88 S.Ct. 1731, 1734, 20 L.Ed.2d 811; Sherbert v. Verner, 374 U.S. 398, 404, 83 S.Ct. 1790, 1794, 10 L.Ed.2d 965.

10 See, e.g., Connell v. Higginbotham, 403 U.S. 207, 208, 91 S.Ct. 1772, 1773, 29 L.Ed.2d 418; Bell v. Burson, supra; Goldberg v. Kelly, supra. © 2015 Thomson Reuters. No claim to original U.S. Government Works. 12 Board of Regents of State Colleges v. Roth, 408 U.S. 564 (1972) 92 S.Ct. 2701, 33 L.Ed.2d 548, 1 IER Cases 23

11 ‘Although the Court has not assumed to define ‘liberty’ (in the Fifth Amendment’s Due Process Clause) with any great precision, that term is not confined to mere freedom from bodily restraint.’ Bolling v. Sharpe, 347 U.S. 497, 499, 74 S.Ct. 693, 694, 98 L.Ed. 884. See, e.g., Stanley v. Illinois, 405 U.S. 645, 92 S.Ct. 1208, 31 L.Ed.2d 551.

12 The purpose of such notice and hearing is to provide the person an opportunity to clear his name. Once a person has cleared his name at a hearing, his employer, of course, may remain free to deny him future employment for other reasons.

13 The District Court made an assumption ‘that non-retention by one university or college creates concrete and practical difficulties for a professor in his subsequent academic career.’ 310 F.Supp., at 979. And the Court of Appeals based its affirmance of the summary judgment largely on the premise that ‘the substantial adverse effect non-retention is likely to have upon the career interests of an individual professor’ amounts to a limitation on future employment opportunities sufficient invoke procedural due process guarantees. 446 F.2d, at 809. But even assuming, arguendo, that such a ‘substantial adverse effect’ under these circumstances would constitute a state-imposed restriction on liberty, the record contains no support for these assumptions. There is no suggestion of how nonretention might affect the respondent’s future employment prospects. Mere proof, for example, that his record of nonretention in one job, taken alone, might make him somewhat less attractive to some other employers would hardly establish the kind of foreclosure of opportunities amounting to a deprivation of ‘liberty.’ Cf. Schware v. Board of Bar Examiners, 353 U.S. 232, 77 S.Ct. 752, 1 L.Ed.2d 796.

14 See n. 5, supra. The Court of Appeals, nonetheless, argued that opportunity for a hearing and a statement of reasons were required here ‘as a prophylactic against non-retention decisions improperly motivated by exercise of protected rights.’ 446 F.2d, at 810 (emphasis supplied). While the Court of Appeals recognized the lack of a finding that the respondent’s nonretention was based on exercise of the right of free speech, it felt that the respondent’s interest in liberty was sufficiently implicated here because the decision not to rehire him was made ‘with a background of controversy and unwelcome expressions of opinion.’ Ibid. When a State would directly impinge upon interests in free speech or free press, this Court has on occasion held that opportunity for a fair adversary hearing must precede the action, whether or not the speech or press interest is clearly protected under substantive First Amendment standards. Thus, we have required fair notice and opportunity for an adversary hearing before an injunction is issued against the holding of rallies and public meetings. Carroll v. President and Com’rs of Princess Anne, 393 U.S. 175, 89 S.Ct. 347, 21 L.Ed.2d 325. Similarly, we have indicated the necessity of procedural safeguards before a State makes a large-scale seizure of a person’s allegedly obscene books, magazines, and so forth. A Quantity of Books v. Kansas, 378 U.S. 205, 84 S.Ct. 1723, 12 L.Ed.2d 809; Marcus v. Search Warrant, 367 U.S. 717, 81 S.Ct. 1708, 6 L.Ed.2d 1127. See Freedman v. Maryland, 380 U.S. 51, 85 S.Ct. 734, 13 L.Ed.2d 649; Bantam Books v. Sullivan, 372 U.S. 58, 83 S.Ct. 631, 9 L.Ed.2d 584. See generally Monaghan, First Amendment ‘Due Process’, 83 Harv.L.Rev. 518. In the respondent’s case, however, the State has not directly impinged upon interests in free speech or free press in any way comparable to a seizure of books or an injunction against meetings. Whatever may be a teacher’s rights of free speech, the interest in holding a teaching job at a state university, simpliciter, is not itself a free speech interest.

15 Goldsmith v. United States Board of Tax Appeals, 270 U.S. 117, 46 S.Ct. 215, 70 L.Ed. 494, is a related case. There, the petitioner was a lawyer who had been refused admission to practice before the Board of Tax Appeals. The Board had ‘published rules for admission of persons entitled to practice before it, by which attorneys at law admitted to courts of the United States and the states, and the District of Columbia, as well as certified public accountants duly qualified under the law of any state or the District are made eligible. . . . The rules further provide that the Board may in its discretion deny admission to any applicant, or suspend or disbar any person after admission.’ Id., at 119, 46 S.Ct., at 216. The Board denied admission to the petitioner under its discretionary power, without a prior hearing and a statement of the reasons for the denial. Although this Court disposed of the case on other grounds, it stated, in an opinion by Mr. Chief Justice Taft, that the existence of the Board’s eligibility rules gave the petitioner an interest and claim to practice before the Board to which procedural due process requirements applied. It said that the Board’s discretionary power ‘must be construed to mean the exercise of a discretion to be exercised after fair investigation, with such a notice, hearing and opportunity to answer for the applicant as would constitute due process.’ Id., at 123, 46 S.Ct., at 217.

16 To be sure, the respondent does suggest that most teachers hired on a year-to-year basis by Wisconsin State University-Oshkosh are, in fact, rehired. But the District Court has not found that there is anything approaching a ‘common law’ of re-employment, see Perry v. Sindermann, 408 U.S. 593, at 602, 92 S.Ct. 2694, at 2705, 33 L.Ed.2d 570, so strong as to require University officials to give the respondent a statement of reasons and a hearing on their decision not to rehire him.

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17 See, e.g., Report of Committee A on Academic Freedom and Tenure, Procedural Standards in the Renewal or Nonrenewal of Faculty Appointments, 56 AAUP Bulletin No. 1, p. 21 (Spring 1970).

1 Section 1983 reads as follows: ‘Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.’

1a Such a procedure would not be contrary to the well-settled rule that s 1983 actions do not require exhaustion of other remedies. See, e.g., Wilwording v. Swenson, 404 U.S. 249, 92 S.Ct. 407, 30 L.Ed.2d 419 (1971); Damico v. California, 389 U.S. 416, 88 S.Ct. 526, 19 L.Ed.2d 647 (1967); McNeese v. Board of Education, 373 U.S. 668, 83 S.Ct. 1433, 10 L.Ed.2d 622 (1963); Monroe v. Pape, 365 U.S. 167, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961). One of the allegations in the complaint was that respondent was denied any effective sate remedy, and the District Court’s staying its hand thus furthered rather than thwarted the purposes of s 1983.

1 Respondent has also alleged that the true reason for the decision not to rehire him was to punish him for certain statements critical of the University. As the Court points out, this issue is not before us the present time.

2 See, e.g., Griggs v. Duke Power Co., 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971); 42 U.S.C. s 2000e.

3 Cf. Note, Procedural ‘Due Process’ in Union Disciplinary Proceedings, 57 Yale L.J. 1302 (1948).

4 Goldsmith v. United States Board of Tax Appeals, 270 U.S. 117, 46 S.Ct. 215, 70 L.Ed. 494 (1926).

5 Slochower v. Board of Higher Education, 350 U.S. 551, 76 S.Ct. 637, 100 L.Ed. 692 (1956).

6 Willner v. Committee on Character, 373 U.S. 96, 83 S.Ct. 1175, 10 L.Ed.2d 224 (1963).

7 Connell v. Higginbotham, 403 U.S. 207, 91 S.Ct. 1772, 29 L.Ed.2d 418 (1971).

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 14 Connecticut Bd. of Pardons v. Dumschat, 452 U.S. 458 (1981) 101 S.Ct. 2460, 69 L.Ed.2d 158

Involved in General KeyCite Yellow Flag - Negative Treatment Distinguished by Tellier v. Fields, 2nd Cir.(N.Y.), November 1, State-created right can, in some circumstances, 2000 beget yet other rights to procedures essential to 101 S.Ct. 2460 realization of the parent right; however, Supreme Court of the United States underlying right must have come into existence before it can trigger due process protection. CONNECTICUT BOARD OF PARDONS et al., U.S.C.A.Const. Amend. 14. Petitioners, v. David DUMSCHAT et al. 58 Cases that cite this headnote

No. 79-1997. | Argued Feb. 24, 1981. | Decided June 17, 1981.

[2] Pardon and Parole Life inmate brought suit against Connecticut Board of Proceedings to Obtain Clemency Pardons seeking declaratory judgment that Board’s failure to provide him with written statement of reasons for Unlike probation, pardon and commutation denying commutation violated his rights under due decisions have not traditionally been business of process clause of the Fourteenth Amendment. The United courts; as such, they are rarely, if ever, States District Court for the District of Connecticut, 432 appropriate subjects for judicial review. F.Supp. 1310 and 462 F.Supp. 509, entered declaratory judgment requiring statement of reasons by Board in case of denial of application for pardon by prisoners serving 75 Cases that cite this headnote life terms, and appeal was taken. The Court of Appeals for the Second Circuit, 593 F.2d 165, affirmed, and petition for writ of certiorari was filed. The United States Supreme Court, 442 U.S. 926, 99 S.Ct. 2854, 61 L.Ed.2d [3] 294, vacated and remanded for further proceedings. On Constitutional Law remand, the Court of Appeals for the Second Circuit, 618 Pardon and Clemency F.2d 216, reaffirmed its original decision, and petition for Pardon and Parole writ of certiorari was filed. The Supreme Court, Chief Commutation of Sentence Justice Burger, held that power vested in Connecticut Board of Pardons to commute sentences conferred no Life inmate had no constitutional or inherent rights on life inmates beyond right to seek commutation. right to commutation of his sentence and consistent practice of Connecticut Board of Reversed. Pardons of granting commutations to most life inmates was not sufficient to create protectible Justice Brennan concurred and filed opinion. liberty interest. C.G.S.A. § 18-26; U.S.C.A.Const. Amend. 14. Justice White concurred and filed opinion.

Justice Stevens dissented and filed opinion in which 337 Cases that cite this headnote Justice Marshall joined.

[4] Constitutional Law West Headnotes (5) Constitutional Rights in General

Constitutional entitlement cannot be created, as [1] Constitutional Law if by estoppel, merely because wholly and Rights, Interests, Benefits, or Privileges expressly discretionary state privilege has been

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Tab E-3 Connecticut Bd. of Pardons v. Dumschat, 452 U.S. 458 (1981) 101 S.Ct. 2460, 69 L.Ed.2d 158

granted generously in the past. necessary under the Due Process Clause.

Held: The power vested in the Connecticut Board of 44 Cases that cite this headnote Pardons to commute sentences conferred no rights on respondents beyond the right to seek commutation. Pp. 2463-2465.

[5] (a) Far from supporting an “entitlement,” Greenholtz, Constitutional Law which rejected the claim that a constitutional entitlement Life in General to release from a valid prison sentence exists Pardon and Parole independently of a right explicitly conferred by the State, Commutation of Sentence compels the conclusion that an inmate has “no constitutional or inherent right” to commutation of his life Connecticut commutation statute, having no sentence. In terms of the Due Process Clause, a definitions, no criteria, and no mandated Connecticut felon’s expectation that a lawfully imposed “shalls,” created no duty or constitutional right sentence will be commuted or that he will be pardoned is in life inmates beyond right to seek no *459 more substantial than an inmate’s expectation, commutation. C.G.S.A. § 18-26. for example, that he will not be transferred to another prison; it is simply a unilateral hope. A constitutional 99 Cases that cite this headnote entitlement cannot “be created-as if by estoppel-merely because a wholly and expressly discretionary state privilege has been granted generally in the past.” Leis v. Flynt, 439 U.S. 438, 444, n.5, 99 S.Ct. 698, 701, 702, 58 L.Ed.2d 717. No matter how frequently a particular form of clemency has been granted, the statistical probabilities generate no constitutional protections. Pp. 2463-2464. **2461 *458 Syllabus* (b) In contrast to the unique Nebraska parole statute After several applications by respondent Dumschat, a life which was applied in Greenholtz and which created a inmate in a Connecticut state prison, for commutation of right to parole **2462 unless certain findings were made, his life sentence had been rejected by the Connecticut the mere existence of a power to commute under the Board of Pardons without explanation, he sued the Board Connecticut commutation statute-which imposes no limit in Federal District Court under 42 U.S.C. § 1983, seeking on what procedure is to be followed, what evidence may a declaratory judgment that the Board’s failure to provide be considered, or what criteria are to be applied by the him with a written statement of reasons for denying Board of Pardons-and the granting of commutation to commutation violated his rights under the Due Process many inmates, create no right or “entitlement.” P. 2465. Clause of the Fourteenth Amendment. Relying chiefly on the fact that the Board had granted approximately 2 Cir., 618 F.2d 216, reversed. three-fourths of all applications for commutation of life sentences, the District Court, after allowing other inmates (also respondents) to intervene and certifying the suit as a Attorneys and Law Firms class action, held that all prisoners serving life sentences in Connecticut state prisons have a constitutionally Stephen J. O’Neill, Hartford, Conn., for petitioners. protected “entitlement” to a statement of reasons why commutation is not granted. The Court of Appeals Stephen Wizner, New Haven, Conn., for respondents. affirmed, and then, after its judgment had been vacated by this Court and the case had been remanded for Opinion reconsideration in light of Greenholtz v. Nebraska Penal Chief Justice BURGER delivered the opinion of the Inmates, 442 U.S. 1, 99 S.Ct. 2100, 60 L.Ed.2d 668, held Court. that the overwhelming likelihood that Connecticut life inmates will be pardoned and released before they complete their minimum terms gave them a The question presented is whether the fact that the constitutionally protected liberty interest in pardon Connecticut Board of Pardons has granted approximately proceedings, and that under Greenholtz a statement of three-fourths of the applications for commutation of life reasons for denying commutation was constitutionally © 2015 Thomson Reuters. No claim to original U.S. Government Works. 2 Connecticut Bd. of Pardons v. Dumschat, 452 U.S. 458 (1981) 101 S.Ct. 2460, 69 L.Ed.2d 158

sentences creates a constitutional “liberty interest” or motions, the District Court allowed other life inmates to “entitlement” in life-term inmates so as to require that intervene, certified the suit as a class action, and heard Board to explain its reasons for denial of an application additional evidence.5 *462 The court held that all for commutation. prisoners serving life sentences in Connecticut state prisons have a constitutionally protected expectancy of commutation and therefore that they have a right to a statement of reasons when commutation is not granted. The Court of Appeals affirmed. 593 F.2d 165 (CA2 *460 I 1979). A petition for a writ of certiorari was filed, and we vacated and remanded for reconsideration in light of In 1964, respondent Dumschat was sentenced to life Greenholtz v. Nebraska Penal Inmates, 442 U.S. 1, 99 imprisonment for murder. Under state law, he was not S.Ct. 2100, 60 L.Ed.2d 668 (1979). 442 U.S. 926, 99 eligible for parole until December 1983.1 The Connecticut S.Ct. 2854, 61 L.Ed.2d 294 (1979). Board of Pardons is empowered to commute the sentences of life inmates by reducing the minimum prison term,2 On remand, the Court of Appeals reaffirmed its original and such a commutation accelerates eligibility for parole.3 decision, 618 F.2d 216 (CA2 1980), stating: The authority of the Board of Pardons derives from “In marked contrast [to the Nebraska statute considered in Conn.Gen.Stat. § 18-26 (1981), which provides in Greenholtz], Connecticut’s pardons statute contains pertinent part: neither a presumption in favor of pardon nor a list of factors to be considered by the Board of Pardons. Instead, “(a) Jurisdiction over the granting of, and the authority to the statute grants the board unfettered discretion in the grant, commutations of punishment or releases, exercise of its power. The statute offers only the ‘mere conditioned or absolute, in the case of any person hope’ of pardon; it does not create a legitimate convicted of any offense against the state and expectation of freedom and therefore does not implicate commutations from the penalty of death shall be vested in due process.” Id., at 219 (citation omitted). the board of pardons. “(b) Said board shall have authority to grant pardons, conditioned or absolute, for any offense against the state The Court of Appeals also noted that the District Court’s at any time after the imposition and before or after the holding that the mere possibility of a pardon creates a service of any sentence.” constitutionally cognizable liberty interest or entitlement was “no longer tenable” in light of Greenholtz. 618 F.2d, at 221; see 442 U.S., at 8-11, 99 S.Ct. at 2104-2105. *461 On several occasions prior to the filing of this suit in However, the Court of Appeals then proceeded to February 1976, Dumschat applied for a commutation of conclude that “[t]he overwhelming likelihood that his sentence. The Board rejected each application without Connecticut life inmates will be pardoned and released explanation. Dumschat then sued the Board under 42 before they complete their minimum terms gives them a U.S.C. § 1983, seeking a declaratory judgment that the constitutionally protected liberty interest in pardon Board’s failure to provide him with a written statement of proceedings.” *463 618 F.2d, at 220. The Court of reasons for denying commutation violated his rights Appeals also understood our opinion in Greenholtz to guaranteed by the Due Process Clause of the Fourteenth hold that under the Due Process Clause, a brief statement Amendment. of reasons is “not only constitutionally sufficient but also constitutionally necessary.”6 618 F.2d, at 222. On that After hearing testimony from officials of the Board of reading of Greenholtz, the case was remanded to the Pardons and the Board of Parole, the District Court District Court for a determination of “how many years life concluded (a) that Dumschat had a constitutionally inmates must serve before the probability of pardon protected liberty entitlement in the pardon process, and becomes so significant as to give rise to a protected (b) that his due process rights had been violated when the liberty interest.”7 Board of Pardons failed to give “a written statement of reasons and facts relied on” in denying commutation. **2463 432 F.Supp. 1310, 1315 (1977). The court relied chiefly on a showing that “at least 75 percent of all lifers received some favorable action from the pardon board **2464 II prior to completing their minimum sentences” and that virtually all of the pardoned inmates were promptly paroled.4 Id., at 1314. In response to postjudgment © 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 Connecticut Bd. of Pardons v. Dumschat, 452 U.S. 458 (1981) 101 S.Ct. 2460, 69 L.Ed.2d 158

A *465 Respondents nevertheless contend that the Board’s [1] A state-created right can, in some circumstances, beget consistent practice of granting commutations to most life yet other rights to procedures essential to the realization inmates is sufficient to create a protectible liberty interest. of the parent right. See Meachum v. Fano, 427 U.S. 215, They argue: 226, 96 S.Ct. 2532, 2539, 49 L.Ed.2d 451 (1976); Wolff v. “[T]he State Board has created an unwritten common law McDonnell, 418 U.S. 539, 557, 94 S.Ct. 2963, 2975, 41 of sentence commutation and parole acceleration for L.Ed.2d 935 (1974). Plainly, however, the underlying Connecticut life inmates.... In effect, there is an unspoken right must have come into existence before it can trigger understanding between the State Board and inmates. The due process protection. See, e. g., Leis v. Flynt, 439 U.S. terms are simple: If the inmate cooperates with the State, 438, 442-443, 99 S.Ct. 698, 701-702, 58 L.Ed.2d 717 the State will exercise its parole power on the inmate’s (1979). behalf. Both the State and the inmate recognize those terms. Each expects the other to abide by them.” Brief for [2] In Greenholtz, far from spelling out any judicially Respondents 17-18. divined “entitlement,” we did no more than apply the unique Nebraska statute. We rejected the claim that a constitutional entitlement to release from a valid prison [4] This case does not involve parole, and respondents’ sentence exists independently *464 of a right explicitly argument wholly misconceives the nature of a decision by conferred by the State. Our language in Greenholtz leaves a state to commute the sentence of a convicted felon. The no room for doubt: petition in each case is nothing more **2465 than an “There is no constitutional or inherent right of a appeal for clemency. See Schick v. Reed, 419 U.S. 256, convicted person to be conditionally released before the 260-266, 95 S.Ct. 379, 382, 385, 42 L.Ed.2d 430 (1974). expiration of a valid sentence. The natural desire of an In terms of the Due Process Clause, a Connecticut felon’s individual to be released is indistinguishable from the expectation that a lawfully imposed sentence will be initial resistance to being confined. But the conviction, commuted or that he will be pardoned is no more with all its procedural safeguards, has extinguished that substantial than an inmate’s expectation, for example, that liberty right: ‘[G]iven a valid conviction, the criminal he will not be transferred to another prison;10 it is simply a defendant has been constitutionally deprived of his unilateral hope. Greenholtz, supra, at 11, 99 S.Ct., at liberty.’ ” 442 U.S., at 7, 99 S.Ct., at 2103, (emphasis 2106, seeLeis v. Flynt, 439 U.S., at 443-444, 99 S.Ct., at supplied; citation omitted). 701-702. A constitutional entitlement cannot “be created-as if by estoppel-merely because a wholly andexpressly discretionary state privilege has been Greenholtz pointedly distinguished parole revocation and granted generously in the past.” Id., at 444, n. 5, 99 S.Ct., probation revocation cases,8 noting that there is a at 701-702, n. 5. No matter how frequently a particular “critical” difference between denial of a prisoner’s form of clemency has been granted, the statistical request for initial release on parole and revocation of a probabilities standing alone generate no constitutional parolee’s conditional liberty. Id., at 9-11, 99 S.Ct. at protections; a contrary conclusion would trivialize the 2104-2106, quoting, inter alia, Friendly, “Some Kind of Constitution. The ground for a constitutional claim, if Hearing,” 123 U.Pa.L.Rev. 1267, 1296 (1975). Unlike any, must be found in statutes or other rules defining the probation, pardon and commutation decisions have not obligations of the authority charged with exercising traditionally been the business of courts; as such, they are clemency. rarely, if ever, appropriate subjects for judicial review.9 Cf. Meachum v. Fano, supra, at 225, 96 S.Ct., at 2538. [3] A decision whether to commute a long-term sentence generally depends not simply on objective factfinding, but *466 B also on purely subjective evaluations and on predictions of future behavior by those entrusted with the decision. A The Court of Appeals correctly recognized that commutation decision therefore shares some of the Connecticut has conferred “unfettered discretion” on its characteristics of a decision whether to grant parole. See Board of Pardons, but-paradoxically-then proceeded to Greenholtz, 442 U.S., at 9-10, 99 S.Ct., at 2104-2105. Far fetter the Board with a halter of constitutional from supporting an “entitlement,” Greenholtz therefore “entitlement.” The statute imposes no limit on what compels the conclusion that an inmate has “no procedure is to be followed, what evidence may be constitutional or inherent right” to commutation of his considered, or what criteria are to be applied by the sentence. Board. Respondents challenge the Board’s procedure © 2015 Thomson Reuters. No claim to original U.S. Government Works. 4 Connecticut Bd. of Pardons v. Dumschat, 452 U.S. 458 (1981) 101 S.Ct. 2460, 69 L.Ed.2d 158

precisely because of “the absence of any apparent reference to statute, **2466 regulation, administrative standards.” Brief for Respondents 28. We agree that there practice, contractual arrangement or other mutual are no explicit standards by way of statute, regulation, or understanding-that particularized standards or criteria otherwise. guide the State’s decisionmakers. See Leis v. Flynt, 439 U.S. 438, 442, 99 S.Ct. 698, 701, 58 L.Ed.2d 717 (1979); [5] This contrasts dramatically with the Nebraska statutory Perry v. Sindermann, 408 U.S. 593, 601, 92 S.Ct. 2694, procedures in Greenholtz, which expressly mandated that 2699, 33 L.Ed.2d 570 (1972); Board of Regents v. Roth, the Nebraska Board of Parole “shall” order the inmate’s 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548 release “unless” it decided that one of four specified (1972). Thestructure of the State’s decisionmaking reasons for denial was applicable. 442 U.S., at 11, 99 process is thus as significant as the likely result of that S.Ct., at 2106. The Connecticut commutation statute, process. Respondents have not shown that the Board is having no definitions, no criteria, and no mandated required to base its decisions on objective and defined “shalls,” creates no analogous duty or constitutional criteria. As inMeachum v. Fano, 427 U.S. 215, 228, 96 entitlement. S.Ct. 2532, 2540, 49 L.Ed.2d 451 (1976), the decisionmaker can deny the requested relief for any It is clear that the requirement for articulating reasons for constitutionally permissible reason or for no reason at all. denial of parole in Greenholtz derived from unique Accordingly, I agree that respondents have no protectible mandates of the Nebraska statutes. Thus, although we liberty interest in a pardon. noted that under the terms of the Nebraska statute, the inmates’ expectancy of parole release “is entitled to some measure of constitutional protection,” we emphasized that “this statute has unique structure and language and thus Justice WHITE, concurring. whether any other state statute provides a protectible I join the Court’s opinion and write separately only to entitlement must be decided on a case-by-case basis.” Id., observe that neither Wolff v. McDonnell, 418 U.S. 539, 94 at 12, 99 S.Ct., at 2106. S.Ct. 2963, 41 L.Ed.2d 935 (1974), nor Meachum v. Fano, 427 U.S. 215, 96 S.Ct. 2532, 49 L.Ed.2d 451 (1976), suggested that state law is the only source of a Moreover, from the standpoint of a reasons requirement, prisoner’s liberty worthy of *468 federal constitutional there is a vast difference between a denial of protection. The opinion in Wolff v. McDonnell pointed out parole-particularly on the facts of Greenholtz-and a state’s that although a prisoner’s “rights may be diminished by refusal to commute a lawful sentence. When Nebraska the needs and exigencies of the institutional environment, statutes directed that inmates who are eligible for parole [he] is not wholly stripped of constitutional protections “shall” be released “unless” *467 a certain finding has when he is imprisoned for crime.... [He] may not be been made, the statutes created a right. By contrast, the deprived of life, liberty or property without due process of mere existence of a power to commute a lawfully law.” 418 U.S., at 555-556, 94 S.Ct., at 2974. The issue in imposed sentence, and the granting of commutations to the case was the deprivation of the right to good-time many petitioners, create no right or “entitlement.” A state credits, a right which was not guaranteed by the Federal cannot be required to explain its reasons for a decision Constitution but was a creation of state law. Wolff held when it is not required to act on prescribed grounds. that even such a liberty interest rooted in state law was entitled to constitutional protection. We hold that the power vested in the Connecticut Board of Pardons to commute sentences conferred no rights on Meachum v. Fano also pointed out that “the convicted respondents beyond the right to seek commutation. felon does not forfeit all constitutional protections by reason of his conviction and confinement in prison. He Reversed. retains a variety of important rights that the courts must be alert to protect.” 427 U.S., at 225, 96 S.Ct., at 2538. The Court went on to hold that a state prisoner has no federal constitutional right protecting him against administrative transfers to another state prison. Neither Justice BRENNAN, concurring. did state law purport to create a liberty interest entitled to protection under the Fourteenth Amendment. Of course, I join the Court’s opinion. Although respondents have Justice STEVENS was in dissent in that case; but even demonstrated a statistical likelihood of obtaining the relief there he recognized that the Court’s opinion first they request, that is not enough to create a protectible addressed whether the right asserted was one of the liberty interest. Rather, respondents must also show-by liberty interests retained by convicted felons. We decided © 2015 Thomson Reuters. No claim to original U.S. Government Works. 5 Connecticut Bd. of Pardons v. Dumschat, 452 U.S. 458 (1981) 101 S.Ct. 2460, 69 L.Ed.2d 158

that it was not; he thought that it was. But neither Wolff defendant’s liberty, he would thereafter retain no nor Meachum is fairly characterized as suggesting that all constitutional right to procedural safeguards against liberty interests entitled to constitutional protection must arbitrary action. The process of sentencing, parole release, be found in state law. parole revocation, and ultimate discharge could all be totally arbitrary. But no State asserts such total control over the convicted offender, and this Court has unequivocally held that the Constitution affords protection at different stages of the postconviction *471 process.4 The basic reason **2468 the constitutional Justice STEVENS, with whom Justice MARSHALL protection applies at these stages is that liberty itself joins, dissenting. survives to some extent and its deprivation is a continuous process rather than an isolated event. “Liberty from bodily restraint always have been recognized as the core of the liberty protected by the Due This case involves the State of Connecticut’s process for Process Clause from arbitrary governmental action.” determining when a relatively small group of serious Greenholtz v. Nebraska Penal Inmates, 442 U.S. 1, 18, 99 offenders will be released from custody. Routinely that S.Ct. 2100, 2109, 60 L.Ed.2d 668 (opinion of POWELL, process includes three determinations: the judge imposes J.). *469 The liberty that is worthy of constitutional a life sentence; the Board of Pardons in due course protection is not merely “a statutory creation of the State,” commutes that sentence; and finally the Board of Parole Wolff v. McDonnell, 418 U.S. 539, 558, 94 S.Ct. 2963, discharges the prisoner from custody. Each of these three 2975, 41 L.Ed.2d 935. Surely the Court stumbles when it decisions is a regular and critical component of the states that liberty “must be found in statutes or other rules decisionmaking process employed by the State of defining the obligations of the authority charged with Connecticut to determine the magnitude of its deprivation exercising clemency,” ante, at 2464, or when it implies of the prisoner’s liberty.5 In my opinion the Due Process that liberty has “its roots in state law,” Meachum v. Fano, Clause applies to each step and denies the State the power 427 U.S. 215, 226, 96 S.Ct. 2532, 2539, 49 L.Ed.2d 451. to act arbitrarily.6 To some of us, it is “self-evident” that individual liberty *472 Whether the refusal to provide the inmates with a has far deeper roots.1 **2467 Moreover, the deprivation statement of reasons is a procedural shortcoming of of liberty that follows conviction of a criminal offense is constitutional magnitude is, admittedly, fairly debatable. not total; the individual possesses a residuum of Judges often decide difficult and important cases without constitutionally protected liberty even while he is in the explaining their reasons, and I would not suggest that they legal custody of the State.2 The question this case presents thereby commit constitutional error. But the ordinary is not whether these respondents are mere slaves, wholly litigant has other substantial procedural safeguards against divested of any constitutionally protected interest in arbitrary decisionmaking in the courtroom. The prison liberty; rather, the question is whether the decision by the inmate has few such protections. Indeed, as in this case, Connecticut Board of Pardons refusing to commute their often he is not even afforded the protection of written life sentences constitutes a deprivation of liberty entitling standards to govern the exercise of the powers of the respondents to the protection of the Due Process Clause. Board of Pardons. His protection is somewhat analogous to that of the litigant in the earliest days of our *470 The facile answer to that question is that the common-law history. The judges then were guided by few distinction between a refusal to grant freedom on the one written laws, but developed a meaningful set of rules by hand and the imposition of a sentence or the revocation of the process of case-by-case adjudication. Their a parole on the other forms the basis for a determination explanations of why they decided cases as they did whether due process is implicated. Only the imposition of provided guideposts for future decisions and an assurance sentence or revocation of parole is obviously a to litigants that like cases were being decided in a similar deprivation of liberty. But in practice, as Justice way. Many of us believe that those statements of reasons POWELL has explained, that distinction is far less provided a better guarantee of justice than could possibly satisfactory than it first appears.3 In my judgment, it have been described in a code written in sufficient detail provides an insufficient answer to the question presented to be fit for Napoleon. by this case because the distinction does not correctly evaluate the character of the deprivation of liberty that As Justice MARSHALL has pointed out, “the obligation occurs when a person is convicted of a crime. to justify a decision publicly would provide the assurance, critical to the appearance of fairness, that the Board’s If the conviction were effective to terminate the © 2015 Thomson Reuters. No claim to original U.S. Government Works. 6 Connecticut Bd. of Pardons v. Dumschat, 452 U.S. 458 (1981) 101 S.Ct. 2460, 69 L.Ed.2d 158

decision is not capricious,” see Greenholtz, 442 U.S., at All Citations 40, 99 S.Ct., at 2121 (dissenting opinion). I therefore believe the Court of Appeals correctly concluded that in 452 U.S. 458, 101 S.Ct. 2460, 69 L.Ed.2d 158 this context a brief statement of reasons is an essential element of the process that is due these respondents.

Accordingly, I respectfully dissent.

* The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Lumber Co., 200 U.S. 321, 337, 26 S.Ct. 282, 287, 50 L.Ed.2d 499.

1 A Connecticut inmate serving a life sentence, imposed before 1971, that does not have a specified minimum term must serve a minimum of 25 years in prison, less a maximum of 5 years’ good-time credits, unless the Board of Pardons commutes the sentence. See Conn.Gen.Stat. § 54-125 (1981). Effective in 1971, the sentencing judge must specify a minimum term, which may be as low as 10 years or as high as 25 years. Conn.Gen.Stat. § 53a-35(c)(1) (1981).

2 The Board of Pardons also has the power to grant immediate release in the form of an absolute pardon, but according to the District Court, that power has not been employed in recent history. 432 F.Supp. 1310, 1313 (D.C. Conn. 1977). The District Court noted that by virtue of this statute, Connecticut “stands outside the traditional scheme of clemency through application to the state’s chief executive.” The Governor of Connecticut has only the power to grant temporary reprieves. Id., at 1312.

3 Parole determinations are made by the Board of Parole, a separate body. This case does not involve parole procedure; it involves only denials of commutations.

4 Of the inmates whose minimum sentences have been commuted by the Board of Pardons, the Board of Parole has paroled approximately 90% during the first year of eligibility, and all have been paroled within a few years. App. 33, 39. The Chairman of the Board of Parole testified that “no more than 10 or 15 per cent” of Connecticut’s life inmates serve their 20-year minimum terms. Id., at 31.

5 On the day that the District Court entered its declaratory judgment, the Board commuted Dumschat’s sentence to time served and granted him immediate release. The Board then moved to dismiss the suit as moot. The District Court denied the Board’s motion and permitted three other inmates to intervene. Those inmates were serving life terms for murder and had been denied commutation without statements of reasons. Two of them are still serving their sentences. According to respondents, there are approximately 35 persons in the certified class, which consists of all “inmates of the State of Connecticut who are currently serving sentences of life imprisonment [without court-imposed minimum terms] and who have been, or who will be, denied pardons during their current terms of incarceration” by the Board of Pardons. App. to Pet. for Cert. 21a; Brief for Petitioners ii; Tr. of Oral Arg. 36; see n. 1, supra.

6 In the cited passage of Greenholtz, we said: “The Nebraska [statutory] procedure affords an opportunity to be heard, and when parole is denied it informs the inmate in what respects he falls short of qualifying for parole; this affords the process that is due under these circumstances. The Constitution does not require more.” 442 U.S., at 16, 99 S.Ct., at 2108.

7 The Court of Appeals remarked that “[o]nly after this period has elapsed are lifers entitled to due process safeguards in the pardon process.” 618 F.2d, at 221. Because it believed that every life inmate who is denied a pardon is constitutionally entitled to a statement of reasons, the District Court did not make such a determination prior to the decision of the Court of Appeals that is now before us. Id., at 220-221; see App. to Pet. for Cert. 25a.

8 Gagnon v. Scarpelli, 411 U.S. 778, 93 S.Ct. 1756, 36 L.Ed.2d 656 (1973); Morrissey v. Brewer, 408 U.S. 471, 92 S.Ct. 2593, 33 L.Ed.2d 484 (1972).

9 Respondents have not raised any equal protection claim.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 7 Connecticut Bd. of Pardons v. Dumschat, 452 U.S. 458 (1981) 101 S.Ct. 2460, 69 L.Ed.2d 158

10 See Meachum v. Fano, 427 U.S. 215, 228, 96 S.Ct. 2532, 2540, 49 L.Ed.2d 451 (1976).

1 “It is self-evident that all individuals possess a liberty interest in being free from physical restraint.” Greenholtz v. Nebraska Penal Inmates, 442 U.S. 1, 23, 99 S.Ct. 2100, 2112, 60 L.Ed.2d 668 (MARSHALL, J., dissenting). “If man were a creature of the State, the analysis would be correct. But neither the Bill of Rights nor the laws of sovereign States create the liberty which the Due Process Clause protects. The relevant constitutional provisions are limitations on the power of the sovereign to infringe on the liberty of the citizen. The relevant state laws either create property rights, or they curtail the freedom of the citizen who must live in an ordered society. Of course, law is essential to the exercise and enjoyment of individual liberty in a complex society. But it is not the source of liberty, and surely not the exclusive source. “I had thought it self-evident that all men were endowed by their Creator with liberty as one of the cardinal unalienable rights. It is that basic freedom which the Due Process Clause protects, rather than the particular rights or privileges conferred by specific laws or regulations.” Meachum v. Fano, 427 U.S. 215, 230, 96 S.Ct. 2532, 2541, 49 L.Ed.2d 451 (STEVENS, J., dissenting).

2 See Meachum v. Fano, supra, at 231-233, 96 S.Ct., at 2541-2542.

3 “The Court today, however, concludes that parole release and parole revocation ‘are quite different,’ because ‘there is a ... difference between losing what one has and not getting what one wants,’ ante, at 9, 10 [99 S.Ct., at 2105]. I am unpersuaded that this difference, if indeed it exists at all, is as significant as the Court implies. Release on parole marks the first time when the severe restrictions imposed on a prisoner’s liberty by the prison regimen may be lifted, and his behavior in prison often is molded by his hope and expectation of securing parole at the earliest time permitted by law. Thus, the parole-release determination may be as important to the prisoner as some later, and generally unanticipated, parole-revocation decision. Moreover, whatever difference there may be in the subjective reactions of prisoners and parolees to release and revocation determinations is not dispositive. From the day that he is sentenced in a State with a parole system, a prisoner justifiably expects release on parole when he meets the standards of eligibility applicable within that system. This is true even if denial of release will be a less severe disappointment than revocation of parole once granted.” Greenholtz v. Nebraska Penal Inmates, supra, at 19-20, 99 S.Ct., at 2109-2110 (opinion of POWELL, J.).

4 Thus the Court has held that the Due Process Clause protects the prisoner at the sentencing stage. Mempa v. Rhay, 389 U.S. 128, 88 S.Ct. 254, 19 L.Ed.2d 336, in probation revocation proceedings, Gagnon v. Scarpelli, 411 U.S. 778, 93 S.Ct. 1756, 36 L.Ed.2d 656, and in parole revocation proceedings, Morrissey v. Brewer, 408 U.S. 471, 92 S.Ct. 2593, 33 L.Ed.2d 484. Moreover, the Constitution has been applied to other issues affecting prisoners. See, e. g., Bounds v. Smith, 430 U.S. 817, 97 S.Ct. 1491, 52 L.Ed.2d 72 (right to assistance in the filing of legal papers); Pell v. Procunier, 417 U.S. 817, 822, 94 S.Ct. 2800, 2804, 41 L.Ed.2d 495 (First Amendment rights); Cruz v. Beto, 405 U.S. 319, 92 S.Ct. 1079, 31 L.Ed.2d 263 (right to practice religious faith); Wilwording v. Swenson, 404 U.S. 249, 92 S.Ct. 407, 30 L.Ed.2d 418 (right to file petition for writ of habeas corpus); Cooper v. Pate, 378 U.S. 546, 84 S.Ct., 1733, 12 L.Ed.2d 1030 (right to purchase religious materials); Ex parte Hull, 312 U.S. 546, 61 S.Ct. 640, 85 L.Ed. 1034 (right to petition federal court for writ of habeas corpus). Cf.Weems v. United States, 217 U.S. 349, 30 S.Ct. 544, 54 L.Ed. 793 (sentence may violate Eighth Amendment).

5 As the Court recognizes, ante, at 2462, at least 75% of all life inmates receive some favorable action from the Board of Pardons. The Board of Parole paroles approximately 90% of these inmates during the first year after the Board of Pardons commutes their minimum sentences, and all are paroled within a few years. Ante, at 2462, n.4.

6 The fact that the petitioner agency is given the title “Board of Pardons” does not, of course, make its work the equivalent of the exercise by a chief executive of the occasional totally discretionary power to grant pardons in isolated cases. As the record in this case makes clear, the petitioner commutes sentences with roughly the same frequency that parole boards make parole release determinations.

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 8 Connecticut Bd. of Pardons v. Dumschat, 452 U.S. 458 (1981) 101 S.Ct. 2460, 69 L.Ed.2d 158

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 9 Mikeska v. City of Galveston, 451 F.3d 376 (2006)

[1] KeyCite Yellow Flag - Negative Treatment Water Law Called into Doubt by Lindquist v. City of Pasadena, Tex., Use of shores or banks S.D.Tex., September 10, 2009 451 F.3d 376 Texas Open Beaches Act (OBA) was passed in United States Court of Appeals, order to protect the public’s right for “free and Fifth Circuit. unrestricted” access to state-owned beaches. V.T.C.A., Natural Resources Code § 61.011(a). Wayne MIKESKA; Janice Mikeska; Mose Smith; Carol Smith, Plaintiffs–Appellants, v. 1 Cases that cite this headnote CITY OF GALVESTON; et al., Defendants, City of Galveston, Defendant–Appellee.

No. 04–41147. | June 6, 2006. [2] Water Law Use of shores or banks Synopsis Pursuant to the Texas Open Beaches Act Background: Beachfront homeowners filed § 1983 (OBA), to prevent destruction of the public action alleging that city’s refusal to permit them to repair beach from a landward shift of the mean low and maintain their homes or to access municipal utility tide line, the legal boundaries of the public and sewer services following tropical storm violated their easement change with their physical constitutional rights. The United States District Court for counterparts. V.T.C.A., Natural Resources Code the Southern District of Texas, Samuel B. Kent, J., 328 § 61.011 et seq. F.Supp.2d 671, granted city’s motion for summary judgment and dismissed the complaint. Homeowners 2 Cases that cite this headnote appealed.

Holdings: The Court of Appeals, Edith Brown Clement, [3] Zoning and Planning Circuit Judge, held that: De novo review [1] city failed to demonstrate rational relationship between Whether a particular zoning action has the its refusal to reconnect public utilities to houses and its requisite rational relationship to a legitimate legitimate interest in protecting open access to public government interest to satisfy substantive due beach, and process or equal protection requirements is a [2] question of law, the district court’s city posited no reason for its differential treatment of determination of which is reviewed de novo. homes. U.S.C.A. Const.Amend. 14.

Vacated and remanded. 11 Cases that cite this headnote Patrick E. Higginbotham, Circuit Judge, filed opinion concurring in part and dissenting in part.

Opinion, 419 F.3d 431, superseded. [4] Constitutional Law Reasonableness, rationality, and relationship to object

To succeed on a substantive due process claim, a West Headnotes (9) plaintiff must cross two hurdles: first, he must

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Tab E-4 Mikeska v. City of Galveston, 451 F.3d 376 (2006)

allege a deprivation of a constitutionally homeowners to reconnect their public utility protected right, and second, he must show that services following tropical storm but allegedly the governmental action was not rationally allowed reconnection of other similarly situated related to a legitimate governmental interest. homeowners’ utility services, posited no reason, U.S.C.A. Const.Amend. 14. let alone one supported by evidence, for its differential treatment of plaintiffs’ homes, as required to sustain its motion for summary 19 Cases that cite this headnote judgment on homeowners’ equal protection claim; city’s only proffered evidence consisted of a district court decision dismissing the similar complaint of other plaintiffs against city and [5] city’s motion in response to homeowners’ Constitutional Law injunction request, neither of which constituted a Particular issues and applications cognizable evidentiary source. U.S.C.A. Constitutional Law Const.Amend. 14. Carriers and Public Utilities Water Law Use of shores or banks 5 Cases that cite this headnote

City’s refusal to restore utility service to homes, after tropical storm had moved vegetation line landward of those homes, leaving them positioned on public beach as defined by Texas [8] Federal Courts law, had to be rationally related to governmental Briefs interest of protection of open access to public beach under Texas Open Beaches Act, in order The Court of Appeals generally does not address to comport with substantive due process. newly minted arguments at oral argument. U.S.C.A. Const.Amend. 14; V.T.C.A., Natural Resources Code § 61.011 et seq. Cases that cite this headnote 7 Cases that cite this headnote

[9] Zoning and Planning [6] Constitutional Law Scope of Review Selective enforcement Although the federal appellate courts are to To bring an equal protection claim for the denial resist becoming “super zoning boards,” zoning of zoning permits, plaintiff must show that the decisions are to be reviewed by federal courts by difference in treatment with others similarly the same constitutional standards that the Court situated was irrational. U.S.C.A. Const.Amend. of Appeals employs to review statutes enacted 14. by the state legislatures.

17 Cases that cite this headnote 1 Cases that cite this headnote

[7] Constitutional Law Public Services Attorneys and Law Firms Federal Civil Procedure Civil rights cases in general *377 J. David Breemer (argued), Meriem L. Hubbard, Pac. Legal Found., Sacramento, CA, Robert M. Moore, City, which refused to allow beachfront Robert M Moore & Associates, Galveston, TX, for

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2 Mikeska v. City of Galveston, 451 F.3d 376 (2006)

Plaintiffs–Appellants. General Land Office (“GLO”) to both “strictly and vigorously enforce the prohibition against encroachments George William Vie, III (argued), Mills Shirley, on and interferences with the public beach easement,” and Galveston, TX, for Defendant–Appellee. to “promulgate rules” to enforce the OBA’s public beach protections. § 61.011(c), (d). The OBA also requires local *378 Kenneth Charles Cross, Brian E. Berwick, Asst. municipalities to design plans to protect access to public Atty. Gens., Austin, TX, for Amicus Curiae. beaches that are within their respective jurisdictions. § 61.015(a). Appeal from the United States District Court for the Southern District of Texas. Wayne and Janice Mikeska and Mose and Carol Smith (collectively “appellants”) own separate beachfront rental Before HIGGINBOTHAM, BARKSDALE and properties in the Bermuda Beach subdivision of CLEMENT, Circuit Judges. Galveston, Texas. Until 1998, when Tropical Storm Opinion Frances hit the coast of Texas causing erosion of the vegetation line, these homes were landward of the public EDITH BROWN CLEMENT, Circuit Judge: beach. After Frances, the appellants’ homes were entirely seaward of the vegetation line—i.e., the homes were completely situated on the public beach as defined by The petition for panel rehearing is DENIED. The prior Texas law. Along with 105 other houses that were also opinion, Mikeska v. City of Galveston, 419 F.3d 431 (5th fully positioned on the public beach, the appellants’ Cir.2005), is WITHDRAWN, and the following opinion properties were placed on the GLO’s 100% List.1 The is substituted: 100% List was submitted to the Texas Attorney General to decide whether the listed homes should be removed. This appeal arises from the dismissal, on summary judgment, of the appellants’ suit against the City of *379 The City of Galveston (“City”) then condemned the Galveston for its refusal to grant permits for reconnection appellants’ homes, disabling a number of important of the appellants’ homes to utility services after Tropical utilities including electricity, sewer, and water services. Storm Frances. We vacate the lower court’s ruling and Although the Attorney General concluded that the remand for further proceedings. appellants’ homes did not require removal, his office notified the appellants by letter that it was deferring any questions as to the reconnection of utilities services to the City. The appellants submitted a number of requests for the reconnection of their electricity, water, and sewer I. lines. As to the sewer lines, the appellants requested [1] [2] connection to the City’s newly constructed line built The Texas Open Beaches Act (“OBA”) was passed through the Bermuda Beach subdivision. The appellants’ in order to protect the public’s right for “free and requests, along with those from five others whose homes unrestricted” access to state-owned beaches. TEX. NAT. also are located in Bermuda Beach,2 were rejected. RES.CODE ANN. § 61.011(a). The OBA safeguards the public’s common law easement for access to the “public The appellants subsequently filed suit in federal court beach”—defined by the OBA as consisting of the area seeking both a preliminary injunction to force the City to between the line of vegetation and the mean low tide line. allow the restoration of utility services and compensatory § 61.001(8). Due to shifts of the vegetation line and the damages. The district court granted the preliminary erosion of the shoreline, the natural demarcation lines are injunction request, and the appellants pursued their suit not static. To prevent destruction of the public beach from for money damages, averring that the City violated their a landward shift of the mean low tide line, the legal substantive due process and equal protection rights under boundaries of the public easement change with their the color of state law in violation of 42 U.S.C. § 1983.3 physical counterparts. Feinman v. State, 717 S.W.2d 106, 110–11 (Tex.App.Ct.1986). On the City’s motion for summary judgment, the district court dismissed the complaint. According to the district The OBA makes it “an offense against the public policy court, the City’s actions were rationally related to the of this state for any person to create, erect, or construct protection of open access to the public beach (substantive any obstruction, barrier, or restraint that will interfere ... due process) and to the City’s obligation to follow state [with the right of the public] to enter or to leave any law to “protect the public beaches from interference” public beach.” § 61.013(a). Texas empowers the Texas © 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 Mikeska v. City of Galveston, 451 F.3d 376 (2006)

(equal protection). The appellants filed this timely appeal. State law does provide the City with an important role in the protection of the public beach. However, the City’s obligations, under the relevant provisions of the Texas Administrative Code and the OBA, did not mandate that the City refuse to reconnect utilities to existing homes. II. Rather, the City’s obligations under state law were limited [3] to prohibiting “construction.” The Texas Administrative The appellants challenge two related rulings of the Code prohibits local governments from district court. They argue that neither the City’s persistent denial of the appellants’ requests for utility connections issu[ing] any beachfront nor its differential treatment of appellants’ homes construction certificate authorizing vis-a-vis similarly situated houses was rationally related construction landward of the public to any legitimate governmental interest. “Whether a beach that functionally supports or particular zoning action has the requisite rational depends on, or is otherwise related relationship to a legitimate government interest is a to, proposed or existing structures question of law,” FM Props. Operating Co. v. City of that encroach on the public beach, Austin, 93 F.3d 167, 172 n. 6 (5th Cir.1996), the district regardless of whether the court’s determination of which is reviewed de novo. Simi encroaching structure is on land Inv. Co. v. Harris County, 236 F.3d 240, 249 (5th that was previously landward of the Cir.2000). Each claim is discussed in turn. public beach.

31 TEX. ADMIN. CODE § 15.5(c)(2). The City emphasizes that this code section applies to any A. construction, even related to preexisting structures, to support its argument that it simply did not have the [4] authority to reconnect the appellants’s utilities. However, To succeed on a substantive due process claim, a plaintiff must cross two hurdles. First, he must allege a no “construction,” defined as “[c]ausing or carrying out deprivation of a constitutionally protected right. Simi, 236 any building, bulkheading, filling, clearing, excavation, or F.3d at 249. The district court held that the appellants substantial improvement to land or the size of any have a constitutionally protected right in their homes and structure,” was necessary to reconnect utilities to a in access to public utility services, a decision that the City preexisting home. 31 TEX. ADMIN. CODE § 15.2(18). does not seek to disturb on appeal. Thus, the precise issue Indeed, the City’s zoning code states that no beachfront here, and the second and last prong of the substantive due construction certificate is needed for “routine repairs, process test, is whether the governmental action was maintenance and upkeep of existing structures.” City of “rationally related to a legitimate governmental interest.” Galveston Zoning Ordinance § 29–90(a)(3). The City Id. (quoting FM Props., 93 F.3d at 174) (internal reconnected utility and sewer service to thirty homes that quotations omitted). were similarly identified as encroachments on the public beach without running afoul of any explicit state law [5] provisions. Therefore, the City had at least some authority The City and appellants dispute the scope of the City’s duties under state law. The City contends that it has a under state law for deciding the disposition of permit legitimate *380 governmental interest in following its requests. obligations under state law. Its actions were related to this interest, the City argues, in that the OBA is designed to Perhaps the City also had some authority to deny utility protect access to the public beach, the GLO has permits pursuant to its state law obligations to protect promulgated rules for the enforcement of the OBA, and public beaches. However, in exercising that discretionary the City and the GLO generally cooperate on matters authority, the City must still conform to its constitutional related to the protection of the public beach. TEX. NAT. obligations. Cf. Mickens–Thomas v. Vaughn, 321 F.3d RES.CODE ANN. § 61.013; 31 TEX. ADMIN. CODE § 374, 386 (3d Cir.2003) (noting, in a different context, that 15.3; see also Application for City of Galveston “[t]he possession of a discretionary component” fails to Beachfront Construction/Dune Protection Permit. The remove governmental action from “constitutional appellants challenge this assertion, contending that scrutiny”). Thus, the City actions must be rationally nothing in the OBA explicitly requires the denial of related to some other independent and legitimate interest. service permits in situations such as this. The rational basis test requires not only a legitimate state

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4 Mikeska v. City of Galveston, 451 F.3d 376 (2006)

interest, but also that the government action is rationally claims ... where the plaintiff alleges that she has been related to furthering that interest. There is indeed a intentionally treated differently from others similarly legitimate state interest at stake—the protection of public situated and that there is no rational basis for the access to the public beach—but, at this stage, the difference in treatment.”). government fails to provide any rational reason why [7] [8] refusing to reconnect utilities to houses found on a public The City failed to offer any reason for the beach furthers the end of protecting public access to differential treatment of the appellants’ homes in its brief. public beaches. Although the City proffered two reasons at oral argument for its denial of the appellants’ permit application, as a After further development of the record, facts may come general matter we do not address newly minted arguments to light that indeed serve to indicate that there was a at oral argument. See, e.g., Whitehead v. Food Max of rational basis for the government’s action. For example, Miss., Inc., 163 F.3d 265, 270 (5th Cir.1998). *381 we might learn that reconnecting the utilities Furthermore, the fact that these reasons were raised for involved hanging obtrusive wires or placing unsightly the first time at oral argument bolsters our view that they water meters that would discourage public use of the are merely ex post facto justifications for the City’s beach. However, there is no indication of such facts in the irrational treatment. record at this summary judgment stage, and we decline to invent them. Thus, we find that the government’s The lack of identifiable reasons for the City’s actions argument fails because there is nothing in the record highlights the more general problem of the insufficiency before us to suggest that the connection of either the of evidentiary support. The City’s only proffered evidence appellants’ sewer system or their electricity and water consists of (a) Judge Kent’s decision dismissing the lines to the City’s service grid would hinder the public’s similar complaint of other plaintiffs against the City, access to the beach or otherwise serve as an Korndorffer v. City of Galveston, No. G–02–144 impermissible encroachment under the OBA. (S.D.Tex. July 9, 2002) (unpublished), and (b) the City’s motion in response to the appellants’ *382 injunction As the City argues, the “local government does not have request. Neither of these constitutes a cognizable to be right” in implementing the requirements of state evidentiary source. Indeed, at oral argument the City law, nor may a plaintiff bootstrap violations of state law conceded that it had failed to support its arguments with into the Constitution. The appellants’ allegations record evidence. This lack of evidentiary support is implicate neither of these concerns, however. The City particularly acute with regard to the refusal to reconnect must conform its discretionary actions to its constitutional electricity and water services—the City posits no reason, obligations; because the City has not demonstrated the let alone one supported by evidence, for how requisite rational relationship to sustain a motion for reconnection of those particular services interfered with summary judgment at this stage of litigation, we vacate access to the public beach. the district court’s determination as to the substantive due process claim.

C. [9] B. Although we are to resist becoming “super zoning boards,” S. Gwinnett Venture v. Pruitt, 482 F.2d 389, 390 [6] The appellants’ equal protection claim is based on their (5th Cir.1973), “[w]e have plainly and consistently held contention that there are a number of other similarly that zoning decisions are to be reviewed by federal courts situated homes that were allowed reconnection of their by the same constitutional standards that we employ to utility services. In contrast to a due process action, which review statutes enacted by the state legislatures.” Shelton looks solely to the government’s exercise of its power v. City of Coll. Station, 780 F.2d 475, 479 (5th Cir.1986). vis-a-vis the appellants, an equal protection claim asks Without supporting evidence for the City’s rationales, we whether a justification exists for the differential exercise hold that summary judgment at this stage was improper. of that power. To bring such an equal protection claim for the denial of zoning permits,4 the appellant must show that the difference in treatment with others similarly situated was irrational. Vill. of Willowbrook v. Olech, 528 U.S. 562, 564, 120 S.Ct. 1073, 145 L.Ed.2d 1060 (2000) III. (“Our cases have recognized successful equal protection © 2015 Thomson Reuters. No claim to original U.S. Government Works. 5 Mikeska v. City of Galveston, 451 F.3d 376 (2006)

The decision of the district court is VACATED and state purpose is rational as a matter of law. I agree that the REMANDED for further proceedings. case must go forward on the challenge to the means of achieving the purpose of mandatory open beaches, the equal protection claim.

PATRICK E. HIGGINBOTHAM, Circuit Judge, concurring in part and dissenting in part: All Citations

I concur in all respects, except that I would affirm the 451 F.3d 376 district court’s grant of summary judgment dismissing the substantive due process claim. To my eyes, the challenged

1 The 100% List consisted of 107 homes on the Texas coast that, after Frances, were 100% seaward of the natural vegetation line and therefore considered encroachments on the public beach.

2 The other five homeowners filed a separate suit, which was ultimately dismissed by Judge Kent, who was also the presiding judge for this action. See Korndorffer v. City of Galveston, No. G–02–144 (S.D.Tex. July 9, 2002) (unpublished).

3 The appellants also brought a takings claim, which the district court dismissed. That decision is not appealed.

4 Contrary to the City’s contention, the appellants’ equal protection cause of action does not sound in two other types of “class of one” claims: “selective enforcement,” Allred’s Produce v. United States Dep’t of Agric., 178 F.3d 743, 748 (5th Cir.1999), and “personal vindictiveness.” See Esmail v. Macrane, 53 F.3d 176, 179 (7th Cir.1995); Bryan v. City of Madison, 213 F.3d 267, 277 (5th Cir.2000) (citing Esmail, 53 F.3d 176). We thus reject the City’s contention that we must apply the higher evidentiary burden that would normally be required by either claim.

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 6 Olim v. Wakinekona, 461 U.S. 238 (1983) 103 S.Ct. 1741, 75 L.Ed.2d 813

KeyCite Yellow Flag - Negative Treatment [2] Abrogation Recognized by Elwell v. Byers, 10th Cir.(Kan.), Prisons November 14, 2012 Interstate and State-Federal Transfer 103 S.Ct. 1741 Supreme Court of the United States Given statutes and interstate agreements which recognize that, from time to time, it is necessary Antone OLIM, et al., Petitioners to transfer inmate to prison in other states, it is v. neither unreasonable nor unusual for inmate to Delbert Kaahanui WAKINEKONA. serve practically his entire sentence in a state other than the one in which he was convicted No. 81-1581. | Argued Jan. 19, 1983. | Decided April and sentenced, or to be transferred to 26, 1983. out-of-state prison after serving portion of his sentence in his home state. 18 U.S.C.A. §§ Hawaii prisoner, who had been transferred to prison in 4002, 5003(a); U.S.C.A. Const.Amend. 14. California, brought action on claim of denial of due process rights arising out of reclassification proceedings. 92 Cases that cite this headnote The United States District Court for the District of Hawaii, 459 F.Supp. 473, Dick Yin Wong, J., dismissed the complaint, and prisoner appealed. The Court of Appeals for the Ninth Circuit, 664 F.2d 708, reversed and remanded. Certiorari was granted. The Supreme Court, [3] Prisons Justice Blackmun, held that: (1) the interstate prison Inter-System Issues transfer did not deprive the inmate of any liberty interest protected by the due process clause in and of itself, even Confinement in another state, unlike though the transfer covered a substantial distance, and (2) confinement in a mental institution, is within the Hawaii’s prison regulations did not create a normal limits or range of custody which a constitutionally protected liberty interest. conviction has authorized state to impose. U.S.C.A. Const.Amend. 14. Reversed.

Justice Marshall filed a dissenting opinion in which 140 Cases that cite this headnote Justice Brennan joined and in which Justice Stevens joined in part.

[4] Prisons Interstate and State-Federal Transfer West Headnotes (10) Even when interstate prison transfer involves long distances and an ocean crossing, [1] Prisons confinement remains within constitutional Inter-System Issues limits. U.S.C.A. Const.Amend. 14.

Just as inmate has no justifiable expectation that he will be incarcerated in any particular prison 46 Cases that cite this headnote within any state, he has no justifiable expectation that he will be incarcerated in any particular state. U.S.C.A. Const.Amend. 14. [5] Constitutional Law 644 Cases that cite this headnote Transfer

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Tab E-5 Olim v. Wakinekona, 461 U.S. 238 (1983) 103 S.Ct. 1741, 75 L.Ed.2d 813

Interstate prison transfer, including one from Hawaii to California, does not deprive inmate of any liberty interest protected by due process clause in and of itself. U.S.C.A. Const.Amend. [9] 14. Constitutional Law Transfer

1243 Cases that cite this headnote If prison officials may transfer prisoner for whatever reason or for no reason at all, there is no substantive interest for process to protect. U.S.C.A. Const.Amend. 14. [6] Constitutional Law Imprisonment and Incidents Thereof 289 Cases that cite this headnote

Hawaii’s prison regulations place no substantive limitations on official discretion and thus create no liberty interest entitled to protection under [10] due process clause. U.S.C.A. Const.Amend. 14. Prisons Transfer

1371 Cases that cite this headnote Although state may choose to require procedures governing transfers of prisoners for reasons other than protection against deprivation of substantive rights, in making that choice state does not create independent substantive right. [7] Prisons U.S.C.A. Const.Amend. 14. Particular Issues and Applications

Where Hawaii prison regulations prescribed no 318 Cases that cite this headnote substantive standards to guide committee whose task it was to advise administrator in deciding whether to transfer inmate, no significance attached to fact that prison regulations required a particular kind of hearing before administrator could exercise his unfettered discretion. U.S.C.A. Const.Amend. 14. **1742 Syllabus*

*238 Petitioner members of a prison “Program 112 Cases that cite this headnote Committee,” after investigating a breakdown in discipline and the failure of certain programs within the maximum control unit of the Hawaii State Prison outside Honolulu, singled out respondent and another inmate as troublemakers. After a hearing-respondent having been [8] Constitutional Law notified thereof and having retained counsel to represent Rights, Interests, Benefits, or Privileges him-the same Committee recommended that respondent’s Involved in General classification as a maximum security risk be continued and that he be transferred to a prison on the mainland. Process is not an end in itself, its constitutional Petitioner administrator of the Hawaii prison accepted the purpose is to protect substantive interest to Committee’s recommendation, and respondent was which individual has legitimate claim of transferred to a California state prison. Respondent then entitlement. U.S.C.A. Const.Amend. 14. filed suit against petitioners in Federal District Court, alleging that he had been denied procedural due process because the Committee that recommended his transfer 346 Cases that cite this headnote consisted of the same persons who had initiated the hearing, contrary to a Hawaii prison regulation, and © 2015 Thomson Reuters. No claim to original U.S. Government Works. 2 Olim v. Wakinekona, 461 U.S. 238 (1983) 103 S.Ct. 1741, 75 L.Ed.2d 813

because the Committee was biased against him. The State of Alaska et al. by Paul L. Douglas, Attorney District Court dismissed the complaint, holding that the General of Nebraska, J. Kirk Brown, Assistant Attorney Hawaii regulations governing prison transfers did not General, Judith W. Rogers, Corporation Counsel of the create a substantive liberty interest protected by the Due District of Columbia, and the Attorneys General for their Process Clause of the Fourteenth Amendment. The Court respective jurisdictions as follows: Wilson L. Condon of of Appeals reversed. Alaska, Aviata F. Fa’alevao of American Samoa, Robert K. Corbin of Arizona, Jim Smith of Florida, David H. Held: Leroy of Idaho, William J. Guste, Jr., of Louisiana, William A. Allain of Mississippi, Michael T. Greely of 1. An interstate prison transfer does not deprive an inmate Montana, Richard H. Bryan of Nevada, Irwin I. of any liberty interest protected by the Due Process Kimmelman of New Jersey, Jeff Bingaman of New Clause in and of itself. Just as an inmate has no justifiable Mexico, Rufus L. Edmisten of North Carolina, Robert expectation that he will be incarcerated in any particular Wefald of North Dakota, William J. Brown of Ohio, prison within a State so as to implicate the Due Process Dennis J. Roberts II of Rhode Island, Mark V. Meierhenry Clause directly when an intrastate prison transfer is made, of South Dakota, William M. Leech, Jr., of Tennessee, Meachum v. Fano, 427 U.S. 215, 96 S.Ct. 2532, 49 John J. Easton of Vermont, Gerald L. Baliles of Virginia, L.Ed.2d 451; Montanye v. Haymes, 427 U.S. 236, 96 Kenneth O. Eikenberry of Washington, Chauncey H. S.Ct. 2543, 49 L.Ed.2d 466, he has no justifiable Browning of West Virginia, Bronson C. La Follette of expectation that he will be incarcerated in any particular Wisconsin, and Steven F. Freudenthal of Wyoming; and State. Statutes and interstate agreements recognize that, for the Commonwealth of Massachusetts et al. by Francis from time to time, it is necessary to transfer inmates to X. Bellotti, Attorney General of Massachusetts, Stephen prisons in other States. Confinement in another State is R. Delinsky, Barbara A.H. Smith, and Leo J. Cushing, within the normal limits or range of custody which the Assistant Attorneys General, Anthony Ching, Solicitor conviction has authorized the transferring State to impose. General of Arizona, and the Attorneys General for their Even when, as here, the transfer involves long distances respective jurisdictions as follows: Wilson L. Condon of and an ocean crossing, the confinement remains within Alaska, Aviata F. Fa’alevao of American Samoa, Robert constitutional limits. Pp. 1745-1747. K. Corbin of Arizona, Jim Smith of Florida, David H. Leroy of Idaho, William A. Allain of Mississippi, Michael 2. Nor do Hawaii’s prison regulations create a T. Greely of Montana, Irwin I. Kimmelman of New constitutionally protected liberty interest. Although a Jersey, Jeff Bingaman of New Mexico, Rufus L. Edmisten State creates a protected liberty interest *239 by placing of North Carolina, Robert O. Wefald of North Dakota, substantive limitations on official discretion, Hawaii’s William J. Brown of Ohio, Dennis J. Roberts II of Rhode prison regulations place no substantive limitations on the Island, Mark V. Meierhenry of South Dakota, William M. prison administrator’s discretion to transfer an inmate. For Leech, Jr., of Tennessee, John J. Easton of Vermont, that matter, the regulations prescribe no substantive Chauncey H. Browning of West Virginia, and Bronson C. standards to guide the Program Committee whose task is La Follette of Wisconsin. to advise the administrator. Thus no significance attaches to the fact that the prison regulations require a particular Opinion kind of hearing before the administrator can exercise his unfettered discretion. Pp. 1747-1748. *240 Justice BLACKMUN delivered the opinion of the Court. 664 F.2d 708 (CA9 1981), reversed. The issue in this case is whether the transfer of a prisoner Attorneys and Law Firms from a state prison **1743 in Hawaii to one in California implicates a liberty interest within the meaning of the Due Michael A. Lilly, First Deputy Attorney General of Process Clause of the Fourteenth Amendment. Hawaii, argued the cause for petitioners. With him on the brief was James H. Dannenberg, Deputy Attorney General.

Robert Gilbert Johnston argued the cause for respondent. I With him on the brief was Clayton C. Ikei.*

* Briefs of amici curiae urging reversal were filed for the A

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 Olim v. Wakinekona, 461 U.S. 238 (1983) 103 S.Ct. 1741, 75 L.Ed.2d 813

Respondent Delbert Kaahanui Wakinekona is serving a sentence of life imprisonment without the possibility of parole as a result of his murder conviction in a Hawaii state court. He also is serving sentences for various other B crimes, including rape, robbery, and escape. At the Hawaii State Prison outside Honolulu, respondent was Rule IV of the Supplementary Rules and Regulations of classified as a maximum security risk and placed in the the Corrections Division, Department of Social Services maximum control unit. and Housing, State of Hawaii, approved in June 1976, recites that the inmate classification process is not Petitioner Antone Olim is the administrator of the Hawaii concerned with punishment. Rather, it is intended to State Prison. The other petitioners constituted a prison promote the best interests *242 of the inmate, the State, “Program Committee.” On August 2, 1976, the and the prison community.1 Paragraph 3 of Rule **1744 Committee held hearings to determine the reasons for a IV requires a hearing prior to a prison transfer involving breakdown in discipline and the failure of certain “a grievous loss to the inmate,” which the Rule defines programs within the prison’s maximum control unit. “generally” as “a serious loss to a reasonable man.” App. Inmates of the unit appeared at these hearings. The 21.2 The administrator, under ¶ 2 of the Rule, is required Committee singled out respondent and another inmate as to establish “an impartial Program Committee” to conduct troublemakers. On August 5, respondent received notice such a hearing, the Committee to be “composed of at least that the Committee, at a hearing to be held on August 10, three members who were not actively involved in the would review his correctional program to determine process by which the inmate ... was brought before the whether his classification within the system should be Committee.” App. 20. Under ¶ 3, the Committee must changed and whether he should be transferred to another give the inmate written notice of the hearing, permit him, Hawaii facility or to a mainland institution. with certain stated exceptions, to confront and cross-examine witnesses, afford him an opportunity to be *241 The August 10 hearing was conducted by the same heard, and apprise him of the Committee’s findings. App. persons who had presided over the hearings on August 2. 21-24.3 Respondent retained counsel to represent him. The Committee recommended that respondent’s classification The Committee is directed to make a recommendation to as a maximum security risk be continued and that he be the administrator, who then decides what action to take: transferred to a prison on the mainland. He received the “[The administrator] may, as the final decisionmaker: following explanation from the Committee: “(a) Affirm or reverse, in whole or in part, the “The Program Committee, having reviewed your entire recommendation; or file, your testimony and arguments by your counsel, concluded that your control classification remains at “(b) hold in abeyance any action he believes Maximum. You are still considered a security risk in jeopardizes the safety, security, or welfare of the staff, view of your escapes and subsequent convictions for inmate *243 ..., other inmates ..., institution, or serious felonies. The Committee noted the progress you community and refer the matter back to the Program made in vocational training and your expressed desire Committee for further study and recommendation.” to continue in this endeavor. However your relationship Rule IV, ¶ 3d(3), App. 24. with staff, who reported that you threaten and intimidate them, raises grave concerns regarding your The regulations contain no standards governing the potential for further disruptive and violent behavior. administrator’s exercise of his discretion. See Lono v. Since there is no other Maximum security prison in Ariyoshi, 63 Haw. 138, 144-145, 621 P.2d 976, 980-981 Hawaii which can offer you the correctional programs (1981). you require and you cannot remain at [the maximum control unit] because of impending construction of a new facility, the Program Committee recommends your transfer to an institution on the mainland.” App. 7-8. C Petitioner Olim, as administrator, accepted the Committee’s recommendation, and a few days later Respondent filed suit under 42 U.S.C. § 1983 against respondent was transferred to Folsom State Prison in petitioners as the state officials who caused his transfer. California. He alleged that he had been denied procedural due process because the Committee that recommended his © 2015 Thomson Reuters. No claim to original U.S. Government Works. 4 Olim v. Wakinekona, 461 U.S. 238 (1983) 103 S.Ct. 1741, 75 L.Ed.2d 813

transfer consisted of the same persons who had initiated that in another. The conviction has sufficiently the hearing, this being in specific violation of Rule IV, ¶ extinguished the defendant’s liberty *245 interest to 2, and because the Committee was biased against him. empower the State to confine him in any of its prisons. The United States District Court for the District of Hawaii dismissed the complaint, holding that the Hawaii “Neither, in our view, does the Due Process Clause in regulations governing prison transfers do not create a and of itself protect a duly convicted prisoner against substantive liberty interest protected by the Due Process transfer from one institution to another within the state Clause. 459 F.Supp. 473 (1978).4 prison system. Confinement in any of the State’s institutions is within the normal limits or range of The United States Court of Appeals for the Ninth Circuit, custody which the conviction has authorized the State by a divided vote, reversed. 664 F.2d 708 (1981). It held to impose.” Id., at 224-225, 96 S.Ct., at 2538 (emphasis that Hawaii had created a constitutionally protected in original). liberty interest by promulgating Rule IV. In so doing, the court declined to follow cases from other Courts of The Court observed that, although prisoners retain a Appeals holding that certain procedures mandated by residuum of liberty, see Wolff v. McDonnell, 418 U.S. prison transfer regulations do not create a liberty interest. 539, 555-556, 94 S.Ct. 2963, 2974-75, 41 L.Ed.2d 935 See, e.g., Cofone v. Manson, 594 F.2d 934 (CA2 1979); (1974), a holding that “any substantial deprivation Lombardo v. Meachum, 548 F.2d 13 (CA1 1977). The imposed by prison authorities triggers the procedural court reasoned that Rule IV gives Hawaii prisoners a protections of the Due Process Clause would subject to justifiable expectation that they will not be transferred to judicial review a wide spectrum of discretionary actions the mainland absent a hearing, before an impartial that traditionally have been the business of prison committee, concerning the facts alleged in the *244 administrators rather than of the federal courts.” 427 U.S., pre-hearing notice.5 Because **1745 the Court of at 225, 96 S.Ct., at 2538 (emphasis in original). Appeals’ decision created a conflict among the circuits, and because the case presents the further question whether Applying the Meachum and Montanye principles in Vitek the Due Process Clause in and of itself protects against v. Jones, 445 U.S. 480, 100 S.Ct. 1254, 63 L.Ed.2d 552 interstate prison transfers, we granted certiorari. 456 U.S. (1980), this Court held that the transfer of an inmate from 1005, 102 S.Ct. 2294, 73 L.Ed.2d 1299 (1982). a prison to a mental hospital did implicate a liberty interest. Placement in the mental hospital was “not within the range of conditions of confinement to which a prison sentence subjects an individual,” because it brought about “consequences ... qualitatively different from the II punishment characteristically suffered by a person convicted of crime.” Id., at 493, 100 S.Ct., at 1264. In Meachum v. Fano, 427 U.S. 215, 96 S.Ct. 2532, 49 Respondent argues that the same is true of confinement of L.Ed.2d 451 (1976), and Montanye v. Haymes, 427 U.S. a Hawaii prisoner on the mainland, and that Vitek 236, 96 S.Ct. 2543, 49 L.Ed.2d 466 (1976), this Court therefore controls. held that an intrastate prison transfer does not directly implicate the Due Process Clause of the Fourteenth [1] We do not agree. Just as an inmate has no justifiable Amendment. In Meachum, inmates at a Massachusetts expectation that he will be incarcerated in any particular medium security prison had been transferred to a prison within a State, he has no justifiable expectation that maximum security prison in that Commonwealth. In he will be incarcerated in any particular State.6 Often, Montanye, a companion case, an inmate had been confinement *246 in the inmate’s home State will not be transferred from one maximum security New York prison possible. **1746 A person convicted of a federal crime in to another as punishment for a breach of prison rules. This a State without a federal correctional facility usually will Court rejected “the notion that any grievous loss visited serve his sentence in another State. Overcrowding and the upon a person by the State is sufficient to invoke the need to separate particular prisoners may necessitate procedural protections of the Due Process Clause.” interstate transfers. For any number of reasons, a State Meachum, 427 U.S., at 224, 96 S.Ct., at 2538 (emphasis may lack prison facilities capable of providing in original). It went on to state: appropriate correctional programs for all offenders.

“The initial decision to assign the convict to a [2] Statutes and interstate agreements recognize that, from particular institution is not subject to audit under the time to time, it is necessary to transfer inmates to prisons Due Process Clause, although the degree of in other States. On the federal level, 18 U.S.C. § 5003(a) confinement in one prison may be quite different from authorizes the Attorney General to contract with a State © 2015 Thomson Reuters. No claim to original U.S. Government Works. 5 Olim v. Wakinekona, 461 U.S. 238 (1983) 103 S.Ct. 1741, 75 L.Ed.2d 813

for the transfer of a state prisoner to a federal prison, III whether in that State or another. See Howe v. Smith, 452 U.S. 473, 101 S.Ct. 2468, 69 L.Ed.2d 171 (1981).7 Title The Court of Appeals held that Hawaii’s prison 18 U.S.C. § 4002 (1976 ed. and Supp. V) permits the regulations create a constitutionally protected liberty Attorney General to contract with any State for the interest. In Meachum, however, the State had “conferred placement of a federal prisoner in state custody for up to no right on the *249 prisoner to remain in the prison to three years. Neither statute requires that the prisoner which he was initially assigned, defeasible only upon remain in the State in which he was convicted and proof of specific acts of misconduct,” 427 U.S., at 226, 96 sentenced. S.Ct., at 2539, and “ha[d] not represented that transfers [would] occur only on the occurrence of certain events,” On the state level, many States have statutes providing for id., at 228, 96 S.Ct., at 2540. Because the State had the transfer of a state prisoner to a federal prison, e.g., retained “discretion to transfer [the prisoner] for whatever Haw.Rev.Stat. § 353-18 (1976), or another State’s prison, reason or for no reason at all,” ibid., the Court found that e.g., Alaska Stat.Ann. § 33.30.100 (1982). Corrections the State had not created a constitutionally protected compacts between States, implemented by statutes, liberty interest. Similarly, because the state law at issue in authorize incarceration of a prisoner of one State in Montanye “impose[d] no conditions on the discretionary another State’s prison. See, e.g., Cal.Penal Code Ann. § power to transfer,” 427 U.S., at 243, 96 S.Ct., at 2547, 11189 (West 1982) (codifying Interstate Corrections there was no basis for invoking the protections of the Due Compact); § 11190 (codifying Western Interstate Process Clause. Corrections Compact); *247 Conn.Gen.Stat. § 18-102 (1981) (codifying New England Interstate Corrections These cases demonstrate that a State creates a protected Compact); § 18-106 (codifying Interstate Corrections liberty interest by placing substantive limitations on Compact); Haw.Rev.Stat. § 355-1 (1976) (codifying official discretion. An inmate must show “that Western Interstate Corrections Compact); Idaho Code § particularized standards or criteria guide the State’s 20-701 (1979) (codifying Interstate Corrections decisionmakers.” Connecticut Board of Pardons v. Compact); Ky.Rev.Stat. § 196.610 (1982) (same). And Dumschat, 452 U.S. 458, 467, 101 S.Ct. 2460, 2465, 69 prison regulations such as Hawaii’s Rule IV anticipate L.Ed.2d 158 (1981) (BRENNAN, J., concurring). If the that inmates sometimes will be transferred to prisons in decisionmaker is not “required to base its decisions on other States. objective and defined criteria,” but instead “can deny the requested relief for any constitutionally permissible [3] [4] [5] In short, it is neither unreasonable nor unusual for reason or for no reason at all,” ibid., the State has not an inmate to serve practically his entire sentence in a State created a constitutionally protected liberty interest. See other than the one in which he was convicted and id., at 466-467, 101 S.Ct., at 2465 (opinion of the Court); sentenced, or to be transferred to an out-of-state prison see also Vitek v. Jones, 445 U.S., at 488-491, 100 S.Ct., at after serving a portion of his sentence in his home State. 1261-62 (summarizing cases). Confinement in another State, unlike confinement in a [6] [7] [8] [9] [10] mental institution, is “within the normal limits or range of Hawaii’s prison regulations place no custody which the conviction has authorized the State to substantive limitations on official discretion and thus impose.” Meachum, 427 U.S., at 225, 96 S.Ct., at 2538.8 create no liberty interest entitled to protection under the Even when, as here, the transfer involves long distances Due Process Clause. As Rule IV itself makes clear, and as and an ocean crossing, the confinement remains within the Supreme Court of Hawaii has held in Lono v. constitutional limits. The difference between such a Ariyoshi, 63 Haw. 138, 144-145, 621 P.2d 976, 980-981 transfer and an intrastate or interstate transfer of *248 (1981), the prison administrator’s discretion to transfer an shorter **1747 distance is a matter of degree, not of kind,9 inmate is completely unfettered. No standards **1748 and Meachum instructs that “the determining factor is the govern or restrict the administrator’s determination. nature of the interest involved rather than its weight.” 427 Because the administrator is the only decisionmaker U.S., at 224, 96 S.Ct., at 2538. The reasoning of under Rule IV, we need not decide whether the Meachum and Montanye compels the conclusion that an introductory paragraph *250 of Rule IV, see n. 1, supra, interstate prison transfer, including one from Hawaii to places any substantive limitations on the purely advisory California, does not deprive an inmate of any liberty Program Committee.10 interest protected by the Due Process Clause in and of itself. The Court of Appeals thus erred in attributing significance to the fact that the prison regulations require a particular kind of hearing before the administrator can exercise his unfettered discretion.11 As the United States © 2015 Thomson Reuters. No claim to original U.S. Government Works. 6 Olim v. Wakinekona, 461 U.S. 238 (1983) 103 S.Ct. 1741, 75 L.Ed.2d 813

Court of Appeals for the Seventh Circuit recently stated in As we stated in **1749 Wolff v. McDonnell, 418 U.S. Shango v. Jurich, 681 F.2d 1091, 1100-1101 (1982), “[a] 539, 555-556, 94 S.Ct. 2963, 2974, 41 L.Ed.2d 935 liberty interest is of course a substantive interest of an (1974), “a prisoner is not wholly stripped of constitutional individual; it cannot be the right to demand needless protections when he is imprisoned for crime. There is no formality.”12 Process is not an end in itself. Its iron curtain drawn between the Constitution and the constitutional purpose is to protect a substantive interest prisons *252 of this country.... [P]risoners may not be to which the individual has a legitimate claim of deprived of life, liberty, or property without due process entitlement. See generally Simon, Liberty and Property in of law.” the Supreme Court: A Defense of Roth and Perry, 71 Calif.L.Rev. 146, 186 (1983). If officials may transfer a In determining whether a change in the conditions of prisoner “for whatever reason or for no reason at all,” imprisonment implicates a prisoner’s retained liberty Meachum, 427 U.S., at 228, 96 S.Ct., at 2540, there is no interest, the relevant question is whether the change such interest for process to protect. The State may choose constitutes a sufficiently “grievous loss” to trigger the to require procedures for reasons other than protection protection of due process. Vitek v. Jones, 445 U.S. 480, against deprivation of substantive *251 rights, of course,13 488, 100 S.Ct. 1254, 1261, 63 L.Ed.2d 552 (1980). See but in making that choice the State does not create an Morrissey v. Brewer, 408 U.S. 471, 481, 92 S.Ct. 2593, independent substantive right. See Hewitt v. Helms, --- 2600, 33 L.Ed.2d 484 (1972), quoting Joint Anti-Fascist U.S. ----, ----, 103 S.Ct. 864, 871, 74 L.Ed.2d 675 (1983) Refugee Committee v. McGrath, 341 U.S. 123, 168, 71 (slip op. 10). S.Ct. 624, 646, 95 L.Ed. 817 (1951) (Frankfurter, J., concurring). The answer depends in part on a comparison of “the treatment of the prisoner with the customary, habitual treatment of the population of the prison as a whole.” Hewitt v. Helms, supra, 459 U.S., at ----, 103 IV S.Ct., at 879 (STEVENS, J., dissenting). This principle was established in our decision in Vitek, which held that In sum, we hold that the transfer of respondent from the transfer of an inmate from a prison to a mental Hawaii to California did not implicate the Due Process hospital implicated a liberty interest because it brought Clause directly, and that Hawaii’s prison regulations do about “consequences ... qualitatively different from the not create a protected liberty interest.14 Accordingly, the punishment characteristically suffered by a person judgment of the Court of Appeals is convicted of crime.” 445 U.S., at 493, 100 S.Ct., at 1264. Because a significant qualitative change in the conditions Reversed. of confinement is not “within the range of conditions of confinement to which a prison sentence subjects an individual,” ibid., such a change implicates a prisoner’s protected liberty interest.

Justice MARSHALL, with whom Justice BRENNAN There can be little doubt that the transfer of Wakinekona joins, and with whom Justice STEVENS joins as to Part I, from a Hawaii prison to a prison in California represents a dissenting. substantial qualitative change in the conditions of his confinement. In addition to being incarcerated, which is In my view, the transfer of respondent Delbert Kaahanui the ordinary consequence of a criminal conviction and Wakinekona from a prison in Hawaii to a prison in sentence, Wakinekona has in effect been banished from California implicated an interest in liberty protected by his home, a punishment historically considered to be the Due Process Clause of the Fourteenth Amendment. I “among the severest.”1 For an indeterminate period of respectfully dissent. time, possibly the *253 rest of his life, nearly 4,000 miles of ocean will separate him from his family and friends. As a practical matter, Wakinekona may be entirely cut off from his only contacts with the outside world, just as if he had been imprisoned in an institution which prohibited I visits by outsiders. Surely the isolation imposed on him by the transfer is far more drastic than that which An inmate’s liberty interest is not limited to whatever a normally accompanies imprisonment. State chooses to bestow upon him. An inmate retains a significant residuum of constitutionally protected liberty I cannot agree with the Court that Meachum v. Fano, 427 following his incarceration independent of any state law. © 2015 Thomson Reuters. No claim to original U.S. Government Works. 7 Olim v. Wakinekona, 461 U.S. 238 (1983) 103 S.Ct. 1741, 75 L.Ed.2d 813

U.S. 215, 96 S.Ct. 2532, 49 L.Ed.2d 451 (1976), and prison rules, regulations, or practices. State laws that Montanye v. Haymes, 427 U.S. 236, 243, 96 S.Ct. 2543, impose substantive criteria which limit or guide the 2547, 49 L.Ed.2d 466 (1976), compel the conclusion that discretion of officials have been held to create a protected Wakinekona’s transfer implicates no liberty interest. Ante, liberty interest. See, e.g., Hewitt v. Helms, supra; Wolff v. at 1748. Both cases involved transfers of prisoners McDonnell, supra; Greenholtz v. Nebraska Penal between institutions located within the same State in Inmates, 442 U.S. 1, 99 S.Ct. 2100, 60 L.Ed.2d 668 which they were convicted, and the Court expressly (1979); Wright v. Enomoto, 462 F.Supp. 397 (ND phrased its holdings in terms of intrastate transfers.2 Cal.1976), summarily aff’d, 434 U.S. 1052, 98 S.Ct. **1750 Both decisions rested on the premise that no 1223, 55 L.Ed.2d 756 (1978). By contrast, a liberty liberty interest is implicated by an initial decision to place interest is not created by a law which “imposes no a prisoner in one institution in the State rather than conditions on [prison officials’] discretionary power,” another. See Meachum, supra, 427 U.S., at 224, 96 S.Ct., Montanye, supra, 427 U.S., at 243, 96 S.Ct., at 2547, at 2538; Montanye, supra, 427 U.S., at 243, 96 S.Ct., at authorizes prison officials to act “for whatever reason or 2547. On the basis of that premise, the Court concluded for no reason at all,” Meachum, supra, 427 U.S., at 228, that the subsequent transfer of a prisoner to a different 96 S.Ct., at 2540, or accords officials “unfettered facility within the State likewise implicates no liberty discretion,” Connecticut Board of Pardons v. Dumschat, interest. In this case, however, we cannot assume that a 452 U.S. 458, 466, 101 S.Ct. 2460, 2465, 69 L.Ed.2d 158 State’s initial placement of an individual in a prison far (1981). removed from his family and residence would raise no due process questions. None of our *254 prior decisions **1751 The Court misapplies these principles in has indicated that such a decision would be immune from concluding that Hawaii’s prison regulations leave prison scrutiny under the Due Process Clause. officials with unfettered discretion to transfer inmates. Ante, at 1747-1748. Rule IV establishes a scheme under Actual experience simply does not bear out the Court’s which inmates are classified upon initial placement in an assumptions that interstate transfers are routine and that it institution, and must subsequently be reclassified before is “not unusual” for a prisoner “to serve practically his they can be transferred to another institution. Under the entire sentence in a State other than the one in which he Rule the standard for classifying inmates is their was convicted and sentenced.” Ante, at 1746. In Hawaii “optimum placement within the Corrections Division” in less than three percent of the state prisoners were light of the “best interests of the individual, the State, and transferred to prisons in other jurisdictions in 1979, and the community.”6 In classifying inmates, the Program on a nationwide basis less than one percent of the *256 Committee may not consider punitive aims. It may prisoners held in state institutions were transferred to consider only factors relevant to determining where the other jurisdictions.3 Moreover, the vast majority of state individual will be “best situated,” such as “his history, his prisoners are held in facilities located less than 250 miles changing needs, the resources and facilities available to from their homes.4 Measured against these norms, the Corrections Divisions, the other inmates/wards, the Wakinekona’s transfer to a California prison represents a exigencies of the community, and any other relevant punishment “qualitatively different from the punishment factors.” Section 3 of Rule IV establishes a detailed set of characteristically suffered by a person convicted of procedures applicable when, as in this case, the crime.” Vitek v. Jones, 445 U.S., at 493, 100 S.Ct., at reclassification of a prisoner may lead to a transfer 1264. involving a “grievous loss,” a phrase contained in the Rule itself.7 The procedural rules are cast in mandatory I therefore cannot agree that a State may transfer its language, and cover such matters as notice, access to prisoners at will, to any place, for any reason, without information, hearing, confrontation and ever implicating any interest in liberty protected by the cross-examination, and the basis on which the Committee Due Process Clause. is to make its recommendation to the faculty administrator.

The limitations imposed by Rule IV are at least as substantial as those found sufficient to create a liberty II interest in Hewitt v. Helms, supra, decided earlier this Term. In Hewitt an inmate contended that his confinement Nor can I agree with the majority’s conclusion that in administrative custody implicated an interest in liberty Hawaii’s prison regulations do not create a liberty protected by the Due Process Clause. State law provided interest. This Court’s prior decisions establish that a that a prison official could place inmates in administrative liberty interest *255 may be “created”5 by state laws, © 2015 Thomson Reuters. No claim to original U.S. Government Works. 8 Olim v. Wakinekona, 461 U.S. 238 (1983) 103 S.Ct. 1741, 75 L.Ed.2d 813

custody “upon his assessment of the situation and the recommendations for classifications and transfers, this need for control,” or “where it has been determined that cannot give rise to a state-created liberty interest because there is a threat of a serious disturbance or a serious threat the prison administrator retains “completely unfettered ... to the individual or others,” and mandated certain discretion to transfer *258 an inmate,” ante, at 1747. I procedures such as notice and a *257 hearing.8 This Court disagree. Rule IV(3)(d)(3) provides for review by the construed the phrases “ ‘the need for control,’ or ‘the prison administrator of recommendations forwarded to threat of a serious disturbance,’ ” as “substantive him by the Program Committee.10 Even if this provision predicates” which restricted official discretion. Id., at ----, must be construed as authorizing the administrator to 103 S.Ct., at 871. These restrictions, in combination with transfer a prisoner for wholly arbitrary reasons,11 that the mandatory procedural safeguards, “deman[ded] a mere possibility does not defeat the protectible conclusion that the State has created a protected liberty expectation otherwise created by Hawaii’s reclassification interest.” 459 U.S., at ----, 103 S.Ct., at 871. and transfer scheme that transfers will take place only if required to ensure an inmate’s optimum placement. In Rule IV is not distinguishable in any meaningful respect Helms a prison regulation also left open the possibility from the provisions at issue in Helms. The procedural that the Superintendent could decide, for any reason or no requirements contained in Rule IV are, if anything, far reason at all, whether an inmate should be confined in more elaborate than those involved in Helms, and are administrative custody.12 This Court nevertheless held that likewise couched in “language of an unmistakably the state scheme as a whole created an interest in liberty mandatory character.” Id., at ----, 103 S.Ct., at 871. protected by the Due Process Clause. 459 U.S., at ----, Moreover, Rule IV, to no less an extent than the state law 103 S.Ct., at 871. Helms thus necessarily rejects the view at issue in Helms, imposes substantive criteria restricting that state laws which impose substantive *259 limitations official discretion. In Helms this Court held that a and elaborate procedural requirements on official conduct statutory phrase such as “the need **1752 for control” create no liberty interest solely because there remains the constituted a limitation on the discretion of prison possibility that an official will act in an arbitrary manner officials to place inmates in administrative custody. In my at the end of the process.13 view Rule IV, which states that transfers are intended to ensure an inmate’s “optimum placement” in accordance For the foregoing reasons, I dissent. with considerations which include “his changing needs [and] the resources and facilities available to the Corrections Division,” also restrict official discretion in ordering transfers.9 All Citations

The Court suggests that, even if the Program Committee 461 U.S. 238, 103 S.Ct. 1741, 75 L.Ed.2d 813 does not have unlimited discretion in making

* The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Lumber Co., 200 U.S. 321, 337, 26 S.Ct. 282, 287, 50 L.Ed. 499.

1 Paragraph 1 of Rule IV states: “An inmate’s ... classification determines where he is best situated within the Corrections Division. Rather than being concerned with isolated aspects of the individual or punishment (as is the adjustment process), classification is a dynamic process which considers the individual, his history, his changing needs, the resources and facilities available to the Corrections Division, the other inmates ..., the exigencies of the community, and any other relevant factors. It never inflicts punishment; on the contrary, even the imposition of a stricter classification is intended to be in the best interests of the individual, the State, and the community. In short, classification is a continuing evaluation of each individual to ensure that he is given the optimum placement within the Corrections Division.” App. 20.

2 Petitioners concede, “for purposes of the argument,” that respondent suffered a “grievous loss” within the meaning of Rule IV when he was transferred from Hawaii to the mainland. Tr. of Oral Arg. 9, 25.

3 Rule V provides that an inmate may retain legal counsel if his hearing concerns a “potential Interstate transfer.” App. 25.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 9 Olim v. Wakinekona, 461 U.S. 238 (1983) 103 S.Ct. 1741, 75 L.Ed.2d 813

4 Respondent also had alleged that the transfer violated the Hawaii Constitution and state regulations and statutes. In light of its dismissal of respondent’s federal claims, the District Court declined to exercise pendent jurisdiction over these state-law claims. 459 F.Supp., at 476.

5 Several months before the Court of Appeals handed down its decision, the Supreme Court of Hawaii had held that because Hawaii’s prison regulations do not limit the administrator’s discretion to transfer prisoners to the mainland, they do not create any liberty interest. Lono v. Ariyoshi, 63 Haw. 138, 621 P.2d 976 (1981). In a petition for rehearing in the present case, petitioners directed the Ninth Circuit’s attention to the Lono decision. See 664 F.2d, at 714. The Court of Appeals, however, concluded that the Hawaii court’s interpretation of the regulations was not different from its own; the Hawaii court merely had reached a different result on the “federal question.” The Court of Appeals thus adhered to its resolution of the case. Id., at 714-715.

6 Indeed, in Vitek itself the Court did not read Meachum and Montanye as stating a rule applicable only to intrastate transfers. The Court stated: “In Meachum v. Fano ... and Montanye v. Haymes ... we held that the transfer of a prisoner from one prison to another does not infringe a protected liberty interest.” 445 U.S., at 489, 100 S.Ct., at 1261 (emphasis added). The Court’s other cases describing Meachum and Montanye also have eschewed the narrow reading respondent now proposes. See Hewitt v. Helms, --- U.S. ----, ----, 103 S.Ct. 864, 869, 74 L.Ed.2d 675 (1983); Moody v. Daggett, 429 U.S. 78, 88, n. 9, 97 S.Ct. 274, 279 n. 9, 50 L.Ed.2d 236 (1976).

7 This statute has been invoked to transfer prisoners from Hawaii state facilities to federal prisons on the mainland. See Anthony v. Wilkinson, 637 F.2d 1130 (CA7 1980), vacated and remanded sub nom. Hawaii v. Mederios, 453 U.S. 902, 101 S.Ct. 3135, 69 L.Ed.2d 989 (1981).

8 After the decisions in Meachum and Montanye, courts almost uniformly have held that an inmate has no entitlement to remain in a prison in his home State. See Beshaw v. Fenton, 635 F.2d 239, 246-247 (CA3 1980), cert. denied, 453 U.S. 912, 101 S.Ct. 3145, 69 L.Ed.2d 995 (1981); Cofone v. Manson, 594 F.2d 934, 937, n. 4 (CA2 1979); Sisbarro v. Warden, 592 F.2d 1, 3 (CA1), cert. denied, 444 U.S. 849, 100 S.Ct. 99, 62 L.Ed.2d 64 (1979); Fletcher v. Warden, 467 F.Supp. 777, 779-780 (Kan.1979); Curry-Bey v. Jackson, 422 F.Supp. 926, 931-933 (DC 1976); McDonnell v. United States Attorney General, 420 F.Supp. 217, 220 (ED Ill.1976); Goodnow v. Perrin, 120 N.H. 669, 671, 421 A.2d 1008, 1010 (1980); Girouard v. Hogan, 135 Vt. 448, 449-450, 378 A.2d 105, 106-107 (1977); In re Young, 95 Wash.2d 216, 227-228, 622 P.2d 373, 379 (1980); cf. Fajeriak v. McGinnis, 493 F.2d 468 (CA9 1974) (pre-Meachum transfers from Alaska to other States); Hillen v. Director of Department of Social Services, 455 F.2d 510 (CA9), cert. denied, 409 U.S. 989, 93 S.Ct. 331, 34 L.Ed.2d 256 (1972) (pre-Meachum transfer from Hawaii to California). But see In re Young, 95 Wash., at 233, 622 P.2d, at 382 (concurring opinion); State ex rel. Olson v. Maxwell, 259 N.W.2d 621 (ND 1977); cf. Tai v. Thompson, 387 F.Supp. 912 (Haw.1975) (pre-Meachum transfer).

9 Respondent’s argument to the contrary is unpersuasive. The Court in Montanye took note that among the hardships that may result from a prison transfer are separation of the inmate from home and family, separation from inmate friends, placement in a new and possibly hostile environment, difficulty in making contact with counsel, and interruption of educational and rehabilitative programs. 427 U.S., at 241, n. 4, 96 S.Ct., at 2546, n. 4. These are the same hardships respondent faces as a result of his transfer from Hawaii to California. Respondent attempts to analogize his transfer to banishment in the English sense of “beyond the seas,” arguing that banishment surely is not within the range of confinement justified by his sentence. But respondent in no sense has been banished; his conviction, not the transfer, deprived him of his right freely to inhabit the State. The fact that his confinement takes place outside Hawaii is merely a fortuitous consequence of the fact that he must be confined, not an additional element of his punishment. See Girouard v. Hogan, 135 Vt., at 449-450, 378 A.2d, at 105. Moreover, respondent has not been exiled; he remains within the United States. In essence, respondent’s banishment argument simply restates his claim that a transfer from Hawaii to the mainland is different in kind from other transfers. As has been shown in the text, however, respondent’s transfer was authorized by his conviction. A conviction, whether in Hawaii, Alaska, or one of the contiguous 48 States, empowers the State to confine the inmate in any penal institution in any State unless there is state law to the contrary or the reason for confining the inmate in a particular institution is itself constitutionally impermissible. See Montanye, 427 U.S., at 242, 96 S.Ct., at 2547; id., at 244, 96 S.Ct., at 2548 (dissenting opinion); Cruz v. Beto, 405 U.S. 319, 92 S.Ct. 1079, 31 L.Ed.2d 263 (1972); Fajeriak v. McGinnis, 493 F.2d, at 470.

10 In Hewitt v. Helms, 459 U.S. 460, 103 S.Ct. 864, 74 L.Ed.2d 675 (1983), unlike this case, state law limited the decisionmakers’ discretion. To the extent the dissent doubts that the administrator’s discretion under Rule IV is truly unfettered, post, at 1752, and n. 11, it doubts the ability or authority of the Hawaii Supreme Court to construe state law.

11 In Meachum itself, the Court of Appeals had interpreted the applicable regulations as entitling inmates to a pre-transfer hearing, see Fano v. Meachum, 520 F.2d 374, 379-380 (CA1 1975), but this Court held that state law created no liberty © 2015 Thomson Reuters. No claim to original U.S. Government Works. 10 Olim v. Wakinekona, 461 U.S. 238 (1983) 103 S.Ct. 1741, 75 L.Ed.2d 813

interest.

12 Other courts agree that an expectation of receiving process is not, without more, a liberty interest protected by the Due Process Clause. See, e.g., United States v. Jiles, 658 F.2d 194, 200 (CA3 1981), cert. denied, 455 U.S. 923, 102 S.Ct. 1282, 71 L.Ed.2d 465 (1982); Bills v. Henderson, 631 F.2d 1287, 1298-1299 (CA6 1980); Pugliese v. Nelson, 617 F.2d 916, 924-925 (CA2 1980); Cofone v. Manson, 594 F.2d 934, 938 (CA2 1979); Lombardo v. Meachum, 548 F.2d 13, 14-16 (CA1 1977); Adams v. Wainwright, 512 F.Supp. 948, 953 (ND Fla.1981); Lono v. Ariyoshi, 63 Haw., at 144-145, 621 P.2d, at 980-981.

13 Petitioners assert that the hearings required by Rule IV not only enable the officials to gather information and thereby to exercise their discretion intelligently, but also have a therapeutic purpose: inmate participation in the decisionmaking process, it is hoped, reduces tension in the prison. See Tr. of Oral Arg. 52-53.

14 In light of this conclusion, respondent’s claim of bias in the composition of the prison Program Committee becomes irrelevant.

1 J. Madison, 4 Elliott’s Debates, 455. Whether it is called banishment, exile, deportation, relegation or transportation, compelling a person “to quit a city, place, or country, for a specified period of time, or for life,” has long been considered a unique and severe deprivation, and was specifically outlawed by “[t]he twelfth section of the English Habeas Corpus Act, 31 Car. II, one of the three great muniments of English liberty.” United States v. Ju Toy, 198 U.S. 253, 270, 25 S.Ct. 644, 649, 49 L.Ed.2d 1040 (1905) (Brewer, J., dissenting).

2 Thus in Meachum the Court stated that the State, by convicting the defendant, was “empowere[d] to confine him to any of its prisons,” 427 U.S., at 224, 96 S.Ct., at 2538 (latter emphasis added), that a “transfer from one institution to another within the state prison system” implicated no due process interest, id., at 225, 96 S.Ct., at 2538, and that “[c]onfinement in any of the State’s institutions is within the normal limits or range of custody which the conviction has authorized the State to impose.” Ibid. See also Montanye, supra, 427 U.S., at 242, 96 S.Ct., at 2547 (“We held in Meachum v. Fano, that no Due Process Clause liberty interest of a duly convicted prison inmate is infringed when he is transferred from one prison to another within the State.”)

3 U.S. Department of Justice, T. Flanagan, et al., Sourcebook of Criminal Justice Statistics-1981, Table 6.27, pp. 478-479. These figures reflect “all inmates who were transferred from one State’s jurisdiction to another to continue sentences already in force,” and “[d]oes not include the release if [the] State does not relinquish jurisdiction.” Id., at 580.

4 U.S. Department of Justice, Profile of State Prison Inmates: Sociodemographic Findings from the 1974 Survey of Inmates of State Correctional Facilities, p. 1 (1979). Over 70% of state inmates are held in institutions located less than 250 miles from their homes.

5 But see Hewitt v. Helms, --- U.S. ----, at ----, 103 S.Ct. 864, at 880, 74 L.Ed.2d 675 (1983) (STEVENS, J., dissenting) (Prison regulations “provide evidentiary support for the conclusion that the transfer affects a constitutionally-protected interest in liberty,” but they “do not create that interest.” (Emphasis in original)).

6 Section 1 of Regulation IV provides: “An inmate’s/ward’s classification determines where he is best situated within the Corrections Division. Rather than being concerned with the isolated aspects of the individual or punishment (as is the adjustment process), classification is a dynamic process which considers the individual, his history, his changing needs, the resources and facilities available to the Corrections Division, the other inmates/wards, the exigencies of the community, and any other relevant factors. It never inflicts punishment; on the contrary, even the imposition of a stricter classification is intended to be in the best interests of the individual, the State, and the community. In short, classification is a continuing evaluation of each individual to ensure that he is given the optimum placement within the Corrections Division.” App. 20.

7 While the term “grievous loss” is not explicitly defined, the prison regulations treat a transfer to the mainland as a grievous loss entitling an inmate to the procedural rights established in IV(3). This is readily inferred from Rule IV(3), which states that intrastate transfers do not involve a grievous loss, and Rule V, which permits inmates to retain counsel only in specified circumstances, one of which is a reclassification that may result in an interstate transfer. App. 25.

8 See 459 U.S., at ---- n. 6, 103 S.Ct., at 871 n. 6.

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9 See also Wright v. Enomoto, 462 F.Supp. 397 (ND Cal.1976), summarily aff’d, 434 U.S. 1052, 98 S.Ct. 1223, 55 L.Ed.2d 756 (1978). In that case, the District Court held that the language of a prison policy statement, stating that “inmates may be segregated for medical, psychiatric, disciplinary, or administrative reasons,” id., at 403, was sufficient to create a protected expectation that an inmate would not be segregated for arbitrary reasons. See also Bills v. Henderson, 631 F.2d 1287, 1293 (CA6 1980), cert. denied, 449 U.S. 1093, 101 S.Ct. 891, 66 L.Ed.2d 822 (1981); Winsett v. McGinnes, 617 F.2d 996, 1007 (CA3 1980) (en banc).

10 Rule IV(3)(d)(3) provides: “(3) The facility administrator will, within a reasonable period of time, review the Program Committee’s recommendation. He may, as the final decisionmaker: (a) Affirm or reverse, in whole or in part, the recommendation; or (b) hold in abeyance any action he believes jeopardizes the safety, security, or welfare of the staff, inmate/ward, other inmates/wards, institution, or community and refer the matter back to the Program Committee for futher study and recommendation.”

11 I doubt that Rule IV would be construed to permit the administrator to order a transfer for punitive reasons, since Rule IV expressly disallows punitive transfers.

12 That provision provided: “All decisions of the Program Review Committee shall be reviewed by the Superintendent for his sustaining the decision or amending or reversing the decision in favor of the inmate.” Pennsylvania Bureau of Correction Administrative Directive BC-ADM 801, Rule VI(C). Brief for Respondent, 12a, in Hewitt v. Helms, O.T. 1982, No. 81-638. Because an inmate could be confined in administrative custody only if the Program Review Committee determined that such confinement is and continues to be “appropriate,” Brief for Respondent, supra, at 18a, the Superintendent in Helms was the “decisionmaker,” ante, at 11, who determined whether inmates would be held in administrative custody.

13 This view was also implicitly rejected in Greenholtz v. Nebraska Penal Inmates, 442 U.S. 1, 99 S.Ct. 2100, 60 L.Ed.2d 668 (1979). The Court held that the Nebraska statute governing the decision whether or not to grant parole created a “protectible entitlement,” id., at 12, 99 S.Ct., at 2106, even though the statute, which listed a number of factors to be considered in the parole decision, also authorized the Parole Board to deny parole on the basis of “[a]ny other factors the board determines to be relevant.” Id., at 18, 99 S.Ct., at 2109. To the extent that Lono v. Ariyoshi, 63 Haw. 138, 144-145, 621 P.2d 976, 980-981 (1981), on which the majority relies, ante, at 1747, suggests that no liberty interest is created as State law has not entirely eliminated the possibility of arbitrary action, it is inconsistent with both Helms and Greenholtz.

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

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under “color of law” establishes a violation of KeyCite Yellow Flag - Negative Treatment the Fourteenth Amendment. 42 U.S.C.A. § Not Followed on State Law Grounds In re J.B., Pa., December 1983; U.S.C.A.Const. Amend. 14. 29, 2014 96 S.Ct. 1155 Supreme Court of the United States 193 Cases that cite this headnote

Edgar PAUL, etc., et al., Petitioners, v. Edward Charles DAVIS, III. [2] Constitutional Law No. 74-891. | Argued Nov. 4, 1975. | Decided March Immunity in general 23, 1976. | Rehearing Denied May 19, 1976. The Fourteenth Amendment’s due process clause does not ex proprio vigore extend to a See 425 U.S. 985, 96 S.Ct. 2194. person a right to be free of injury wherever the state may be characterized as the tort-feasor. U.S.C.A.Const. Amend. 14. Plaintiff whose name and photograph appeared on a flyer which was captioned “Active Shoplifters” and which was distributed among merchants by police chiefs brought 335 Cases that cite this headnote class action. The United States District Court for the Western District of Kentucky dismissed the complaint and plaintiff appealed. The Court of Appeals, 505 F.2d 1180, reversed and remanded, and certiorari was granted. The Supreme Court, Mr. Justice Rehnquist, held that [3] Constitutional Law reputation alone does not implicate any “liberty” or Rights, Interests, Benefits, or Privileges “property” interests sufficient to invoke the procedural Involved in General protection of the due process clause, and something more than simple defamation by the state official must be The procedural guarantees of the Fourteenth involved to establish a claim under section 1983; that Amendment apply whenever the state seeks to police chiefs’ action in distributing flyer did not deprive remove or significantly alter interests plaintiff of any “liberty” or “property” rights secured comprehended within meaning of either against state deprivations by the due process clauses; and “liberty” or “property.” U.S.C.A.Const. Amend. that the flyer did not deprive plaintiff of right to privacy. 14.

Judgment of Court of Appeals reversed. 353 Cases that cite this headnote Mr. Justice Brennan filed a dissenting opinion in which Mr. Justice Marshall joined and in which Mr. Justice White joined in part. [4] Constitutional Law Reputation; defamation

West Headnotes (8) Any harm or injury to interest in reputation, even where inflicted by an officer of the state, does not result in a deprivation of any “liberty” [1] Constitutional Law or “property” and does not invoke the Protections Provided and Deprivations procedural protection of the due process clause. Prohibited in General U.S.C.A.Const. Amend. 14.

Not every legally cognizable injury which may have been inflicted by a state official acting 2194 Cases that cite this headnote

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Tab E-6 Paul v. Davis, 424 U.S. 693 (1976) 96 S.Ct. 1155, 47 L.Ed.2d 405, 1 IER Cases 1827

Actions of police chiefs in distributing to merchants a flyer which was captioned “Active Shoplifters” and which contained plaintiff’s [5] Civil Rights name and photograph did not violate any Defamation constitutionally protected right to privacy inasmuch as claim was based not upon any To establish a claim under § 1983 and the challenge to the state’s ability to restrict his Fourteenth Amendment more must be involved freedom of action in a sphere intended to be than simple defamation by a state official. 42 “private,” but instead on a claim that state may U.S.C.A. § 1983; U.S.C.A.Const. Amend. 14. not publicize a record of an official act such as an arrest. U.S.C.A.Const. Amends. 1, 4, 5, 9, 14. 402 Cases that cite this headnote 526 Cases that cite this headnote

[6] Constitutional Law Investigative activity in general **1157 *693 Syllabus* A photograph of respondent bearing his name was Plaintiff whose name and photograph appeared included in a “flyer” of “active shoplifters,” after he had on flyer which was captioned “Active been arrested on a shoplifting charge in Louisville, Ky. Shoplifters” and which was distributed by police After that charge had been dismissed respondent brought chiefs to merchants did not have any legal this action under 42 U.S.C. s 1983 against petitioner guarantee of present enjoyment of reputation police chiefs, who had distributed the flyer to area which was altered as the result of police chiefs’ merchants, alleging that petitioners’ action under color of actions and thus suffered no deprivation of any law deprived him of his constitutional rights. The District “liberty” or “property” interests within due Court granted petitioners’ motion to dismiss. The Court of process guarantee. 42 U.S.C.A. § 1983; Appeals reversed, relying on Wisconsin v. Constantineau, U.S.C.A.Const. Amend. 14. 400 U.S. 433, 91 S.Ct. 507, 27 L.Ed.2d 515. Held:

1. Petitioners’ action in distributing the flyer did not 1546 Cases that cite this headnote deprive respondent of any “liberty” or “property” rights secured against state deprivation by the Due Process Clause of the Fourteenth Amendment. Pp. 1159-1165.

[7] (a) The Due Process Clause does not Ex proprio vigore Constitutional Law extend to a person a right to be free of injury wherever the Right to Privacy State may be characterized as the tortfeasor. Pp. 1159-1161. While no “right of privacy” is found in any specific guarantee of the Constitution, “zones of (b) Reputation alone, apart from some more tangible privacy” may be created by more specific interests such as employment, does not implicate any constitutional guarantees and thereby impose “liberty” or “property” interests sufficient to invoke the limits upon government power. U.S.C.A.Const. procedural protection of the Due Process Clause; hence to Amends. 1, 4, 5, 9, 14. establish a claim under s 1983 and the Fourteenth Amendment more must be involved than simply 118 Cases that cite this headnote defamation by a state official. Wisconsin v. Constantineau, supra, distinguished. Pp. 1160-1166.

(c) Kentucky law does not extend to respondent any legal guarantee of present enjoyment of reputation that has [8] been altered by petitioners’ actions, and the interest in Constitutional Law Particular Issues and Applications reputation alone is thus quite different from the “liberty” © 2015 Thomson Reuters. No claim to original U.S. Government Works. 2 Paul v. Davis, 424 U.S. 693 (1976) 96 S.Ct. 1155, 47 L.Ed.2d 405, 1 IER Cases 1827

or “property” recognized in such decisions as Bell v. subjects known to be active in this criminal field. Burson, 402 U.S. 535, 91 S.Ct. 1586, 29 L.Ed.2d 90, and Morrissey v. Brewer, 408 U.S. 471, 92 S.Ct. 2593, 33 “This flyer is being distributed to you, the business man, L.Ed.2d 484, where the guarantee of due process required so that you may inform your security personnel to watch certain procedural safeguards before the State could alter for these subjects. These persons have been arrested the status of the complainants. Pp. 1165-1166. during 1971 and 1972 or have been active in various criminal fields in high density shopping areas. 2. Respondent’s contention that petitioners’ defamatory flyer deprived him of his constitutional right to privacy is “Only the photograph and name of the subject is shown without *694 merit, being based not upon any challenge on this flyer, if additional information is desired, please to the State’s ability to restrict his freedom of action in a forward a request in writing . . . .” sphere contended to be “private” but on a claim that the State may not publicize a record of an official act like an arrest. P. 1166. The flyer consisted of five pages of “mug shot” photos, arranged alphabetically. Each page was headed: 6 Cir., 505 F.2d 1180, reversed.

Attorneys and Law Firms “NOVEMBER 1972

Carson P. Porter, Louisville, Ky., for petitioners. CITY OF LOUISVILLE

Daniel T. Taylor, III, Louisville, Ky., for respondent. JEFFERSON COUNTY

Opinion POLICE DEPARTMENTS

Mr. Justice REHNQUIST delivered the opinion of the ACTIVE SHOPLIFTERS“ Court. In approximately the center of page 2 there appeared photos and the name of the respondent, Edward Charles Davis III. We granted certiorari, 421 U.S. 909, 95 S.Ct. 1556, 43 L.Ed.2d 773 (1975), in this case to consider whether Respondent appeared on the flyer because on June 14, respondent’s charge that petitioners’ defamation of him, 1971, he had been arrested in Louisville on a charge of standing alone and apart from any other governmental shoplifting. He had been arraigned on this charge in action with respect to him, stated a claim for relief under September 1971, and, upon his plea of not guilty, the 42 U.S.C. s 1983 and the Fourteenth Amendment. For the *696 charge had been “filed away with leave (to reasons hereinafter stated, we conclude that it does not. reinstate),” a disposition which left the charge outstanding. Thus, at the time petitioners caused the flyer Petitioner Paul is the Chief of Police of the Louisville, to be prepared and circulated respondent had been Ky., Division of Police, while petitioner McDaniel charged with shoplifting but his guilt or innocence of that occupies the same position in the Jefferson County, Ky., offense had never been resolved. Shortly after circulation Division of Police. In late 1972 they agreed to combine of the flyer the charge against respondent was finally their efforts for the purpose of alerting local area dismissed by a judge of the Louisville Police Court. merchants to possible shoplifters who might be operating during *695 the Christmas season. In early December At the time the flyer was circulated respondent was petitioners distributed to approximately 800 merchants in employed as a photographer by the Louisville the Louisville metropolitan area a “flyer,” which began as Courier-Journal and Times. The flyer, and respondent’s follows: inclusion therein, soon came to the attention of “TO: BUSINESS MEN IN THE METROPOLITAN respondent’s supervisor, the executive director of AREA photography for the two newspapers. This individual called respondent in to hear his version of the events “The Chiefs of The Jefferson County and City of leading to his appearing in the flyer. Following this Louisville Police Departments, **1158 in an effort to discussion, the supervisor informed respondent that keep their officers advised on shoplifting activity, have although he would not be fired, he “had best not find approved the attached alphabetically arranged flyer of © 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 Paul v. Davis, 424 U.S. 693 (1976) 96 S.Ct. 1155, 47 L.Ed.2d 405, 1 IER Cases 1827

himself in a similar situation” in the future. defamation under the laws of Kentucky, but a claim that he had been deprived of rights secured to him by the Respondent thereupon brought this s 1983 action in the Fourteenth Amendment of the United States Constitution. District Court for the Western District of Kentucky, Concededly if the same allegations had been made about seeking redress for the alleged violation of rights respondent by a private individual, he would have nothing guaranteed to him by the Constitution of the United more than a claim for defamation under state law. But, he States. Claiming jurisdiction under 28 U.S.C. s 1343(3), contends, since petitioners are respectively an official of respondent sought damages as well as declaratory and city and of county government, his action is thereby injunctive relief. Petitioners moved to dismiss this transmuted into one for deprivation by the State of rights complaint. The District Court granted this motion, ruling secured under the Fourteenth Amendment. that “(t)he facts alleged in this case do not establish that plaintiff has been deprived of any right secured to him by In Greenwood v. Peacock, 384 U.S. 808, 86 S.Ct. 1800, the Constitution of the United States.” 16 L.Ed.2d 944 (1966), in the course of considering an important and not wholly dissimilar question of the Respondent appealed to the Court of Appeals for the relationship between the National and the State Sixth Circuit which recognized that, under our decisions, Governments, the Court said that “(i)t is worth for respondent to establish a claim cognizable under s contemplating what the result would be if the strained 1983 he had to show that petitioners had deprived *697 interpretation of s 1443(1) urged by the individual him of a right secured by the Constitution1 of the United petitioners were to prevail.” Id., at 832, 86 S.Ct., at 1814, States, and that any such deprivation was achieved under 16 L.Ed.2d, at 959. We, too, pause to consider the result color of law.2 Adickes v. Kress & Co., 398 U.S. 144, 150, should respondent’s interpretation of s 1983 and of the 90 S.Ct. 1598, 1604, 26 L.Ed.2d 2, 150 (1970). The Court Fourteenth Amendment be accepted. of Appeals concluded that respondent had set forth a s 1983 claim “in that he has alleged facts that constitute a If respondent’s view is to prevail, a person arrested by denial of due process of law.” 505 F.2d 1180, 1182 law enforcement officers who announce that they believe (1974). In its view our decision in **1159 Wisconsin v. such person to be responsible for a particular crime in Constantineau, 400 U.S. 433, 91 S.Ct. 507, 27 L.Ed.2d order to calm the fears of an aroused populace, 515 (1971), mandated reversal of the District Court. presumably obtains a claim against such officers under s 1983. And since it is surely far more clear from the language of the Fourteenth Amendment that “life” is protected against state deprivation than it is that I reputation is protected against state injury, it would be difficult to see why the survivors of an innocent bystander mistakenly shot by a policeman or negligently killed by a Respondent’s due process claim is grounded upon his sheriff driving a government vehicle, would not have assertion that the flyer, and in particular the phrase claims equally cognizable under 1983. “Active Shoplifters” appearing at the head of the page [1] It is hard to perceive any logical stopping place to such upon which his name and photograph appear, *699 a line of reasoning. Respondent’s construction impermissibly deprived him of some “liberty” protected would seem almost necessarily to result in every legally by the Fourteenth Amendment. His complaint asserted cognizable injury which may have been inflicted by a that the “active shoplifter” designation would inhibit him state official acting under “color of law” establishing a from entering business establishments for fear of being violation of the Fourteenth Amendment. We think it suspected of shoplifting and possibly apprehended, and would come as a great surprise to those who drafted and would seriously impair his future employment shepherded the adoption of that Amendment to learn that opportunities. Accepting that such consequences may it worked such a result, and a study of our decisions flow from the flyer in question, respondent’s complaint convinces us they do not support the construction urged would appear to state a classical claim for defamation by respondent. actionable in the courts of virtually every State. Imputing criminal behavior to an individual is generally considered defamatory Per se, and actionable without proof of special damages. II Respondent brought his action, however, not in the state courts of Kentucky, but in a United States District *698 Court for that State. He asserted not a claim for The result reached by the Court of Appeals, which

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respondent seeks to sustain here, must be bottomed on L.Ed.2d 492 (1961). There the Court was careful to point one of two premises. The first is that the Due Process out that the complaint stated a cause of action under the Clause of the Fourteenth Amendment and s 1983 make Fourteenth Amendment because it alleged an actionable many wrongs inflicted by government unreasonable search and seizure violative of the guarantee employees which had heretofore been thought to give rise “contained in the Fourth Amendment (and) made only to state-law tort claims. The second premise **1160 applicable to the States by Reason of the Due Process is that the infliction by state officials of a “stigma” to Clause of the Fourteenth Amendment.” Id., at 171, 81 one’s reputation is somehow different in kind from the S.Ct., at 476, 5 L.Ed.2d, at 496. Respondent, however, infliction by the same official of harm or injury to other has pointed to no specific constitutional guarantee interests protected by state law, so that an injury to safeguarding the interest he asserts has been invaded. reputation is actionable under s 1983 and the Fourteenth *701 Rather, he apparently believes that the Fourteenth Amendment even if other such harms are not. We Amendment’s Due Process Clause should ex proprio examine each of these premises in turn. vigore extend to him a right to be free of injury wherever the State may be characterized as the tortfeasor. But such a reading would make of the Fourteenth Amendment a font of tort law to be superimposed upon whatever A systems may already be administered by the States. We have noted the “constitutional shoals” that confront any attempt to derive from congressional civil rights statutes a The first premise would be contrary to pronouncements in body of general federal tort law, Griffin v. Breckenridge, our cases on more than one occasion with respect to the 403 U.S. 88, 101-102, 91 S.Ct. 1790, 1797-98, 29 scope of s 1983 and of the Fourteenth Amendment. In the L.Ed.2d 338, 347-48 (1971); A fortiori, the procedural leading case of Screws v. United States, 325 U.S. 91, 65 guarantees of the Due Process Clause cannot be the S.Ct. 1031, 89 L.Ed. 1495 (1945), the Court considered source for such law. the proper application of the criminal counterpart of s 1983, likewise intended by Congress to enforce the guarantees of the Fourteenth *700 Amendment. In his opinion for the Court plurality in that case, Mr. Justice Douglas observed: B “Violation of local law does not necessarily mean that federal rights have been invaded. The fact that a prisoner is assaulted, injured, or even murdered by state officials The second premise upon which the result reached by the does not necessarily mean that he is deprived of any right Court of Appeals could be rested that the infliction by protected or secured by the Constitution or laws of the state officials of a “stigma” to one’s reputation is United States,” 325 U.S., at 108-109, 65 S.Ct., at 1039, 89 somehow different in kind from infliction by a state L.Ed., at 1506. official of harm to other interests protected by state law is equally untenable. The words “liberty” and “property” as used in the Fourteenth Amendment do not in terms single After recognizing that Congress’ power to make criminal out reputation as a candidate for special protection over the conduct of state officials under the aegis of the and above other interests that may be protected by state Fourteenth Amendment was not unlimited because that law. While we have in a number of our prior cases Amendment “did not alter the basic relations between the pointed out the frequently **1161 drastic effect of the States and the national government,” the plurality opinion “stigma” which may result from defamation by the observed that Congress should not be understood to have government in a variety of contexts, this line of cases attempted does not establish the proposition that reputation alone, “to make all torts of state officials federal crimes. It apart from some more tangible interests such as brought within (the criminal provision) only specified acts employment, is either “liberty” or “property” by itself ‘under color’ of law and then only those acts which sufficient to invoke the procedural protection of the Due deprived a person of some right secured by the Process Clause. As we have said, the Court of Appeals, in Constitution or laws of the United States.” Id., at 109, 65 reaching a contrary conclusion, relied primarily upon S.Ct., at 1039, 89 L.Ed., at 1507. Wisconsin v. Constantineau, 400 U.S. 433, 91 S.Ct. 507, 27 L.Ed.2d 515 (1971). We think the correct import of [2] This understanding of the limited effect of the that *702 decision, however, must be derived from an Fourteenth Amendment was not lost in the Court’s examination of the precedents upon which it relied, as decision in Monroe v. Pape, 365 U.S. 167, 81 S.Ct. 473, 5 well as consideration of the other decisions by this Court,

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before and after Constantineau, which bear upon the Mr. Justice Jackson, who likewise agreed that petitioners relationship between governmental defamation and the had stated a claim, commented: guarantees of the Constitution. While not uniform in their **1162 “I agree that mere designation as subversive treatment of the subject, we think that the weight of our deprives the organizations themselves of no legal right or decisions establishes no constitutional doctrine converting immunity. By it they are not dissolved, subjected to any every defamation by a public official into a deprivation of legal prosecution, punished, penalized, or prohibited from liberty within the meaning of the Due Process Clause of carrying on any of their activities. Their claim of injury is the Fifth3 or Fourteenth Amendment. that they cannot attract audiences, enlist members, or obtain contributions *704 as readily as before. These, In United States v. Lovett, 328 U.S. 303, 66 S.Ct. 1073, however, are sanctions applied by public disapproval, not 90 L.Ed. 1252 (1946), the Court held that an Act of by law.” Id., at 183-184, 71 S.Ct., at 655, 95 L.Ed., at Congress which specifically forbade payment of any 860. salary or compensation to three named Government agency employees was an unconstitutional bill of attainder. The three employees had been proscribed He went on to say: because a House of Representatives subcommittee found “(T)he real target of all this procedure is the government them guilty of “subversive activity,” and therefore unfit employee who is a member of, or sympathetic to, one or for Government service. The Court, while recognizing more accused organizations. He not only may be that the underlying charges upon which Congress’ action discharged, but disqualified from employment, upon no was premised “stigmatized (the employees’) reputation other ground than such membership or sympathetic and seriously impaired their chance to earn a living,” Id., affiliation. . . . To be deprived not only of present at 314, 66 S.Ct., at 1078, 90 L.Ed., at 1259, also made it government employment but of future opportunity for it clear that “(w)hat is involved here is a Congressional certainly is no small injury when government proscription of (these employees), prohibiting their ever employment so dominates the field of opportunity.” Id., at holding a government job.” Ibid. 184-185, 71 S.Ct., at 655, 95 L.Ed., at 860.

Subsequently, in *703 Joint Anti-Fascist Refugee Comm. v. McGrath, 341 U.S. 123, 71 S.Ct. 624, 95 L.Ed. 817 Mr. Justice Reed, writing for himself, The Chief Justice, (1951), the Court examined the validity of the Attorney and Mr. Justice Minton, would have held that petitioners General’s designation of certain organizations as failed to state a claim for relief. In his dissenting opinion, “Communist” on a list which he furnished to the Civil after having stated petitioners’ claim that their listing Service Commission. There was no majority opinion in resulted in a deprivation of liberty or property contrary to the case; Mr. Justice Burton, who announced the the procedure required by the Fifth Amendment, he said: judgment of the Court, wrote an opinion which did not “The contention can be answered summarily by saying reach the petitioners’ constitutional claim. Mr. Justice that there is no deprivation of any property or liberty of Frankfurter, who agreed with Mr. Justice Burton that the any listed organization by the Attorney General’s petitioners had stated a claim upon which relief could be designation. It may be assumed that the listing is hurtful granted, noted that “publicly designating an organization to their prestige, reputation and earning power. It may be as within the proscribed categories of the Loyalty Order such an injury as would entitle organizations to damages does not directly deprive anyone of liberty or property.” in a tort action against persons not protected by privilege. Id., at 164, 71 S.Ct., at 644, 95 L.Ed., at 849. Mr. Justice . . . This designation, however, does not prohibit any Douglas, who likewise concluded that petitioners had business of the organizations, subject them to any stated a claim, observed in his separate opinion: punishment or deprive them of liberty of speech or other “This is not an instance of name calling by public freedom.” Id., at 202, 71 S.Ct., at 664, 95 L.Ed., at 869. officials. This is a determination of status a proceeding to ascertain whether the organization is or is not ‘subversive.’ This determination has consequences that Thus at least six of the eight Justices who participated are serious to the condemned organizations. Those *705 in that case viewed any “stigma” imposed by consequences flow in part, of course, from public opinion. official action of the Attorney General of the United But they also flow from actions of regulatory agencies States, divorced from its effect on the legal status of an that are moving in the wake of the Attorney General’s organization or a person, such as loss of tax exemption or determination to penalize or police these organizations.” loss of government employment, as an insufficient basis Id., at 175, 71 S.Ct., at 650, 95 L.Ed., at 855. for invoking the Due Process Clause of the Fifth Amendment.

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In Wieman v. Updegraff, 344 U.S. 183, 73 S.Ct. 215, 97 those cases, or any of the Members of this Court, had the L.Ed. 216 (1952), the Court again recognized the remotest idea that the Due Process Clause of the Fifth potential “badge of infamy” which might arise from being Amendment might itself form the basis for a claim for branded disloyal by the government. Id., at 191, 73 S.Ct., defamation against federal officials. at 218, 97 L.Ed., at 222. But it did not hold this sufficient by itself to invoke the procedural due process guarantees It was against this backdrop that the Court in 1971 of the Fourteenth Amendment; indeed, the Court decided Constantineau. There the Court held that a expressly refused to pass upon the procedural due process Wisconsin statute authorizing the practice of “posting” claims of petitioners in that case. Id., at 192, 73 S.Ct. at was unconstitutional because it failed to provide 219, 97 L.Ed. at 222. The Court noted that petitioners procedural safeguards of notice and an opportunity to be would, as a result of their failure to execute the state heard, prior to an individual’s being “posted.” Under the loyalty oath, lose their teaching positions at a state statute “posting” consisted of forbidding in writing the university. It held such state action to be arbitrary because sale or delivery of alcoholic beverages to certain persons of its failure to distinguish between innocent and knowing who were determined to have become hazards to membership in the associations named in the list prepared themselves, to their family, or to the community by by the Attorney General of the United States. Id., at 191, reason of their “excessive drinking.” The statute also 73 S.Ct., at 218, 97 L.Ed., at 222. See also Peters v. made it a misdemeanor to sell or give liquor to any person Hobby, 349 U.S. 331, 347, 75 S.Ct. 790, 99 L.Ed. 1129 so posted. See 400 U.S., at 434 n. 2, 91 S.Ct., at 508, 27 (1955). L.Ed.2d, at 517.

A decade after Joint Anti-Fascist Refugee Comm. v. There is undoubtedly language in Constantineau, which is McGrath, supra, the Court returned to consider further the sufficiently ambiguous to justify the reliance upon it by requirements of procedural due process in this area in the the Court of Appeals: case of Cafeteria Workers v. McElroy, 367 U.S. 886, 81 **1164 “Yet certainly where the State attaches ‘a badge S.Ct. 1743, 6 L.Ed.2d 1230 (1961). Holding that the of infamy’ to the citizen due process comes into play. discharge of an employee of a Government contractor in *708 Wieman v. Updegraff, 344 U.S. 183, 191, 73 S.Ct. the circumstances there presented comported with the due 215, 218-219, 97 L.Ed. 216. ‘(T)he right to be heard process required by the Fifth Amendment, the Court before being condemned to suffer grievous loss of any observed: kind, even though it may not involve the stigma and **1163 “Finally, it is to be noted that this is not a case hardships of a criminal conviction, is a principle basic to where government action has operated to bestow a badge our society.’ Anti-Fascist Refugee Committee v. of disloyalty or infamy, with an attendant foreclosure McGrath, 341 U.S. 123, 168, 71 S.Ct. 624, 646, 95 L.Ed. from other employment opportunity. See *706 Wien v. 817 (Frankfurter, J., concurring). Updegraff, 344 U.S. 183, 190-191, 73 S.Ct. 215, 218-219, 97 L.Ed. 216; Joint Anti-Fascist Refugee Comm. v. “Where a person’s good name, reputation, honor, or McGrath, 341 U.S. 123, 140-141, 71 S.Ct. 624, 632, 95 integrity is at stake Because of what the government is L.Ed. 817 . . . .” Id., at 898, 81 S.Ct., at 1750, 6 L.Ed.2d, doing to him, notice and an opportunity to be heard are at 1238. (Emphasis supplied.) essential.” 400 U.S. 433, 437, 91 S.Ct. 507, at 510, 27 L.Ed.2d 515, at 519 (emphasis supplied). Two things appear from the line of cases beginning with Lovett. The Court has recognized the serious damage that could be inflicted by branding a government employee as The last paragraph of the quotation could be taken to “disloyal,” and thereby stigmatizing his good name. But mean that if a government official defames a person, the Court has never held that the mere defamation of an without more, the procedural requirements of the Due individual, whether by branding him disloyal or Process Clause of the Fourteenth Amendment are brought otherwise, was sufficient to invoke the guarantees of into play. If read that way, it would represent a significant procedural due process absent an accompanying loss of broadening of the holdings of Wieman v. Updegraff, 344 government employment.4 U.S. 183, 73 S.Ct. 215, 97 L.Ed. 216 (1952), and Anti-Fascist Comm. v. McGrath, 341 U.S. 123, 71 S.Ct. *707 It is noteworthy that in Barr v. Matteo, 360 U.S. 624, 95 L.Ed. 817 (1951), relied upon by the 564, 79 S.Ct. 1335, 3 L.Ed.2d 1434 (1959), and Howard Constantineau Court in its analysis in the immediately v. Lyons, 360 U.S. 593, 79 S.Ct. 1331, 3 L.Ed.2d 1454 preceding paragraph. We should not read this language as (1959), this Court had before it two actions for significantly broadening those holdings without in any defamation brought against federal officers. But in neither way adverting to the fact if there is any other possible opinion is there any intimation that any of the parties to interpretation of Constantineau’s language. We believe © 2015 Thomson Reuters. No claim to original U.S. Government Works. 7 Paul v. Davis, 424 U.S. 693 (1976) 96 S.Ct. 1155, 47 L.Ed.2d 405, 1 IER Cases 1827

there is. Thus it was not thought sufficient to establish a claim under s 1983 and the Fourteenth Amendment that there We think that the italicized language in the last sentence simply be defamation by a state official; the defamation quoted, “because of what the government is doing to had to occur in the course of the termination of him,” referred to the fact that the governmental action employment. Certainly there is no suggestion in Roth to taken in that case deprived the individual of a right indicate that a hearing would be required each time the previously held under state law the right to purchase or State in its capacity as employer might be considered obtain liquor in common with the rest of the citizenry. responsible for a statement defaming an employee who “Posting,” therefore, significantly altered her status as a continues to be an employee. matter of state law, and it was that alteration of legal status which, combined with the injury resulting *709 This conclusion is quite consistent with our most recent from the defamation, justified the invocation of holding in this area, Goss v. Lopez, 419 U.S. 565, 95 procedural safeguards. The “stigma” resulting from the S.Ct. 729, 42 L.Ed.2d 725 (1975), that suspension from defamatory character of the posting was doubtless an school based upon charges of misconduct could trigger important factor in evaluating the extent of harm worked the procedural guarantees of the Fourteenth Amendment. by that act, but we do not think that such defamation, While the Court noted that charges of misconduct could standing alone, deprived Constantineau of any “liberty” seriously damage the student’s reputation, Id., at 574-575, protected by the procedural guarantees of the Fourteenth 95 S.Ct., at 736-737, 42 L.Ed.2d, at 734-735, it also took Amendment. care to point out that Ohio law conferred a right upon all children to attend school, and that the act of the school This conclusion is reinforced by our discussion of the officials suspending the student there involved resulted in subject a little over a year later in Board of Regents v. a denial or deprivation of that right. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972). There we noted that “the range of interests protected by procedural due process is not infinite,” Id., at 570, 92 S.Ct., at 2705, 33 L.Ed.2d at 556, and that with III respect to property interests they are, [3] “of course, . . . not created by the Constitution. Rather, It is apparent from our decisions that there exists a they are created and their dimensions are defined by variety of interests which are difficult of definition but are existing rules or understandings that stem from an nevertheless comprehended within the meaning of either independent source such as state law rules or “liberty” or “property” as meant in the Due Process understandings that secure certain benefits and that Clause. These interests attain this constitutional status by support claims of entitlement to those benefits.” Id., at virtue of the fact that they have been initially recognized 577, 92 S.Ct., at 2709, 33 L.Ed.2d, at 561. and protected by state law,5 and we *711 have repeatedly ruled that the procedural guarantees of the Fourteenth Amendment apply whenever the State seeks to remove or While Roth recognized that governmental action significantly alter that protected status. In Bell v. Burson, defaming an individual in the course of declining to rehire 402 U.S. 535, 91 S.Ct. 1586, 29 L.Ed.2d 90 (1971), for him could entitle the person to notice and an opportunity example, the State by issuing drivers’ licenses recognized to be heard as to the defamation, its language is quite in its citizens a right to operate a vehicle on the highways inconsistent with any notion that a defamation perpetrated of the State. The Court held that the State could not by a government official but unconnected with any refusal withdraw this right without giving petitioner due process. to rehire would be actionable under the Fourteenth In Morrissey v. Brewer, 408 U.S. 471, 92 S.Ct. 2593, 33 Amendment: L.Ed.2d 484 (1972), the State afforded parolees the right “The State, In declining to rehire the respondent, did not to remain at liberty as long as the conditions of their make any charge against him that might seriously damage parole were not violated. Before the State could alter the his standing and associations in his community. . . . status of a parolee because of alleged violations of these conditions, we held that the Fourteenth Amendment’s “Similarly, there is no suggestion that the State, In guarantee of due process of law required certain declining to re-employ the respondent, imposed on *710 procedural safeguards. him a stigma or other disability that foreclosed his [4] [5] [6] freedom to take advantage of other employment In each of these cases, as a result of the state opportunities.” **1165 Id., at 573, 92 S.Ct., at 2707, 33 action complained of, a right or status previously L.Ed.2d, at 558 (emphasis supplied). recognized by state law was distinctly altered or extinguished. It was this alteration, officially removing

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the interest from the recognition and protection previously within none of these areas. He does not seek to suppress afforded by the State, which we found sufficient to invoke evidence seized in the course of an unreasonable search. the procedural guarantees contained in the Due Process See Katz v. United States, 389 U.S. 347, 351, 88 S.Ct. Clause of the Fourteenth Amendment. But the interest in 507, 511, 19 L.Ed.2d 576, 581 (1967); Terry v. Ohio, 392 reputation alone which respondent seeks to vindicate in U.S. 1, 8-9, 88 S.Ct. 1868, 1872-1873, 20 L.Ed.2d 889, this action in federal court is quite different from the 898 (1968). And our other “right of privacy” cases, while “liberty” or “property” recognized in those decisions. defying categorical description, deal generally with Kentucky law does not extend to respondent any legal substantive aspects of the Fourteenth Amendment. In Roe guarantee of present enjoyment of reputation which has the Court pointed out that the personal rights found in this been altered as a *712 result of petitioners’ actions. guarantee of personal privacy must be limited to those Rather his interest in reputation is simply one of a number which are “fundamental” or “implicit in the concept of which the State may protect against injury by virtue of its ordered liberty” as described in Palko v. Connecticut, 302 tort law, **1166 providing a forum for vindication of U.S. 319, 325, 58 S.Ct. 149, 152, 82 L.Ed. 288, 292 those interests by means of damages actions. And any (1937). The activities detailed as being within this harm or injury to that interest, even where as here definition were ones very different from that for which inflicted by an officer of the State, does not result in a respondent claims constitutional protection—matters deprivation of any “liberty” or “property” recognized by relating to marriage, procreation, contraception, family state or federal law, nor has it worked any change of relationships, and child rearing and education. In these respondent’s status as theretofore recognized under the areas it has been held that there are limitations on the State’s laws. For these reasons we hold that the interest in States’ power to substantively regulate conduct. reputation asserted in this case is neither “liberty” nor [8] “property” guaranteed against state deprivation without Respondent’s claim is far afield from this line of due process of law. decisions. He claims constitutional protection against the disclosure of the fact of his arrest on a shoplifting charge. His claim is based, not upon any challenge to the State’s Respondent in this case cannot assert denial of any right ability to restrict his freedom of action in a sphere vouchsafed to him by the State and thereby protected contended to be “private,” but instead on a claim that the under the Fourteenth Amendment. That being the case, State may not publicize a record of an official act such as petitioners’ defamatory publications, however seriously an arrest. None of our substantive privacy decisions hold they may have harmed respondent’s reputation, did not this or anything like this, and we decline to enlarge them deprive him of any “liberty” or “property” interests in this manner. protected by the Due Process Clause.

None of respondent’s theories of recovery were based upon rights secured to him by the Fourteenth IV Amendment. *714 Petitioners therefore were not liable to him under s 1983. The judgment of the Court of Appeals holding otherwise is Respondent’s complaint also alleged a violation of a “right to privacy guaranteed by the First, Fourth, Fifth, Reversed. Ninth, and Fourteenth Amendments.” The Court of Appeals did not pass upon this claim since it found the allegations of a due process violation sufficient to require reversal of the District Court’s order. As we have agreed Mr. Justice STEVENS took no part in the consideration or with the District Court on the due process issue, we find it decision of this case. necessary to pass upon respondent’s other theory in order to determine whether there is any support for the litigation he seeks to pursue. [7] While there is no “right of privacy” found in any specific guarantee of the Constitution, the Court has **1167 Mr. Justice BRENNAN, with whom Mr. Justice recognized that “zones of privacy” may be created by MARSHALL concurs and Mr. Justice WHITE concurs in *713 more specific constitutional guarantees and thereby part, dissenting. impose limits upon government power. See Roe v. Wade, 410 U.S. 113, 152-153, 93 S.Ct. 705, 726, 35 L.Ed.2d 14 I dissent. The Court today holds that police officials, 176-178 (1973). Respondent’s case, however, comes acting in their official capacities as law enforcers, may on © 2015 Thomson Reuters. No claim to original U.S. Government Works. 9 Paul v. Davis, 424 U.S. 693 (1976) 96 S.Ct. 1155, 47 L.Ed.2d 405, 1 IER Cases 1827

their own initiative and without trial constitutionally Indeed, even if the Court were creating a novel doctrine condemn innocent individuals as criminals and thereby that state law is in any way relevant, it would be brand them with one of the most stigmatizing and incumbent upon the Court to inquire whether respondent debilitating labels in our society. If there are no has an adequate remedy under Kentucky law or whether constitutional restraints on such oppressive behavior, the petitioners would be immunized by state doctrines of safeguards constitutionally accorded an accused in a official or sovereign immunity. The Court, however, criminal trial are rendered a sham, and no individual can undertakes no such inquiry. feel secure that he will not be arbitrarily singled out for similar Ex parte punishment by those primarily charged Equally irrelevant is the Court’s statement that with fair enforcement of the law. The Court accomplishes “(c)oncededly if the same allegations had been made this result by excluding a person’s interest in his good about respondent by a private individual, he would have name and reputation from all constitutional protection, nothing more than a claim for defamation under state regardless of the character of or necessity for the law.” Ante, at 1159. The action complained of here is government’s actions. The result, which is demonstrably “state *716 action” allegedly in violation of the inconsistent with our prior case law and unduly restrictive Fourteenth Amendment, and that Amendment, which is in its construction of our precious Bill of Rights, is one in Only designed to prohibit “state” action, clearly renders which I cannot concur. unconstitutional actions taken by state officials that would merely be criminal or tortious if engaged in by those To clarify what is at issue in this case, it is first necessary acting in their private capacities. Of course, if a private to dispel some misconceptions apparent in the Court’s citizen enters the home of another, manacles and threatens opinion. 42 U.S.C. s 1983 provides: the owner, and searches the house in the course of a “Every person who, under color of robbery, he would be criminally and civilly liable under any statute, ordinance, regulation, state law, but no constitutional **1168 rights of the owner custom, or usage, of any State or would be implicated. However, if state police officials Territory, subjects, or causes to be engage in the same acts in the course of a narcotics subjected, any citizen of the United investigation, the owner may maintain a damages action States or other person within *715 the against the police under s 1983 for deprivation of jurisdiction thereof to the deprivation constitutional rights “under color of” state law. Cf. Bivens of any rights, privileges, or v. Six Unknown Federal Narcotics Agents, 403 U.S. 388, immunities secured by the 390-392, 91 S.Ct. 1999, 2001-2002, 29 L.Ed.2d 619, Constitution and laws, shall be liable 623-624 (1971). See also, E. g., Monroe v. Pape, supra. In to the party injured in an action at short, it is difficult to believe that the Court seriously law, suit in equity, or other prop suggests, see Ante, at 1158-1159, that there is some proceeding for redress.” anomaly in the distinction, for constitutional purposes, between tortious conduct committed by a private citizen and the same conduct committed by state officials under Thus, as the Court indicates, Ante, at 1158, respondent’s color of state law. complaint, to be cognizable under s 1983, must allege both a deprivation of a constitutional right1 and the It may be that I misunderstand the thrust of Part I of the effectuation of that deprivation under color of law. See, E. Court’s opinion. Perhaps the Court is not questioning the g., Adickes v. Kress & Co., 398 U.S. 144, 150, 90 S.Ct. involvement of a constitutional “liberty” or “property” 1598, 1604, 26 L.Ed.2d 142, 150 (1970). But the interest in this case, but rather whether the deprivation of implication, see Ante, at 1158-1160, that the existence those interests was accomplished “under color of” state Vel non of a state remedy for example, a cause of action law. The Court’s expressed concern that but for today’s for defamation is relevant to the determination whether decision, negligent tortious behavior by state officials there is a cause of action under s 1983, is wholly might constitute a s 1983 violation, see Ante, at 1159, unfounded. “It is no answer that the State has a law which suggests this reading.2 But that concern is *717 groundless. An official’s actions are not “under color of” if enforced would give relief. The federal remedy is law merely because he is an official; an off-duty supplementary to the state remedy, and the latter need not policeman’s discipline of his own children, for example, be first sought and refused before the federal one is invoked.” Monroe v. Pape, 365 U.S. 167, 183, 81 S.Ct. would not constitute conduct “under color of” law. The 473, 482, 5 L.Ed.2d 492, 503 (1961). See also, E. g., essential element of this type of s 1983 action3 is Abuse of his Official position. “Congress, in enacting (s 1983), McNeese v. Board of Education, 373 U.S. 668, 671-672, meant to give a remedy to parties deprived of 83 S.Ct. 1433, 1435, 10 L.Ed.2d 622, 624-625 (1963). constitutional rights, privileges and immunities by an © 2015 Thomson Reuters. No claim to original U.S. Government Works. 10 Paul v. Davis, 424 U.S. 693 (1976) 96 S.Ct. 1155, 47 L.Ed.2d 405, 1 IER Cases 1827

official’s Abuse of his position.” Monroe v. Pape, supra, that dissemination of this flyer would “seriously impair 365 U.S., at 172, 81 S.Ct., at 476, 5 L.Ed.2d, at 497 (respondent’s) future employment opportunities” and (emphasis supplied). Section 1983 focuses on “(m)isuse “inhibit him from entering business establishments for of power, possessed by virtue of state law and Made fear of being suspected of shoplifting and possibly possible only because the wrongdoer is clothed with the apprehended,” Ante, at 1159, the Court characterizes the authority of state law.” United States v. Classic, 313 U.S. allegation as “mere defamation” involving no 299, 326, 61 S.Ct. 1031, 1043, 85 L.Ed. 1368, 1383 infringement of constitutionally protected interests. E. g., (1941) (emphasis supplied). Moreover, whether or not ante, at 1163. This is because, the Court holds neither a mere negligent official conduct in the course of duty can “liberty” nor a “property” interest was invaded by the ever constitute such abuse of power, the police officials injury done respondent’s reputation and therefore no here concede that their conduct was intentional and was violation of s 1983 or the Fourteenth Amendment was undertaken in their official capacities. Therefore, beyond alleged. I wholly disagree. peradventure, it is action taken under color of law, see Ante, at 1158, and n. 2, and it is disingenuous for the It is important, to paraphrase the Court, that “(w)e, too, Court to argue, see Ante, at 1160-1161, that respondent is (should) pause to consider the result should (the Court’s) seeking to convert s 1983 into a generalized font of tort interpretation of s 1983 and of the Fourteenth Amendment law. The only issue properly presented by this case is be accepted.” Ante, at 1159. There is no attempt by the whether petitioners’ intentional conduct infringed any of Court to analyze the question as one of reconciliation of respondent’s “liberty” or “property” interests without due constitutionally protected personal rights and the process of law, and that is the question to be addressed. I exigencies of law enforcement. No effort is made to am *718 persuaded that respondent has alleged a case of distinguish the “defamation” that occurs when a grand such infringement, and therefore of a violation of s 1983. jury indicts an accused from the “defamation” that occurs The stark fact is that the police here have officially when executive officials arbitrarily and without *721 trial imposed on respondent the stigmatizing label “criminal” declare a person an “active criminal.”8 Rather, the Court without the salutary and constitutionally mandated by mere fiat and with no analysis wholly excludes safeguards of a criminal trial. The Court concedes that personal interest in reputation from the ambit of “life, this action will have deleterious consequences for liberty, or property” under the Fifth and Fourteenth respondent. For 15 years, the police had prepared and Amendments, thus rendering due process concerns never circulated similar lists, not with respect to shoplifting applicable to the official stigmatization, however alone, but also for other offenses. App., 19, 27-28. arbitrary, of an individual. The logical and disturbing Included in the five-page list in **1169 which corollary of this holding is that no due process infirmities respondent’s name and “mug shot” appeared were would inhere in a statute constituting a commission to numerous individuals who, like respondent, were never conduct ex parte trials of individuals, so long as the only convicted of any criminal activity and whose only official judgment pronounced was limited to the public “offense” was having once been arrested.4 *719 Indeed, condemnation and branding of a person as a Communist, respondent was arrested over 17 months before the flyer a traitor, an “active murderer,” a homosexual, or any other was distributed,5 not by state law enforcement authorities, mark that “merely” carries social opprobrium. The but by a store’s private security police, and nothing in the potential of today’s decision is frightening for a free record appears to suggest the existence at that time of people.9 That decision surely finds no support in our even constitutionally sufficient probable cause for that relevant constitutional jurisprudence. single arrest on a shoplifting charge.6 Nevertheless, petitioners had 1,000 flyers printed (800 were distributed *722 “In Constitution for a free people, there can be no widely throughout the Louisville business community) doubt that the meaning of ‘liberty’ must be broad indeed. proclaiming that the individuals identified *720 by name See, E. g., Bolling v. Sharpe, 347 U.S. 497, 499-500, 74 and picture were “subjects known to be active in this S.Ct. 693, 694, 98 L.Ed. 884; Stanley v. Illinois, 405 U.S. criminal field (shoplifting),” and trumpeting the “fact” 645, 92 S.Ct. 1208, 31 L.Ed.2d 551.” Board of Regents v. that each page depicted “Active Shoplifters” (emphasis Roth, 408 U.S. 564, 572, 92 S.Ct. 2701, 2707, 33 L.Ed.2d supplied).7 548, 558 (1972). “Without doubt it denotes not merely freedom from bodily restraint but also the right of the Although accepting the truth of the allegation, as we must individual . . . generally to enjoy those privileges long on the motion to dismiss, see, E. g., Walker Process recognized . . . as essential to the orderly pursuit of Equipment, Inc. v. Food Machinery & Chemical Corp., happiness by free men.” Meyer v. Nebraska, 262 U.S. 382 U.S. 172, 174-175, 86 S.Ct. 347, 348-349, 15 390, 399, 43 S.Ct. 625, 626, 67 L.Ed. 1042, 1045 (1923).10 L.Ed.2d 247, 249-250 (1965); cf. **1170 Conley v. Certainly the enjoyment of *723 one’s **1171 good name Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957), and reputation has been recognized repeatedly in our © 2015 Thomson Reuters. No claim to original U.S. Government Works. 11 Paul v. Davis, 424 U.S. 693 (1976) 96 S.Ct. 1155, 47 L.Ed.2d 405, 1 IER Cases 1827

cases as being among the most cherished of rights Winship, 397 U.S. 358, 363-364, 90 S.Ct. 1068, 1072, 25 enjoyed by a free people, and therefore as falling within L.Ed.2d 368, 375 (1970). “It is also important in our free the concept of personal “liberty.” society that every individual going about his ordinary “(A)s Mr. Justice Stewart has reminded us, the affairs have confidence that his government cannot individual’s right to the protection of his own good name adjudge him guilty of a criminal offense without “ ‘reflects no more than our basic concept of the essential convincing *725 a proper factfinder of his guilt with dignity and worth of every human being a concept at the utmost certainty.” Id., at 364, 90 S.Ct., at 1073, 25 root of any decent system of ordered liberty. The L.Ed.2d, at 375.12 protection of private personality, like the protection of life itself, is left primarily to the individual States under the Ninth and Tenth Amendments. But this does not mean Today’s decision marks a clear retreat from Jenkins v. that the right is entitled to any less recognition by this McKeithen, 395 U.S. 411, 89 S.Ct. 1843, 23 L.Ed.2d 404 Court as a basic of our constitutional system.’ Rosenblatt (1969), a case closely akin to the factual pattern of the v. Baer, 383 U.S. 75, 92, 86 S.Ct. 669, 679, 15 L.Ed.2d instant case, and yet essentially ignored by the Court. 597 (1966) (concurring opinion).” Gertz v. Robert Welch, Jenkins, which was also an action brought under s 1983, Inc., 418 U.S. 323, 341, 94 S.Ct. 2997, 3008, 41 L.Ed.2d both recognized that the public branding of an individual 789, 806 (1974).11 implicates interests cognizable as either “liberty” or “property,” and held that such public condemnation cannot be accomplished without procedural safeguards *724 We have consistently held that designed to eliminate arbitrary or capricious executive “ ‘(W)here a person’s good name, reputation, honor, or action. Jenkins involved the constitutionality of the integrity is at stake because of what the government is Louisiana Labor-Management Commission of Inquiry, an doing to him, notice and an opportunity to be heard are executive agency whose “very purpose . . . is to find essential.’ Wisconsin v. Constantineau, 400 U.S. 433, persons guilty of violating criminal laws without trial or 437, 91 S.Ct. 507, 510, 27 L.Ed.2d 515; Wieman v. procedural safeguards, and to publicize those findings.” Updegraff, 344 U.S. 183, 191, 73 S.Ct. 215, 219, 97 L.Ed. 395 U.S., at 424, 89 S.Ct., at 1850, 23 L.Ed.2d, at 418. 216; Joint Anti-Fascist Refugee Committee v. McGrath, “(T)he personal and economic consequences alleged to 341 U.S. 123, 71 S.Ct. 624, 95 L.Ed. 817; United States v. flow from such actions are sufficient to meet the Lovett, 328 U.S. 303, 316-317, 66 S.Ct. 1073, 1079, 90 requirement that appellant prove a legally redressable L.Ed. 1252; Peters v. Hobby, 349 U.S. 331, 352, 75 S.Ct. injury. Those consequences would certainly be actionable 790, 801, 99 L.Ed. 1129 (Douglas, J., concurring). See if caused by a private party and thus should be sufficient Cafeteria & Restaurant Workers v. McElroy, 367 U.S. to accord appellant standing. See *726 Greene v. 886, 898, 81 S.Ct. 1743, 1750, 6 L.Ed.2d 1230.” Board of McElroy, 360 U.S. 474, 493, n. 22, 79 S.Ct. 1400, 1411, 3 Regents v. Roth, supra, 408 U.S. at 573, 92 S.Ct. at 2707, L.E2d 1377 (1959); Joint Anti-Fascist Refugee 33 L.Ed.2d at 558. Committee v. McGrath, supra, 341 U.S. at 140-141, 71 S.Ct. (624), at 632 (95 L.Ed. 817) (opinion of Burton, J.); Id., at 151-160, 71 S.Ct. (624), at 637-642 (95 L.Ed. 817) **1172 See also, E. g., Greene v. McElroy, 360 U.S. 474, (Frankfurter, J., concurring). It is no answer that the 496, 79 S.Ct. 1400, 1413, 3 L.Ed.2d 1377, 1390 (1959); Commission has not itself tried to impose any direct Cafeteria Workers v. McElroy, 367 U.S. 886, 899-902, 81 sanctions on appellant; it is enough that the Commission’s S.Ct. 1743, 1750-1752, 6 L.Ed.2d 1230, 1238-1240 alleged actions will have a substantial impact on him. . . . (1961) (Brennan, J., dissenting); Goss v. Lopez, 419 U.S. Appellant’s allegations go beyond the normal publicity 565, 574-575, 95 S.Ct. 729, 736-737, 42 L.Ed.2d 725 attending criminal prosecution; he alleges a concerted (1975). In the criminal justice system, this interest is attempt publicly to brand him a criminal without a trial.” given concrete protection through the presumption of Id., at 424-425, 89 S.Ct., at 1850, 23 L.Ed.2d, at 418. innocence and the prohibition of state-imposed punishment unless the State can demonstrate beyond a reasonable doubt, at a public trial with the attendant **1173 Significantly, we noted that one defect in the constitutional safeguards, that a particular individual has Commission was that it “exercises a function very much engaged in proscribed criminal conduct. “(B)ecause of the akin to making an official adjudication of criminal certainty that (one found guilty of criminal behavior) culpability,” and that it was “concerned only with would be stigmatized by the conviction . . . a society that exposing violations of criminal laws by specific values the good name and freedom of every individual individuals.” Id., at 427, 89 S.Ct., at 1852, 23 L.Ed.2d, at should not condemn a man for commission of a crime 420. “(I)t is empowered to be used and allegedly is used when there is reasonable doubt about his guilt.” In re to find named individuals guilty of violating the criminal © 2015 Thomson Reuters. No claim to original U.S. Government Works. 12 Paul v. Davis, 424 U.S. 693 (1976) 96 S.Ct. 1155, 47 L.Ed.2d 405, 1 IER Cases 1827

laws of Louisiana and the United States and to brand them recognize the crucial difference between the question as criminals in public.” Id., at 428, 89 S.Ct., at 1852, 23 whether there is a personal interest in one’s good name L.Ed.2d, at 420. See also Ibid., quoting Hannah v. Larche, and reputation that is constitutionally cognizable as a 363 U.S. 420, 488, 80 S.Ct. 1502, 1543, 4 L.Ed.2d 1307, “liberty” or “property” interest within the Fourteenth and 1353 (1960) (Frankfurter, J., concurring in result). Fifth Amendment Due Process Clauses, and the totally Although three Justices in dissent would have dismissed separate question whether particular government *728 the complaint for lack of standing, since there were no action with respect to that interest satisfies the mandates allegations that the appellant would be investigated, called of due process. See, e. g., supra, at 1170 and n. 8. as a witness, or named in the Commission’s findings, 395 Although the dissenters in Jenkins thought that the U.S., at 436, 80 S.Ct., at 1512, 4 L.Ed.2d, at 1318 Commission’s procedures complied with due process, (Harlan, J., dissenting), they nevertheless observed, Id., at they clearly believed that there was a personal interest 438, 80 S.Ct., at 1857, 4 L.Ed.2d, at 1318: that had to be weighed in reaching that conclusion.14 The “(There is) a constitutionally **1174 dissenters in Jenkins, like the Court in Hannah v. significant distinction between two Larche, supra, held the view that in the context of a kinds of governmental bodies. The purely investigatory, factfinding agency, full trial first is an agency whose sole or safeguards are not required to comply with due process. predominant function, without serving But that question would never have been reached unless any other public interest, is to expose there were some constitutionally cognizable personal and publicize the names of persons it interest making the inquiry necessary the interest in finds guilty of wrongdoing. To the reputation that is affected *729 by public “exposure.” The extent that such a determination Court, by contrast, now implicitly repudiates a substantial whether called a ‘finding’ or an body of case law and finds no such constitutionally ‘adjudication’ *727 finally and cognizable interest in a person’s reputation, thus directly affects the substantial foreclosing any inquiry into the procedural protections personal interests, I do not doubt that accorded that interest in a given situation. the Due Process Clause may require that it be accompanied by many of the In short, it is difficult to fathom what renders respondent’s traditional adjudicatory procedural interest in his reputation somehow different from the safeguards. Cf. Joint Anti-Fascist personal interest affected by “ ‘an agency whose sole or Refugee Committee v. McGrath, 341 predominant function, without serving any other public U.S. 123, 71 S.Ct. 624, 95 L.Ed. 817 interest, is to expose and publicize the names of persons it (1951).” finds guilty of wrongdoing.’ ” Ante, at 1163 n. 4, quoting 395 U.S., at 438, 89 S.Ct., at 1857, 23 L.Ed.2d, at 426. Surely the difference cannot be found in the fact that police officials rather than a statutory “agency” engaged See also Id., at 442, 89 S.Ct., at 1859, 23 L.Ed.2d, at 428. in the stigmatizing conduct, for both situations involve the Thus, although the Court was divided on the particular procedural safeguards that would be necessary in requisite action “under color of” law. Ante, at 1158 n. 2. particular circumstances, the common point of agreement, Nor can the difference be found in the argument that petitioners’ actions were “serving any other public and the one that the Court today inexplicably rejects, was interest,” for that consideration Only affects the outcome that the official characterization of an individual as a of the due process balance in a particular case, not criminal affects a constitutional “liberty” interest. whether there is a personal “liberty” interest to be The Court, however, relegates its discussion of Jenkins to weighed against the government interests supposedly a dissembling footnote. First, the Court ignores the fact justifying the State’s official actions. It is remarkable that that the Court in Jenkins clearly recognized a the Court, which is so determined to parse the language of constitutional “liberty” or “property” interest in reputation other cases, see generally Ante, Part II, can be thus sufficient to invoke the strictures of the Fourteenth oblivious to the fact that Every Member of the Court so Amendment.13 It baffles me how, in the face of that recently felt that the intentional, public exposure of holding, the Court can come to today’s conclusion by alleged wrongdoing like the branding of an individual as reliance on the fact that the conduct in question does not an “active shoplifter” implicates a constitutionally “come within the language” of the Dissent in Jenkins, protected “liberty” or “property” interest and requires ante, at 1163 n. 4. Second, and more important, the analysis as to whether procedures adequate to satisfy due Court’s footnote manifests the same confusion that process were accorded the accused by the State. pervades the remainder of its opinion; it simply fails to Moreover, Wisconsin v. Constantineau, 400 U.S. 433, 91 S.Ct. 507, 27 L.Ed.2d 515 (1971), which was relied on by © 2015 Thomson Reuters. No claim to original U.S. Government Works. 13 Paul v. Davis, 424 U.S. 693 (1976) 96 S.Ct. 1155, 47 L.Ed.2d 405, 1 IER Cases 1827

the Court of Appeals in this case, did not rely at all on the reputation that affects an individual’s employment fact asserted by the *730 Court today as controlling prospects or, as “a right or status previously recognized namely, upon the fact that “posting” denied Ms. by state law (that the State) distinctly altered or Constantineau the right to purchase alcohol for a year, extinguished.” Ante, at 1165. See also, E. g., ante, at ante, at 1164. Rath, Constantineau stated: “The Only 1160, 1162-1163, 1164-1165. The obvious answer is that issue present here is whether the label or characterization such references in those cases (when there even were such given a person by ‘posting,’ though a mark of serious references) concerned the particular fact situations illness to some, is to others such a stigma or badge of presented, and in nowise implied any limitation upon the disgrace that procedural due process requires notice and application of the principles announced. E. g., ante, at an opportunity to be heard.” 400 U.S., at 436, 91 S.Ct., at 1164-1165, quoting Board of Regents v. Roth, 408 U.S., 509, 27 L.Ed.2d, at 518 (emphasis supplied). In addition at 573, 92 S.Ct., at 2707, 33 L.Ed.2d, at 558. See n. 15, to the statements quoted by the Court, Ante, at Supra. Discussions of impact upon future employment 1163-1164, the Court in Constantineau continued: “ opportunities were nothing more than recognition of the ‘Posting’ under the Wisconsin Act may to some be logical and natural consequences flowing from the stigma merely the **1175 mark of illness, to others it is a stigma, condemned. E. g., ante, at 1162-1163, quoting Cafeteria an official branding of a person. The label is a degrading Workers v. McElroy, 367 U.S., at 898, 81 S.Ct. 1743, 6 one. Under the Wisconsin Act, a resident of Hartford is L.Ed.2d 1230, 1238.17 given no process at all. This appellee was not afforded a chance to defend herself. She may have been the victim of *734 Moreover, the analysis has a hollow ring in light of an official’s caprice. Only when the whole proceedings the Court’s acceptance of the truth of the allegation that leading to the pinning of an unsavory label on a person the “active shoplifter” label would “seriously impair are aired can oppressive results be prevented.” 400 U.S., **1177 (respondent’s) future employment opportunities.” at 437, 91 S.Ct., at 510, 27 L.Ed.2d, at 519. “ ‘(T)he right Ante, at 1159. This is clear recognition that an official to be heard before being condemned to suffer grievous “badge of infamy” affects tangible interests of the loss of any kind, Even though it may not involve the defamed individual and not merely an abstract interest in stigma and hardships of a criminal conviction, is a how people view him; for the “badge of infamy” has principle basic to our society.’ ” Ibid., quoting Joint serious consequences in its impact on no less than the Anti-Fascist Refugee Comm. v. McGrath, 341 U.S. 123, opportunities open to him to enjoy life, liberty, and the 168, 71 S.Ct. 624, 646, 95 L.Ed. 817, 852 (1951) pursuit of happiness. It is inexplicable how the Court can (Frankfurter, J., concurring) (emphasis supplied). There say that a person’s status is “altered” when the State again, the fact that government stigmatization of an suspends him from school, revokes his driver’s license, individual implicates constitutionally protected interests fires him from a job, or denies him the right to purchase a was made plain.15 drink of alcohol, but is in no way “altered” when it *731 **1176 Thus Jenkins and Constantineau, and the officially pins upon him the brand of a criminal, decisions upon which they relied, are cogent authority particularly since the Court recognizes how deleterious that a person’s interest in his good name and reputation will be the consequences that inevitably flow from its falls *732 within the broad term “liberty” and clearly official act. See, E. g., ante, at 1164, 1165-1166. Our require that the government afford procedural protections precedents clearly mandate that a person’s interest in his before infringing that name and reputation by branding a good name and reputation is cognizable as a “liberty” person as a criminal. The Court is reduced to discrediting interest within the meaning of the Due Process Clause, the clear thrust of Constantineau and Jenkins by excluding and the Court has simply failed to distinguish those the interest in reputation from all constitutional protection precedents in any rational manner in holding that no “if there is any other possible interpretation” by which to invasion of a “liberty” interest was effected in the official deny their force as precedent according constitutional stigmatizing of respondent as a criminal without any protection for the interest in reputation.16 Ante, at 1164. “process” whatsoever. The Court’s approach oblivious both to Mr. Chief Justice I have always thought that one of this Court’s most Marshall’s admonition that “we must never forget, that it important roles is to provide a formidable bulwark against is A constitution we are expounding,” McCulloch v. governmental violation of the constitutional safeguards Maryland, 4 Wheat. 316, 407, 4 L.Ed. 579, 601 (1819), *735 securing in our free society the legitimate and to the teaching of cases such as Roth and Meyer, expectations of every person to innate human dignity and which were attentive to the necessary breadth of sense of worth. It is a regrettable abdication of that role constitutional “liberty” and “property” interests, see nn. and a saddening denigration of our majestic Bill of Rights 10, 15, supra— is to water down our prior precedents by when the Court tolerates arbitrary and capricious official reinterpreting *733 them as confined to injury to conduct branding an individual as a criminal without compliance with constitutional procedures designed to © 2015 Thomson Reuters. No claim to original U.S. Government Works. 14 Paul v. Davis, 424 U.S. 693 (1976) 96 S.Ct. 1155, 47 L.Ed.2d 405, 1 IER Cases 1827

ensure the fair and impartial ascertainment of criminal All Citations culpability. Today’s decision must surely be a short-lived aberration.18 424 U.S. 693, 96 S.Ct. 1155, 47 L.Ed.2d 405, 1 IER Cases 1827

* The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337, 26 S.Ct. 282, 287, 50 L.Ed. 499, 505.

1 The “and laws” provision of 42 U.S.C. s 1983 is not implicated in this case.

2 It is not disputed that petitioners’ actions were a part of their official conduct and that this element of a s 1983 cause of action is satisfied here.

3 If respondent is correct in his contention that defamation by a state official is actionable under the Fourteenth Amendment, it would of course follow that defamation by a federal official should likewise be actionable under the cognate Due Process Clause of the Fifth Amendment. Surely the Fourteenth Amendment imposes no more stringent requirements upon state officials than does the Fifth upon their federal counterparts. We thus consider this Court’s decisions interpreting either Clause as relevant to our examination of respondent’s claim.

4 We cannot agree with the suggestion of our Brother BRENNAN, dissenting, Post, at 1173, that the actions of these two petitioner law enforcement officers come within the language used by Mr. Justice Harlan in his dissenting opinion in Jenkins v. McKeithen, 395 U.S. 411, 433, 89 S.Ct. 1843, 23 L.Ed.2d 404 (1969). They are not by any conceivable stretch of the imagination, either separately or together, “an agency whose sole or predominant function, without serving any other public interest, is to expose and publicize the names of persons it finds guilty of wrongdoing.” Id., at 438, 89 S.Ct., at 1857, 23 L.Ed.2d, at 426. Indeed, the actions taken by these petitioners in this case fall far short of the more formalized proceedings of the Commission on Civil Rights established by Congress in 1957, the procedures of which were upheld against constitutional challenge by this Court in Hannah v. Larche, 363 U.S. 420, 80 S.Ct. 1502, 4 L.Ed.2d 1307 (1960). There the Court described the functions of the Commission in this language: “It does not adjudicate. It does not hold trials or determine anyone’s civil or criminal liability. It does not issue orders. Nor does it indict, punish, or impose any Legal sanctions. It does not make determinations depriving anyone of his life, liberty, or property. In short, the Commission does not and cannot take any affirmative action which will affect an individual’s Legal rights. The only purpose of its existence is to find facts which may subsequently be used as the basis for legislative or executive action.” Id., at 441, 80 S.Ct., at 1514, 4 L.Ed.2d, at 1321 (emphasis supplied). Addressing itself to the question of whether the Commission’s “proceedings might irreparably harm those being investigated by subjecting them to public opprobrium and scorn, the distinct likelihood of losing their jobs, and the possibility of criminal prosecutions,” the Court said that “even if such collateral consequences were to flow from the Commission’s investigations, they would not be the result of any affirmative determinations made by the Commission, and they would not affect the legitimacy of the Commission’s investigative function.” Id., at 443, 80 S.Ct., at 1515, 4 L.Ed.2d, at 1322.

5 There are other interests, of course, protected not by virtue of their recognition by the law of a particular State but because they are guaranteed in one of the provisions of the Bill of Rights which has been “incorporated” into the Fourteenth Amendment. Section 1983 makes a deprivation of such rights actionable independently of state law. See Monroe v. Pape, 365 U.S. 167, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961). Our discussion in Part III is limited to consideration of the procedural guarantees of the Due Process Clause and is not intended to describe those substantive limitations upon state action which may be encompassed within the concept of “liberty” expressed in the Fourteenth Amendment. Cf. Part IV, Infra.

1 Deprivations of rights secured by “laws” as well as by the Constitution are actionable under s 1983. Only an alleged constitutional violation is involved in this case. Ante, at 1158 n. 1.

2 Indeed, it would be difficult to interpret that discussion as anything but a discussion of the “under color of” law requirement of s 1983, which is not involved in this case and which has no relationship to the question whether a “liberty” or “property” interest is involved here. There is simply no way in which the Court, despite today’s treatment of the terms “liberty” and “property,” could declare that the loss of a person’s life is not an interest cognizable within the

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 15 Paul v. Davis, 424 U.S. 693 (1976) 96 S.Ct. 1155, 47 L.Ed.2d 405, 1 IER Cases 1827

“life” portion of the Due Process Clause. See Ante, at 1159.

3 Of course, in addition to providing a remedy when an official abuses his position, s 1983 is designed to provide a remedy when a state statute itself abridges constitutional rights, when a remedy under state law is inadequate to protect constitutional rights, and when a state remedy, though adequate in theory, is unavailable in practice. See, E. g., Monroe v. Pape, 365 U.S. 167, 173-174, 81 S.Ct. 473, 476-477, 5 L.Ed.2d 492, 497-498 (1961).

4 Petitioners testified: “Q. And you didn’t limit this to persons who had been convicted of the offense of shoplifting, is that correct? “A. That’s correct. “Q. Now, my question is what is the basis for your conclusion that a person a person who has been arrested for the offense of shoplifting is an active shoplifter? “A. The very fact that he’s been arrested for the charge of shoplifting and evidence presented to that effect. “Q. And this is not based on any finding of the court? “A. No, sir.” App. 26. “Q. All right. So that if my understanding is correct, this included all persons who were arrested in ‘71 and ‘72? “A. That’s true. “Q. And selected persons from who were arrested in previous years? “A. . . . I assume from the number of persons here that many of these have been arrested many years back down the line consecutively . . . . “Q. So there’s no distinction made between persons whose arrest terminated in convictions and persons whose arrest did not terminate in convictions? “A. No, sir.” Id. 29.

5 Respondent was arrested on June 14, 1971. He pleaded not guilty and the charge was “filed away with leave (to reinstate)” on September 22, 1971. The distribution of the flyer was on December 5, 1972. The shoplifting charge was dismissed on December 11, 1972, and respondent filed his complaint the following day. He sought compensatory and punitive damages, and an injunction prohibiting similar dissemination of such flyers in the future and ordering petitioners to obtain the return of the flyers and to instruct those who received them that respondent and the others pictured in the flyers were not “active shoplifters,” and had not been convicted of shoplifting or any similar offense. Respondent’s only other arrest took place five years previously for a speeding offense.

6 The Court, by totally excluding a person’s interest in his reputation from any cognizance under the Due Process Clause, would be forced to reach the same conclusion that there is no cause of action under s 1983 even to obtain injunctive relief if petitioners had randomly selected names from the Louisville telephone directory for inclusion in the “active shoplifters” flyer. Of course, even if a person has been arrested on a constitutionally sufficient basis, that does not justify the State’s treating him as a criminal. “The mere fact that a man has been arrested has very little, if any, probative value in showing that he has engaged in any misconduct. An arrest shows nothing more than that someone probably suspected the person apprehended of an offense. When formal charges are not filed against the arrested person and he is released without trial, whatever probative force the arrest may have had is normally dissipated.” Schware v. Board of Bar Examiners, 353 U.S. 232, 241, 77 S.Ct. 752, 757, 1 L.Ed.2d 796, 803 (1957). The constitutional presumption of innocence, the requirement that conviction for a crime must be based on proof beyond a reasonable doubt, and the other safeguards of a criminal trial are obviously designed at least in part to give concrete meaning to this fact.

7 At one point in the flyer, there was also an indication that “(t)hese persons have been arrested during 1971 and 1972 Or have been active in various criminal fields in high density shopping areas.” The stated purpose of the flyer was “so that you, the businessman . . . may inform your security personnel to Watch for these subjects.” Ante, at 1158 (emphasis supplied).

8 Indeed, the Court’s opinion confuses the two separate questions of whether reputation is a “liberty” or “property” interest and whether, in a particular context, state action with respect to that interest is a violation of due process. E. g., ante, at 1159, 1160-1161, and n. 3 (assuming that if reputation is a cognizable liberty or property interest, every defamation by a public official would be an offense against the Due Process Clause of the Fifth or Fourteenth Amendment).

9 Today’s holding places a vast and arbitrary power in the hands of federal and state officials. It is not difficult to conceive of a police department, dissatisfied with what it perceives to be the dilatory nature or lack of efficacy of the judicial system in dealing with criminal defendants, publishing periodic lists of “active rapists,” “active larcenists,” or other “known criminals.” The hardships resulting from this official stigmatization loss of employment and educational opportunities, creation of impediments to professional licensing, and the imposition of general obstacles to the right of © 2015 Thomson Reuters. No claim to original U.S. Government Works. 16 Paul v. Davis, 424 U.S. 693 (1976) 96 S.Ct. 1155, 47 L.Ed.2d 405, 1 IER Cases 1827

all free men to the pursuit of happiness will often be as severe as actual incarceration, and the Court today invites and condones such lawless action by those who wish to inflict punishment without compliance with the procedural safeguards constitutionally required of the criminal justice system.

10 One of the more questionable assertions made by the Court suggests that “liberty” or “property” interests are protected only if they are recognized under state law or protected by one of the specific guarantees of the Bill of Rights. Ante, at 1165 and n. 5. To be sure, the Court has held that “(p) roperty interests . . . are not created by the Constitution. Rather they are created and their dimensions are defined by existing rules or understandings that stem from an independent source Such as state law rules or understandings that secure certain benefits and that support claims of entitlement to those benefits.” Board of Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548, 561 (1972) (emphasis supplied). See also, E. g., Goss v. Lopez, 419 U.S. 565, 572-573, 95 S.Ct. 729, 734, 42 L.Ed.2d 725, 733 (1975). However, it should also be clear that if the Federal Government, for example, creates an entitlement to some benefit, the States cannot infringe a person’s enjoyment of that “property” interest without compliance with the dictates of due process. Moreover, we have never restricted “liberty” interests in the manner the Court today attempts to do. The Due Process Clause of the Fifth Amendment, like the Due Process Clause of the Fourteenth Amendment, protects “liberty” interests. But the content of “liberty” in those Clauses has never been thought to depend on recognition of an interest by the State or Federal Government, and has never been restricted to interests explicitly recognized by other provisions of the Bill of Rights: “ ‘While this Court has not attempted to define with exactness the liberty . . . guaranteed (by the Fourteenth Amendment), the term has received much consideration and some of the included things have been definitely stated. Without doubt, it denotes not merely freedom from bodily restraint but also the right of the individual to contract, to engage in any of the common occupations of life, to acquire useful knowledge, to marry, establish a home and bring up children, to worship God according to the dictates of his own conscience, and generally to enjoy those privileges long recognized . . . as essential to the orderly pursuit of happiness by free men.’ Meyer v. Nebraska, 262 U.S. 390, 399, 43 S.Ct. 625, 626, 67 L.Ed. 1042.” Board of Regents v. Roth, supra, 408 U.S. at 572, 92 S.Ct. at 2706, 33 L.Ed.2d at 558. See also, E. g., Arnett v. Kennedy, 416 U.S. 134, 157, 94 S.Ct. 1633, 1645, 40 L.Ed.2d 15, 35 (1974) (opinion of Rehnquist, J.). It should thus be clear that much of the content of “liberty” has no tie whatsoever to particular provisions of the Bill of Rights, and the Court today gives no explanation for its narrowing of that content.

11 It is strange that the Court should hold that the interest in one’s good name and reputation is not embraced within the concept of “liberty” or “property” under the Fourteenth Amendment, and yet hold that that same interest, when recognized under state law, is sufficient to overcome the specific protections of the First Amendment. See, E. g., Gertz v. Robert Welch, Inc.; Time, Inc. v. Firestone, ante, 424 U.S. 448, 96 S.Ct. 958, 47 L.Ed.2d 154 (1976).

12 The Court’s insensitivity to these constitutional dictates is particularly evident when it declares that because respondent had never been brought to trial, “his guilt or innocence of that offense (shoplifting) had never been resolved.” Ante, at 1158. It is hard to conceive of a more devastating flouting of the presumption of innocence, 25 L.Ed.2d, at 375, “that bedrock ‘axiomatic and elementary’ principle whose ‘enforcement lies at the foundation of the administration of our criminal law.’ ” In re Winship, 397 U.S., at 363, 90 S.Ct., at 1072, quoting Coffin v. United States, 156 U.S. 432, 453, 15 S.Ct. 394, 402, 39 L.Ed. 481, 491 (1895). Moreover, even if a person was once convicted of a crime, that does not mean that he is “actively engaged” in that activity now.

13 Of course, such oversights are typical of today’s opinion. Compare, E. g., the discussions of Goss v. Lopez, 419 U.S. 565, 95 S.Ct. 729, 42 L.Ed.2d 725 (1975), Ante, at 1165 and n. 15, Infra; the discussions of Wisconsin v. Constantineau, 400 U.S. 433, 91 S.Ct. 507, 27 L.Ed.2d 515 (1971), Ante, at 1163-1164, and Infra, at 1174-1175.

14 For example, in addition to the statements already quoted in text, the dissenters observed: The Commission thus bears close resemblance to certain federal administrative agencies . . .. These agencies have one salient feature in common, which distinguishes them from those designed simply to ‘expose.’ None of them is the Final arbiter of anyone’s guilt or innocence. Each, rather, plays only a Preliminary role designed, in the usual course of events, to Initiate a subsequent formal proceeding in which the accused will enjoy the full panoply of procedural safeguards. For this reason, and because such agencies could not otherwise practicably pursue their investigative functions, they have not been required to follow ‘adjudicatory’ procedures. 395 U.S., at 439, 442, 89 S.Ct., at 858, 23 L.Ed.2d at 427. “Although in this respect the Commission is not different from the federal agencies discussed above, I am not ready to say that the collateral consequences of government-sanctioned opprobrium may not under some circumstances entitle a person to some right, consistent with the Commission’s efficient performance of its investigatory duties, to have his public say in rebuttal. However, the Commission’s procedures are far from being niggardly in this respect. . . . “ . . . It may be that some of my Brethren understand the complaint to allege that in fact the Commission acts primarily as an agency of ‘exposure,’ rather than one which serves the ends required by the state statutes. If so although I do not believe that the complaint can be reasonably thus construed the area of disagreement between us may be small or © 2015 Thomson Reuters. No claim to original U.S. Government Works. 17 Paul v. Davis, 424 U.S. 693 (1976) 96 S.Ct. 1155, 47 L.Ed.2d 405, 1 IER Cases 1827

nonexistent.” Id., at 442, 89 S.Ct., at 858.

15 Even more recently, in Goss v. Lopez, 419 U.S. 565, 95 S.Ct. 729, 42 L.Ed.2d 725 (1975), we recognized that students may not be suspended from school without being accorded due process safeguards. We explicitly referred to “the liberty interest in reputation” implicated by such suspensions, Id., at 576, 95 S.Ct., at 737, 42 L.Ed.2d, at 735, based upon the fact that suspension for certain actions would stigmatize the student, Id., at 574-575, 95 S.Ct., at 736, 42 L.Ed.2d, at 735: “The Due Process Clause also forbids arbitrary deprivations of liberty. ‘Where a person’s good name, reputation, honor, or integrity is at stake because of what the government is doing to him,’ the minimal requirements of the Clause must be satisfied. Wisconsin v. Constantineau, 400 U.S. 433, 437, 91 S.Ct. 507, 510, 27 L.Ed.2d 515 (1971); Board of Regents v. Roth, supra, 408 U.S. at 573, 92 S.Ct. (2701) at 2707 (33 L.Ed.2d 548). School authorities here suspended appellees from school for periods of up to 10 days based on charges of misconduct. If sustained and recorded, those charges could seriously damage the students’ standing with their fellow pupils and their teachers as well as interfere with later opportunities for higher education and employment. It is apparent that the claimed right of the State to determine unilaterally and without process whether that misconduct has occurred immediately collides with the requirements of the Constitution.” The Court states that today’s holding is “quite consistent” with Goss because “Ohio law conferred a right upon all children to attend school, and . . . the act of the school officials suspending the student there involved resulted in a denial or deprivation of that right.” Ante, at 1165. However, that was only one-half of the holding in Goss. The Ohio law established a Property interest of which the Court held a student could not be deprived without being accorded due process. 419 U.S., at 573-574, 95 S.Ct., at 735, 42 L.Ed.2d, at 733-734. However, the Court also specifically recognized that there was an independent Liberty interest implicated in the case, not dependent upon the statutory right to attend school, but based, as noted above, on the fact that suspension for certain conduct could affect a student’s “good name, reputation, honor, or integrity.” Id., at 574-575, 95 S.Ct., at 736, 42 L.Ed.2d, at 735. Similarly, the idea that the language in Board of Regents v. Roth, supra, is “quite inconsistent with any notion that a defamation perpetrated by a government official but unconnected with any refusal to rehire would be actionable,” Ante, at 1164, borders on the absurd. The Court in Roth, like the Court in Goss, explicitly quoted the language from Constantineau that the Court today denigrates, Ante, at 1163-1164, and it was clear that Roth was focusing on stigmatization as such. We said there that when due process safeguards are required in such situations, the “purpose of such notice and hearing is to provide the person an opportunity To clear his name,” 408 U.S., at 573 n. 12, 92 S.Ct., at 2707, 33 L.Ed.2d, at 558 (emphasis supplied), and only found no requirement for due process safeguards because “(i)n the present case . . . there is no suggestion whatever that the respondent’s ‘good name, reputation, honor, or integrity’ is at stake.” Id., at 573, 92 S.Ct., at 2707, 33 L.Ed.2d, at 558. See also Arnett v. Kennedy, 416 U.S., at 157, 94 S.Ct., at 1646, 40 L.Ed.2d 15 (opinion of Rehnquist, J.) (“(L)iberty is not offended by dismissal from employment itself, but instead by dismissal based upon an unsupported charge which could wrongfully injure the reputation of an employee . . . . (T)he purpose of the hearing in such a case is to provide the person ‘an opportunity to clear his name’ . . .”). The fact that a stigma is imposed by the government in terminating the employment of a government employee may make the existence of state action unquestionable, but it surely does not detract from the fact that the operative “liberty” concept relates to the official stigmatization of the individual, whether imposed by the government in its status as an employer or otherwise.

16 Similar insensitivity is exhibited by the Court when it declares that respondent “has pointed to no specific constitutional guarantee safeguarding the interest he asserts has been invaded.” Ante, at 1160. The gravamen of respondent’s complaint is that he has been stigmatized as a criminal without Any of the constitutional protections designed to prevent an erroneous determination of criminal culpability.

17 The import of these cases and the obvious impact of official stigmatization as a criminal were not lost on the Court of Appeals in this case: “This label (”active shoplifter“) carries with it the badge of disgrace of a criminal conviction. Moreover, it is a direct statement by law enforcement officials that the persons included in the flyer are presently pursuing an active course of criminal conduct. All of this was done without the slightest regard for due process. There was no notice nor opportunity to be heard prior to the distribution of the flyer, and appellant and others have never been accorded the opportunity to refute the charges in a criminal proceeding. It goes without saying that the Police Chiefs cannot determine the guilt or innocence of an accused in an administrative proceeding. Such a determination can be made only in a court of law. “The harm is all the more apparent because the branding has been done by law enforcement officials with the full power, prestige and authority of their positions. There can be little doubt that a person’s standing and associations in the community have been damaged seriously when law enforcement officials brand him an active shoplifter, accuse him of a continuing course of criminal conduct, group him with criminals and distribute his name and photograph to the merchants and businessmen of the community. Such acts are a direct and devastating attack on the good name, reputation, honor and integrity of the person involved. The fact of an arrest without more may impair or cloud a person’s reputation. Michelson v. United States, 335 U.S. 469, 482, 69 S.Ct. 213, 93 L.Ed. 168 (1948). Such acts on © 2015 Thomson Reuters. No claim to original U.S. Government Works. 18 Paul v. Davis, 424 U.S. 693 (1976) 96 S.Ct. 1155, 47 L.Ed.2d 405, 1 IER Cases 1827

the part of law enforcement officials may result in direct economic loss and restricted opportunities for schooling, employment and professional licenses. Menard v. Mitchell, 139 U.S.App.D.C. 113, 430 F.2d 486, 490 (1970).” 505 F.2d 1180, 1183 (1974).

18 In light of my conviction that the State may not condemn an individual as a criminal without following the mandates of the trial process, I need not address the question whether there is an independent right of privacy which would yield the same result. Indeed, privacy notions appear to be inextricably interwoven with the considerations which require that a State not single an individual out for punishment outside the judicial process. Essentially, the core concept would be that a State cannot broadcast even such factual events as the occurrence of an arrest that does not culminate in a conviction when there are no legitimate law enforcement justifications for doing so, since the State is chargeable with the knowledge that many employers will treat an arrest the same as a conviction and deny the individual employment or other opportunities on the basis of a fact that has no probative value with respect to actual criminal culpability. See, E. g., Michelson v. United States, 335 U.S. 469, 482, 69 S.Ct. 213, 221, 93 L.Ed. 168, 177 (1948); Schware v. Board of Bar Examiners, 353 U.S., at 241, 77 S.Ct., at 757, 1 L.Ed.2d, at 802. A host of state and federal courts, relying on both privacy notions and the presumption of innocence, have begun to develop a line of cases holding that there are substantive limits on the power of the government to disseminate unresolved arrest records outside the law enforcement system, see, E. g., Utz v. Cullinane, 172 U.S.App.D.C. 67, 520 F.2d 467 (1975); Tarlton v. Saxbe, 165 U.S.App.D.C. 293, 507 F.2d 1116 (1974); United States v. Dooley, 364 F.Supp. 75 (E.D.Pa.1973); Menard v. Mitchell, 328 F.Supp. 718, 725-726 (D.C.1971), rev’d on other grounds, 162 U.S.App.D.C. 284, 498 F.2d 1017 (1974); United States v. Kalish, 271 F.Supp. 968 (P.R.1967); Davidson v. Dill, 180 Colo. 123, 503 P.2d 157 (1972); Eddy v. Moore, 5 Wash.App. 334, 487 P.2d 211 (1971). I fear that after today’s decision, these nascent doctrines will never have the opportunity for full growth and analysis. Since the Court of Appeals did not address respondent’s privacy claims, and since there has not been substantial briefing or oral argument on that point, the Court’s pronouncements are certainly unnecessary. Of course, States that are more sensitive than is this Court to the privacy and other interests of individuals erroneously caught up in the criminal justice system are certainly free to adopt or adhere to higher standards under state law. See, E. g., Michigan v. Mosley, 423 U.S. 96, 111, 120-121, 96 S.Ct. 321, 330, 334-335, 46 L.Ed.2d 313, 326, 331-332 (1975) (Brennan, J., dissenting). Mr. Justice WHITE does not concur in this footnote.

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 19 Phillips v. Washington Legal Foundation, 524 U.S. 156 (1998) 118 S.Ct. 1925, 141 L.Ed.2d 174, 66 USLW 4468, 98 Cal. Daily Op. Serv. 4563...

77 Cases that cite this headnote KeyCite Yellow Flag - Negative Treatment Declined to Extend by Engquist v. Oregon Dept. of Agriculture, 9th Cir.(Or.), February 8, 2007 118 S.Ct. 1925 Supreme Court of the United States [2] Eminent Domain Thomas R. PHILLIPS, et al., Petitioners, Property and Rights Subject of Compensation v. WASHINGTON LEGAL FOUNDATION et al. At least as to confiscatory regulations, as opposed to those regulating use of property, No. 96–1578. | Argued Jan. 13, 1998. | Decided June state may not sidestep Takings Clause by 15, 1998. disavowing traditional property interests long recognized under state law. U.S.C.A. Const.Amend. 5. Public interest group, Texas attorney, and Texas citizen brought action against justices of Texas Supreme Court, Texas Equal Access to Justice Foundation, and 47 Cases that cite this headnote Foundation’s chairman, challenging constitutionality of Texas’ Interest on Lawyers Trust Account (IOLTA) program. The United States District Court for the Western District of Texas, James R. Nowlin, J., 873 F.Supp. 1, granted summary judgment to defendants. Plaintiffs [3] Property appealed. The Court of Appeals for the Fifth Circuit, 94 Right of alienation F.3d 996,reversed. Certiorari was granted. The Supreme Court, Chief Justice Rehnquist, held that under Texas law, Fundamental maxim of property law is that interest income generated by funds held in IOLTA owner of property interest may dispose of all or accounts is private property of owner of principal for part of that interest as he sees fit. purposes of Takings Clause.

Affirmed. 11 Cases that cite this headnote

Justice Souter dissented and filed a separate opinion in which Justices Stevens, Ginsburg, and Breyer joined. [4] Justice Breyer dissented and filed a separate opinion in Interest which Justices Stevens, Souter, and Ginsburg joined. Nature and grounds in general

Government has great latitude in regulating circumstances under which interest may be earned. West Headnotes (7) 1 Cases that cite this headnote [1] Federal Courts Property

Inasmuch as Federal Constitution protects rather [5] Interest than creates property interests, existence of Funds in litigation or in custody of the law property interest is determined by reference to existing rules or understandings that stem from Under Texas law, regardless of whether owner independent source such as state law. U.S.C.A. of principal has constitutionally cognizable Const.Amend. 5. interest in anticipated generation of interest by his funds, any interest that does accrue attaches © 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Tab E-7 Phillips v. Washington Legal Foundation, 524 U.S. 156 (1998) 118 S.Ct. 1925, 141 L.Ed.2d 174, 66 USLW 4468, 98 Cal. Daily Op. Serv. 4563...

as a property right incident to ownership of Service does not attribute such interest to the individual underlying principal. clients for federal income tax purposes if they have no control over the decision whether to place the funds in the IOLTA account and do not designate who will receive the 46 Cases that cite this headnote interest. Respondents—a public-interest organization having Texas members opposed to the IOLTA program, a Texas attorney who regularly deposits client funds in an IOLTA account, and a Texas businessman whose attorney [6] retainer has been so deposited—filed this suit against Property TEAJF and the other petitioners, alleging, inter alia, that Ownership and incidents thereof the Texas IOLTA program violated their rights under the Fifth Amendment, which provides that “private property” Property is more than economic value; it also shall not “be taken for public use, without just consists of group of rights which so-called compensation.” The District Court granted petitioners owner exercises in his dominion of the physical summary judgment, reasoning that respondents had no thing, such as right to possess, use and dispose property interest in the IOLTA interest proceeds. The of it. Fifth Circuit reversed, concluding that such interest belongs to the owner of the principal. 13 Cases that cite this headnote Held:

1. Interest earned on client funds held in IOLTA accounts is the “private property” of the client for Takings Clause [7] Eminent Domain purposes. The existence of a property interest is Property and Rights Subject of Compensation determined by reference to existing rules or understandings stemming from an independent source Under Texas law, interest income generated by such as state law. Board of Regents of State Colleges v. funds held in Interest on Lawyers Trust Account Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed.2d (IOLTA) accounts is private property of owner 548. All agree that under Texas law the principal held in of principal for purposes of Takings Clause. IOLTA accounts is the client’s “private property.” U.S.C.A. Const.Amend. 5; State Bar Rules, Moreover, the general rule that “interest follows V.T.C.A., Government Code Title 2, Subtitle G principal” applies in Texas. See Webb’s Fabulous App., Art. 11, §§ 3, 4, 5(A); Equal Access to Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 162, 101 Justice Program Rules 4, 6, 7, 9(a). S.Ct. 446, 451, 66 L.Ed.2d 358. Petitioners’ contention **1927 that *157 Webb’s does not control because examples such as income-only trusts and marital 133 Cases that cite this headnote community property rules demonstrate that Texas does not, in fact, adhere to the general rule is rejected. These examples miss the point of Webb’s. Their exception by Texas from the “interest follows principal” rule has a firm basis in traditional property law principles, whereas **1926 *156 Syllabus* petitioners point to no such principles allowing the owner Under Texas’ Interest on Lawyers Trust Account of funds temporarily deposited in an attorney trust (IOLTA) program, an attorney who receives client funds account to be deprived of the interest the funds generate. must place them in a separate, interest-bearing, federally Petitioners’ further contention that “interest follows authorized “NOW” account upon determining that the principal” in Texas only if it is allowed by law does not funds “could not reasonably be expected to earn interest assist their cause. They do not argue that Texas law for the client or [that] the interest which might be earned prohibits the payment of interest on IOLTA funds, but, ... is not likely to be sufficient to offset the cost of rather, that interest actually “earned” by such funds is not establishing and maintaining the account, service charges, the private property of the principal’s owner. Regardless accounting costs and tax reporting costs which would be of whether that owner has a constitutionally cognizable incurred in attempting to obtain the interest.” IOLTA interest in the anticipated generation of interest by his interest income is paid to the Texas Equal Access to funds, any interest that does accrue attaches as a property Justice Foundation (TEAJF), which finances legal right incident to the ownership of the underlying services for low-income persons. The Internal Revenue © 2015 Thomson Reuters. No claim to original U.S. Government Works. 2 Phillips v. Washington Legal Foundation, 524 U.S. 156 (1998) 118 S.Ct. 1925, 141 L.Ed.2d 174, 66 USLW 4468, 98 Cal. Daily Op. Serv. 4563...

principal. Petitioners’ final argument that the money Richard A. Samp, Arlington, VA, for respondents. transferred to the TEAJF is not “private property” because IOLTA funds cannot reasonably be expected to generate Opinion interest income on their own is plainly incorrect under Texas’ requirement that client funds be deposited in an *159 Chief Justice REHNQUIST delivered the opinion of IOLTA account “if the interest which might be earned” is the Court. insufficient to offset account costs and service charges that would be incurred in obtaining it. It is not that the funds to be placed in IOLTA accounts cannot generate Texas, like 48 other States and the District of Columbia,1 interest, but that they cannot generate net interest. This has adopted an Interest on **1928 Lawyers Trust Account Court has indicated that a physical item does not lack *160 (IOLTA) program. Under these programs, certain “property” status simply because it does not have a client funds held by an attorney in connection with his positive economic or market value. See, e.g., Loretto v. practice of law are deposited in bank accounts. The Teleprompter Manhattan CATV Corp., 458 U.S. 419, 435, interest income generated by the funds is paid to 437, n. 15, 102 S.Ct. 3164, 3175–3176, 3177, n. 15, 73 foundations that finance legal services for low-income L.Ed.2d 868. While IOLTA interest income may have no individuals. The question presented by this case is economically realizable value to its owner, its possession, whether interest earned on client funds held in IOLTA control, and disposition are nonetheless valuable rights. accounts is “private property” of either the client or the See Hodel v. Irving, 481 U.S. 704, 715, 107 S.Ct. 2076, attorney for purposes of the Takings Clause of the Fifth 2083–2084, 95 L.Ed.2d 668. The United States’ argument Amendment. We hold that it is the property of the client. that “private property” is not implicated here because IOLTA interest income is “government-created value” is factually erroneous: The State does nothing to create value; the value is created by respondents’ funds. The I Federal Government, through its banking and taxation regulations, imposes costs on this value if private citizens In the course of their legal practice, attorneys are attempt to exercise control over it. Waiver of these costs frequently required to hold client funds for various if the property is remitted to the State hardly constitutes lengths of time. Before 1980, an attorney generally held “government-created value.” In any event, this Court such funds in noninterest-bearing, federally insured rejected a similar argument in Webb’s, supra, at 162, 101 checking accounts in which all client trust funds of an S.Ct., at 451. Pp. 1930–1933. individual attorney were pooled. These accounts provided administrative convenience and ready access to funds. 2. This Court leaves for consideration on remand the They were noninterest bearing because federal law question whether IOLTA funds have been “taken” by the prohibited federally insured banks and savings and loans State, as well as the amount of “just compensation,” if from paying interest on checking accounts. See 12 U.S.C. any, due respondents. P. 1934. §§ 371a, 1464(b)(1)(B), 1828(g). When a lawyer held a large sum in trust for his client, such funds were generally 94 F.3d 996, affirmed. placed in an interest-bearing savings account because the interest generated *161 outweighed the inconvenience *158 REHNQUIST, C. J., delivered the opinion of the caused by the lack of check-writing capabilities. Court, in which O’CONNOR, SCALIA, KENNEDY, and THOMAS, JJ., joined. SOUTER, J., filed a dissenting In 1980, Congress authorized the creation of Negotiable opinion, in which STEVENS, GINSBURG, and Order of Withdrawal (NOW) accounts, which for the first BREYER, JJ., joined, post, p. 1934. BREYER, J., filed a time permitted federally insured banks to pay interest on dissenting opinion, in which STEVENS, SOUTER, AND demand deposits. § 303, 94 Stat. 146, as amended, 12 GINSBURG, JJ., joined, post, p. 1937. U.S.C. § 1832. NOW accounts are permitted only for deposits that “consist solely of funds in which the entire beneficial interest is held by one or more individuals or by Attorneys and Law Firms an organization which is operated primarily for religious, philanthropic, charitable, educational, political, or other Darrell E. Jordan, Dallas, TX, for petitioners. similar purposes and which is not operated for profit.” § Edwin S. Kneedler, Washington, DC, for United States as 1832(a)(2). For-profit corporations and partnerships are amicus curiae by special leave of the Court. thus prohibited from earning interest on demand deposits. See ibid. However, interpreting § 1832(a), the Federal

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 Phillips v. Washington Legal Foundation, 524 U.S. 156 (1998) 118 S.Ct. 1925, 141 L.Ed.2d 174, 66 USLW 4468, 98 Cal. Daily Op. Serv. 4563...

Reserve Board has concluded that corporate funds may be Respondents are the Washington Legal Foundation held in NOW accounts if the funds are held in trust (WLF), Michael Mazzone, and William Summers. WLF pursuant to a program under which charitable is a public-interest law and policy center with members in organizations have “the exclusive right to the interest.” the State of Texas who are opposed to the Texas IOLTA Letter from Federal Reserve Board General Counsel program. App. 26. Mazzone is an attorney admitted to Michael Bradfield to Donald Middlebrooks (Oct. 15, practice in *163 Texas who maintains an IOLTA account 1981), reprinted in Middlebrooks, The Interest on Trust into which he regularly deposits client funds. Id., at 82. Accounts Program: Mechanics of its Operation, 56 Fla. Summers is a Texas citizen and businessman whose work B.J. 115, 117 (Feb. 1982) (hereinafter Federal **1929 requires him to make regular use of the services of an Reserve’s IOLTA Letter).2 attorney. In January 1994, Summers learned that a retainer he had deposited with his attorney was being held Beginning with Florida in 1981, a number of States in an IOLTA account. Id., at 85. In February 1994, moved quickly to capitalize on this change in the banking respondents filed this suit against petitioners—TEAJF, W. regulations by establishing IOLTA programs. Texas Frank Newton, in his official capacity as chairman of followed suit in 1984. Its Supreme Court issued an order, TEAJF, and the nine Justices of the Supreme Court of now codified as Article XI of the State Bar Rules, Texas. Respondents alleged, inter alia, that the Texas providing that an attorney who receives client funds that IOLTA program violated their rights under the Fifth are “nominal in amount or are reasonably anticipated to Amendment, by taking their property without just be held for a short period of time” must place such funds compensation. in a separate, interest-bearing NOW account (an IOLTA account). Tex. State Bar Rule, Art. XI, *162 § 5(A); The District Court granted summary judgment to Rules 4, 7 of the Texas Rules Governing the Operation of petitioners, reasoning that respondents had no property the Texas Equal Access to Justice Program. Client funds interest in the interest proceeds generated by the funds are considered “nominal in amount” or “held for a short held in IOLTA accounts. Washington Legal Foundation period of time” if the attorney holding the funds v. Texas Equal Access to Justice Foundation, 873 F.Supp. determines that 1 (W.D.Tex.1995). The Court of Appeals for the Fifth Circuit reversed, concluding that “any interest that “such funds, considered without regard to funds of accrues belongs to the owner of the principal.” other clients which may be held by the attorney, law Washington Legal Foundation v. Texas Equal Access to firm or professional corporation, could not reasonably Justice Foundation, 94 F.3d 996, 1004 (1996). Because of be expected to earn interest for the client or if the a split over whether the interest income generated by interest which might be earned on such funds is not funds held in IOLTA accounts is private property for likely to be sufficient to offset the cost of establishing purposes of the Fifth Amendment’s Takings Clause,3 we and maintaining the account, service charges, granted certiorari. **1930 521 U.S. 1117, 117 S.Ct. 2535, accounting costs and tax reporting costs which would 138 L.Ed.2d 1011 (1997). be incurred in attempting to obtain the interest on such funds for the client.” Texas IOLTA Rule 6.

Interest earned by the funds deposited in an IOLTA account is to be paid to the Texas Equal Access to Justice II Foundation (TEAJF), a nonprofit corporation established [1] by the Supreme Court of Texas. Tex. State Bar Rule, Art. The Fifth Amendment, made applicable to the States XI, §§ 3, 4; Texas IOLTA Rule 9(a). TEAJF distributes through the Fourteenth Amendment, Chicago, B. & Q.R. the funds to nonprofit organizations that “have as a Co. *164 v. Chicago, 166 U.S. 226, 239, 17 S.Ct. 581, primary purpose the delivery of legal services to low 585–586, 41 L.Ed. 979 (1897), provides that “private income persons.” Texas IOLTA Rule 10. The Internal property” shall not “be taken for public use, without just Revenue Service does not attribute the interest generated compensation.” Because the Constitution protects rather by an IOLTA account to the individual clients for federal than creates property interests, the existence of a property income tax purposes so long as the client has no control interest is determined by reference to “existing rules or over the decision whether to place the funds in the IOLTA understandings that stem from an independent source account and does not designate who will receive the such as state law.” Board of Regents of State Colleges v. interest generated by the account. See Rev.Rul. 81–209, Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 1981–2 Cum.Bull. 16; Rev.Rul. 87–2, 1987–1 Cum.Bull. 548 (1972). 18. All agree that under Texas law the principal held in © 2015 Thomson Reuters. No claim to original U.S. Government Works. 4 Phillips v. Washington Legal Foundation, 524 U.S. 156 (1998) 118 S.Ct. 1925, 141 L.Ed.2d 174, 66 USLW 4468, 98 Cal. Daily Op. Serv. 4563...

IOLTA trust accounts is the “private property” of the public property without compensation” simply by client. Texas IOLTA Rule 4 (discussing circumstances legislatively abrogating the traditional rule that “earnings under which “client funds” must be deposited in an of a fund are incidents of ownership of the fund itself and IOLTA account); Texas Bar Rule 1.14(a) (lawyers “shall are property just as the fund itself is property.” 449 U.S., hold funds ... belonging in whole or in part to clients ... at 164, 101 S.Ct., at 452. In other words, at least as to separate from the lawyer’s own property”); see also Brief confiscatory regulations (as opposed to those regulating for United States as Amicus Curiae 10 (“There can be no the use of property), a State may not sidestep the Takings doubt that the client funds underlying the IOLTA program Clause by disavowing traditional property interests long are the property of respondents”). When deposited in an recognized under state law. See id., at 163–164, 101 S.Ct., IOLTA account, these funds remain in the control of a at 451–453; see also Lucas v. South Carolina Coastal private attorney and are freely available to the client upon Council, 505 U.S. 1003, 1029, 112 S.Ct. 2886 demand. As to the principal, then, the IOLTA rules at 2900–2901, 120 L.Ed.2d 798 (1992). most “regulate the use of [the] property.” Yee v. Escondido, 503 U.S. 519, 522, 112 S.Ct. 1522, 1526, 118 Petitioners nevertheless contend that Webb’s does not L.Ed.2d 153 (1992). Respondents do not contend that the control because Texas does not, in fact, adhere to the State’s regulation of the manner in which attorneys hold “interest follows principal” rule, “at least if elevated to the and manage client funds amounts to a taking of private level of an absolute legal rule.” Brief for Petitioners 22. property. The question in this case is whether the interest They point to several examples, such as income-only on an IOLTA account is “private property” of the client trusts and marital community property rules, where under for whom the principal is being held.4 Texas law interest does not follow principal. According to petitioners, the IOLTA program is simply another *165 The rule that “interest follows principal” has been exception to the general rule. established under English common law since at least the [3] mid-1700’s. Beckford v. Tobin, 1 Ves.Sen. 308, 310, 27 We find these examples insufficient to dispel the Eng.Rep. 1049, 1051 (Ch. 1749) (“[I]nterest shall follow presumption of deference given the views of a federal the principal, as the shadow the body”). Not surprisingly, court as to the law of a State within its jurisdiction. this rule has become firmly embedded in the common law Bernhardt v. Polygraphic Co. of America, 350 U.S. 198, of the various States.5 The Court of Appeals in **1931 204, 76 S.Ct. 273, 276–277, 100 L.Ed. 199 (1956). this case, two of the three *166 judges of which are Petitioners’ examples miss the point of our decision in Texans, held that Texas also follows this rule, citing Webb’s. Texas’ exception of income-only trusts and Sellers v. Harris County, 483 S.W.2d 242, 243 certain marital property from the general rule that (Tex.1972) (“The interest earned by deposit of money “interest **1932 follows principal” has a firm basis in owned by the parties to the lawsuit is an increment that traditional property law principles. Permitting the owner accrues to that money and to its owners”). Indeed, in of a sum of money to distribute to a designated Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. beneficiary the interest income generated by his principal 155, 162, 101 S.Ct. 446, 451, 66 L.Ed.2d 358 (1980), we is entirely consistent with the fundamental maxim of cited the Sellers opinion as demonstrative of the general property law that the owner of a property interest may rule that “any interest ... follows the principal.” dispose of all or part of that interest as he sees fit. United *168 States v. General Motors Corp., 323 U.S. 373, [2] In Webb’s, we addressed a Florida statute providing 377–378, 65 S.Ct. 357, 359, 89 L.Ed. 311 (1945) that interest accruing on an interpleader fund deposited in (property “denote[s] the group of rights inhering in the the registry of the court “ ‘shall be deemed income of the citizen’s relation to the physical thing, as the right to ... office of the clerk of the circuit court.’ ” Id., at 156, n. 1, dispose of it”). Similarly, the Texas rules governing the 101 S.Ct., at 448, n. 1 (quoting Fla. Stat. § 28.33 (1977)) distribution of marital assets have a historical pedigree (emphasis deleted). The appellant in that case filed an tracing back to the marital property laws adopted by the interpleader action in Florida state court and tendered the Texas Congress only four years after Texas became an sum at issue, nearly $2 million, into court. In addition to independent republic. W. McClanahan, Community deducting $9,228.74 from the interpleader fund as a fee Property Law in the United States § 3:23, pp. 123–124 “for services rendered,” the clerk of court also retained (1982). But petitioners point to no “background the more than $100,000 in interest income generated *167 principles” of property law, Lucas, supra, at 1030, 112 by the deposited funds. We held that the statute S.Ct., at 2901, that would lead one to the conclusion that authorizing the clerk to confiscate the earned interest the owner of a fund temporarily deposited in an attorney violated the Takings Clause. As we explained, “a State, trust account may be deprived of the interest the fund by ipse dixit, may not transform private property into generates.

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client would not. But in the District Court, petitioners [4] [5] Petitioners further contend that “interest follows agreed that this portion of the rule was not to be enforced, principal” is an incomplete explication of the Texas rule. and that an attorney could make the necessary calculation Reply Brief for Petitioners 11. Petitioners explain that on the basis of pooled accounts. Petitioners made a interest follows principal in Texas only if the interest is similar concession during oral argument here. Tr. of Oral “allowed by law or fixed by the parties.” Cavnar v. Arg. 13–16. We accept this concession but find that it Quality Control Parking, Inc., 696 S.W.2d 549, 552 does not avail petitioners. (Tex.1985). We fail to see how this assists petitioners’ cause. We agree that the government has great latitude in **1933 [6] We have never held that a physical item is not regulating the circumstances under which interest may be “property” simply because it lacks a positive economic or earned. As we explained in Andrus v. Allard, 444 U.S. 51, market value. For example, in Loretto v. Teleprompter 66, 100 S.Ct. 318, 327, 62 L.Ed.2d 210 (1979), Manhattan CATV *170 Corp., 458 U.S. 419, 102 S.Ct. “anticipated gains ha[ve] traditionally been viewed as less 3164, 73 L.Ed.2d 868 (1982), we held that a property compelling than other property-related interests.” But right was taken even when infringement of that right petitioners do not argue that the payment of interest on arguably increased the market value of the property at client funds deposited in an attorney trust account is not issue. Id., at 437, n. 15, 102 S.Ct., at 3177, n. 15. Our “allowed by law” in Texas. Rather, they argue that conclusion in this regard was premised on our interest actually “earned” by funds held in IOLTA longstanding recognition that property is more than accounts, Texas IOLTA Rule 9, is not the private property economic value, see id., at 435, 102 S.Ct., at 3175–3176; of the owner of the principal. However, regardless of it also consists of “the group of rights which the so-called whether the owner of the principal has a constitutionally owner exercises in his dominion of the physical thing,” cognizable interest in the anticipated generation of such “as the right to possess, use and dispose of it,” interest by his funds, any interest that does accrue attaches General Motors, supra, at 378, 65 S.Ct., at 359. While the as a property right incident to the ownership of the interest income at issue here may have no economically underlying principal. realizable value to its owner, possession, control, and disposition are nonetheless valuable rights that inhere in *169 Finally, petitioners argue that the interest income the property. See Hodel v. Irving, 481 U.S. 704, 715, 107 transferred to the TEAJF is not “private property” because S.Ct. 2076, 2083, 95 L.Ed.2d 668 (1987) (noting that “the the client funds held in IOLTA accounts “cannot right to pass on” property “is itself a valuable right”). The reasonably be expected to generate interest income on government may not seize rents received by the owner of their own.” Brief for Petitioners 18. As an initial matter, a building simply because it can prove that the costs petitioners’ assertion that client funds held in IOLTA incurred in collecting the rents exceed the amount accounts cannot be expected to generate interest income is collected. plainly incorrect under the express terms of the Texas IOLTA rules. Texas IOLTA Rule 6 requires that client The United States, as amicus curiae, additionally argues funds held by an attorney be deposited in an IOLTA that “private property” is not implicated by the IOLTA account “if the interest which might be earned” is program because the interest income generated by funds insufficient to offset the “cost of establishing and held in IOLTA accounts is “government-created value.” maintaining the account, service charges, accounting costs Brief for United States as Amicus Curiae 20. We disagree. and tax reporting costs which would be incurred in As an initial matter, this argument is factually erroneous. attempting to obtain the interest on such funds for the The interest income transferred to the TEAJF is not the client.” In other words, it is not that the client funds to be product of increased efficiency, economies of scale, or placed in IOLTA accounts cannot generate interest, but pooling of funds by the government. Indeed, as noted that they cannot generate net interest. above, the State has conceded at oral argument that if an attorney could in any way (such as pooling of client Whether client funds held in IOLTA accounts could funds) earn interest for a client, he is ethically obligated to generate net interest is a matter of some dispute. As do so rather than place the funds in an IOLTA account. written, the Texas IOLTA program requires the Interest income is economically realizable by IOLTA calculation as to net interest to be made “without regard to primarily because: (1) the Federal Government imposes funds of other clients which may be held by the attorney.” tax reporting costs only on those who attempt to exercise Texas IOLTA Rule 6. This provision would deny to an control over the interest their funds generate, see Rev.Rul. attorney the traditional practice of pooling funds of 81–209, 1981–2 Cum.Bull. 16; *171 Rev.Rul. 87–2, several clients in one account, a practice which might 1987–1 Cum.Bull. 18; and (2) the Federal Government produce net interest when opening an account for each prohibits for-profit corporations from holding funds in

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NOW accounts if the interest is paid to the corporation, but permits corporate funds to be held in NOW accounts if the interest is paid to the TEAJF, see Federal Reserve’s IOLTA Letter. In other words, the State does nothing to create value; the value is created by respondents’ funds. Justice SOUTER, with whom Justice STEVENS, Justice The Federal Government, through the structuring of its GINSBURG, and Justice Breyer join, dissenting. banking and taxation regulations, imposes costs on this value if private citizens attempt to exercise control over it. The Court holds that “interest income generated by funds Waiver of these costs if the property is remitted to the held in IOLTA accounts is the ‘private property’ of the State hardly constitutes “government-created value.” owner of the principal.” Ante, this page. I do not join in today’s ruling because the Court’s limited enquiry has led In any event, we rejected a similar “government-created it to announce an essentially abstract proposition; even value” argument in Webb’s. There, the State of Florida assuming that the proposition correctly states the law, it argued that since the clerk’s authority to invest deposited may ultimately turn out to have no significance in funds was a statutorily created right, any interest income resolving the real issue raised in this case, which is generated by the funds was not private property. 449 U.S., whether the Interest on Lawyers Trust Account (IOLTA) at 163, 101 S.Ct., at 451–452. We rejected this argument, scheme violates the Takings Clause of the Fifth explaining that “the State’s having mandated the accrual Amendment. Since the sounder course would be to vacate of interest does not mean the State or its designate is the similarly limited judgment of the Court of Appeals for entitled to assume ownership of the interest.” Id., at 162, the Fifth Circuit and remand for the broader enquiry 101 S.Ct., at 451. outlined below, I respectfully dissent.

This would be a different case if the interest income The Court recognizes three distinct issues implicated by a generated by IOLTA accounts was transferred to the State takings claim: whether the interest asserted by the as payment “for services rendered” by the State. Id., at plaintiff is property, whether the government has taken 157, 101 S.Ct., at 448–449. Our holding does not prohibit that property, and whether the plaintiff has been denied a State from imposing reasonable fees it incurs in just compensation for the taking. Ibid. The Court is generating and allocating interest income. See id., at 162, careful to address only the first of these questions, ibid., 101 S.Ct., at 451; cf. United States v. Sperry Corp., 493 which is the only one on which the Fifth Circuit ruled. U.S. 52, 60, 110 S.Ct. 387, 393–394, 107 L.Ed.2d 290 See Washington Legal Foundation v. Texas Equal Access (1989) (upholding the imposition of a “reasonable ‘user to Justice Foundation, 94 F.3d 996, 1004 (1996). fee’ ” on those utilizing the Iran-United States Claims Tribunal). But here the State does not, indeed cannot, *173 The affirmative answer given by the Court and the argue that its confiscation of respondents’ interest income Fifth Circuit to the question whether IOLTA interest amounts to a fee for services performed. Unlike in attributable to a client’s funds is the client’s property Webb’s, where the State safeguarded and invested the states, in essence, a proposition of state law, which is one deposited funds, funds held in IOLTA accounts are source of property interests entitled to federal managed entirely by banks and private attorneys. constitutional protection, see Board of Regents of State Colleges v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548 (1972), and Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1030, 112 S.Ct. 2886, 2901, 120 L.Ed.2d 798 (1992). In this instance the **1934 *172 III relevant state law is said to embrace the general principle that property in interest income follows ownership of the [7] In sum, we hold that the interest income generated by principal on which the interest is earned, ante, at 1930, funds held in IOLTA accounts is the “private property” of and n. 4, and the Court treats any income generated by a the owner of the principal. We express no view as to client’s funds like income that the client could derive whether these funds have been “taken” by the State; nor directly through a method of money management or do we express an opinion as to the amount of “just investment that costs more than it produced, ante, at compensation,” if any, due respondents. We leave these 1932–1933. issues to be addressed on remand. The judgment of the Court of Appeals is In addressing only the issue of the property interest, leaving the questions of taking and compensation for a Affirmed. later day in the litigation of respondents’ action, the Court and the Court of Appeals have, however, postponed © 2015 Thomson Reuters. No claim to original U.S. Government Works. 7 Phillips v. Washington Legal Foundation, 524 U.S. 156 (1998) 118 S.Ct. 1925, 141 L.Ed.2d 174, 66 USLW 4468, 98 Cal. Daily Op. Serv. 4563...

consideration of the most salient fact relied upon by compensation, see, e.g., First English Evangelical petitioners in contesting respondents’ Fifth Amendment Lutheran Church of Glendale v. County of Los Angeles, claim: that the respondent client would effectively be 482 U.S. 304, 315, 107 S.Ct. 2378, 2385–2386, 96 barred from receiving any net interest on his funds subject L.Ed.2d 250 (1987); Williamson County Regional to the state IOLTA rule by the combination of an Planning Comm’n v. Hamilton Bank of Johnson City, 473 unchallenged federal banking statute and regulation, 12 U.S. 172, 194, 105 S.Ct. 3108, 3120–3121, 87 L.Ed.2d U.S.C. § 1832(a); 12 CFR § 204.130 (1997); a separate, 126 (1985). It thus makes good sense to consider what is unchallenged Texas rule of attorney discipline, Texas Bar property only in connection with what is a compensable Rules, Art. 10, § 9, Rule 1.14(b); and unchallenged taking, an approach to Fifth Amendment analysis that not Internal Revenue Service interpretations of the Tax Code, only would avoid spending time on what might turn out to Rev.Rul. 81–209, 1981–2 Cum.Bull. 16; Rev.Rul. 87–2, be an entirely theoretical matter, but would also reduce 1987–1 Cum.Bull. 18. The argument for the view the risk of placing such undue emphasis on the existence contrary to the one taken by the Court would emphasize of a generalized property right as to distort the taking and that salient fact right now. The view that the client has no compensation analyses that necessarily follow before the cognizable property right in the IOLTA interest is said to Fifth Amendment’s significance can be known.3 rest not only on a different understanding of the scope of the general principle *174 and its place in state law,1 but *176 That is not to say, of course, that we should resolve **1935 also upon the very regulatory framework that either the taking or compensation issues here, for the Fifth would prevent a client from obtaining any net interest on Circuit did not address them. Rather, we should determine funds now subject to IOLTA, even if IOLTA did not here whether either of the remaining issues might exist.2 It is not, of course, that the federal and state reasonably be resolved against respondents; if so, we regulatory combination includes some rule that is facially should not abstract the property issue for resolution in inconsistent with the general principle that interest their **1936 favor now, but should return the case to the follows principal; the components of the regulatory Court of Appeals to consider all three issues before structure do not even directly address the question of who resolving the first. Suffice it to say that both the taking owns interest. Indeed, the most obvious relevance of the and compensation questions are serious ones for regulatory provisions and their effects is to the issues of respondents. whether IOLTA results in a taking of the client’s property and whether any such taking requires compensation. And First, as to a taking, we start with Penn Central Transp. yet by this route the regulatory structure becomes relevant Co. v. New York City, 438 U.S. 104, 98 S.Ct. 2646, 57 to the property issue as well, simply because the way we L.Ed.2d 631 (1978), and its guidance about certain sorts may ultimately resolve the taking and compensation of facts that are of particular importance in what is issues bears on the way we ought to resolve the property supposed to be an “ad hoc, factual” enquiry, id., at 124, issue. If it should turn out that within the meaning of the 98 S.Ct., at 2659, into whether the government has Fifth Amendment, the IOLTA scheme had not taken the “go[ne] too far.” Pennsylvania Coal Co. v. Mahon, 260 property recognized today, or if it should turn out that the U.S. 393, 415, 43 S.Ct. 158, 160, 67 L.Ed. 322 (1922). “just compensation” for any taking was zero, then there Attention should be paid to the nature of the would be no practical consequence for purposes of the government’s action, its economic impact, and the degree Fifth Amendment in recognizing a client’s property right of any interference with reasonable, investment-backed in the interest in the first place; any such recognition expectations. Penn Central, supra, at 124, 98 S.Ct., at would be an inconsequential *175 abstraction. Cf. Hooker 2659. Here it is enough to note the possible significance v. Burr, 194 U.S. 415, 419, 24 S.Ct. 706, 708, 48 L.Ed. of the facts that there is no physical occupation or seizure 1046 (1904) (If a contractual obligation is impaired, but of tangible property, cf. Loretto v. Teleprompter the obligor is “not injured to the extent of a penny Manhattan CATV Corp., 458 U.S. 419, 426, 102 S.Ct. thereby, his abstract rights are unimportant”). The 3164, 3170–3171, 73 L.Ed.2d 868 (1982) (noting that significance of the regulatory structure, and the issues of physical intrusion is “unusually serious” in the takings taking and compensation, should therefore be considered context); that there is no apparent economic impact (since today. the client would have no net interest to go in his pocket, IOLTA or no IOLTA); and that the facts present neither Approaching the property issue in conjunction with the anything resembling an investment nor (for the reason just two others would, in fact, be entirely faithful to the Fifth given) any apparent basis for reasonably expecting to Amendment, for as we have repeatedly said its Takings obtain net interest. While a court would certainly consider Clause does nothing to bar the government from taking any proposal that respondents might make for a departure property, but only from taking it without just from the Penn Central approach to vindicating the Fifth

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Amendment in these circumstances, application of Penn But, however these issues of taking and compensation Central would not bode well for claimants like may someday be adjudicated, **1937 two things are clear respondents. now: the issues are serious and they might be resolved against respondents. If that should happen, today’s Second, as to the just compensation requirement, the holding would stand as an abstract proposition without client’s inability to earn net interest outside IOLTA, due significance for the application of the Fifth Amendment. to *177 the unchallenged federal and state regulations, raises serious questions about entitlement to any If abstraction were guaranteed to be harmless, of course, compensation (which, if required, would convert any an abstract ruling now and again would not matter much, “taking” into a wash transaction from the client’s beyond the time spent reaching it. But our law has been standpoint). “Just compensation” generally means “the wary of abstract legal propositions not only because the full monetary equivalent of the property taken.” United common-law tradition is a practical one, but because States v. Reynolds, 397 U.S. 14, 16, 90 S.Ct. 803, 805, 25 abstractions pose their own peculiar risks. As THE L.Ed.2d 12 (1970). In determining the amount of just CHIEF JUSTICE noted in a different but related context, compensation for a taking, a court seeks to place a there is a danger in “cutting loose the notion of ‘just claimant “ ‘in as good a position pecuniarily as if his compensation’ from the notion of ‘private property.’ ” property had not been taken.’ ” United States v. 564.54 Almota Farmers Elevator & Warehouse Co. v. United Acres Land, 441 U.S. 506, 510, 99 S.Ct. 1854, 1857, 60 States, 409 U.S. 470, 486, 93 S.Ct. 791, 800, 35 L.Ed.2d 1 L.Ed.2d 435 (1979) (quoting Olson v. United States, 292 (1973) (REHNQUIST, J., dissenting); see also id., at U.S. 246, 255, 54 S.Ct. 704, 708, 78 L.Ed. 1236 (1934)), 482–483, 93 S.Ct., at 798–799 (“While the inquiry as to calculating any loss objectively and independently of the what property interest is taken by the condemnor and the claimant’s subjective valuation, see, e.g., Kimball inquiry as to how that property interest shall be valued are Laundry Co. v. United States, 338 U.S. 1, 5, 69 S.Ct. not identical ones, they cannot be divorced without 1434, 1437–1438, 93 L.Ed. 1765 (1949). seriously undermining a number of rules dealing with the law of eminent domain”). Thus, in deciding what award would be needed to place the client respondent in as good a position as he would One may wonder here not only whether the theoretical have enjoyed without a taking, a court presumably would property analysis may skew the resolution of the taking look to the claimant’s putative property interest as it was and compensation issues that will follow, but also how far or would have been enjoyed in the absence of IOLTA, cf. today’s holding may unsettle accepted governmental Boston Chamber of Commerce v. Boston, 217 U.S. 189, practice elsewhere. By recognizing an abstract property 195, 30 S.Ct. 459, 460–461, 54 L.Ed. 725 (1910), and right to interest “actually ‘earned’ ” by a party’s principal, consequently would measure any required compensation ante, at 1932, does the Court not raise the possibility of by the claimant’s loss, not by the government’s (or the takings challenges whenever the government holds and public’s) gain, ibid. This rule would not obviously makes use of the principal of private parties, as it produce much benefit to respondents. While it has been frequently does? When, for *179 example, the National suggested in their favor that a cognizable taking may Government, or a State, has engaged in excessive tax occur even when value has been enhanced, on the withholding, it does not refund the interest earned supposed authority of Loretto, supra, at 437, n. 15, 102 between the time of withholding and the issuance of a S.Ct., at 3177, n. 15, that case dealt only with physical refund. For any number of reasons unrelated to the occupation, it rested on no finding that value had actually recognition or nonrecognition of a generalized property been enhanced, and it held nothing about the legal right in interest, but tied to the questions of takings and consequences of an actual finding that enhancement had compensation, it seems unlikely that such withholding occurred. The Court today makes a further suggestion of a practices would violate the Fifth Amendment. way in which respondents might deflect the objection that Nevertheless, the Court’s abstract ruling may encourage they have lost nothing, when it observes that the notion of claims of just this sort. property is not limited by the concept of value, ante, at 1933. But the Court makes the point by equating the To avoid the dangers of abstraction, I would therefore government’s seizure *178 of funds from the pocket of a vacate the judgment of the Court of Appeals and remand failing business owner with IOLTA’s disposition of funds for plenary Fifth Amendment consideration. If, however, the client never had or could have received. Neither the the property interest question is to be considered in the equation, nor its relevance to the Fifth Amendment’s abstract, I would recast it and answer it as Justice guarantee of just compensation, is immune to question. BREYER has done in his own dissenting opinion, which I join.

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Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 101 S.Ct. 446, 66 L.Ed.2d 358 (1980). See ante, at 1931–1932, 1933–1934. In my view, neither truism nor case can Justice BREYER, with whom Justice STEVENS, Justice answer the hypothetical question the Court addresses. SOUTER, and Justice GINSBURG join, dissenting. The truism does not help because the question presented The question presented is whether “interest earned on assumes circumstances that differ dramatically from those client trust funds,” which would “not earn interest” in the in which interest is ordinarily at issue. Ordinarily, absence of a special “IOLTA program,” amounts to a principal is capable of generating interest for whoever “property interest of the client or lawyer” for purposes of holds it. Here, by the very terms of the question, we must the Fifth Amendment’s Takings Clause. Brief for assume *181 that (because of pre-existing federal law) the Petitioners i; Brief for Respondents i; see U.S. Const., client’s principal could not generate interest without Amdt. 5 (“nor shall private property be taken for public IOLTA intervention. That is to say, the client could not use, without just compensation”). have had an expectation of receiving interest without that intervention. Nor can one say that IOLTA rules excluded, The question presented is premised on four assumptions: or prevented, the client’s use of his principal to generate First, that lawyers sometimes hold small amounts of interest that would otherwise be his. Under these clients’ funds for short periods of time; second, that circumstances, what is the property right of the client that because of federal tax and banking rules and regulations, IOLTA could have “confiscat [ed]”? Ante, at 1932. such funds normally could not earn interest during that time; third, that state Interest on Lawyers Trust Account The most that Texas law here could have taken from the (IOLTA) rules require lawyers to place such funds in a client is not a right to use his principal to create a benefit special account where, mixed with other funds, they will (for he had no such right), but the client’s right to keep earn interest; and fourth, that IOLTA rules require that the client’s principal sterile, a right to prevent the interest earned on these funds *180 is distributed to principal from being put to productive use by others. Cf. groups that represent low-income individuals rather than National Bd. of YMCA v. United States, 395 U.S. 85, to the lawyers or their clients who own the funds. 92–93, 89 S.Ct. 1511, 1515–1516, 23 L.Ed.2d 117 (1969) (noting that government deprivation of property requiring Insofar as factual circumstances such as these raise a Fifth compensation normally takes from an owner use that the Amendment question, I agree with Justice SOUTER that owner may otherwise make of the property). And the question is whether Texas, by requiring the placing of whatever this Court’s cases may have said about the the funds in special IOLTA accounts and depriving the constitutional status of such a right, they have not said funds’ owners of the subsequently earned interest has that the Constitution forces a State to confer, upon the temporarily “taken” what is undoubtedly “private owner of property that cannot produce anything of value property,” namely, the client’s funds, i.e., the principal, for him, ownership of the fruits of that property should without “just compensation.” To answer this that property be rendered fertile through the government’s (appropriately framed) question, the parties **1938 and lawful intervention. Cf., e.g., United States ex rel. TVA v. the lower courts would have to consider whether the use Powelson, 319 U.S. 266, 276, 63 S.Ct. 1047, 1053, 87 of the principal in the fashion dictated by the IOLTA rules L.Ed. 1390 (1943) (no need to pay for value that the amounts to a deprivation of a property right, and, if so, “power of eminent domain” itself creates); City of New whether the government’s “taking” required York v. Sage, 239 U.S. 57, 61, 36 S.Ct. 25, 26, 60 L.Ed. compensating the owner of the funds, where it did not 143 (1915) (city need not pay for value added by unifying deprive the funds’ owners of interest they might have parcels where unification impracticable absent eminent otherwise received. But the Court of Appeals did not domain); United States v. Twin City Power Co., 350 U.S. address this latter question. See ante, at 1937 (SOUTER, 222, 228, 76 S.Ct. 259, 263, 100 L.Ed. 240 (1956) (to J., dissenting). require payment for value created by government “would be to create private claims in the public domain”). Thus Although I believe it wrong to separate Takings Clause the question is whether “interest,” earned only as a result analysis of the property rights at stake from analysis of of IOLTA rules and earned upon otherwise barren client the alleged deprivation, I have considered the question principal, “follows principal.” The slogan “interest presented on its own terms. And, on the majority’s follows principal” no more answers that question than assumptions, I believe that its answer is not the right one. *182 does King Diarmed’s legendary slogan, “[T]o every The majority’s answer rests upon the use of a legal cow her calf.” A. Birrell, Seven Lectures on The Law and truism, namely, “interest follows principal,” and its History of Copyright in Books 42 (1889) (internal application of a particular case, namely, Webb’s Fabulous © 2015 Thomson Reuters. No claim to original U.S. Government Works. 10 Phillips v. Washington Legal Foundation, 524 U.S. 156 (1998) 118 S.Ct. 1925, 141 L.Ed.2d 174, 66 USLW 4468, 98 Cal. Daily Op. Serv. 4563...

quotation marks omitted). Cf. Berkey v. Third Avenue S.Ct. 276, 280–281, 87 L.Ed. 336 (1943) (“[S]pecial Railway Co., 244 N.Y. 84, 94, 155 N.E. 58, 61 (1926) value to the condemnor ... must be excluded as an element (Cardozo, J.) (“Metaphors in law are to be narrowly of market value”); United States *183 v. watched, for starting as devices to liberate thought, they Chandler–Dunbar Water Power Co., 229 U.S. 53, 75–76, end often by enslaving it”). 33 S.Ct. 667, 676–677, 57 L.Ed. 1063 (1913). This principle suggests that the government must pay the Nor can Webb’s Fabulous Pharmacies answer the current value of condemned land, not the added value that question presented. But for state intervention the principal a highway it builds on the property itself creates. It also in that case could have, and would have, earned interest. suggests that condemnation of, say, riparian rights in See 449 U.S., at 156–157, and nn. 1, 2, 101 S.Ct., at 448, order to build a dam must be followed by compensation and nn. 1, 2 (state law required party to deposit funds with for these rights, not for the value of the electricity that the court, authorized court to hold the funds in an dam would later produce. Cf. id., at 76, 33 S.Ct., at 677; interest-bearing account, and allowed the court to claim Twin City Power Co., supra, at 226–228, 76 S.Ct., at the interest as well as a fee). Here, federal law **1939 261–263; United States v. Appalachian Elec. Power Co., ensured that, in the absence of IOLTA intervention, the 311 U.S. 377, 423–424, 427, 61 S.Ct. 291, 306–307, client’s principal would earn nothing. Webb’s Fabulous 308–309, 85 L.Ed. 243 (1940). Indeed, no one would say Pharmacies holds that a state law which places that that such electricity was, for Takings Clause purposes, the ordinary kind of principal in an interest-bearing account owner’s “private property,” where, as here, in the absence (which interest the State unjustifiably keeps) takes of the lawful government “taking,” there would have been “private property ... for public use without just no such property. compensation.” That holding says little about this kind of principal, principal that otherwise is barren. Nor do cases that find a private interest in property with virtually no These legal analogies more directly address the key economic value tell us to whom the fruits of that property assumption raised by the question presented, namely, that belong when that property bears fruit through the “absent the IOLTA program,” no “interest” could have intervention of another. Ante, at 1933 (citing Loretto v. been earned. I consequently believe that the interest Teleprompter Manhattan CATV Corp., 458 U.S. 419, 102 earned is not the client’s “private property.” S.Ct. 3164, 73 L.Ed.2d 868 (1982); Hodel v. Irving, 481 I respectfully dissent. U.S. 704, 715, 107 S.Ct. 2076, 2082–2083, 95 L.Ed.2d 668 (1987)).

If necessary, I should find an answer to the question All Citations presented in other analogies that this Court’s precedents 524 U.S. 156, 118 S.Ct. 1925, 141 L.Ed.2d 174, 66 provide. Land valuation cases, for example, make clear USLW 4468, 98 Cal. Daily Op. Serv. 4563, 98 Daily that the value of what is taken is bounded by that which is Journal D.A.R. 6227, 98 CJ C.A.R. 3102, 11 Fla. L. “lost,” not that which the “taker gained.” Boston Chamber Weekly Fed. S 634 of Commerce v. Boston, 217 U.S. 189, 195, 30 S.Ct. 459, 460–461, 54 L.Ed. 725 (1910) (opinion of Holmes, J.); see also United States v. Miller, 317 U.S. 369, 375, 63

* The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337, 26 S.Ct. 282, 287, 50 L.Ed. 499.

1 Ala. Rule Prof. Conduct 1.15(g) (1996); Alaska Rule Prof. Conduct 1.15(d) (1997); Ariz. Sup.Ct. Rule 44(c)(2) (1997); Ark. Rule Prof. Conduct 1.15(d)(2) (1997); Cal. Bus. & Prof.Code Ann. § 6211(a) (West 1990 and Supp.1998); Colo. Rule Prof. Conduct 1.15(e)(2) (1997); Conn. Rule Prof. Conduct 1.15(d) (1998); Del. Rule Prof. Conduct 1.15(h) (1998); D.C. Rule Prof. Conduct 1.15(e) (1997); Fla. Bar Rule 5–1.1 (1994 and Supp.1998); Ga.Code Prof. Responsibility Rule 3–109, DR 9–102 (1998); Haw. Sup.Ct. Rule 11 (1997); Idaho Rule Prof. Conduct 1.15(d) (1997); Ill. Rule Prof. Conduct 1.15(d) (1997); Iowa Code Prof. Responsibility DR 9–102 (1997); Kan. Rule Prof. Conduct 1.15(d)(3) (1997); Ky. Sup.Ct. Rule 3.830 (1998); La. Rule Prof. Conduct 1.15(d) (1997); Me. Code Prof. Responsibility 3.6(e)(4) (1997); Md. Bus. Occ. & Prof.Code Ann. § 10–303 (1995); Mass. Sup.Ct. Rule 3:07, DR 9–102 (1997); Mich. Rule Prof. Conduct 1.15(d) (1997); Minn. Rule Prof. Conduct 1.15(d) (1993); Miss. Rule Prof. Conduct 1.15(d) (1997); Mo. Rule Prof. Conduct 1.15(d) (1997); Mont. Rule Prof. Conduct 1.18(b) (1996); Neb. Sup.Ct. Trust Acct. Rules 1–8

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 11 Phillips v. Washington Legal Foundation, 524 U.S. 156 (1998) 118 S.Ct. 1925, 141 L.Ed.2d 174, 66 USLW 4468, 98 Cal. Daily Op. Serv. 4563...

(1997); Nev. Sup.Ct. Rule 217 (1998); Petition of New Hampshire Bar Assn., 122 N.H. 971, 453 A.2d 1258 (1982); N.J. Rules Gen. Application 1:28A–2 (1998); N.M. Rule Prof. Conduct 16–115(D) (1998); N.Y. Jud. Law § 497 (McKinney Supp.1997 and 1998); N.C. Rule Prof. Conduct 1.15–3 (1997); N.D. Rule Prof. Conduct 1.15(d)(1) (1997); Ohio Rev.Code Ann. § 4705.09(A)(1) (1997); Okla. Rule Prof. Conduct 1.15(d) (1997); Ore.Code Prof. Responsibility DR 9–101(D)(2) (1997); Pa. Rule Prof. Conduct 1.15(d) (1997) and Pa. Rule Disciplinary Enforcement 601(d) (1997); R.I. Rule Prof. Conduct 1.15(d) (1997); S.C.App.Ct. Rule 412 (1988); S.D. Rule Prof. Conduct 1.15(d)(4) (1995); Tenn.Code Prof. Responsibility DR 9–102(C)(2) (1997); In re Interest on Lawyers’ Trust Accounts, 672 P.2d 406 (Utah 1983); Va. Sup.Ct. Rules, Pt. 6, § 4, & para. 20 (1997); Vt.Code Prof. Responsibility DR 9–103 (1996); Wash. Rule Prof. Conduct 1.14(c)(1) (1997); W. Va. Rule Prof. Conduct 1.15(d) (1997); Wis. Sup.Ct. Rules 13.04, 20:1.15 (1997); Wyo. Rule Prof. Conduct 1.15(II) (1997). Indiana is the only State that has not implemented an IOLTA program. See In re Indiana State Bar Association Petition, 550 N.E.2d 311 (Ind.1990).

2 We express no opinion as to the reasonableness of this interpretation of § 1832(a). See Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 844, 104 S.Ct. 2778, 2782–2783, 81 L.Ed.2d 694 (1984).

3 Cone v. State Bar of Fla., 819 F.2d 1002 (C.A.11), cert. denied, 484 U.S. 917, 108 S.Ct. 268, 98 L.Ed.2d 225 (1987); In re Interest on Lawyers’ Trust Accounts, 672 P.2d 406 (Utah 1983); Petition of New Hampshire Bar Assn., 122 N.H., at 975–976, 453 A.2d, at 1260–1261; In re Minnesota State Bar Assn., 332 N.W.2d 151, 158 (Minn.1982); In re Interest on Trust Accounts, 402 So.2d 389, 395–396 (Fla.1981).

4 We granted certiorari in this case to answer the question whether “interest earned on client trust funds held by lawyers in IOLTA accounts [is] a property interest of the client or lawyer, cognizable under the ... Fifth Amendmen[t] to the U.S. Constitution....” Pet. for Cert. i. Justice SOUTER contends that we should vacate the judgment of the Court of Appeals because it was improper for that court to have answered this question apart from the takings and just compensation questions. Petitioners, however, did not argue in their petition for certiorari that it was error for the Fifth Circuit to address the property question alone. Because, under this Court’s Rule 14(1)(a), our practice is to consider “[o]nly the questions set forth in the petition, or fairly included therein,” it would be improper for us sua sponte to raise and address the question answered by Justice SOUTER.

5 E.g., Freeman v. Young, 507 So.2d 109, 110 (Ala.Civ.App.1987) (“The earnings of a fund are incidents of ownership of the fund itself and are property just as the fund itself is property” (internal quotation marks omitted)); Pomona City School Dist. v. Payne, 9 Cal.App.2d 510, 512, 50 P.2d 822, 823 (1935) (“[O]bviously the interest accretions belong to such owner”); Vidal Realtors of Westport, Inc. v. Harry Bennett & Assocs., Inc., 1 Conn.App. 291, 297–298, 471 A.2d 658, 662 (1984) (“As long as the attached fund is used for profit, the profit ... is impounded for the benefit of the attaching creditor and is subject to the same ultimate disposition as the principal of which it is the incident” (internal quotation marks omitted)); Burnett v. Brito, 478 So.2d 845, 849 (Fla.App.1985) (“[A]ny interest earned on interpleaded and deposited funds follows the principal and shall be allocated to whomever is found entitled to the principal”); Morton Grove Park Dist. v. American Nat. Bank & Trust Co., 78 Ill.2d 353, 362–363, 35 Ill.Dec. 767, 771, 399 N.E.2d 1295, 1299 (1980) (“The earnings on the funds deposited are a mere incident of ownership of the fund itself ”); B & M Coal Corp. v. United Mine Workers, 501 N.E.2d 401, 405 (Ind.1986) (“[I]nterest earnings must follow the principal and be distributed to the ultimate owners of the fund”); Unified School Dist. No. 490, Butler County v. Board of County Commissioners of Butler County, 237 Kan. 6, 9, 697 P.2d 64, 69 (1985) ( “[I]nterest follows principal”); Pontiac School Dist. v. City of Pontiac, 294 Mich. 708, 715–716, 294 N.W. 141, 144 (1940) (“The generally understood and applied principles that interest is merely an incident of the principal and must be accounted for”); State Highway Comm’n v. Spainhower, 504 S.W.2d 121, 126 (Mo.1973) (“Interest earned by a deposit of special funds is an increment accruing thereto” (internal quotation marks omitted)); Siroky v. Richland County, 271 Mont. 67, 74, 894 P.2d 309, 313 (1995) (“[I]nterest earned belongs to the owner of the funds that generated the interest”); Bordy v. Smith, 150 Neb. 272, 276, 34 N.W.2d 331, 334 (1948) (“Once settled clearly and definitely whose money the principal sum was, the interest necessarily belongs to that person as an increment to the principal fund”); State ex rel. Board of County Commissioners v. Montoya, 91 N.M. 421, 423, 575 P.2d 605, 607 (1978) ( “[T]he general rule is that interest is an accretion or increment to the principal fund earning it”); Stuarco, Inc. v. Slafbro Realty Corp., 30 A.D.2d 80, 82, 289 N.Y.S.2d 883, 885 (1968) (plaintiff “is entitled to the interest actually accrued ... despite the absence of any agreement to pay interest on the deposit, and this precisely and only because interest was in fact earned thereon”); McMillan v. Robeson County, 262 N.C. 413, 417, 137 S.E.2d 105, 108 (1964) (“The earnings on the fund are a mere incident of ownership of the fund itself”); Des Moines Mut. Hail & Cyclone Ins. Assn. v. Steen, 43 N.D. 298, 301, 175 N.W. 195 (1919) ( “[A]ccruing interest follows the principal”); Board of Educ., Woodward Public Schools v. Hensley, 665 P.2d 327, 331 (Okla.App.1983) (“The interest earned ... becomes a part of the principal of the fund which generates it”); University of S.C. v. Elliott, 248 S.C. 218, 220, 149 S.E.2d 433, 434 (1966) (“[I]nterest earned ... is simply an increment of the principal fund, making the interest the property of the party who owned the principal fund”); Board of County Commissioners of the County of Laramie v. Laramie County School Dist. No. One, 884 P.2d 946, 953 (Wyo.1994) (“In general, interest is merely an incident of the principal fund, making it the property of the party owning the principal © 2015 Thomson Reuters. No claim to original U.S. Government Works. 12 Phillips v. Washington Legal Foundation, 524 U.S. 156 (1998) 118 S.Ct. 1925, 141 L.Ed.2d 174, 66 USLW 4468, 98 Cal. Daily Op. Serv. 4563...

fund”).

1 The highest court of Texas has not understood the general principle that a property right in interest always follows property in principle in a way that supports respondents in this IOLTA challenge. See Sellers v. Harris County, 483 S.W.2d 242, 243 (Tex.1972) (owner of principal is entitled to interest, less administrative and accounting costs). Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 101 S.Ct. 446, 66 L.Ed.2d 358 (1980), is not on point precisely because it dealt with interest actually in the hands of the fiduciary, net of any administrative expense.

2 These unchallenged state and federal rules clearly fall within the general category of relevant law defining property subject to constitutional protection, see Board of Regents of State Colleges v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548 (1972) ( “Property interests” are “created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law”).

3 For example, with respect to the determination whether government regulation “goes too far” in diminishing the value of a claimant’s property, we have repeatedly instructed that a “parcel of property could not first be divided into what was taken and what was left for the purpose of demonstrating the taking of the former to be complete and hence compensable.” Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal., 508 U.S. 602, 644, 113 S.Ct. 2264, 2290, 124 L.Ed.2d 539 (1993); see also Penn Central Transp. Co. v. New York City, 438 U.S. 104, 130–131, 98 S.Ct. 2646, 2662–2663, 57 L.Ed.2d 631 (1978). With its narrow focus on a party’s right to any interest generated by its principal, the Court’s opinion might be read (albeit erroneously, in my view) to mean that the accrued interest is the only property right relevant to the question whether IOLTA effects a taking.

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© 2015 Thomson Reuters. No claim to original U.S. Government Works. 13 Pinnacle Charter Sch. v Board of Regents of the Univ. of..., 108 A.D.3d 1024 (2013) 969 N.Y.S.2d 318, 294 Ed. Law Rep. 973, 2013 N.Y. Slip Op. 05105

108 A.D.3d 1024, 969 N.Y.S.2d 318, 294 Ed. Law Schools Rep. 973, 2013 N.Y. Slip Op. 05105 Charter Schools

**1 Pinnacle Charter School et al., Failure to Renew Charter School’s Charter No Violation Respondents-Appellants of Right to Sound Basic Education v Board of Regents of the University of the State of New York et al., Appellants-Respondents. Schools Supreme Court, Appellate Division, Fourth Charter Schools Department, New York Failure to Renew Charter School’s Charter by Board of July 5, 2013 Regents No Basis for Negligent Misrepresentation Claim

CITE TITLE AS: Pinnacle Charter Sch. v Board of Regents of the Univ. of the State of N.Y. Eric T. Schneiderman, Attorney General, Albany (Robert M. Goldfarb of counsel), for defendants-appellants-respondents. Rupp, Baase, Pfalzgraf, Cunningham & Coppola LLC, HEADNOTES Buffalo (Lisa A. Coppola of counsel), for plaintiffs-respondents-appellants.

Appeal and cross appeal from an order of the Supreme Injunctions Court, Erie County (Paula L. Feroleto, J.), entered July 5, Preliminary Injunction 2012. The order, among other things, granted plaintiffs’ motion for a preliminary injunction and granted in part Failure to Demonstrate Likelihood of Success on Merits defendants’ cross motion by dismissing the fourth cause of action.

It is hereby ordered that the order so appealed from is Schools unanimously modified on the law by denying plaintiffs’ Charter Schools motion for a preliminary injunction, vacating the preliminary injunc *1025 tion, and granting defendants’ Failure of Board of Regents to Renew Charter School’s cross motion in its entirety and dismissing the complaint, Charter—No Constitutionally Protected Property Right and as modified the order is affirmed without costs.

Memorandum: In April 2012 defendant Board of Regents of the University of the State of New York (Board of Schools Regents) denied the application of plaintiff Pinnacle Charter Schools Charter School (Pinnacle) to renew its charter to operate a Limitation on Administrative Review of Board of charter school in the City of Buffalo. Pinnacle and the Regents’ Decision Not to Renew Charter School’s individual plaintiffs, parents of infant children enrolled at Charter Pinnacle, commenced this action seeking, inter alia, judgment declaring that the action of the Board of Regents was unconstitutional, and preliminary and permanent injunctions enjoining defendants from Administrative Law enforcing the denial of the renewal application and Rule Making permitting Pinnacle to continue operating as an authorized charter school. Plaintiffs allege, inter alia, that the Board of Regents Not Required to Promulgate Rule When decision of the Board of Regents was made in violation of Denying Renewal of Charter School’s Charter their rights to due process, the requirements of the State Administrative **2 Procedure Act and the rights of the individual plaintiffs’ children to a sound basic education

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under the Education Article of the State Constitution (NY Coughlin, 138 AD2d 899, 901 [1988]). Absent any Const, art XI, § 1). Plaintiffs further allege that Education indication that the Board of Regents acted illegally, Law § 2852 (6) is unconstitutional to the extent that it unconstitutionally or in excess of its jurisdiction, limits judicial and administrative review of the Board of moreover, the limitation on judicial review does not Regents’ action. Finally, plaintiffs allege that employees implicate Pinnacle’s due process rights (see Matter of of defendant New York State Education Department New York City Dept. of Envtl. Protection v New York City (Department) negligently misrepresented that Pinnacle’s Civ. Serv. Commn., 78 NY2d 318, 323-324 [1991]). charter would likely be renewed and the school would remain open at the same time that the Department was Contrary to the court’s conclusion with respect to the preparing its recommendation to deny Pinnacle’s third cause of action, alleging violation of the State application to renew its charter and close the school. Administrative Procedure Act, we agree with defendants that the Board of Regents was acting pursuant to its Supreme Court erred in granting plaintiffs’ motion discretionary authority when it denied Pinnacle’s renewal seeking a preliminary injunction enjoining enforcement of application, and it was not required to promulgate any the Board of Regents’ determination denying Pinnacle’s rules pursuant to article 2 of the State Administrative application to renew its charter and permitting Pinnacle to Procedure Act with respect to its exercise of such operate as an authorized charter school, inasmuch as authority (see generally Matter of Alca Indus. v Delaney, plaintiffs failed to demonstrate a likelihood of success on 92 NY2d 775, 777-778 [1999]). Plaintiffs’ contention that the merits with respect to any of their claims (see Doe v the Department’s guidelines for charter renewal Axelrod, 73 NY2d 748, 750-751 [1988]). To the contrary, applications must be promulgated as rules pursuant to the evidence establishes conclusively that plaintiffs have State Administrative Procedure Act § 202 was improperly no cause of action. Thus, although the court properly raised for the first time in their reply papers (see Keitel v granted defendants’ cross motion to dismiss the complaint Kurtz, 54 AD3d 387, 391 [2008]; Sanz v Discount Auto, for failure to state a cause of action to the extent that it 10 AD3d 395, 395 [2004]). In any event, that contention sought dismissal of the fourth cause of action, for lacks merit inasmuch as the guidelines are excluded from negligent misrepresentation, we conclude that the court the Act’s rulemaking requirement (see § 102 [2] [b] [iv]). should have granted defendants’ cross motion in its The charter renewal process, moreover, is not an entirety and dismissed the complaint (see generally “adjudicatory proceeding” within the meaning of State Kaufman v International Bus. Machs. Corp., 97 AD2d Administrative Procedure Act § 102 (3), and thus the 925, 926-927 [1983], affd 61 NY2d 930 [1984]). We requirements of section 301 (3) are inapplicable. **3 therefore modify the order accordingly. *1026 *1027

The first and second causes of action allege, respectively, With respect to the fifth cause of action, even assuming, that the determination of the Board of Regents violated arguendo, that the individual plaintiffs have standing to Pinnacle’s due process rights under the State Constitution allege a violation of the Education Article on behalf of (NY Const, art I, § 6) and the Federal Constitution (US their children enrolled at Pinnacle based upon the alleged Const, 14th Amend, § 1). We agree with defendants that failure of the Buffalo School District to offer a sound the New York Charter Schools Act (Education Law art basic education, we also agree with defendants that 56) creates no constitutionally protected property interest plaintiffs fail to state a cause of action for such violation in the renewal of a charter and thus that the first and (see generally Paynter v State of New York, 100 NY2d second causes of action fail to state a cause of action (see 434, 439 [2003]). In any event, the renewal of Pinnacle’s Matter of New Covenant Charter School Educ. Faculty charter would not remedy the alleged violation of the Assn. v Board of Trustees of the State Univ. of N.Y., 30 Education Law article. Misc 3d 1205[A], 2010 NY Slip Op 52287[U], *2 [Sup Ct, Albany County 2010]; see generally Board of Regents Finally, with respect to plaintiffs’ cross appeal, we of State Colleges v Roth, 408 US 564, 577 [1972]). conclude that the court properly granted that part of Moreover, we note that Pinnacle’s charter expressly defendants’ cross motion seeking dismissal of the fourth provided that “[n]othing herein shall require the [Board cause of action, for negligent misrepresentation, inasmuch of] Regents to approve a Renewal Application.” Contrary as plaintiffs did not have a special or privity-like to Pinnacle’s further allegation, the limitation on relationship with the Department such that it was required administrative review set forth in Education Law § 2852 to impart correct information to plaintiffs (see Mandarin (6) does not effect an unconstitutional denial of due Trading Ltd. v Wildenstein, 16 NY3d 173, 180 [2011]; process inasmuch as Pinnacle has no constitutional right Sample v Yokel, 94 AD3d 1413, 1414-1415 [2012]). to an administrative appeal (see Matter of Wong v Present—Scudder, P.J., Peradotto, Lindley, Valentino and

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2 Pinnacle Charter Sch. v Board of Regents of the Univ. of..., 108 A.D.3d 1024 (2013) 969 N.Y.S.2d 318, 294 Ed. Law Rep. 973, 2013 N.Y. Slip Op. 05105

Martoche, JJ. Copr. (c) 2015, Secretary of State, State of New York

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© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 Project Reflect, Inc. v. Metropolitan Nashville Bd. of Public Educ., 947 F.Supp.2d 868... 299 Ed. Law Rep. 530

[1] Constitutional Law KeyCite Yellow Flag - Negative Treatment Duration and timing of deprivation; pre- or Distinguished by Reach Academy for Boys and Girls, Inc. v. post-deprivation remedies Delaware Department of Education, D.Del., May 30, 2014 947 F.Supp.2d 868 The Fourteenth Amendment’s due process United States District Court, clause includes a guarantee of procedural M.D. Tennessee, fairness, assuring that a deprivation of life, Nashville Division. liberty, or property must be preceded by notice and opportunity for a hearing appropriate to the PROJECT REFLECT, INC. SMITHSON nature of the case. U.S.C.A. Const.Amend. 14. CRAIGHEAD MIDDLE SCHOOL, et al., Plaintiffs, v. METROPOLITAN NASHVILLE BOARD OF Cases that cite this headnote PUBLIC EDUCATION, et al., Defendants.

No. 3:13–cv–00341. | May 22, 2013.

[2] Municipal Corporations Rights of action Synopsis Background: Charter school’s sponsor and parents of Political subdivisions cannot sue the state of attending children brought action under § 1983 alleging which they are a part under the United States violations of the equal protection and due process clauses Constitution. of the Fourteenth Amendment based on school district’s decision to revoke school’s charter. School district moved to dismiss. Cases that cite this headnote

Holdings: The District Court, Kevin H. Sharp, J., held that: [3] Education [1] Judicial review sponsor failed to state a claim for violation of procedural due process; Sponsor of charter school that filed application [2] in support of charter school possessed standing school sponsor did not have protected property interest to sue school district under the Due Process in continuation of school; Clause of the Fourteenth Amendment; sponsor [3] was not a political subdivision of the state that parents did not have a protected property interest in would be precluded from suing the state under sending their children to charter school; the constitution. U.S.C.A. Const.Amend. 14; [4] West’s T.C.A. § 49–13–104(10). sponsor and parents received adequate process; [5] There was no relevant comparator for sponsor’s 1 Cases that cite this headnote class-of-one discrimination claim.

Motion granted. [4] Constitutional Law Procedural due process in general

A § 1983 plaintiff may prevail on a procedural West Headnotes (26) due process claim by either: (1) demonstrating that he is deprived of property as a result of

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Tab E-9 Project Reflect, Inc. v. Metropolitan Nashville Bd. of Public Educ., 947 F.Supp.2d 868... 299 Ed. Law Rep. 530

established state procedure that itself violates Duration and timing of deprivation; pre- or Fourteenth Amendment due process rights; or post-deprivation remedies (2) by proving that the defendants deprived him of property pursuant to a random and The controlling inquiry into a procedural due unauthorized act and that available state process claim under § 1983 for violation of the remedies would not adequately compensate for Fourteenth Amendment based on allegations of the loss. U.S.C.A. Const.Amend. 14; 42 a random unauthorized act for which state law U.S.C.A. § 1983. remedies are inadequate is solely whether the state is in a position to provide for predeprivation process. U.S.C.A. Const.Amend. Cases that cite this headnote 14; 42 U.S.C.A. § 1983.

Cases that cite this headnote [5] Constitutional Law Relationship to Other Sources of Law [8] Because § 1983 was not meant to supply an Constitutional Law exclusive federal remedy for every alleged Establishment and closing of schools wrong committed by state officials, a plaintiff Education proceeding under the due process random, Termination of charter unauthorized act theory under § 1983 must prove as an element of the claim that state Charter school sponsor’s allegations that school procedural remedies are inadequate. 42 district officials acted without statutory authority U.S.C.A. § 1983. in revoking the school’s charter were insufficient to state a claim for a violation of procedural due process guaranteed by the Cases that cite this headnote Fourteenth Amendment, where sponsor failed to make required pleading that state procedural remedies were inadequate, since the state could not have provided a sufficient predeprivation [6] process to address district officials’ alleged ultra Civil Rights vires actions in revoking the charter. U.S.C.A. Education Const.Amend. 14. Sponsor of charter school was required to plead inadequacy of state procedural remedies in its Cases that cite this headnote challenge under § 1983 alleging that school district’s decision to revoke its charter violated the Due Process Clause of the Fourteenth Amendment, where it did not allege that [9] Tennessee Charter Schools Act or other state Constitutional Law law was procedurally unfair in depriving them Benefits, rights and interests in of due process, but argued instead that school district authorities had no statutory authority to When evaluating a claim for the violation of due revoke the school’s charter. U.S.C.A. process rights under the Fourteenth Amendment, Const.Amend. 14; 42 U.S.C.A. § 1983; West’s the court undertakes a two-step analysis: first, a T.C.A. § 49–13–101 et seq. plaintiff must establish as a threshold matter that it had a protected property interest in a benefit; Cases that cite this headnote second, the court must determine what process is due. U.S.C.A. Const.Amend. 14.

Cases that cite this headnote [7] Constitutional Law © 2015 Thomson Reuters. No claim to original U.S. Government Works. 2 Project Reflect, Inc. v. Metropolitan Nashville Bd. of Public Educ., 947 F.Supp.2d 868... 299 Ed. Law Rep. 530

Source of right or interest

The existence of a property interest protected by the Due Process Clause of the Fourteenth [10] Constitutional Law Amendment is a matter of state law; whether Source of right or interest that interest rises to the level of a legitimate claim of entitlement protected by the due Property interests protected by the Due Process process clause is determined by federal law. Clause of the Fourteenth Amendment are not U.S.C.A. Const.Amend. 14. created by the Constitution; rather they are created and their dimensions are defined by existing rules or understandings that stem from Cases that cite this headnote an independent source such as state law-rules. U.S.C.A. Const.Amend. 14.

[14] Cases that cite this headnote Federal Civil Procedure Matters considered in general

Documents that a defendant attaches to a motion to dismiss are considered part of the pleadings if [11] Constitutional Law they are referred to in the plaintiff’s complaint Source of right or interest and are central to her claim.

A property interest protected by the Due Process Clause of the Fourteenth Amendment can be Cases that cite this headnote created by a state statute, a formal contract, or a contract implied from the circumstances. U.S.C.A. Const.Amend. 14. [15] Federal Civil Procedure Cases that cite this headnote Matters considered in general Federal Civil Procedure Motion

A court may consider public records without [12] Constitutional Law converting a motion to dismiss for failure to Property Rights and Interests state a claim into a motion for summary Constitutional Law judgment. Fed.Rules Civ.Proc.Rules 12(b)(6), Benefits, rights and interests in 56, 28 U.S.C.A.

Property interests protected by the Due Process Clause of the Fourteenth Amendment must be Cases that cite this headnote more than abstract desires or attractions to a benefit; the Due Process Clause only protects those interests to which one has a legitimate claim of entitlement. U.S.C.A. Const.Amend. [16] 14. Constitutional Law Benefits, rights and interests in

Cases that cite this headnote A party cannot possess a property interest protected by the Due Process Clause of the Fourteenth Amendment in the receipt of a benefit when the state’s decision to award or withhold the benefit is wholly discretionary. [13] Constitutional Law © 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 Project Reflect, Inc. v. Metropolitan Nashville Bd. of Public Educ., 947 F.Supp.2d 868... 299 Ed. Law Rep. 530

U.S.C.A. Const.Amend. 14. In Tennessee, school-age children have a constitutional and statutory right to a public Cases that cite this headnote education. West’s T.C.A. Const. Art. 11, § 12; West’s T.C.A. §§ 49–6–3001(c)(1), 49–6–3003.

Cases that cite this headnote [17] Constitutional Law Establishment and closing of schools Education Termination of charter [20] Constitutional Law Charter school sponsor did not have a protected Establishment and closing of schools property interest in the continuation of the Education charter school protected by the Due Process Termination of charter Clause of the Fourteenth Amendment; Tennessee Charter Schools Act committed Parents of students attending charter school that revocation of a school’s charter to the discretion had its charter revoked did not have a protected of the chartering authority, and the purpose of property interest under the Due Process Clause the act was to a provide the school system with of the Fourteenth Amendment in sending their options, not protect the interests of charter children to that school, where other schools school sponsors. U.S.C.A. Const.Amend. 14; were available and parents had sufficient notice West’s T.C.A. §§ 49–13–102(a)(2), (b–e), to participate in the school choice application 49–13–122(a). process. U.S.C.A. Const.Amend. 14.

2 Cases that cite this headnote 1 Cases that cite this headnote

[18] [21] Constitutional Law Constitutional Law Right to Education Duration and timing of deprivation; pre- or Constitutional Law post-deprivation remedies Elementary and Secondary Education Constitutional Law The right to procedural due process under the Education Fourteenth Amendment requires that when a state seeks to terminate a protected interest it Public education is not a right granted to must afford notice and opportunity for hearing individuals by the Constitution; however, if a appropriate to the nature of the case before the state elects to furnish free compulsory public termination becomes effective. U.S.C.A. education to any of its citizens it must do so in a Const.Amend. 14. manner, respecting all of its residents, which comports with basic Fourteenth Amendment equal protection and due process strictures. Cases that cite this headnote U.S.C.A. Const.Amend. 14.

Cases that cite this headnote [22] Constitutional Law Establishment and closing of schools Education Termination of charter [19] Education Right to education in general Charter school sponsor and parents of charter © 2015 Thomson Reuters. No claim to original U.S. Government Works. 4 Project Reflect, Inc. v. Metropolitan Nashville Bd. of Public Educ., 947 F.Supp.2d 868... 299 Ed. Law Rep. 530

school students received adequate process Equal protection required by the Due Process Clause of the Fourteenth Amendment in the decision of the Plaintiffs must overcome a heavy burden to school district to close their charter school, prevail based on the class-of-one theory under where sponsor and parents received notice of the the Equal Protection Clause of the Fourteenth revocation, and the sponsor’s representative was Amendment. U.S.C.A. Const.Amend. 14. allowed to address the school board. U.S.C.A. Const.Amend. 14. Cases that cite this headnote

1 Cases that cite this headnote

[26] Constitutional Law Establishment and closing of schools [23] Constitutional Law Education Similarly situated persons; like circumstances Termination of charter Constitutional Law Strict scrutiny and compelling interest in There was no relevant comparator to charter general school in its sponsor’s action alleging class-of-one discrimination in violation of the The Equal Protection Clause of the Fourteenth Equal Protection Clause of the Fourteenth Amendment prohibits discrimination by Amendment for chartering authority’s decision government which either burdens a fundamental to revoke its charter; the school was the only right, targets a suspect class, or intentionally charter school performing in the bottom 5%, and treats one differently than others similarly was not similar to public schools since the situated without any rational basis for the chartering authority had no authority to close difference. U.S.C.A. Const.Amend. 14. them. U.S.C.A. Const.Amend. 14.

Cases that cite this headnote 1 Cases that cite this headnote

[24] Constitutional Law “Class of one” claims Attorneys and Law Firms Constitutional Law “Class of one” claims *871 W. Carl Spining, Ortale, Kelley, Herbert & Crawford, Nashville, TN, for Plaintiffs. Because Equal Protection Clause of the Fourteenth Amendment is concerned with Keli J. Oliver, Derrick C. Smith, James E. Robinson, arbitrary government classification, a plaintiff Metropolitan Legal Department, W. Carl Spining, Ortale, can state a class-of-one discrimination claim by Kelley, Herbert & Crawford, Nashville, TN, for alleging that she has been intentionally treated Defendants. differently from others similarly situated and that there is no rational basis for the difference in treatment. U.S.C.A. Const.Amend. 14.

MEMORANDUM Cases that cite this headnote

KEVIN H. SHARP, District Judge.

Plaintiff Project Reflect, Inc. Smithson Craighead Middle [25] Constitutional Law © 2015 Thomson Reuters. No claim to original U.S. Government Works. 5 Project Reflect, Inc. v. Metropolitan Nashville Bd. of Public Educ., 947 F.Supp.2d 868... 299 Ed. Law Rep. 530

School, a nonprofit charter school, and two parents of standardized test scores were low. Despite the parties children enrolled in the school bring this putative class being signatories to a “collaboration compact” in which action lawsuit against the Metropolitan Nashville Board they pledged to support one another, Coverstone did not of Public Education (the “Board”) and individual visit or provide support or notification of areas of concern defendants Metro Nashville Public Schools (“MNPS”) for SCMS when he determined the school needed Director of Schools Jesse Register and MNPS Office of assistance. Innovation Executive Director Alan Coverstone. In it, they allege that the Defendants violated their rights under On November 13, 2012, the Board voted 8–1 to revoke the Due Process and Equal Protection Clauses of the 14th SCMS’ charter because it was underperforming Amendment to the United States Constitution when the academically. However, test scores were improving Board, relying on the recommendation of Register and incrementally, the school was safe, and it had been taking Coverstone, voted on November 13, 2012, to revoke steps since February 2012 to turn around the academic Smithson Craighead’s charter, effectively shutting down performance of the school. At the November 13 board the school at the end of the current academic year. Among meeting in which Coverstone and Register presented their other forms of relief requested, Plaintiffs ask the Court to recommendation to revoke the charter, Dr. Carolyn issue a Preliminary Injunction preventing Defendants Baldwin Tucker addressed the Board during the public from closing Smithson Craighead and from interfering comment period and urged them not to revoke SCMS’ with its operations. (Docket Nos. 2 & 8). charter. Parents and representatives of SCMS were not allowed to speak other than during the public comment In response, Defendants have filed Motions to Dismiss period. SCMS was not notified of the decision to (Docket Nos. 12 & 14) for failure to state a claim upon recommend closure of the school until November 9, 2012. which relief can be granted, see Fed.R.Civ.P. 12(b)(6), and, with respect to the individual Defendants, on the The school has deteriorated since the Board’s November grounds that they are entitled to qualified immunity from 13 action. Parents have withdrawn students and sent them suit. They have also asked the Court to stay discovery to other schools; teachers have transferred; students could pending resolution of the qualified immunity issue not concentrate on their standardized tests; when MNPS (Docket No. 21) and have responded to the Motion for officials have visited the campus, they have created stress Preliminary Injunction (Docket No. 24). Plaintiffs have for students and faculty by their very presence as “closers responded to the Motions to Dismiss (Docket No. 23), of the school.” As of April 1, 2013, enrollment dropped and Defendants have replied (Docket No. 29). 20%, forcing the school to adopt undesirable schedule, curriculum, and operational changes. Its programming has For the reasons explained herein, the Court will grant suffered, and it has experienced economic harm. Defendants’ Motions to *872 Dismiss and deny as moot all other pending motions.

FACTS1 LEGAL STANDARD Project Reflect, Inc., has started several educational initiatives with MNPS since 1994 designed to address the The Federal Rules of Civil Procedure require a plaintiff to academic and developmental needs of low-income provide “a short and plain statement of the claim showing students. Project Reflect, Inc. Smithson Craighead Middle that the pleader is entitled to relief.” Fed R. Civ. P. School has operated a public charter elementary school in 8(a)(2). In deciding a motion to dismiss under Rule Nashville since 2003, after the Board approved their 2002 12(b)(6), the Court will “construe the complaint in the application and renewed it in 2008. In 2008, Project light most favorable to the plaintiff, accept its allegations Reflect, Inc., presented to MNPS and the Board an as true, and draw all reasonable inferences in favor of the application to open and run a charter middle school plaintiff.” Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th targeting minority, underprivileged, and Title I students. Cir.2007); Inge v. Rock Fin. Corp., 281 F.3d 613, 619 (6th Cir.2002). The Court must assume that all of the The Board granted this charter, and Smithson Craighead factual allegations are true, even if they are doubtful in Middle School (SCMS) opened in an MNPS “abandoned fact. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, school” in August 2009. The leaky, flooding, and 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). However, “[i]n deteriorating facility necessitated that SCMS move to addition to the *873 allegations in the complaint, [the Madison before its third year of operation, and due to Court] may also consider other materials that are integral student displacement associated with this move, to the complaint, are public records, or are otherwise appropriate for the taking of judicial notice.” Ashland, © 2015 Thomson Reuters. No claim to original U.S. Government Works. 6 Project Reflect, Inc. v. Metropolitan Nashville Bd. of Public Educ., 947 F.Supp.2d 868... 299 Ed. Law Rep. 530

[1] Inc. v. Oppenheimer & Co., Inc., 648 F.3d 461, 467 (6th “The Fourteenth Amendment’s due process clause Cir.2011) (citation omitted). In contrast, legal conclusions includes a guarantee of procedural fairness, assuring that are not entitled to the assumption of truth. Ashcroft v. a deprivation of life, liberty, or property must ‘be Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d preceded by notice and opportunity for a hearing 868 (2009). appropriate to the nature of the case.’ ” Blazy v. Jefferson Cnty. Regional Planning Com’n, 438 Fed.Appx. 408, 411 Generally, a complaint does not need to contain “detailed (6th Cir.2011) (quoting Cleveland Bd. of Educ. v. factual allegations,” although its allegations “must be Loudermill, 470 U.S. 532, 542, 105 S.Ct. 1487, 84 enough to raise a right to relief above the speculative L.Ed.2d 494 (1985)). level.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955. “Blanket assertions” or a “formulaic recitation of the elements of a cause of action” are not sufficient. Twombly, 550 U.S. at 555, 556 n. 3, 127 S.Ct. 1955. In A. Plaintiff Project Reflect, Inc. Smithson Craighead’s other words, “a complaint must contain sufficient factual Standing to Sue matter, accepted as true, to ‘state a claim to relief that is Defendants argue that the relationship between SCMS plausible on its face.’ ” Iqbal, 556 U.S. at 678, 129 S.Ct. and MNPS is analogous to the relationship between a 1937 (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). municipality and the state that created it. As a political The factual allegations must “allow[ ] the court to draw subdivision of the state of Tennessee, they argue, the the reasonable inference that the defendant is liable for organizational Plaintiff lacks standing to sue the state the misconduct alleged.” Id. at 1949–50. This is a under the Fourteenth Amendment. Plaintiffs respond that “context-specific task that requires the reviewing court to Project Reflect, Inc., is a nonprofit corporation and draw on its judicial experience and common sense.” Id. at private citizen of the *874 state of Tennessee that 1950. “In the context of Section 1983 municipal liability, acquired a property interest by virtue of its contractual courts have interpreted Iqbal’s standards strictly.” relationship with MNPS. Hutchison v. Metro. Gov’t, 685 F.Supp.2d 747, 751 (M.D.Tenn.2010); Maness v. Boston Scientific, 751 As an initial matter, it must be determined exactly which F.Supp.2d 962, 966 (E.D.Tenn.2010) (explaining that organization is the Plaintiff in this case. The Complaint Twombly applies to state-law claims in federal cases). identifies as a party “PROJECT REFLECT, INC. SMITHSON CRAIGHEAD MIDDLE SCHOOL (hereinafter referred to as ‘SC–MS’) ... a publicly funded Charter School organized and existing under the Tennessee Charter Schools Act, Tenn.Code Ann. § ANALYSIS 49–13–101, et seq.” (Docket No. 1 ¶ 6). It then states that “PROJECT REFLECT, INC. is a Nonprofit Corporation Plaintiffs’ Complaint under 42 U.S.C. § 1983 alleges that organized and existing under the laws of the State of Defendants deprived Plaintiff Project Reflect, Inc. Tennessee, and PROJECT REFLECT, INC. is the Smithson Craighead Middle School of a legally protected ‘Sponsor’ of the Charter School SC–MS pursuant to the interest in running a charter school, without due process Tennessee Charter Schools Act.” Id. In subsequent of law in violation of the Fourteenth Amendment; that briefing, Plaintiffs seem to distinguish between cases in Defendants deprived the individual and class Plaintiffs of which “the Charter School itself was the plaintiff” and the a legally protected interest, created by Tennessee law, in instant case, in which Project Reflect, Inc., seeks to educating their children at SCMS, without due process of defend its protected property interest. (Docket No. 23 at law in violation of the Fourteenth Amendment; and that 6). Defendants denied Plaintiffs’ rights to equal protection of the laws in violation of the Fourteenth Amendment by [2] It is a distinction that may make a difference. “It is well singling out SCMS for charter revocation and closure established that political subdivisions cannot sue the state without a rational basis, acting arbitrarily and of which they are part under the United States capriciously, and with discriminatory intent. Constitution.” Greater Heights Acad. v. Zelman, 522 F.3d 678, 680 (6th Cir.2008) (citing City of Trenton v. New Defendants have moved to dismiss this action in its Jersey, 262 U.S. 182, 186–87, 43 S.Ct. 534, 67 L.Ed. 937 entirety. The Court analyzes each claim in turn. (1923)). In Greater Heights, the Sixth Circuit, considering Ohio’s “community schools,” which are functionally similar to Tennessee charter schools, held that “community schools are political subdivisions of the I. Count I: Due Process Violations state” and thus “barred from invoking the protections of © 2015 Thomson Reuters. No claim to original U.S. Government Works. 7 Project Reflect, Inc. v. Metropolitan Nashville Bd. of Public Educ., 947 F.Supp.2d 868... 299 Ed. Law Rep. 530

the Fourteenth Amendment.” 522 F.3d at 680–81. Tennessee may be properly regarded as political Defendants also cite a thoroughly reasoned district court subdivisions that lack standing to sue the state. opinion from Pennsylvania, a state with a charter school [3] law that is similar, but not identical, to Tennessee’s law in However, the Court need not resolve this issue at relevant respects, dismissing a charter school’s § 1983 present. Instead, it accepts Plaintiffs’ argument that claims against a school district because the school was Project Reflect, Inc., the “sponsor” of SCMS, is the “sufficiently analogous to a municipal corporation” to intended organizational Plaintiff in this case. Tennessee preclude it from filing suit against its creator. Pocono law defines a charter school’s “sponsor” as “any Mountain Charter Sch. v. Pocono Mountain Sch. Dist., individual, group, or other organization filing an 908 F.Supp.2d 597, 614 (M.D.Pa.2012). application in support of the establishment of a public charter school” and subject to certain restrictions However, these cases are of limited value in determining including, inter alia, nonsectarian and nonprofit status. Id. whether a public charter school created by Tennessee law § 49–13–104(10). The sponsor—as distinguished from is a political subdivision of the state. The Court’s analysis the “governing body of the public charter school”—plays in Greater Heights was based on Ohio’s “statutory and a key role in applying for a charter, appealing its case law, as well as the substantive control that Ohio disapproval, and, if approved, signing the written exerts on its community schools,” id. at 680, and Ohio agreement, “which shall be binding upon the governing statutory law is quite different from Tennessee law on this body of the public charter school.” Id. §§ 49–13–107, question. Among other salient differences, an Ohio statute 108, & 110. Defendants do not contend that Project defines “political subdivision” to include a “community Reflect, Inc., a nonprofit corporation that has run school established under Chapter 3314.” Id. (quoting educational programming for approximately nine years Ohio Rev.Code § 2744.01(F)) (emphasis removed). before opening a charter school, lacks standing to sue. Tennessee law does not. Pennsylvania law, meanwhile, (See Docket Nos. 1 at 8 & 29 at 2). Thus, in an effort to specifies that a charter school may “sue and be sued, but construe the Complaint “so as to do justice,” Fed.R.Civ.P. only to the same extent and upon the same condition that 8(e), and mindful of the time-sensitive nature of the issues political subdivisions and local agencies can be sued.” 24 presented, the number of individuals potentially affected, Pa. Stat. Ann. § 17–1714–A (West). Tennessee law, in and considerations of judicial economy, the Court will contrast, provides that “The governing body of a public discuss the Complaint and Motion to Dismiss under the charter school may sue and be sued,” without assumption that Project Reflect, Inc., is the organizational qualification, and prohibits the governing body of a Plaintiff.2 charter school from levying taxes or issuing bonds “except in accordance with state law.” Tenn.Code Ann. § 49–13–124(a). This suggests a formal distinction in the law between political subdivisions and charter schools, in B. Adequacy of State Remedies which “control of instruction” is “vested in the governing Defendants argue that Plaintiffs have failed to plead the body of the school under the general supervision of the inadequacy of state law remedies, which Defendants chartering authority” and in compliance with a signed contend is an essential element of any due process claim. charter agreement and state law. Id. § 111(a)(1) (emphasis Alternatively, they argue that inadequacy of state added); see also id. § 49–13–102 (noting the legislative remedies must be pled for claims alleging a due process intent *875 to allow the establishment of public charter violating arising from a random, unauthorized act, and schools that “operate within a school district structure but that Plaintiffs have presented such a claim. Plaintiffs do are allowed maximum flexibility to achieve their goals”). not address this argument in their response. [4] On the other hand, Tennessee exerts a great deal of In the Sixth Circuit, “a § 1983 plaintiff may prevail on substantive control over its charter schools. Public charter a procedural due process claim by either (1) schools are “part of the state program of public demonstrating that he is deprived of property as a result of education.” Id. § 105. They are subject to formation, established state procedure that itself violates due process reporting, licensure, and insurance requirements, periodic rights; or (2) by proving that the defendants deprived him audits, educational performance standards and of property pursuant to a ‘random and unauthorized act’ requirements, liability limits, open meetings laws, and and that available state remedies would not adequately public records laws, all either identical or analogous to the compensate for the loss.” Macene v. MJW, Inc., 951 F.2d laws that govern political subdivisions and municipalities. 700, 706 (6th Cir.1991) (citation omitted); see also Mertik See, e.g., id. §§ 49–13–106, 111, 116, 119, 120, 125, 127, v. Blalock, 983 F.2d 1353, 1364 (6th Cir.1993) (“Where 138, 140. This suggests that public charter schools in the state action *876 complained of consists of, e.g., unpredictable and tortious or otherwise random and © 2015 Thomson Reuters. No claim to original U.S. Government Works. 8 Project Reflect, Inc. v. Metropolitan Nashville Bd. of Public Educ., 947 F.Supp.2d 868... 299 Ed. Law Rep. 530

unauthorized acts of state employees, the Constitution recommendation to revoke the charter, they say, does not require the state to do the impossible and predict when the loss will occur.”). is an ultra vires act beyond the scope of the Act, which resulted in the deprivation of the Plaintiffs’ protected [5] “Not all due process challenges can be so conveniently property interest. The [Board] and the individual categorized” as either attacking an established state Defendants acted without statutory authority in procedure or a random, unauthorized act, however. Id. at recommending the revocation of the SCMS Charter as 1365. Nor has the relevant case law always been clear. the “Office of Innovation” has no Statutory basis. See Mitchell v. Fankhauser, 375 F.3d 477, 481–84 (6th Cir.2004) (chronicling the inconsistent development of Most importantly, because the “Director” of the “Office circuit precedent, and holding that the inadequacy of state of Innovation” has no statutory authority, the [Board’s] remedies must only be pled when a plaintiff challenges a reliance on his statements is particularly misguided and deprivation arising from a random, unauthorized act). unfair.... Since the Office of Innovation is a fictional Still, because § 1983 “was not meant to supply an entity and the Director thereof has no more power than exclusive federal remedy for every alleged wrong a common citizen, ... the action by the [Board] cannot committed by state officials,” Vicory v. Walton, 721 F.2d be validated. 1062, 1065 (6th Cir.1983), a plaintiff proceeding under the random, unauthorized act theory “must prove as an Id. at 10–11. Finally, Plaintiffs remain silent in response element of the claim that state procedural remedies are to Defendants’ argument that they failed to plead the inadequate.” Magnum Towing & Recovery v. City of inadequacy of state remedies, specifically why they could Toledo, 287 Fed.Appx. 442, 447 (6th Cir.2008) (in the *877 not obtain redress through a writ of certiorari action context of a motion for summary judgment). brought pursuant to Tenn.Code Ann. § 27–8–101 et seq. [7] [8] [6] On its face, the Complaint seems to challenge an Plaintiffs are “master[s] of the complaint,” Holmes official process—the revocation of a school charter—that Group, Inc. v. Vornado Air Circ. Sys., Inc., 535 U.S. 826, is largely controlled by state law, namely the Tennessee 831, 122 S.Ct. 1889, 153 L.Ed.2d 13 (2002) (citation Charter Schools Act, Tenn.Code Ann. § 49–13–101 et omitted), and they have eliminated any ambiguity about seq. Based upon “the nature of the deprivation the due process theory under which they proceed. The complained of and the circumstances under which the school board Defendant acted randomly and without deprivation occurred,” then, it would appear that the authority when it voted to approve a recommendation gravamen of the Complaint is that “a state process made by the head of a fictional entity, a man harboring a dictated by statute ... itself deprived [Plaintiffs] of due “desire to close SCMS for his own personal reasons.” process,” and thus there would be no requirement that (Docket No. 23 at 7). This is akin to the state official who Plaintiffs allege the inadequacy of state remedies. See “was not acting pursuant to any established state Mertik, 983 F.2d at 1365–67 (explaining analysis that procedure, but, instead, was apparently pursuing a should be used to categorize complaints, particularly random, unauthorized personal vendetta ....” Zinermon, when they challenge statutory schemes that give officials 494 U.S. at 130, 110 S.Ct. 975 (discussing Hudson v. “broad power and little guidance”) (citing Zinermon v. Palmer, 468 U.S. 517, 104 S.Ct. 3194, 82 L.Ed.2d 393 Burch, 494 U.S. 113, 110 S.Ct. 975, 108 L.Ed.2d 100 (1984)). “The controlling inquiry is solely whether the (1990)). state is in a position to provide for predeprivation process.” Hudson, 468 U.S. at 534, 104 S.Ct. 3194. But the Complaint and subsequent briefing (or the lack thereof) resist this analysis, inexplicably. First, Plaintiffs Because Plaintiffs allege that Defendants acted ultra vires allege in the Complaint that they “have no adequate and do not respond to Defendants’ argument that they remedy in state law.” (Docket No. 1 ¶ 52). Second, failed to allege inadequate postdeprivation state remedies, Plaintiffs’ assertions in response to the Motion to Dismiss the Court is compelled to conclude that Defendants’ render the Court’s attempted interpretation untenable. unauthorized reliance on a malicious individual, who Plaintiffs argue that Defendant Coverstone and the Office himself acted outside the bounds of state law, could not of Innovation “have no authority” under state law. have been anticipated. Accordingly, the state could not (Docket No. 23 at 10). They characterize state law as have provided adequate predeprivation process. Plaintiffs providing “absolutely no procedural or substantive are thus required to plead that state procedural remedies guidance for revocation other than the [sic] LEA [local are inadequate. See Magnum Towing, 287 Fed.Appx. at education authority] ‘may’ revoke a Charter.” Id. That the 447. Board acted on Defendants Coverstone and Register’s Plaintiffs’ conclusory allegation that they lack an © 2015 Thomson Reuters. No claim to original U.S. Government Works. 9 Project Reflect, Inc. v. Metropolitan Nashville Bd. of Public Educ., 947 F.Supp.2d 868... 299 Ed. Law Rep. 530

adequate postdeprivation remedy in state law is factually v. Cleveland, 923 F.2d 477, 481–82 (6th Cir.1991). insufficient to raise a reasonable expectation that such is [14] [15] [16] [17] the case, see Twombly, 550 U.S. at 555, 127 S.Ct. 1955, In the case at hand, the statutory language and they fail to attack the state’s judicial process for the and the charter agreement4 do not support Plaintiff’s claim correction of board and agency errors, see Copeland v. of a property interest protected by state law. “[A] party Machulis, 57 F.3d 476, 479–80 (6th Cir.1995).3 For this cannot possess a property interest in the receipt of a reason, the procedural due process claim should be benefit when the state’s decision to award or withhold the dismissed as to all Defendants. Nonetheless, the Court benefit is wholly discretionary.” EJS Properties, LLC v. will analyze the remainder of Defendants’ motion. City of Toledo, 698 F.3d 845 (6th Cir.2012) (citation omitted). The charter agreement incorporates Tenn.Code Ann. § 49–13–122(a), which provides that “A public charter school agreement may be revoked or denied C. Merits of the Due Process Claim renewal by the final chartering authority if the chartering authority determines that the school ... (2) Received identification as a priority school, as defined by the state’s i. Property Interest of Project Reflect, Inc. accountability system.” “The word ‘may’ customarily connotes discretion.” Jama v. Immigration and Customs Defendants argue that Project Reflect., Inc., has no Enforcement, 543 U.S. 335, 346, 125 S.Ct. 694, 160 property interest, protected by due process, to operate a L.Ed.2d 708 (2005). Interpreting similar statutory charter school, much less an underperforming one, and language while rejecting a charter school’s procedural due that neither Tennessee law nor the charter agreement process challenge, one federal district court wrote that the between MNPS and Project Reflect, Inc., provides that law “frames the decision to revoke a charter as a any particular process is due before the state may revoke a discretionary matter” and “affords the sponsor5 of a failing school’s charter. Plaintiffs respond that Project charter school significant—indeed, almost Reflect, Inc., acquired a property interest by virtue of its total—discretion.” Project School v. City of Indianapolis, contractual relationship with MNPS, manifested in the No. 1:12–cv–01028–SEB–DKL, 2012 WL 3114573, at *3 form of the charter agreement, which was signed (S.D.Ind. July 31, 2012) (noting that the “use of the word according to state law. ‘may’ is significant; this word is precatory and [9] customarily connotes discretion”) (internal quotation When evaluating a claim for the violation of due marks and citation omitted). Tennessee’s law similarly process rights, “[t]his court undertakes a two-step uses the language of discretion, *879 not entitlement, and analysis.” Blazy, 438 Fed.Appx. at 411 (quoting Mitchell, only minimally conditions that exercise of discretion. 375 F.3d at 480). First, a Plaintiff must establish as a threshold matter that it had a protected property interest in Underscoring this broad grant of discretion, the Tennessee a benefit. Id. at 411–12. Second, the Court must charter school statute repeatedly declares its purpose and determine what process is due. Id. at 412. intention to provide the state department of education and local school systems with “options,” “alternative means,” *878 [10] [11] [12] [13] Property interests are not created by and “flexibility”—hardly the language of a statute the Constitution. Bd. of Regents of State Colleges v. Roth, creating a property interest. Tenn.Code Ann. § 408 U.S. 564, 577, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972). 49–13–102(a)(2), (b), (c), (d), & (e). The law constrains “Rather they are created and their dimensions are defined this discretion only by requiring the chartering authority by existing rules or understandings that stem from an to state its reason(s) for revoking the charter. Id. § independent source such as state law-rules ....” Id. “A 49–13–122(b). If, as in this case, the revocation occurs property interest can be created by a state statute, a formal because of the school’s priority status, no appeal is contract, or a contract implied from the circumstances.” permitted—again emphasizing state discretion, not the Blazy, 438 Fed.Appx. at 412 (citation omitted). “Property charter holder’s property rights. Id. § 49–13–122(c). interests protected by the due process clause must be more than abstract desires or attractions to a benefit. The Even if it could be said that state law and the charter due process clause only protects those interests to which agreement create a property interest, for the one has a legitimate claim of entitlement.” Waeschle v. aforementioned reasons, the Court finds that this interest Dragovic, 576 F.3d 539, 544–45 (6th Cir.2009) (citation does not rise to the level of a legitimate claim of omitted). The existence of a property interest is a matter entitlement protected by the Due Process Clause. See of state law; “whether that interest rises to the level of a Town of Castle Rock, Colo. v. Gonzales, 545 U.S. 748, legitimate claim of entitlement protected by the due 756–57, 125 S.Ct. 2796, 162 L.Ed.2d 658 (2005). process clause is determined by federal law.” Brotherton

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process. (Docket No. 23 at 5). However, the Court disagrees and finds no support in statutory or case law for this proposition, nor do Plaintiffs cite any such authority. As explained supra, the Tennessee Charter Schools Act ii. Property Interest of Parent and Putative Class represents a broad grant of discretion to LEAs to revoke a Plaintiffs school’s charter. While SCMS can at least point to a signed charter agreement to support its claim to Defendants assert that the parent Plaintiffs do not have a proprietary status, the Parent Plaintiffs present even less protected property interest in sending their children to the to justify their claim to “any significant property interests individual charter school of their choosing, i.e. SCMS. ... including statutory entitlements.” Arnett v. Myers, 281 Furthermore, they argue, the parent Plaintiffs cannot show F.3d 552, 565 (6th Cir.2002) (citation omitted). that the education their students will receive at new schools to which they are assigned next year is As to the parent Plaintiffs’ assertion that, if SCMS is significantly different from, or inferior to, the education closed, they will have no choice but to transfer their received at SCMS. Plaintiffs respond that the Tennessee children to an inferior MNPS zoned school, enroll them in Charter Schools Act gives them a legally protected private school, or homeschool them (Docket No. 1 ¶¶ interest in enrolling their children in the charter school of 14–15), that allegation is belied by other allegations in the their choice, and that the parent Plaintiffs have established complaint (see id. ¶ 43), statements made at the an entitlement, protected by the Due Process Clause, not November 13, 2012, meeting in question, and public to be transferred to an inferior school. records.6 Defendants specifically discussed the need to [18] [19] give parents sufficient notice of the school’s closing so “Public education is not a ‘right’ granted to that they could participate in the choice school and charter individuals by the Constitution.” Plyler v. Doe, 457 U.S. school application process, which was taking place in 202, 221, 102 S.Ct. 2382, 72 L.Ed.2d 786 (1982) (citing November 2012. (Docket No. 14–4). Plaintiffs’ allegation San Antonio Indep. Sch. Dist. v. Rodriguez, 411 U.S. 1, that they will have no choice but to send their children to 35, 93 S.Ct. 1278, 36 L.Ed.2d 16 (1973)). “However, if a an inferior zoned school, home school, or private school state elects to furnish free compulsory public education to falls short of the plausibility threshold and is contradicted any of its citizens ... it must do so in a manner, respecting by the pleadings.7 all of its residents, which comports with basic Fourteenth Amendment equal protection and due process strictures.” Wayne v. Shadowen, 15 Fed.Appx. 271, 283 (6th Cir.2001) (emphasis in original). In Tennessee, school-age children have a constitutional and statutory iii. What Process Is Due right to a public education. Heyne v. Metropolitan [21] [22] Nashville Bd. of Public Educ., 380 S.W.3d 715, 731–32 “The right to procedural due process requires that (Tenn.2012). However, in the context of student when a State seeks to terminate a protected interest it discipline, the Sixth Circuit has suggested that a public must afford notice and opportunity for hearing school student “may not have procedural due process appropriate to the nature of the case before the rights to notice and an opportunity to be heard when the termination becomes effective.” Crump v. Lafler, 657 sanction is attendance at an alternative school absent F.3d 393, 397 (6th Cir.2011) (internal citations omitted). some showing that the education received at the Because the Court finds that no Plaintiff has a property alternative school is significantly different from or interest protected by due process in the continued inferior to that received at his regular public school.” existence of SCMS, no process is due. However, the Buchanan v. City of Bolivar, Tenn., 99 F.3d 1352, 1359 Complaint and the materials cited therein make it clear (6th Cir.1996) (citations omitted); accord Wayne, 15 that Plaintiffs had notice of the revocation Fed.Appx. at 290; see also Mullen v. Thompson, 31 recommendation (Docket No. 14–3), and that their Fed.Appx. 77, 80 (3rd Cir.2002) (holding that students representative, Dr. Carolyn Baldwin Tucker, addressed “have no constitutionally cognizable property or liberty the Board at the November 13, 2012, meeting (Docket interest in attending the individual school of their No. 14–4). Even assuming arguendo that a Plaintiff could choice”). establish a protected property interest, the Court finds that they received appropriate procedural protections under the [20] Plaintiffs argue that the Tennessee legislature created a circumstances. See Mathews v. Eldridge, 424 U.S. 319, substantive right to attend a charter school when it passed 334, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976) (discussing the Tennessee Charter Schools Act, and *880 that this three-factor analysis to determine what process is due); right represents a property interest protected by due (Docket No. 14–1 at 17 (signed agreement stating that the © 2015 Thomson Reuters. No claim to original U.S. Government Works. 11 Project Reflect, Inc. v. Metropolitan Nashville Bd. of Public Educ., 947 F.Supp.2d 868... 299 Ed. Law Rep. 530

chartering authority may revoke agreement “according to conceivable reason for the the procedures set forth in TCA § 49–13–121 and TCA § government’s actions or by 49–13–122”)). demonstrating that the actions were motivated by animus or ill-will. Accordingly, Plaintiffs’ due process claims will be dismissed. Id. (internal citation omitted).

In the instant case, Plaintiffs have not alleged the existence of another charter school that is similarly II. Equal Protection Claim situated in all material respects, or other charter school [23] [24] “ ‘The Equal Protection Clause prohibits parents who are likewise situated. Indeed, they concede discrimination by government *881 which either burdens that SCMS “is the only charter school in the bottom 5%.” a fundamental right, targets a suspect class, or (Docket No. 23 at 7). Despite Plaintiffs’ subsequent intentionally treats one differently than others similarly suggestion that SCMS be compared to traditional public situated without any rational basis for the difference.’ ” schools in priority status, traditional public schools are Loesel v. City of Frankenmuth, 692 F.3d 452, 461 (6th not relevant comparators because Plaintiffs have not Cir.2012) (citation omitted) cert. denied, ––– U.S. ––––, alleged that they have “relevant similarity,” see Bench 133 S.Ct. 878, 904, 184 L.Ed.2d 660 (2013). Because “the Billboard Co. v. City of Cincinnati, 675 F.3d 974, 987 Equal Protection Clause is concerned with arbitrary (6th Cir.2012) (citation omitted), namely, that Defendants government classification,” a plaintiff can state a are authorized to close them for being identified as a class-of-one discrimination claim by alleging that she has priority school by the state. Nor do they assert that the “been intentionally treated differently from others legislative distinction between charter schools and similarly situated and that there is no rational basis for the traditional public schools lacks a “rational relation to difference in treatment.” Engquist v. Oregon Dep’t of some legitimate end.” Romer v. Evans, 517 U.S. 620, 631, Agr., 553 U.S. 591, 601–02, 128 S.Ct. 2146, 170 L.Ed.2d 116 S.Ct. 1620, 134 L.Ed.2d 855 (1996). While Plaintiffs 975 (2008) (citation omitted). do allege that Defendants’ “ ‘Class of One’ discrimination had no rational basis” and was implemented “arbitrarily Defendants allege that Plaintiffs have failed to identify a and capriciously with a singular discriminatory intent,” similarly situated comparator for their class-of-one equal they fail to plead the existence of a similarly situated protection claim. Plaintiffs respond that their equal comparator. See Vill. of Willowbrook v. Olech, 528 U.S. protection claim “is unique in that SCMS is the only 562, 565, 120 S.Ct. 1073, 145 L.Ed.2d 1060 (2000). charter school in the bottom 5%.” (Docket No. 23 at 7). However, they assert in their response that MNPS treats As such, the Complaint does not contain sufficient factual charter schools differently than traditional public schools matter to state a plausible claim for relief under the Equal in priority status because traditional schools “are Protection Clause. See Iqbal, 556 U.S. at 678–79, 129 apparently exempt from closure or revocation.” Id. S.Ct. 1937. Accordingly, Count II will be dismissed as to all Defendants. [25] [26] Plaintiffs “must overcome a ‘heavy burden’ to prevail based on the class-of-one theory.” Loesel, 692 F.3d at 462 (citing TriHealth, Inc. v. Bd. of Comm’rs, Hamilton Cnty., Ohio, 430 F.3d 783, 791 (6th Cir.2005)). *882 III. Other Pending Motions Plaintiffs Because the Court will grant Defendants’ Motions to Dismiss, all other pending motions will be denied as must show that they were treated moot. differently than those similarly situated in all material respects. In addition, they must show that the adverse treatment they experienced was so unrelated to the CONCLUSION achievement of any combination of legitimate purposes that the court For the foregoing reasons, Defendants’ Motions to can only conclude that the Dismiss (Docket Nos. 12 & 14) will be GRANTED. All government’s actions were other pending motions will be DENIED AS MOOT. This irrational. This showing is made action will be dismissed. either by negativing every © 2015 Thomson Reuters. No claim to original U.S. Government Works. 12 Project Reflect, Inc. v. Metropolitan Nashville Bd. of Public Educ., 947 F.Supp.2d 868... 299 Ed. Law Rep. 530

An appropriate Order will be entered. The hearing scheduled for May 22, 2013, at 4:00 p.m. is cancelled.

It is SO ORDERED.

For the reasons stated in the accompanying Memorandum, Defendants’ Motions to Dismiss (Docket All Citations Nos. 12 & 14) are hereby GRANTED. All other pending motions are hereby DENIED AS MOOT. This action is 947 F.Supp.2d 868, 299 Ed. Law Rep. 530 dismissed.

1 Unless otherwise indicated, this brief recitation of the factual background is drawn from the Complaint and documents referred to therein. See infra n. 4.

2 Of course, the discussion that follows would apply with equal force to a claim by the charter school itself.

3 A common-law writ of certiorari would seem to be an adequate state remedy for the unconstitutional deprivation alleged here. See Heyne v. Metropolitan Nashville Bd. of Pub. Ed., 380 S.W.3d 715, 729–30 (Tenn.2012).

4 “Documents that a defendant attaches to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff’s complaint and are central to her claim.” Weiner v. Klais & Co., Inc., 108 F.3d 86, 89 (6th Cir.1997) (“[A] defendant may introduce certain pertinent documents if the plaintiff fails to do so. Otherwise, a plaintiff with a legally deficient claim could survive a motion to dismiss simply by failing to attach a dispositive document upon which it relied.”) (internal citations omitted). Additionally, “a court may consider public records without converting a Rule 12(b)(6) motion into a Rule 56 motion.” Jones v. City of Cincinnati, 521 F.3d 555, 562 (6th Cir.2008) (citing Passa v. City of Columbus, 123 Fed.Appx. 694, 697 (6th Cir.2005) (“[I]n order to preserve a party’s right to a fair hearing, a court, on a motion to dismiss, must only take judicial notice of facts which are not subject to reasonable dispute.”)); accord Ashland, Inc., 648 F.3d at 467 (“In addition to the allegations in the complaint, [the Court] may also consider other materials that are integral to the complaint, are public records, or are otherwise appropriate for the taking of judicial notice.”).

5 The term “sponsor” in the Indiana statute is roughly equivalent to the term “chartering authority” in Tennessee law.

6 See supra n. 4.

7 It is also doubtful that Plaintiffs can show that the zoned schools are “inferior” to SCMS. They concede that SCMS is a “priority school” (academic progress within the bottom 5% of schools in the state) under the state’s academic accountability regime and that they “cannot refute the standardized test scores” (Docket No. 23 at 6). In light of these statistics, the Complaint’s vague allegations about safety, overcrowding, learning, and nurture at unspecified MNPS zoned schools (Docket No. 1 at 5–6) cannot establish a claim of significant educational inferiority.

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scheduled.1SeeDocket No. 1–7.Defendants removed the lawsuit to federal court on the basis of federal question 2012 WL 3114573 Only the Westlaw citation is currently available. jurisdiction2 on July 26, 2012. Hoping to maintain the United States District Court, status quo under the state court order, TPS filed its S.D. Indiana, Motion for Preliminary Injunction [Docket No. 10] the Indianapolis Division. following day. In the instant motion, TPS seeks permanent injunctive relief as described above and, The PROJECT SCHOOL, Plaintiff, pursuant to Federal Rule of Civil Procedure 65(a), seeks v. an expedited, consolidated hearing on the merits of CITY OF INDIANAPOLIS and Gregory A. Ballard, preliminary and permanent injunctive relief. The motion in his official capacity as Mayor of is fully briefed, and the Court, being duly advised in the Indianapolis/Marion County, Indiana, matter, DENIES both of Plaintiff’s motions. Defendants. Bearing in mind that time is of the essence, we begin with No. 1:12–cv–01028–SEB–DKL. | July 31, 2012. a very brief recitation of the facts. TPS is an Indianapolis charter school, which the Indiana Code defines as “a public elementary or secondary school ... that: (1) is Attorneys and Law Firms nonsectarian and nonreligious; and (2) operates under a charter.”Ind.Code § 20–24–1–4. On August 5, 2008, in Andrew J. Mallon, Jayme E. Donnelson, Sean Thomas his official capacity as Mayor of the City of Indianapolis, Devenney, Drewry Simmons Vornehm, LLP, Carmel, IN, Gregory Ballard agreed to serve as TPS’s “sponsor” for Plaintiff. within the meaning of Indiana Code § 20–24–1–9(3).3 Pl.’s P.I. Br. at 2. The parties concomitantly executed a Alexander Phillip Will, Amanda J. Griffith, Office Of Charter Agreement,4 which has governed the continuous Corporation Counsel, Clifford R. Whitehead, City Of operation of TPS since the 2008–09 school year. See Indianapolis, Corporation Counsel, Indianapolis, IN, for id.Ex. A. One of the Mayor’s Office’s established Defendants. sponsorship practicesnot only for TPS, but for every other charter school it supervisedis to conduct a Fourth Year Charter Review (FYCR) and associated site visit. Pl.’s P.I. Br. at 2. Defendants furnished a preliminary draft of the FYCR to TPS’s board of directors by letter dated July ORDER DENYING PLAINTIFF’S MOTION FOR 17, 2012. See id .Ex. G. This document served two PRELIMINARY INJUNCTION additional purposes: first, to notify TPS of Mayor Ballard’s intent to revoke the school’s charter; and second, to inform TPS of its right to appeal the notice on SARAH EVANS BARKER, District Judge. or before August 7, 2012, when a final revocation decision would issue. Id. *1 This cause is presently before the Court on the Emergency Motion to Expedite and Consolidate Hearing Both parties concede that the FYCR draft report was not on Merits of Injunctive Relief [Docket No. 12], filed July the first indication that Defendants were concerned about 29, 2012 by Plaintiff, The Project School (“TPS”). On the quality of TPS’s operations and performance. July 23, 2012, TPS filed its Verified Complaint [Docket Between May and July of 2012, TPS officials attempted No. 1–1] in the Marion Superior Court, asserting two to discuss “media reports critical of the [s]chool’s causes of action: (1) a 42 U.S.C. § 1983 claim alleging performance” as well as “ways to address data and issues violation of procedural due process protected by the raised during the [FYCR] process” with the Mayor’s Fourteenth Amendment to the Constitution, and (2) Office. Pl.’s P.I. Br. at 3. Each time, they were instructed promissory estoppel. TPS contemporaneously moved for to wait until all the data required to complete the FYCR a temporary restraining order and a limited permanent had been collected and analyzed. See, e.g., id.Ex. E. The injunction to prevent Defendants from revoking TPS’s Mayor’s Office indicated on July 12, 2012 that it charter until June 30, 2013. Following receipt of a second “anticipate[d] receiving the[se] final pieces of data ... in motion for injunctive relief, the state court granted TPS’s August” and provided a document to “give [TPS] a sense motion on July 24, 2012 and temporarily enjoined of what [its] FYCR [would] look like.”Importantly, Defendants from any activities that would effectively Defendants did not explicitly guarantee TPS a fifth year prevent the School from opening on August 6, 2012 as © 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Tab E-10 Project School v. City of Indianapolis, Not Reported in F.Supp.2d (2012) 2012 WL 3114573

of operation, let alone a review of the school’s fifth year TPS’s § 1983 constitutional claim. Success on the merits plan. See id.5 Notwithstanding these communications, on of this claim requires a showing that, while acting under July 17, 2012, Defendants appointed interim trustees to color of state law, the defendant caused the plaintiff to facilitate enrollment of TPS students in other schools. suffer a constitutional injury. 42 U.S.C. § 1983. Section TPS further alleges that around the same time, agents of 1983 is not a source of substantive rights; rather, it the Mayor’s Office verbally represented to parents and “provides the means by which rights conferred elsewhere one media outlet that its decision to revoke TPS’s charter may be enforced.”Bublitz v. Cottey, 327 F.3d 485, 488 was “final.” Pl.’s P.I. Br. at 6, Exs. I, J. On July 20, 2012, (7th Cir.2003). Accordingly, the Court must first identify TPS filed two responses to the Mayor’s notice of intent to the specific constitutional or statutory rights purportedly revoke. Compl. ¶ 27. TPS now entreats this court to find infringed. Id. These specific rights dictate “the that, “[u]nless Defendants are immediately enjoined ... appropriate analytical lens through which facts are to be from the proposed school closing activities ..., it [will be] viewed.”Payne ex rel. Hicks v. Churchich, 161 F.3d 1030, impossible to maintain TPS’s student enrollment, upon 1039 (7th Cir.1998). Here, TPS contends that, while which it is both manifestly and financially dependent for acting under color of state law, Defendants infringed upon the 2012–2013 academic year and permanently.”Id. ¶ 56. its Fourteenth Amendment right to due process. The Fourteenth Amendment provides, in relevant part, that no *2 To determine whether injunctive relief is appropriate, a state “shall deprive any person of life, liberty, or property, district court engages in a two-pronged analysis without due process of law.”U.S. Const. Amend. XIV. consisting of a threshold phase and a balancing phase. Due process mandates an opportunity to be heard “at a The party seeking injunctive relief must satisfy three meaningful time and in a meaningful manner,” but only requirements to survive the threshold phase; it must show where a plaintiff has properly alleged an infringement of a (1) that the claim has some likelihood of success on the protected property interest. Mathews v. Eldridge, 424 U.S. merits; (2) that, absent a preliminary injunction, it will 319, 333, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976). suffer irreparable harm pending final resolution of its claim; and (3) that no adequate legal remedy will suffice. *3 As TPS has repeatedly informed the Court, the school Girl Scouts of Manitou Council, Inc. v. Girl Scouts of is committed to its goal of commencing the 2012–13 U.S.A., Inc., 549 F.3d 1079, 1086 (7th Cir.2008); Ty, Inc. school year on August 6, 2012. We cast no aspersions on v. Jones Grp., Inc., 237 F.3d 891, 895 (7th Cir.2001). TPS’s expressed devotion to public education; indeed, we Permanent injunctive relief requires the same threshold applaud the school’s enthusiastic and principled advocacy showing, save one important distinction: the plaintiff must over the past few years. Regrettably, however, whereas demonstrate actual success on the merits. Plummer v. Am. TPS’s energy abounds, its understanding of the applicable Inst. of Certified Pub. Accountants, 97 F.3d 220, 229 (7th law falls critically short. The school first alleges that its Cir.1996) (noting that the relevant inquiry is “whether “ability to operate as a charter school for the 2012–2013 [the plaintiff] has in fact succeeded on the merits”); see school year” is a protected property interest. Pl.’s Emerg. also Amoco v. Vill. of Gambell, 480 U.S. 531, 546 n. 12, Mot. at 6. Further, TPS contends that its very existence 107 S.Ct. 1396, 94 L.Ed.2d 542 (1987) (“The standard for and operation under the Charter Agreement are “not mere a preliminary injunction is essentially the same as for a unilateral expectations or otherwise subject to the permanent injunction with the exception that the plaintiff discretionary whims of the Mayor.”Pl.’s P.I. Br. at 12. We must show a likelihood of success on the merits rather disagree. A plain reading of Indiana’s charter school than actual success.”).“If the court determines that the statute, as applied to the relevant facts, plainly repudiates moving party has failed to demonstrate any one of [the] this argument. threshold requirements, it must deny the injunction” and refrain from the balancing phase of its analysis. Girl We find TPS’s apparent belief that its existence is not Scouts of U.S.A., Inc., 549 F.3d at 1086 (citing Abbott subject to Defendants’ discretion patently unreasonable. Labs. v. Mead Johnson & Co., 971 F.2d 6, 11 (7th Indiana law, which governs the Charter Agreement, Cir.1992)) (emphasis added). This is precisely the affords the sponsor of a charter school significantindeed, situation before the Court: TPS has not established that almost totaldiscretion. Notably, the charter school statute either of its claims has some likelihood of succeeding on frames the decision to revoke a charter as a discretionary the merits, not to mention actual success. Accordingly, we matter, as follows: shall abbreviate our discussion by limiting it to the first requirement of the threshold phase and omitting the Notwithstanding the provisions of balancing phase. the charter, a sponsor that grants a charter may revoke the charter at Our first inquiry in the present matter is the viability of any time before the expiration of

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the term of the charter if the *4 The facts also support revocation of TPS’s charter sponsor determines that at least one under Indiana Code § 20–24–9–4(2), which permits the (1) of the following occurs: (1) The sponsor to cease school operations if the school fails to organizer6 fails to comply with the meet the charter’s educational goals. The uncontroverted conditions established in the evidence before the Court paints a bleak picture of the charter; (2) The charter school school in this respect. In its charter application, TPS established by the organizer fails to stated that its primary goals were to have each student meet the educational goals set forth reading, writing, and computing “at or above grade level” in the charter; (3) The organizer within his or her first three consecutive years of study. fails to comply with all applicable Charter App. at 4. Reports from the Mayor’s Director of laws; (4) The organizer fails to Charter Schools document clear failures with respect to meet generally accepted this goal, citing “failing ISTEP+ test scores for all of government accounting principles; [TPS’s] year[s] operating as a charter school.”Defs.’ [or] (5) One (1) or more grounds Resp. Ex. 1 at 2. In fact, disaggregated state test results for revocation exist as specified in placed TPS in the bottom five percent of Marion County the charter. schools and the bottom two percent of Indiana schools. Id. at 3. The Director of Charter Schools also made a specific Ind.Code § 20–24–9–4 (emphases added). The use of the finding with respect to TPS’s educational goals: word “may” is significant; this word “is precatory and ‘customarily connotes discretion.’ “ Exelon Generation [I]n 2011–2012, only 36.0% of Co. v. Local 15, Int’l B’hood of Elec. Workers, 676 F.3d students who had been enrolled for 566, 571 (7th Cir.2012) (internal citations omitted). Other three consecutive years or more provisions of the statute support our conclusion that demonstrated proficiency in both decisionmaking regarding TPS’s very existence falls English and mathematics. This falls squarely within the ambit of Defendants’ sponsorship short of the school’s academic goal, duties. For instance, a sponsor may grant a charter to an as stated in the Charter Agreement, organizer to operate a charter school,”Ind.Code § that by the third year of enrollment, 20–24–3–1, and may reject a charter school proposal, see every student would be able to id. § 20–24–3–11. read, write and compute as measured by state standardized With the foregoing provisions in mind, it is clear that tests. Defendants’ decision to revoke TPS’s charter was both permissible under Indiana statute and entirely within Id. at 4. Defendants’ prerogatives. Between July 1, 2008 and June 30, 2010, the State Board of Accounts (SBOA) audited Faced with such dismal results respecting TPS’s academic TPS and found “significant deficiencies and material and financial health, Mayor Ballard’s decision was weaknesses in [TPS’s] management” of federal grant factually reasonable and legally permissible. His monies. Defs.’ Resp. Ex. 3 at 1. SBOA found, inter alia, revocation of TPS’s charter was justified not only by that TPS: had overdrawn its general fund by nearly concrete facts, but also by statutory law which clearly $225,000 as of June 30, 2010; regularly used restricted afforded him discretion in the matter. Consequently, funds to pay salaries; failed to submit timely financial TPS’s argument that somehow its existence is a “property data to the Mayor’s Office when requested to do so; failed right” for purposes of Fourteenth Amendment due process to maintain a balanced budget between 2009 and 2012; is a nonstarter. and regularly used its revolving line of credit to pay expenses. Id. at 1–2;see also Defs.’ Resp. Ex. 5 TPS also asserts that “[l]egitimate and reasonable reliance (indicating TPS’s massive debt load and projected on a promise from the state can be the source of property negative cash flow). In the aggregate, these facts support rights protected under the Due Process Clause.”Pl.’s a finding that, pursuant to Indiana Code § 20–24–9–4(5), Reply at 5 (citing Vail v. Bd. of Educ. of Paris Union Sch. “one (1) or more grounds for revocation exist as specified Dist. No. 95, 706 F.2d 1435, 1440 (7th Cir.1983)). in the charter.”Specifically, they constitute compelling Although indisputably true, this legal principle is evidence that TPS was “becom[ing] insolvent,” which is applicable only with a showing as to one thing TPS has one of the Charter Agreement’s permissible bases for failed to demonstrate: an actual promise. In Vail, the revocation of the charter. Charter Agrmt. § 16.4(j). Seventh Circuit alluded to its prior holding in McElearney v. University of Illinois, 612 F.2d 285, 290 (7th Cir.1979),

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 Project School v. City of Indianapolis, Not Reported in F.Supp.2d (2012) 2012 WL 3114573

which held that informal assurances do not give rise to a Amendment or the critical element of promissory constitutionally protected property right. Additional estoppel, further analysis is unnecessary. It is patently Seventh Circuit case law supports this proposition; for clear that TPS has failed to establish any likelihood of instance, in Upadhya v. Langenberg, 834 F.2d 661, 665 succeeding on the merits of either claim it has advanced (7th Cir.1987), the court held that vague statements (and a against Defendants. By extension, TPS has similarly party’s understanding of what has been said to him) “do faltered in its efforts to demonstrate actual success, as not transmute probabilities into entitlements.”The Seventh required for permanent injunctive relief. TPS’s failures at Circuit has also noted “overwhelming” authority this stage of the analysis foreclose any need for the Court establishing that even repeated assurances of being “on to convene a hearing as TPS has requested that we do, the right track” or being “certain [to] be retained if ... given that oral argument cannot revitalize the school’s performance is satisfactory” do not create an enforceable case or overcome its deficiencies. Therefore, we DENY property right. Colburn v. Trs. of Ind. Univ., 973 F.2d Plaintiff’s request for an expedited, consolidated hearing 581, 592 (7th Cir.1992). Having reviewed the inter-party on the matter. Additionally, in accordance with guiding communications in the record, we can point to no case law, we DENY Plaintiff’s Motions for preliminary statements that rise above the level of “vague assurances,” and permanent injunctive relief. guesses, or anticipated results. A promise requires something much more, strengthening our view that none IT IS SO ORDERED. of Defendants’ statements to Plaintiff suffice to provide a basis for any property right. Having found no evidence of any actionable “promise” made by Defendants, we need not address Plaintiff’s promissory estoppel claim, which All Citations cannot survive in the absence of a promise. Not Reported in F.Supp.2d, 2012 WL 3114573 *5 Because TPS has failed to demonstrate the existence of a protected property right under the Fourteenth

1 This order, which also enjoined Defendants from “promoting the removal of students from TPS enrollment or teachers from TPS staff,” was to expire at 4:00 p.m. on August 3, 2012, barring extension by the Marion Superior Court. Docket No. 1–1 at 2.

2 28 U.S.C. § 1331.

3 For purposes of the charter school statute, a “sponsor” is “one of the following ... (3)[t]he executive ... of a consolidated city.”Ind.Code § 20–24–1–9(3). The term “executive” includes the mayor of a city. Id. § 36–1–2–5.

4 The Charter Agreement is “governed by, subject to, and construed under the laws of the State of Indiana.”Pl.’s P.I. Br. Ex. A § 18.2.

5 TPS was informed only that an anticipated meeting “would be the opportune time for [the parties] to discuss the [fif]th year plan.”Pl.’s P.I. Br. Ex. E.

6 “Organizer” refers to the not-for-profit group that enters into a contract to operate as a charter school; thus, for purposes of this lawsuit, the “organizer” is TPS. SeeInd.Code § 20–24–1–7.

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

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KeyCite Yellow Flag - Negative Treatment Distinguished by S.M. v. Delaware Department of Education, D.Del., January 12, 2015 West Headnotes (35) 46 F.Supp.3d 455 United States District Court, D. Delaware. [1] Federal Courts Pleadings and motions Reach Academy for Boys and Girls, Inc., O.G., by her parent and next friend, T.W., by her parent When a motion to dismiss for failure to state a and next friend, T.W., by her parent and next claim relies on the absence of Article III friend, S.O., by her parent and next friend, standing, the motion is analyzed pursuant to the Plaintiffs, rule governing motions to dismiss for lack of v. subject matter jurisdiction. U.S. Const. art. 3, § Delaware Department of Education and Mark 2, cl. 1; Fed. R. Civ. P. 12(b)(1), 12(b)(6). Murphy in his capacity as Secretary of the Delaware Department of Education, Defendants. Cases that cite this headnote C.A. No. 13–1974–LPS | Signed May 30, 2014

Synopsis [2] Federal Courts Background: All-girls public charter school, and students Pleadings and motions through their parents or guardians, sued Delaware Federal Courts Department of Education (DOE) and its Secretary, Evidence; Affidavits claiming that non-renewal of school’s charter violated Equal Protection Clause, Due Process Clause, Title IX, Motions to dismiss for lack of subject matter and two provisions of Delaware’s Charter School Act jurisdiction may present either facial or factual (CSA). Plaintiffs moved for preliminary injunction, and challenges to district court’s jurisdiction. Fed. R. defendants moved to dismiss for failure to state claim. Civ. P. 12(b)(1).

Cases that cite this headnote Holdings: The District Court, Stark, J., held that: [1] charter school lacked standing; [2] procedural due process claim was not actionable; [3] Federal Courts [3] Pleadings and motions DOE did not violate CSA’s technical assistance Federal Courts provision; Presumptions and burden of proof [4] DOE did not violate CSA’s notice provision; A facial challenge to district court’s subject [5] matter jurisdiction, which contests only the equal protection claim was sufficiently alleged; sufficiency of the pleadings, is subjected to an [6] analysis identical to that of a motion to dismiss Title IX claim was sufficiently alleged; and for failure to state a claim; thus, the court [7] considers only the allegations of the complaint preliminary injunction was warranted. and documents referenced therein and attached thereto, in the light most favorable to the plaintiff. Fed. R. Civ. P. 12(b)(1), 12(b)(6). Plaintiffs’ motion granted; defendants’ motion granted in part and denied in part.

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Cases that cite this headnote Cases that cite this headnote

[4] [7] Federal Civil Procedure Education In general; injury or interest Construction and operation of charter Federal Civil Procedure Causation; redressability Under Delaware law, just as school districts are “political subdivisions,” so effectively, are To establish Article III standing, plaintiff must charter schools, and charter schools lack satisfy three requirements: (1) an injury in fact, capacity to bring suit against the state. 14 Del. which is an invasion of a legally-protected Code § 504(d). interest that is both concrete and particularized and actual or imminent, not conjectural or hypothetical, (2) a causal connection between Cases that cite this headnote the injury and the conduct complained of, and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision. U.S. Const. art 3, § 2, cl. 1. [8] Civil Rights Education Cases that cite this headnote Education Judicial review

All-girls charter school lacked standing to pursue claims against Delaware Department of [5] Education (DOE) and its Secretary for allegedly Constitutional Law Local government violating constitution, Title IX, and Delaware’s Constitutional Law Charter School Act (CSA) by non-renewal of Governmental entities school’s charter, since charter school was political subdivision lacking capacity to bring A political subdivision created by a state for the suit in opposition to state of Delaware that better ordering of government has no privileges created school. U.S. Const. art. 3, § 2, cl. 1; or immunities under the federal constitution Education Amendments of 1972 § 901, 20 which it may invoke in opposition to the will of U.S.C.A. § 1681; 14 Del. C. §§ 506, 514A. its creator; nonetheless, an exception to this principle is recognized in actions against the state arising under the Supremacy Clause. U.S. Cases that cite this headnote Const. art. 6, cl. 2.

Cases that cite this headnote [9] Constitutional Law Procedural due process in general

When a plaintiff filed a § 1983 claim based on a [6] Education state actor’s failure to provide procedural due Construction and operation of charter process, district courts undertake a two-stage inquiry to determine: (1) whether the asserted Under Delaware law, the legal status of a charter individual interests are encompassed within the school is equivalent to that of a public school Fourteenth Amendment’s protection of life, district. 14 Del. Code §§ 503, 503, 504. liberty, or property, and (2) whether the procedures available provided the plaintiff with due process of law. U.S. Const. Amend. 14; 42 © 2015 Thomson Reuters. No claim to original U.S. Government Works. 2 Reach Academy for Boys and Girls, Inc. v. Delaware..., 46 F.Supp.3d 455 (2014) 314 Ed. Law Rep. 693

U.S.C.A. § 1983. Even if students in all-girls charter school and their parents had protected property interest in renewal of school’s charter, they were provided Cases that cite this headnote with constitutionally adequate procedural due process, where charter school accountability committee (CSAC) met with school to discuss renewal application, DOE then held public [10] hearing affording school opportunity to submit Constitutional Law supplemental materials, and CSAC afforded Source of right or interest school yet another hearing before making final Constitutional Law determination of non-renewal. U.S. Const. Benefits, rights and interests in Amend. 14; 14 Del. Code § 514A(g). In analyzing a due process claim, property rights are not created by the constitution; rather, they 1 Cases that cite this headnote are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law, rules, or understandings that secure benefits and that [13] support claims of entitlement to those benefits. Civil Rights U.S. Const. Amend. 14. Due process of law and equal protection

Section 1983 may not be invoked every time Cases that cite this headnote local officials allegedly act contrary to state or local procedural law purportedly in violation of due process. U.S. Const. Amend. 15; 42 U.S.C.A. § 1983. [11] Constitutional Law Accreditation and licensure Cases that cite this headnote Education Termination of charter Education Judicial review [14] Education Students in all-girls charter school and their Application and approval parents lacked cognizable property interest in renewal of school’s charter, as required to Delaware Department of Education’s (DOE) support procedural due process claim by failure to provide technical assistance to all-girls students and parents against Delaware charter school after its creation did not violate Department of Education (DOE); under Delaware’s Charter School Act (CSA) Delaware law, charter was renewable only at provision, requiring DOE to assist school with discretion of DOE. U.S. Const. Amend. 14; 14 initial charter application, but not requiring DOE Del. Code § 514A(b). to provide technical assistance on continuous ongoing basis. 14 Del. Code § 506(a)(3).

[12] Constitutional Law [15] Accreditation and licensure Education Education Termination of charter Termination of charter Delaware Department of Education’s (DOE) © 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 Reach Academy for Boys and Girls, Inc. v. Delaware..., 46 F.Supp.3d 455 (2014) 314 Ed. Law Rep. 693

failure to provide all-girls charter school notice the constitution or laws of the United States, and that its charter was in jeopardy of non-renewal (2) that the alleged deprivation was committed did not violate Delaware’s Charter School Act by a person acting under color of state law. 42 (CSA) provision requiring such notice, since U.S.C.A. § 1983. provision did not exist at time that school’s charter was in jeopardy of non-renewal. 14 Del. Code § 514A. Cases that cite this headnote

Cases that cite this headnote [19] Constitutional Law Similarly situated persons; like circumstances [16] Injunction The Fourteenth Amendment’s Equal Protection Extraordinary or unusual nature of remedy Clause is essentially a direction that all persons Injunction similarly situated should be treated alike. U.S. Grounds in general; multiple factors Const. Amend. 14.

A preliminary injunction is an extraordinary remedy, and district courts consider four factors Cases that cite this headnote when faced with a request to grant one: (1) whether the movant has shown a reasonable probability of success on the merits, (2) whether the movant will be irreparably injured by denial [20] of relief, (3) whether granting preliminary relief Constitutional Law will result in even greater harm to the Intentional or purposeful action requirement nonmoving party, and (4) whether granting the Constitutional Law preliminary relief will be in the public interest. Similarly situated persons; like circumstances

In order to bring a successful § 1983 claim for Cases that cite this headnote the denial of equal protection, plaintiffs must prove the existence of purposeful discrimination; in other words, they must demonstrate that they received different treatment from that received by other [17] Civil Rights individuals similarly situated. U.S. Const. Substantive or procedural rights Amend. 14; 42 U.S.C.A. § 1983.

Section 1983 is not itself a source of substantive rights, but a method for vindicating federal Cases that cite this headnote rights elsewhere conferred by those parts of the United States constitution and federal statutes that it describes. 42 U.S.C.A. § 1983. [21] Constitutional Law Cases that cite this headnote Sex or Gender

In the context of a sex discrimination claim, to bring a successful § 1983 claim for the denial of equal protection, plaintiffs must show that their [18] Civil Rights disparate treatment from others similarly Nature and elements of civil actions situated was based upon gender. U.S. Const. Amend. 14; 42 U.S.C.A. § 1983. To prevail on a § 1983 claim, plaintiff must demonstrate: (1) a violation of a right secured by © 2015 Thomson Reuters. No claim to original U.S. Government Works. 4 Reach Academy for Boys and Girls, Inc. v. Delaware..., 46 F.Supp.3d 455 (2014) 314 Ed. Law Rep. 693

Clause by not renewing charter for all-girls Cases that cite this headnote school while continuing to renew charter for all-boys school. U.S. Const. Amend. 14; 14 Del. Code § 506(a)(3).

[22] Constitutional Law 2 Cases that cite this headnote Sex or Gender

Gender classifications under law are not inherently proscribed by the Equal Protection [25] Clause; indeed, gender classifications may be Civil Rights used in a variety of legitimate ways, such as to Sex Discrimination compensate women for particular economic disabilities they have suffered, to promote equal To prevail on a Title IX claim, plaintiffs need employment opportunity, or to advance full not show that a defendant purposefully development of the talent and capacities of discriminated on the basis of gender. Education citizens. U.S. Const. Amend. 14. Amendments of 1972 § 901, 20 U.S.C.A. § 1681(a).

[23] Constitutional Law [26] Sex or gender Civil Rights Education Because gender classifications have been used to create or perpetuate the legal, social, and Students of all-girls charter school and their economic inferiority of women, courts review parents, seeking preliminary injunction requiring classifications based on gender to determine Delaware Department of Education (DOE) to whether the proffered justification is renew school’s charter for additional school exceedingly persuasive; thus, the burden on year, had likelihood of success on merits of Title defendants is demanding, as they must show that IX claim, where DOE refused to renew charter the challenged classification serves important for all-girls school while continuing to renew governmental objectives and that the charter for all-boys school. Education discriminatory means employed are Amendments of 1972 § 901, 20 U.S.C.A. § substantially related to the achievement of those 1681(a); 34 C.F.R. § 106.34(c); 14 Del. Code § objectives. U.S. Const. Amend. 14. 506(a)(3).

Cases that cite this headnote 2 Cases that cite this headnote

[27] [24] Civil Rights Injunction Education Irreparable injury Injunction Students of all-girls charter school and their Adequacy of remedy at law parents, seeking preliminary injunction requiring Delaware Department of Education (DOE) to To obtain a preliminary injunction, a plaintiff renew school’s charter for additional school must demonstrate potential harm which cannot year, had likelihood of success on merits of be redressed by a legal or an equitable remedy claim that DOE violated Equal Protection following a trial; the preliminary injunction © 2015 Thomson Reuters. No claim to original U.S. Government Works. 5 Reach Academy for Boys and Girls, Inc. v. Delaware..., 46 F.Supp.3d 455 (2014) 314 Ed. Law Rep. 693

must be the only way of protecting the plaintiff relief, against the potential harm, if any, to the from harm. nonmoving party and others not subject to the action if the relief is granted. Cases that cite this headnote Cases that cite this headnote

[28] Injunction [31] Irreparable injury Injunction Extraordinary or unusual nature of remedy The possibility that adequate compensatory or Injunction other corrective relief will be available at a later Balancing or weighing factors; sliding scale date, in the ordinary course of litigation, weighs heavily against a claim of irreparable harm A preliminary injunction is an extraordinary required to grant a preliminary injunction. remedy never awarded as of right; in each case, district courts must balance the competing claims of injury and must consider the effect on Cases that cite this headnote each party of the granting or withholding of the requested relief.

Cases that cite this headnote [29] Civil Rights Education

Students of all-girls charter school and their [32] parents, seeking preliminary injunction requiring Injunction Delaware Department of Education (DOE) to Public interest considerations renew school’s charter for additional school year on grounds that non-renewal allegedly violated District court must determine whether a grant of Equal Protection Clause and Title IX, would preliminary relief would be in the public likely suffer irreparable harm in absence of interest; in other words, in exercising their preliminary injunctive relief, where non-renewal sound discretion, the court must pay particular would negatively impact parents’ willingness to regard for the public consequences in employing consider school as option for their children, the extraordinary remedy of injunction. causing precipitous drop in enrollment and lack of financial viability even though students and parents could succeed at trial. U.S. Const. Cases that cite this headnote Amend. 14; Education Amendments of 1972 § 901, 20 U.S.C.A. § 1681(a); 14 Del. Code § 506(a)(3). [33] Civil Rights Cases that cite this headnote Preliminary Injunction

In determining whether to grant a preliminary injunction, in the absence of legitimate, countervailing concerns, the public interest [30] Injunction clearly favors the protection of constitutional Balancing or weighing hardship or injury rights.

Before issuing a preliminary injunction, district courts must weigh the potential harm to the Cases that cite this headnote moving party, in the absence of the requested © 2015 Thomson Reuters. No claim to original U.S. Government Works. 6 Reach Academy for Boys and Girls, Inc. v. Delaware..., 46 F.Supp.3d 455 (2014) 314 Ed. Law Rep. 693

Catherine T. Hickey, Joseph Clement Handlon, Kenisha LaShelle Ringgold, DEPARTMENT OF JUSTICE, Wilmington, DE, Attorneys for Defendants. [34] Civil Rights Education

Balance of hardships favored preliminary injunction requiring Delaware Department of OPINION Education (DOE) to renew charter for all-girls charter school for additional school year on STARK, U.S. District Judge: grounds that non-renewal allegedly violated Equal Protection Clause and Title IX, since non-renewal would likely cause school to cease to exist before trial on merits of claims, so educational opportunities for students would be INTRODUCTION gone forever, which outweighed harms to DOE by allowing failing school to continue receiving This case arises from unique factual circumstances and benefits. U.S. Const. Amend. 14; Education presents the Court with difficult issues of first impression Amendments of 1972 § 901, 20 U.S.C.A. § implicating the public availability of same-gender 1681(a); 14 Del. Code § 506(a)(3). education in the State of Delaware. On November 12, 2013, the State of Delaware, through its Department of Education and Secretary of Education (“DOE” or Cases that cite this headnote “Defendants”), made the decision not to renew the charter of Reach Academy for Girls (“Reach”), thereby effectuating the closing of the only all-girls public school in the State of Delaware. Reach filed suit in federal court, [35] alleging violations of Equal Protection, Title IX of the Civil Rights Education Act (20 U.S.C. § 1681), Due Process, and two Education provisions of Delaware’s Charter School Act (14 Del. C. §§ 506 & 514A). (D.I. 1) (“Complaint”) The Complaint is Public interest favored preliminary injunction also filed on behalf of individual students at Reach *460 requiring Delaware Department of Education through their parents and guardians1 (“Individual (DOE) to renew charter for all-girls charter Plaintiffs” and, with Reach, “Plaintiffs”). In their suit, school for additional school year on grounds that Plaintiffs seek an order that Defendants renew Reach’s non-renewal allegedly violated Equal Protection charter for a five-year term. Clause and Title IX, since public interest was served by demanding that DOE comply with Plaintiffs filed a Motion for a Preliminary Injunction (D.I. federal and state laws. U.S. Const. Amend. 14; 7) and Defendants filed a Motion to Dismiss. (D.I. 10) Education Amendments of 1972 § 901, 20 After a hearing on January 2, 2014, on January 3 the U.S.C.A. § 1681(a); 14 Del. Code § 506(a)(3). Court granted in part and denied in part Defendants’ Motion to Dismiss and granted Plaintiffs’ Motion for a 1 Cases that cite this headnote Preliminary Injunction. (D.I. 18) Although the Court issued an 11–page Memorandum Order at that time, it stated it would provide further explanation in a later opinion. Today’s Opinion sets forth in detail the reasoning of the Court.2

Attorneys and Law Firms

*459 Duane D. Werb, WERB & SULLIVAN, Wilmington, DE, Charles J. Brown, III, GELLERT BACKGROUND SCALI BUSENKELL & BROWN, LLC, Wilmington, DE, Attorneys for Plaintiffs. Factual Background

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In 1996, the Supreme Court issued its decision in United application to the Department of States v. Virginia (“VMI”), 518 U.S. 515, 116 S.Ct. 2264, Education and the State Board of 135 L.Ed.2d 735 (1996), relating to state-sanctioned Education. schools that deny applicants admission on the basis of gender. The Supreme Court held that “Virginia’s 14 Del. C. § 506(a)(3)c. Subsection 506(a)(3)d calls for categorical exclusion of women from the educational the creation of a “substantially equal” “same-gender opportunities [the Virginia Military Institute] provides charter school of the opposite gender ... matching in grade denies equal protection to women;” “[n]either federal nor level and marketed towards similar demographics [as state government acts compatibly with equal protection Prestige Academy].” when a law or official policy denies to women, simply because they are women, full citizenship stature—equal In 2009, Reach was approved as the all-girls counterpart opportunity to aspire, achieve, participate in and to Prestige, and in 2010 Reach began conducting classes contribute to society based on their individual talents and for several grade levels. (D.I. 1 ¶¶ 8, 10, 20 n.1) From the capacities.” Id. at 515–16, 116 S.Ct. 2264. In 2006, the very start, Reach had difficulties. Less than two months United States Department of Education (“U.S. after opening its doors to its first students, Reach came Department of Education”) issued regulations relating to under the scrutiny of the DOE for financial the requirements for the opening and operation of mismanagement and was placed under formal review. same-sex schools receiving federal funding pursuant to (D.I. 1 ¶¶ 10–12) With the school threatened with closure, the No Child Left Behind Act of 2001, 20 U.S.C. § 6301 Reach’s Board of Directors was in turmoil, and in May et seq. See generally 34 C.F.R. § 106.34. 2011 all of the directors resigned. (D.I. 1 ¶ 13–15) Under the direction of a new board, in June 2011 Reach filed suit In 2008, the Delaware General Assembly amended its in the Delaware Court of Chancery seeking to enjoin the charter school laws in accordance with the U.S. DOE from closing Reach. (D.I. 1 ¶ 16) Before the Department of Education regulations to allow applicants Chancery Court was required to make any ruling on the an opportunity to apply for and create same-gender merits, the DOE and Reach came to an agreement charter schools. See 76 Del. Laws ch. 202, §§ 1–6 (2008) whereby the DOE recommended that Reach remain open (codified at 14 Del. C. § 506(a)(3)).3 However, this but also be placed on probation. (D.I. 1 ¶ 18) opportunity was made available for only a limited period. Section 506 limits the acceptance of applications for a Under new leadership, enrollment for the 2012–2013 same-sex charter school by providing that “[t]he school year was robust, as Reach expanded from offering same-gender charter school provisions shall sunset, for four grade levels (kindergarten, first, fifth, and sixth) in any new charter applications, on June 30, 2013, unless the the 2010–2011 school year to now offering eight grade General Assembly has otherwise acted to extend such levels (kindergarten through third and fifth through date prior to its expiration.” 14 Del. C. § 506(a)(3)e. eighth). (D.I. 1 ¶ 20 n. 1) Because state funding for a charter school is based on its enrollment in September of At the time Section 506 was adopted, Delaware had one any given year, the number of students enrolled at a all-boys school, Prestige Academy, and no all-girls charter school is key to its continued viability. (D.I. 1 ¶ charter school. The new law reflects this state of affairs, 10) Reach’s increased enrollment meant an improved providing: financial status, and in May 2013 the DOE removed Reach from probation. (D.I. 1 ¶ 19) In June 2013, the [T]he Department of Education, DOE approved a modification of Reach’s charter and with approval of the State Board of authorized it to enter into a long-term lease to occupy a Education, shall be considered the recently-vacated school complex. (D.I. 1 ¶ 22) approving authorizer of Prestige Academy, a same-gender school, Reach’s application for a renewal of its charter was due in and shall provide oversight to such September 2013. In July 2013, Reach students’ results on school. The Department of the Delaware Comprehensive Assessment Scores Education, with the approval of the (“DCAS”), the statewide test used to monitor student State Board, may waive any performance, were poor. The scores placed Reach provisions *461 in this Chapter that students’ performance in Delaware’s lowest-performing would limit the school from category of “Falls Far Below Standard” in both math and opening for the 2008–2009 school reading, resulting in an overall school rating of “F.” (See year. Any subsequent same-gender D.I. 9 ex. A)4 charter school shall make its

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Coinciding with Reach’s impending renewal deadline was discrimination action under Title IX of the Educational a July 2013 amendment to the Delaware Code, which Amendments of 1972, 20 U.S.C. § 1681; (3) a violation of changed the renewal process for charter schools; the their right to due process under the Fourteenth DOE’s charter application procedure was also revised. Amendment and 42 U.S.C. § 1983; (4) violations of See 79 Del. Laws ch. 51, §§ 1–2 (July 1, 2013); see also Delaware law relating to 14 Del. C. § 506; and (5) D.I. 11 ex. A at 7–8; D.I. 7 ex. 4 ¶ 3. Amended 14 Del. C. violations of Delaware law relating to 14 Del. C. § 514A. § 514A(c) now mandates that the DOE issue a renewal (D.I. 1) On December 11, 2013, Plaintiffs filed an report by April 30th to provide guidance to charter emergency Motion for a Preliminary Injunction6 seeking a schools in danger of non-renewal. Reach did not benefit temporary stay of the DOE’s decision in advance of a from this amendment, however, since Reach’s renewal critical application deadline of January 8, 2014, the date application year was 2013 and the amendment *462 was by which parents are required to file “choice” requests for adopted after April 30, 2013. Similarly, the timing of the student placement for the 2014–15 school year. (D.I. 7) DOE’s revision to its charter application process had the effect of truncating the time available for Reach to After ordering and receiving letters concerning Plaintiffs’ prepare its renewal application from seven months to motion (D.I. 8, 9), on December 13 the Court held a three months. (D.I. 7 ex. 4 ¶ 3) teleconference to discuss how the case would proceed. At the conclusion of the teleconference, the Court directed Reach submitted its charter renewal application by the the parties to *463 complete, by December 30, all briefing deadline of September 30, 2013. (D.I. 1 ¶ 26) On October on the preliminary injunction motion as well as a motion 7, Reach met with the Charter School Accountability to dismiss Defendants intended to file. The Court Committee (“CSAC”) to discuss its renewal application. expressed the view it was in all parties’ interest to On October 15, the CSAC—citing the poor performance expedite proceedings given the impending January 8 of Reach’s students—issued a preliminary report choice deadline. (See Dec. 13 Hr’g Tr. at 27–32) recommending that Reach’s charter not be renewed. (D.I. 1 ¶ 27; see also D.I. 14 App. at A85) On October 23, a On January 2, 2014, the Court heard oral argument on public hearing lasting several hours was held in Dover, both motions. (See D.I. 12–13) The next day, January 3, Delaware at which Reach students and their parents the Court issued its memorandum order granting in part testified about the school’s significance in the community. and denying in part Defendants’ Motion to Dismiss, and (D.I. 1 ¶ 28; see also D.I. 3 ex. D) After receiving granting Plaintiffs’ Motion for a Preliminary Injunction. supplemental materials responding to concerns raised at (D.I. 18) Specifically, the Court dismissed Plaintiffs’ Due the October 15 meeting, the CSAC met once more on Process and state law claims, and dismissed Reach as a November 4 to discuss Reach’s renewal application. (D.I. party due to lack of standing. (Id.) The Court found that 1 ¶ 29; see also D.I. 14 App. at A115–20) On November the Individual Plaintiffs had sufficiently plead claims 6, a second public hearing was conducted, during which upon which relief may be granted with respect to Equal Reach made a final effort to persuade the DOE to grant its Protection and Title IX. (Id.) Finally, the Court granted application, including by presenting testimony from the Individual Plaintiffs’ preliminary injunction motion on representatives of the NAACP and submitting data related the surviving claims and, as relief, extended Reach’s to the recent test scores of Reach students. (D.I. 1 ¶ 30; charter by one school year, subject to any reasonable D.I. 3 exs. E, G) These efforts failed and the next day the conditions the DOE might impose. (Id. at 10–11) CSAC issued its final report recommending denial of Reach’s renewal application. (D.I. 1 ¶ 32; D.I. 14 App. at A121) On November 12, Reach’s application for renewal was officially denied when Secretary Murphy informed the State Board of Education that he was not MOTION TO DISMISS recommending renewal of Reach’s charter.5 (D.I. 1 ¶ 34) I. Legal Standards When presented with a motion to dismiss for failure to Procedural Background state a claim, pursuant to Federal Rules of Civil Procedure On November 25, 2013, Reach and several of its students 12(b)(6), courts conduct a two-part analysis. See Fowler filed this suit against the Delaware Department of v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir.2009). Education and Secretary Mark Murphy. Plaintiffs assert First, courts separate the factual and legal elements of a five causes of action: (1) deprivation of their claim, accepting “all of the complaint’s well-pleaded facts constitutional right to equal protection under the as true, but [disregarding] any legal conclusions.” Id. at Fourteenth Amendment and 42 U.S.C. § 1983; (2) a 210–11. This step requires courts to draw all reasonable

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inferences in favor of the non-moving party. See Maio v. Defendants’ motion is properly construed as a facial Aetna, Inc., 221 F.3d 472, 500 (3d Cir.2000). However, challenge because Defendants “accept[ ] as true” the courts are not obligated to accept as true “bald “facts set forth in the Complaint” but nevertheless assertions,” Morse v. Lower Merion Sch. Dist., 132 F.3d contend that the allegations are insufficient to “state[ ] a 902, 906 (3d Cir.1997), “unsupported conclusions and plausible claim for relief.” (D.I. 11 ¶ 1) unwarranted inferences,” Schuylkill Energy Res., Inc. v. Pa. Power & Light Co., 113 F.3d 405, 417 (3d Cir.1997), or allegations that are “self-evidently false,” Nami v. Fauver, 82 F.3d 63, 69 (3d Cir.1996). II. Standing [4] The Court agrees with Defendants that Reach lacks Second, courts determine “whether the facts alleged in the standing to press any of the claims in the complaint. (D.I. complaint are sufficient to show that the plaintiff has a 11 ¶¶ 11–12) To establish standing, a plaintiff must ‘plausible claim for relief.’ ” Fowler, 578 F.3d at 211 satisfy three requirements: (1) an injury in fact, which is (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S.Ct. an invasion of a legally-protected interest that is both 1937, 173 L.Ed.2d 868 (2009)). A claim is facially “concrete and particularized” and “actual or imminent, plausible “when the plaintiff pleads factual content that not ‘conjectural’ or ‘hypothetical;’ ” (2) a causal allows the court to draw the reasonable inference that the connection between the injury and the conduct defendant is liable for the misconduct alleged.” Iqbal, 556 complained of; and (3) it is “likely,” as opposed to merely U.S. at 678, 129 S.Ct. 1937. This is a context-specific “speculative,” that the injury will be “redressed by a determination, requiring the court “to draw on its judicial favorable decision.” Lujan v. Defenders of Wildlife, 504 experience and common sense.” Id. at 679, 129 S.Ct. U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 1937. At bottom, “[t]he complaint must state enough facts (1992). to raise a reasonable expectation that discovery will reveal evidence of [each] necessary element” of a claim. Wilkerson v. New Media Tech. Charter Sch. Inc., 522 F.3d 315, 321 (3d Cir.2008) (internal quotation marks A. Reach as Charter Holder and Reach as Charter omitted). Courts may consider exhibits attached to the School complaint, matters of public record, and “undisputedly Defendants argue that Reach lacks standing because authentic” documents when the plaintiff’s claims are charter schools have a legal status equivalent to that of a based on the documents and the defendant has attached school district, and a school district lacks standing to sue copies of the documents to the motion to dismiss. See the State that created it.7 (D.I. 11 ¶ 12) Reach counters Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., that it brings suit in its capacity as a charter holder rather 998 F.2d 1192, 1196 (3d Cir.1993). than as a charter school and, thus, should not be viewed as like a school district. Nevertheless, Reach further argues it [1] [2] [3] When a Rule 12(b)(6) motion relies on the absence would have standing as a charter school because it is of Article III standing, it is analyzed pursuant to Federal bringing claims under the Supremacy Clause. (D.I. 15 at Rule of Civil Procedure Rule 12(b)(1). See *464 5–7) Ballentine v. United States, 486 F.3d 806, 810 (3d Cir.2007) (“A motion to dismiss for want of standing is ... As a threshold matter, the Court must examine the properly brought pursuant to Rule 12(b)(1), because distinction between a charter holder and a charter school. standing is a jurisdictional matter.”); see also Steel Co. v. If Reach Academy for Boys and Girls, Inc. as the holder Citizens for a Better Env’t, 523 U.S. 83, 102, 118 S.Ct. of a charter, is a legally distinct entity from the charter 1003, 140 L.Ed.2d 210 (1998) (noting that standing is school Reach Academy for Girls, then the standing “threshold jurisdictional question”). Motions brought inquiry may be affected. Plaintiffs contend that under Rule 12(b)(1) may present either facial or factual “[w]hereas Reach might have an issue suing Defendants challenges to a court’s subject matter jurisdiction. See in its capacity as a Charter School, that fact should not Mortensen v. First Fed. Sav. & Loan Ass’n, 549 F.2d 884, preclude it from filing suit in its capacity as a private 891 (3d Cir.1977). A facial challenge, which contests Delaware corporation that is a Charter Holder.” (D.I. 16 at only the sufficiency of the pleadings, is subjected to an 4) In attempting to distinguish between the corporate analysis identical to that of a Rule 12(b)(6) motion; thus, entity and the school, Plaintiffs observe that, absent a court considers “only ... the allegations of the complaint judicial relief, “the school itself will cease to exist. In the and documents referenced therein and attached thereto, in event of non-renewal, Reach, on the other hand, will not the light most favorable to the plaintiff.” Gould Elec. Inc. cease to exist but will still be a private non-profit v. United States, 220 F.3d 169, 176 (3d Cir.2000). Here, corporation with assets and liabilities that have to be administered pursuant to its corporate charter and its © 2015 Thomson Reuters. No claim to original U.S. Government Works. 10 Reach Academy for Boys and Girls, Inc. v. 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by-laws.” (D.I. 15 at 8) B. Reach’s Standing is Equivalent to that of a School District [5] *465 At least one court has held that this distinction A political subdivision “created by a state for the better makes a difference. In Project Reflect, Inc. v. Metro. ordering of government, has no privileges or immunities Nashville Bd. of Pub. Educ., 947 F.Supp.2d 868, 875 under the Federal Constitution which it may invoke in (M.D.Tenn.2013), the court found that the Plaintiff before opposition to the will of its creator.” Williams v. Mayor & it was the charter school sponsor, not the charter school, City Council of Baltimore, 289 U.S. 36, 40, 53 S.Ct. 431, obviating the need for a standing analysis. Id. The court 77 L.Ed. 1015 (1933); see also Coleman v. Miller, 307 based its conclusion on the clear distinction in Tennessee U.S. 433, 441, 59 S.Ct. 972, 83 L.Ed. 1385 (1939) law between a sponsor and a charter school: “[t]he (“Being but creatures of the State, municipal corporations sponsor—as distinguished from the ‘governing body of have no standing to invoke the contract clause or the the public charter school’—plays a key role in applying provisions of the Fourteenth Amendment of the for a charter, appealing its disapproval, and, if approved, Constitution in opposition to the will of their creator.”). signing the written agreement, ‘which shall be binding Nonetheless, courts recognize an exception in actions upon the governing body of the public charter school.’ ” against the state arising under the Supremacy Clause of Id. Defendants assert that, in Delaware, no such the U.S. Constitution. See Pocono Mountain Charter Sch. distinction exists: “Reach Academy for Girls and Reach v. Pocono Mountain Sch. Dist, 908 F.Supp.2d 597, 612 Academy for Boys and Girls, Inc. are not separate legal (M.D.Pa.2012) (“[C]ourts that have allowed a entities. The former is a ‘d/b/a’ of the latter.... Reach municipality or municipal corporation to assert claims Academy for Girls could only sue the state in its corporate against its creator have generally permitted claims *466 name.” (D.I. 17 at 4) In this way, according to only for violations of the Supremacy Clause.”). Defendants, Delaware’s charter school regime is different [6] [7] from that involved in Tennessee’s Project Reflect case. Delaware law unambiguously provides that the legal (D.I. 17 at 4) status of a charter school is equivalent to that of a public school district. See 14 Del. C. §§ 503, 504. Unlike Defendants are correct. Generally speaking, Delaware law Pocono Mountain and Project Reflect—where the state makes no substantive distinction between a charter holder law was silent with respect to the charter school’s and a charter school. See generally 14 DE Admin. Code capacity to bring suit—in Delaware the statute expressly 275.2.1. Beyond the initial application process, a charter provides that “[a] charter school may sue or be sued to the holder does not exist or act separately from the charter same extent and on the same conditions as a public school school; among other things, the two share a common district.” 14 Del. C. § 504(d); see also Pocono Mountain, board of directors. See 14 DE Admin. Code 275.2.1 908 F.Supp.2d at 607 (Pennsylvania charter schools may (defining board of directors of charter school as board of be sued to same extent as political subdivisions); Project directors of applicant at time of charter approval). Reflect, 947 F.Supp.2d at 874 (Tennessee charter schools Delaware law makes explicit that a charter school’s board may sue and be sued without qualification). Hence, just as of directors is deemed a public body with the same school districts are political subdivisions, see 14 Del. C. § standing and authority, except for the power to tax, as a 1002(3), (5); see generally Davis v. Thomas, 2009 WL board of education of a traditional public school district. 3112318 (D.Del. Sept. 25, 2009); Beck v. Claymont Sch. See 14 Del. C. §§ 503, 1041(1). The situation is different Dist., 407 A.2d 226, 229 (Del.Super.Ct.1979), so, in Tennessee, where a sponsor is a distinct entity separate effectively, are charter schools, and charter schools lack from the governing body of the charter school, possessing capacity to bring suit against the state. the power to bind the governing body to contracts. See Project Reflect, 947 F.Supp.2d at 875. Unlike the situation in Project Reflect, Reach’s operations are limited to the operation of the charter school, as Delaware law C. Reach Lacks Standing [8] does not permit a charter holder to operate any business As it is a charter school, Reach lacks standing to sue except a charter school. 14 DE Admin. Code 275.4.1.3.2. Defendants. Nonetheless, Reach analogizes itself to school districts that were found by the Supreme Court to Thus, the Court finds no legally cognizable distinction have standing to sue the State of Washington concerning between Reach’s capacity as a charter holder and Reach’s desegregation laws in Washington v. Seattle School capacity as a charter school as affects the standing District No. 1, 458 U.S. 457, 102 S.Ct. 3187, 73 L.Ed.2d analysis. 896 (1982). In Seattle School District, 458 U.S. at 464, 102 S.Ct. 3187, three school districts sued the state to bring an equal protection challenge to a ballot initiative approved by popular vote. However, as the Middle © 2015 Thomson Reuters. No claim to original U.S. Government Works. 11 Reach Academy for Boys and Girls, Inc. v. Delaware..., 46 F.Supp.3d 455 (2014) 314 Ed. Law Rep. 693

District of Pennsylvania explained in Pocono Mountain, benefits.” Bd. of Regents of State Colleges v. Roth, 408 908 F.Supp.2d at 613, Seattle School District did not U.S. 564, 577, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972). expressly address the issue of standing and, thus, “does [11] not establish a binding rule that a school district can sue The interest Plaintiffs assert, the renewal of Reach’s the state.” Id.; see also Common Cause of Pa. v. charter, is not an interest protected by the Fourteenth Pennsylvania, 558 F.3d 249, 266 (3d Cir.2009) (“The Amendment’s Due Process Clause. Delaware law Supreme Court has ‘repeatedly held that the existence of provides that a charter “may be renewed for successive unaddressed jurisdictional defects has no precedential 5–year terms,” vesting the DOE with the discretion to effect.’ ”). Seattle School District, then, does not help renew or not renew charters. 14 Del. C. § 514A(b) Reach. (emphasis added). Just as no protected property interest was found in other cases involving charter schools, Reach also cites to Rogers v. Brockette, 588 F.2d 1057 neither, here, do Plaintiffs have such an interest. See (5th Cir.1979), an example of a case in which suits by Jackson v. Pocono Mountain School District, 2010 WL municipalities against states have been permitted for 4867615, at *4 (M.D.Pa. Nov. 23, 2010), aff’d Pocono violations of the Supremacy Clause. Here, the Complaint Mountain Charter School v. Pocono Mountain School does not mention the Supremacy Clause, and Reach District, 442 Fed.Appx. 681, 684 (3d Cir.2011); Project provides no persuasive basis for viewing its claims as Reflect, 947 F.Supp.2d at 878–79; Pinnacle Charter alleging a violation of the Supremacy Clause. School v. Board of Regents, 108 A.D.3d 1024, 969 N.Y.S.2d 318, 320 (2013) (“[T]he New York Charter Therefore, the Court concludes that Reach lacks standing Schools Act ... creates no constitutionally protected and the claims it asserts must be dismissed. property interest in the renewal of a charter....”); State ex rel. Sch. Dist. of Kansas City v. Williamson, 141 S.W.3d 418, 427 (Mo.Ct.App.2004) (“[J]ust as a prospective charter school has no protected property interest at stake III. Procedural Claims8 regarding an initial charter application, the school also has Plaintiffs9 allege that “[p]rocedural due process requires no protected property interest under the Charter Schools some minimal notice and an opportunity to be heard.” Act with regard to renewal of its charter.”). (D.I. 1 ¶ 59) Specifically, in Count III Plaintiffs allege a violation of the Due Process Clause; in Count IV they [12] Even if Plaintiffs had a protected property interest, they allege a violation of 14 Del. C. § 506(d), due to a lack of were provided with constitutionally adequate processes. sufficient *467 technical assistance from Defendants (D.I. Plaintiffs allege that “Reach was exposed to a terribly 1 ¶¶ 76–82); and in Count V Plaintiffs allege that flawed process” (D.I. 7–1 at 18), consisting of “sham Defendants violated 14 Del. C. § 514A by not providing public hearings that do no more than pay lip service to the adequate notice under state law (D.I. 1 ¶¶ 83–89). The concept of due process” (D.I. 15 at 2), which subjected Court concludes that Plaintiffs lack a cognizable property Reach to a “kangaroo process in a quasi-star chamber interest in the renewal of Reach’s charter and, further, that environment” (id. at 6), culminating in Defendants’ Plaintiffs received adequate notice and procedure. “knee-jerk response” (D.I. 1 ¶ 88) to use Reach as its “sacrificial lamb” (D.I. 1 at 25). The materials which the Court is permitted to consider at this stage establish that Plaintiffs’ allegations cannot be proven. A. Fourteenth Amendment Procedural Due Process [9] [10] When a plaintiff sues under 42 U.S.C. § 1983 for a [13] Renewal decisions for a five-year extension of a state actor’s failure to provide procedural due process, charter must result from a process involving (a) grounding courts undertake a two-stage inquiry: determining (1) in evidence of the school’s performance over the term of whether “the asserted individual interests are the charter, (b) data used that is made available to the encompassed within the Fourteenth Amendment’s school and the public, and (c) a public report summarizing protection of ‘life, liberty, or property;’ ” and (2) whether the evidentiary basis for each decision. (D.I. 14 at 6) the procedures available provided the plaintiff with “due (citing 14 Del. C. § 514A(g)) Here, after *468 Reach process of law.” Robb v. City of Philadelphia, 733 F.2d submitted its renewal application on September 30, the 286, 292 (3d Cir.1984). Property rights are not created by CSAC met with Reach to discuss the application, before the Constitution; rather, “they are created and their the CSAC issued its preliminary report on October 15. dimensions are defined by existing rules or (D.I. 1 ¶¶ 26–27) The DOE then held a public hearing and understandings that stem from an independent source gave Reach an opportunity to submit supplemental such as state law-rules or understandings that secure materials in support of the application, after which the benefits and that support claims of entitlement to those © 2015 Thomson Reuters. No claim to original U.S. Government Works. 12 Reach Academy for Boys and Girls, Inc. v. Delaware..., 46 F.Supp.3d 455 (2014) 314 Ed. Law Rep. 693

CSAC met before making its final determination of observe, this section was not added to Delaware law until non-renewal on November 4. (D.I. 1 ¶ 29; see also D.I. 14 June 2013—well after the April 30 deadline in the statute. App. at A102–114 (containing supplemental materials)) The renewal report deadline did not exist prior to the June Plaintiffs were then afforded another hearing, before the 2013 amendment. (D.I. 11 ¶ 33 (citing 79 Del. Laws ch. CSAC issued its report recommending non-renewal and 51, §§ 1, 2 (effective July 2013))) Plaintiffs cannot *469 Secretary Murphy later made his final decision of prove that Defendants’ failure to comply with a timing non-renewal on November 12. (D.I. 1 ¶¶ 30–34) Plaintiffs requirement that did not exist at the relevant time was a had access all along to the data Defendants were using to violation of Plaintiffs’ rights. Thus, Count V must also be assess the application. While there is some evidence that dismissed. Defendants may not have fully comported with state law,10 “Section 1983 ... may not be invoked every time local officials allegedly act contrary to state or local procedural law.” Mullen v. Thompson, 31 Fed.Appx. 77, IV. Discrimination Claims 79 (3d Cir.2002). Plaintiffs’ Due Process claims must be Plaintiffs allege that the decision to close Reach, dismissed. combined with the sunset provision of Section 506, creates a situation that indefinitely deprives Delaware girls, but not Delaware boys, of the opportunity to attend a state-provided same-sex school. (D.I. 1 ¶¶ 47–51) As B. State Law Claim under 14 Del.C. § 506 the Court held previously, the Individual Plaintiffs have [14] In Count IV, Plaintiffs allege that “at no point during standing to pursue their Equal Protection and Title IX Reach’s initial application process through its initial five claims (“Discrimination Claims”). (D.I. 18 ¶ 3) The year term did DOE provide any technical assistance to Individual Plaintiffs allege an invasion of a Reach regarding its academic program.” (D.I. 7–1 at 3) legally-protected interest to be free from discrimination Plaintiffs contend this is a violation of 14 Del. C. § based on gender, a concrete and particularized injury of 506(a)(3)d, which requires the DOE to “work with the not being afforded the benefits of single-gender education community on a plan for recruitment and education, which—due to Defendants’ decisions—is not technical assistance for applicants of a same-gender merely speculative. (D.I. 1 ¶ 2) Defendants do not appear charter school of the opposite gender [from Prestige]” to contest the Individual Plaintiffs’ standing to pursue the (emphasis added). Specifically, Plaintiffs claim that “[i]f Discrimination Claims. (See Jan. 2 Hr’g Tr. at 68–69) not explicit, at least implicit, in the mandate ... to render Rather, Defendants argue that, as a matter of law, the technical assistance to Reach is that this obligation does Equal Protection Clause and Title IX are not violated not end the minute that DOE approved the Reach charter when a state has only one same-sex charter school. (D.I. but ... continues so as to ensure that the State of Delaware 11 ¶¶ 14–18) ... provide[s] equal education opportunities to both genders.” (D.I. 1 ¶ 77) The parties are in agreement that, at least for some students, there may be inherent benefits in single-gender Section 506(a)(3)d mandates technical assistance to assist education. (Tr. at 69 (“Certainly, the Court can take in the initial creation of a charter school similar to judicial notice of the fact that single-gender education is Prestige, meaning that the DOE was statutorily obligated more beneficial than coed education and therefore they to assist Reach with its initial application. The statute have alleged an injury in fact.”)) Defendants contend, does not require the DOE also to ensure Reach’s success however, that “so long as the state makes available to one by providing it with technical assistance on an ongoing, gender ‘education equal’—in whatever form—to [the continuous basis. Hence, Count IV must be dismissed. single-gender public school offering] available for the other gender,” then neither the Equal Protection Clause nor Title IX are violated. (D.I. 11 ¶ 14) Defendants cite to the U.S. Department of Education’s regulations under 34 C. State Law Claim under 14 Del. C. § 514A C.F.R. § 106.34(c)(1) in support of their position, as these [15] Invoking 14 Del. C. § 514A, Plaintiffs contend, “Reach federal regulations provide that “a recipient ... must was never advised that its charter was in jeopardy of provide students of the excluded sex a substantially equal non-renewal as current state law mandates.” (D.I. 7–1 at single-sex school or coeducational school.” (D.I. 11 ¶ 16) 19) (emphasis added) Section 514A(c) provides that “[n]o (emphasis added) later than April 30, the approving authority shall issue a charter school renewal report and charter renewal The Court disagrees with Defendants. The closure of application guidance to any charter school whose charter Delaware’s only publicly-funded all-girls school without will expire the following year.” However, as Defendants any opportunity for another publicly-funded all-girls © 2015 Thomson Reuters. No claim to original U.S. Government Works. 13 Reach Academy for Boys and Girls, Inc. v. 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school even to be considered, while the State funds the female students in general, are attending, or have an all-boys Prestige Academy, states a claim that survives a option to attend, a single gender public school just like the motion to dismiss. Therefore, the Discrimination Claims option that is available for the male students through as brought by the Individual Plaintiffs will not be Prestige Academy.” (D.I. 16 at 1) From this perspective, dismissed. “[i]t is only through an extension of the Reach Charter for one year that the status quo can be preserved.” (D.I. 16 at 1) In Plaintiffs’ view, then, the ordinary preliminary injunction standard applies.

PRELIMINARY INJUNCTION Neither side is completely correct. The status quo is that the Individual Plaintiffs are attending Reach Academy, and may do so for the remainder of the current school I. Legal Standards [16] year, but are not permitted to choose to attend Reach A preliminary injunction is an “extraordinary remedy,” Academy for the 2014–15 school year, since Reach and courts consider four factors when faced with a request Academy will not be permitted to operate in 2014–15. to grant one. NutraSweet Co. v. Vit–Mar Enters., Inc., 176 Thus, the preliminary relief Plaintiffs seek would alter the F.3d 151, 153 (3d Cir.1999). They are: status quo. However, that alteration is not truly analogous (1) whether the movant has shown a reasonable to the injunctions involved in the cases on which probability of success on the merits;11 Defendants rely for their heightened standard. In Hart (2) whether the movant will be irreparably injured by Intercivic, Inc. v. Diebold, Inc., 2009 WL 3245466, at *1 denial of relief; (D.Del. Sept. 30, 2009), this Court determined that the mandatory preliminary injunction standard applied where (3) whether granting preliminary relief will result in the plaintiffs’ requested relief was a mandatory divestiture even greater harm to the nonmoving party; and of a corporation’s stock and holdings after a merger had already been effectuated. In Punnett v. Carter, 621 F.2d at (4) whether granting the preliminary relief will be in 580, the plaintiffs sought an injunction requiring the the public interest. government to issue public warnings to U.S. Army Servicemen of the potential mutagenic effects of exposure *470 Council of Alternative Political Parties v. Hooks, to nuclear testing. 121 F.3d 876, 879 (3d Cir.1997). These cases are simply not comparable to the circumstances presented here. Reach is presently open and has all the resources to enable it to be operating in the II. Mandatory Injunction 2014–15 school year. It is not as if Plaintiffs are asking Defendants assert that Plaintiffs are seeking a mandatory the Court to order Defendants to create a new school out injunction, an even more extreme form of relief, which of nothing. Thus, the Court finds the mandatory imposes a “particularly heavy” burden on Plaintiffs to injunction standard inapplicable. make a showing under each prong of the applicable legal standard. (D.I. 14 at 13) (citing Punnett v. Carter, 621 F.2d 578, 582 (3d Cir.1980)) Defendants characterize Plaintiffs’ requested relief as an injunction that would III. Likelihood of Success on the Merits alter the status quo. In Defendants’ view, the status quo is In Counts I and II, Plaintiffs challenge “the decision of that Reach Academy’s charter will terminate at the end of DOE to deny Reach’s charter renewal application,” the school year, so Reach Academy will be shutting its asserting claims pursuant to 42 U.S.C. § 1983 and Title doors. (See D.I. 14 at 13; see also Tr. 61 (“[T]he renewal IX based on allegations that Defendants’ decision decision has already been made. They’re [Plaintiffs] “depriv[es] the female students of Delaware the same seeking to undo that.”)) To Defendants, then, the relief educational opportunity for a single gender public Plaintiffs are seeking by their motion—the extension of education that is afforded the male students in Delaware.” Reach’s charter, allowing Reach to operate in the (D.I. 1 ¶ 2) Plaintiffs contend that, due to the sunset 2014–15 school year—would alter the status quo, provision of *471 Section 506(a)(3)e, “the closure of resulting in a mandatory injunction. Delaware’s only all-girls charter school” will have the effect of “depriving the female students in Delaware now Plaintiffs counter that the injunction they seek would, and forever from having access to the same single gender instead, preserve the status quo. To Plaintiffs, the “status educational opportunities that are afforded to the male quo is that the individual Reach students, and Delaware students in Delaware.” (D.I. 7–1 at 8) Defendants respond © 2015 Thomson Reuters. No claim to original U.S. Government Works. 14 Reach Academy for Boys and Girls, Inc. v. Delaware..., 46 F.Supp.3d 455 (2014) 314 Ed. Law Rep. 693

that Plaintiffs’ Discrimination Claims are “based upon the “proscribed classification[s].” United States v. Virginia, faulty premise that it is a per se violation of the Equal 518 U.S. at 533, 116 S.Ct. 2264. Indeed, they may be Protection Clause and Title IX for a state to have a used in a variety of legitimate ways, such as “to single-gender public school for one gender and not the compensate women ‘for particular economic disabilities other.” (D.I. 14 at 15) [they have] suffered,’ to ‘promot[e] equal employment opportunity,’ [or] to advance full development of the Defendants correctly note the absence of any “compelling talent and capacities of our Nation’s people.” Id. (internal authority demonstrating that [Plaintiffs] will succeed on citations omitted). But because gender classifications the merits.” (D.I. 14 at 26) However, this asks too have historically been used “to create or perpetuate the much—Plaintiffs are not required to cite “compelling” legal, social, and economic inferiority of women,” courts authority nor show they certainly “will” prevail. Instead, review classifications based on gender to determine at this stage of the proceedings, Plaintiffs have met their “whether the proffered justification is ‘exceedingly burden to show that indefinitely depriving Delaware’s persuasive.’ ” *472 Id. at 533–34, 116 S.Ct. 2264. The girls of access to same-gender education, while at the burden on Defendants, then, is demanding, as they must same time providing that option to Delaware’s boys for at show that the “[challenged] classification serves least several more years, is likely to be found to be a ‘important governmental objectives and that the violation of Plaintiffs’ rights under the Equal Protection discriminatory means employed’ are ‘substantially related Clause and Title IX. to the achievement of those objectives.’ ” Id. at 533, 116 S.Ct. 2264.

Defendants contend that equal protection is not typically A. Likelihood of Success on Count I violated when a state offers optional, single-gender public [17] [18] Section 1983 prohibits the “deprivation of any schools, so long as the state makes available to both rights, privileges, or immunities secured by the genders “education equal” options. See Vorchheimer v. Constitution.” 42 U.S.C. § 1983. Section 1983 “is not School Dist. of Philadelphia, 532 F.2d 880, 886 (3d itself a source of substantive rights, but a method for Cir.1976). However, as Plaintiffs observe, “[d]ue to the vindicating federal rights elsewhere conferred by those sunset provision of 14 Del. C. § 506, Reach is the only parts of the United States Constitution and federal statutes option that is available to Defendants to comply with that it describes.” City of Monterey v. Del Monte Dunes, Federal law and provide female students with an 526 U.S. 687, 749 n. 9, 119 S.Ct. 1624, 143 L.Ed.2d 882 educational option that is comparable to that of the male (1999) (internal quotation marks omitted). To prevail on a students at Prestige Academy.” (D.I. 16 at 16 (citing 14 Section 1983 claim, a plaintiff must demonstrate: (1) a Del. C. § 506(a)(3)e, which prohibits new same-gender violation of a right secured by the Constitution or laws of charter schools after June 30, 2013)) To Plaintiffs, there is the United States; and (2) that the alleged deprivation was an inherent benefit—for at least some boys, and at least committed by a person acting under color of state law. some girls—to same-gender education, and Delaware See Nicini v. Morra, 212 F.3d 798, 806 (3d Cir.2000). may not provide these benefits to one gender but not the other. [19] [20] [21] Plaintiffs claim they were deprived of equal protection of the laws under the Fourteenth Amendment. [24] Plaintiffs are likely to succeed in showing that there are (D.I. 1 ¶¶ 47–51) The Fourteenth Amendment’s Equal unique benefits to same-gender schooling opportunities Protection Clause is “essentially a direction that all for at least some students. Defendants state in their Reply persons similarly situated should be treated alike.” City of that they “do not dispute that single-gender education has Cleburne v. Cleburne Living Ctr., 473 U.S. 432, 439, 105 potential benefits and is, in obvious respects, different S.Ct. 3249, 87 L.Ed.2d 313 (1985). “In order to bring a from coed education.” (D.I. 17 ¶ 21) This is consistent successful section 1983 claim for the denial of equal with the apparent policy decision of Delaware’s protection, plaintiffs must prove the existence of lawmakers, who by enactment of the amended Section purposeful discrimination.” Shuman ex rel. Shertzer v. 506 mandated the creation of two same-gender charter Penn Manor Sch. Dist., 422 F.3d 141, 151 (3d Cir.2005). schools. Given the conceded benefits of same-sex “In other words, they must demonstrate that they received education for some students, and not just boys, different treatment from that received by other individuals Defendants have failed to show that providing such similarly situated.” Id. In the context of a sex benefits to boys while depriving girls of the same benefits discrimination claim, plaintiffs must show that this serves important governmental objectives. disparate treatment was based upon gender. Defendants argue that “there are no allegations in the [22] [23] Gender classifications under law are not inherently © 2015 Thomson Reuters. No claim to original U.S. Government Works. 15 Reach Academy for Boys and Girls, Inc. v. Delaware..., 46 F.Supp.3d 455 (2014) 314 Ed. Law Rep. 693

Complaint that Defendants took any action based on the (1) General Standard. Except as provided in gender of Reach students,” and therefore the Individual paragraph (c)(2) of this section, a recipient that Plaintiffs have failed to show the purposeful operates a public nonvocational elementary or discrimination required for an Equal Protection violation. secondary school that excludes from admission any (D.I. 17 ¶ 24) Defendants continue: “[T]hat their decision students, on the basis of sex, must provide students not to renew Reach’s charter results in the elimination of of the excluded sex a substantially equal single-sex the only single-gender charter school for girls does not school or coeducation school. make their decision gender-based governmental action. At least, Plaintiffs provide the Court with no support for it to (2) Exception. A nonvocational public charter school reach such a conclusion.” (Id.) But this analysis ignores that is a single-school educational agency13 under the additional fact that the State of Delaware—including State law may be operated as a single-sex charter Defendants—is not even permitted to consider offering school without regard to the requirements in the same benefits to girls that it currently provides to paragraph (c)(1) of this section. boys. On the facts here—where Delaware is providing its boys the opportunity for a single-gender public school Thus Defendants conclude that, “Plaintiffs’ education and, for no articulated reason, is forever [discrimination claims] fail [ ] because there is no claim depriving its girls of the same opportunity—Plaintiffs are or proof that Reach students do not have educational likely to show an Equal Protection violation.12 opportunities substantially equivalent to a single-gender, all-male school.” (D.I. 14 at 3)

Plaintiffs read Section 106.34(c)(1)—requiring that B. Title IX districts “must provide students of the excluded sex a [25] In Count II, Plaintiffs contend that the “interplay substantially equal single-sex school or coeducational between the sun-setting *473 provision of 14 Del. C. § school”—as meaning that Delaware must provide both 506 and the regulations under Title IX, which encouraged options to students of both sexes. To Plaintiffs, in this single gender charter schools, and envisioned equal context “or” means “and,” so “[i]n the context of this opportunity for both sexes through the opportunity for regulation, the word ‘or’ is referring to the options that multiple single gender charter schools creates a unique the state has to make available to the excluded sex.” (D.I. situation in Delaware whereby DOE has a heightened 16 at 5; see also id. at 6 (“This regulation is clearly burden to ensure that Reach remains open in order to referring to the options that must be available to the promote gender equality.” (D.I. 1 ¶ 7) Title IX provides students and does not mean that the state gets to limit the that “[n]o person in the United States shall, on the basis of students’ options to whatever the state decides.”))14 sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any The Court finds neither side’s reasoning persuasive. education program or activity receiving Federal financial Plaintiffs’ reading is a stretch. *474 But even Defendants’ assistance.” 20 U.S.C. § 1681(a). To prevail, plaintiffs interpretation does not look as if it would prevent a need not show that a defendant purposefully finding of liability. On Defendants’ reading of the discriminated on the basis of gender. See Favia v. Indiana regulation, a school district and/or a charter school may Univ. of Pennsylvania, 812 F.Supp. 578, 584 not have to provide single-sex schools to both boys and (W.D.Pa.1993), aff’d, 7 F.3d 332 (3d Cir.1993); Mehus v. girls, but this does not mean that the State of Delaware, Emporia State Univ., 295 F.Supp.2d 1258, 1272 its DOE, and its Secretary of Education may discriminate (D.Kan.2004). on a statewide level. See generally 34 C.F.R. § 106.34(a) (“Except as provided for in this section or otherwise in [26] For all the reasons already stated in connection with this part, a recipient shall not provide or otherwise carry Plaintiffs’ Equal Protection claim, Plaintiffs are also out any of its education programs or activities separately likely to succeed on the merits of their Title IX claim. on the basis of sex, or require or refuse participation therein by any of its students on the basis of sex.”); In arguing for a contrary conclusion, Defendants rely “Nondiscrimination on the Basis of Sex in Education heavily on the federal regulations issued under Title IX, Programs or Activities Receiving Federal Financial which appear to contemplate the existence of Assistance,” 71 Fed.Reg. 62,530, 62,541 (Oct. 25, 2006) single-gender charter schools, even in the absence of (codified at 34 C.F.R. § 106.34(c)(2)) (“With regard to single-gender charter schools of the opposite gender. See public charter schools, it would be impracticable to 34 C.F.R. 106.34(c). The regulations provide: require either chartering authorities, which are merely approving applications for—but are not (c) Schools. operating—single-sex charter schools, or the groups of © 2015 Thomson Reuters. No claim to original U.S. Government Works. 16 Reach Academy for Boys and Girls, Inc. v. Delaware..., 46 F.Supp.3d 455 (2014) 314 Ed. Law Rep. 693

community leaders, developers, or parents who seek to granting the requested *475 relief “would subject ... establish a single-sex charter school that will be a students to another year of an admittedly unacceptable single-school LEA under State law, to establish and education.” § Id. at 25) (emphasis added) Nothing, operate an additional substantially equal school to meet including the Court’s order, has compelled any parent to the needs of the other sex.”). send his or her daughter to Reach. Each Reach student is at Reach by choice. Nor did Defendants present evidence Consequently, the Court finds that Plaintiffs are likely to to support a finding that parents are choosing to send their show that Defendants’ conduct violated Title IX. daughters to a school they believe will fail them.

Therefore, the Court finds that the Individual Plaintiffs will be irreparably harmed in the absence of an order that IV. Irreparable Injury Reach’s charter be renewed for an additional academic [27] [28] To obtain a preliminary injunction, a plaintiff must year.15 “demonstrate potential harm which cannot be redressed by a legal or an equitable remedy following a trial. The preliminary injunction must be the only way of protecting the plaintiff from harm.” Instant Air Freight Co. v. C.F. V. Balance of Hardships and the Public Interest [30] [31] [32] Air Freight, Inc., 882 F.2d 797, 801 (3d Cir.1989). “The Before issuing a preliminary injunction, courts possibility that adequate compensatory or other corrective also must weigh the potential harm to the moving party, relief will be available at a later date, in the ordinary in the absence of the requested relief, against the potential course of litigation, weighs heavily against a claim of harm, if any, to the nonmoving party (and others not irreparable harm.” Id. (internal quotation marks omitted). subject to the action) if the relief is granted. See Council of Alternative Political Parties, 121 F.3d at 879. “A [29] Plaintiffs argue that, without temporary relief, “Reach preliminary injunction is an extraordinary remedy never faces the impossible task of attempting to retain and awarded as of right. In each case, courts must balance the recruit students while facing school closure during the competing claims of injury and must consider the effect critical period that students have for exercising their on each party of the granting or withholding of the school choice options.” (D.I. 7–1 at 21) Plaintiffs requested relief.” Winter v. Natural Res. Def. Council, illustrate the potential harm to Reach by describing the Inc., 555 U.S. 7, 24, 129 S.Ct. 365, 172 L.Ed.2d 249 financial problems confronted by other charter schools in (2008) (internal quotation marks omitted). Finally, the Delaware that have been threatened with closure. (Id. at Court must also determine whether a grant of preliminary 21–24) As already noted, funding for charter schools is relief would be in the public interest. As the Supreme dependent on enrollment numbers. (D.I. 1 ¶ 10) Plaintiffs Court has instructed, “[i]n exercising their sound thus argue that without a preliminary injunction before the discretion, [courts must] pay particular regard for the January 8, 2014 deadline for “choice applications” to public consequences in employing the extraordinary attend a specific school in the 2014–15 school year, the remedy of injunction.” Id. “DOE’s threatened non-renewal of [Reach’s] charter obviously [will have] a very negative impact on a parent’s Plaintiffs argue that the irreparable harm to them in the willingness to consider Reach as an option for their absence of a preliminary injunction (described above) children,” causing a precipitous drop in enrollment and would outweigh any harm that might be suffered by lack of financial viability—even if Plaintiffs prevail at Defendants as a result of a Court order to renew Reach’s trial. (D.I. 7–1 at 23–24) charter for one additional year while this case proceeds to trial and a final judgment. Plaintiffs further assert that the Defendants acknowledge that “Reach may be irreparably “public interest is served by demanding Defendants harmed,” but insist “equally if not more important is the comply with Federal and State law.” (D.I. 7–1 at 24) irreparable harm to children who continue to attend Reach [33] [34] or plan to attend Reach next year.” (D.I. 14 at 26) The Court agrees with Plaintiffs. “In the absence of Defendants urge the Court to deny the preliminary legitimate, countervailing concerns, the public interest injunction because “[o]n balance, the greater irreparable clearly favors the protection of constitutional rights.” harm will befall Reach students because the students will Council of Alternative Political Parties, 121 F.3d at be able to attend one of the worst academically 883–84. That principle plainly applies here. And the performing schools in the State for another year.” (Id. at irreparable harm to Plaintiffs that would occur here if the 23) Court denied a preliminary injunction—essentially, that Reach would likely cease to exist before this case could The Court does not agree with Defendants’ assertion that be completed, so the educational opportunities it provides © 2015 Thomson Reuters. No claim to original U.S. Government Works. 17 Reach Academy for Boys and Girls, Inc. v. Delaware..., 46 F.Supp.3d 455 (2014) 314 Ed. Law Rep. 693

would be gone forever, even if Plaintiffs ultimately Court has determined that, on balance, the public interest prevailed at trial—outweighs the harms to Defendants favors preliminary relief for the Individual Plaintiffs. resulting from the granting of the preliminary injunction. [35] Yet it is important to point out that there are harms to Defendants from the Court’s ruling, and those harms factor into the public interest analysis as well. That is, CONCLUSION there are “legitimate, countervailing concerns” on Defendants’ side of the ledger. The difficulty of this case stems from the absence of any single-sex public charter school option for girls, now Charter schools are mandated to meet measurable and—under current law—forever, all while Delaware standards of student performance, see 14 Del. C. § 501, provides that very option to boys. If the DOE’s denial and Defendants are “statutorily required to determine decision stands, all boys in the State of Delaware will *476 whether [a charter] school is providing an adequate have an option of attending a single-gender public charter education to its students” (D.I. 14 at 23). Defendants school, while at the same time no girl in the State of insist that this is precisely what they have done here, Delaware will have such an option. At a time when the necessitating “the tough decision not to renew the only choice deadline was just weeks away, yet this case was all-girl public school in Delaware.” (D.I. 9 at 5; see also still in its earliest stages, the parties presented the Court D.I. 11 at 16 (“The Defendants indeed were forced to with only two courses of action: Defendants’ planned make the difficult and necessary decision not to permit imminent closure of Reach or Plaintiffs’ request for a the continued existence of a charter school that was one-year extension of operations while this case could be performing at the academic-bottom of Delaware’s public litigated to a conclusion. Given the Court’s findings, schools.”)) The Court agrees with Defendants that “it is in Plaintiffs’ proposal was clearly the better of the two. the public interest that DOE not consent to allow a failing charter school to continue receiving the benefits afforded This conclusion is bolstered by the facts that, in the to charter schools when that school has repeatedly failed months leading up to Defendants’ closure decision, Reach to meet its academic requirements and is moving in the had moved into its new, larger facilities, on which it has wrong direction.” (D.I. 14 at 24) signed a long-term lease; Reach had achieved full enrollment and had grown to its final grade configuration The Court further agrees with Defendants that “the public of K–8; and Reach had been removed from DOE interest cautions against judicial interposition in the probation in May 2013. (D.I. 1 ¶ 19) Now may be a operation of a state public school system.” (D.I. 14 at 3) It particularly auspicious moment for Reach to turn its seems likely that the success of Delaware’s charter school academic performance around. At minimum, another year system depends, in part, on the State’s ability to close a of operations will provide additional data that should failing school—and on the understanding of all interested enable all interested parties to make an accurate constituencies that the State can and will, when necessary, assessment of Reach’s program and competency. revoke or not renew some charters. It is not in the public interest for courts to make it more difficult for the State to Hence, for the reasons provided here, as well as those properly exercise this authority and implement hard stated in the earlier Memorandum Order, the Court has decisions supported by educational expertise. See Richard decided to grant Plaintiffs’ motion for a preliminary *477 Milburn Public Charter Alternative High School v. injunction and grant in part and deny in part Defendants’ Cafritz, 798 A.2d 531, 547 (D.C.2002) (“[An] obvious motion to dismiss. burden in the context of the charter revocation proceedings from additional procedural safeguards would be the delay involved by more elaborate proceedings, as All Citations well as the cost of continuing to provide public funding to charter schools that have flouted their statutory 46 F.Supp.3d 455, 314 Ed. Law Rep. 693 obligations while the revocation proceeding is pending.”).

Though Defendants’ concerns carry serious weight, the

1 The students are O.G., T.W., another T.W., and S.O., each student by her parent and next friend. (D.I. 1)

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2 The parties filed a stipulation of dismissal on May 2, 2014. (D.I. 31) The Court subsequently sought the parties’ views as to whether the Court should adhere to its plan and issue this opinion, and no party objected.

3 The Court uses the terms “same-sex” and “same-gender” interchangeably throughout this Opinion, and does the same with the terms “single-sex” and “single-gender.”

4 It may be that Reach’s influx of students contributed to the low scores. For grades five through eight—the grades represented in Reach’s DCAS scores—82% of Reach’s students enrolled with scores below proficient in math, and 68% enrolled with scores below proficient in reading. (D.I. 7–1 ex. 4 ¶¶ 12–13; see also D.I. 14 App. at A91 (noting that there were only 23 students who had attended Reach for three years))

5 Although the State Board is required to assent to the Secretary’s decision to approve a charter or revoke a charter, the Secretary’s decisions denying non-renewal of a charter are final. See 14 Del. C. §§ 511(c), 514A(f); see also 14 DE Admin. Code 275.10.3 (“Charters shall be renewed only if the school receives a satisfactory performance review.”).

6 Plaintiffs initially requested relief in the form of a temporary restraining order or a preliminary injunction. (D.I. 7) The Court, after conferring with the parties, decided to proceed only on the preliminary injunction. (See Dec. 13, 2013 Hr’g Tr. at 27)

7 The Court need not address Defendants’ additional argument that Reach lacks third party standing (D.I. 11 ¶ 12), as Reach does not assert it has standing on this basis.

8 Plaintiffs appeared to concede at oral argument that the Individual Plaintiffs are parties only to Counts I and II, that is the Equal Protection and Title DC claims. (See Jan. 2 Hr’g Tr. (hereinafter “Tr.”) at 55) As the Complaint is unclear on this point, the Court will address all five claims.

9 All references to “Plaintiffs” in the remainder of this opinion are solely to the Individual Plaintiffs.

10 At oral argument, Defendants admitted that Secretary Murphy may not have had access to all materials in the record when he made his decision (although Defendants maintain he had access to the underlying data). (See Tr. at 38–40) The regulations require all decisions to be “base[d] on the record.” 14 DE Admin. Code 275.3.8.

11 The Third Circuit uses “reasonable probability of success” interchangeably with “likelihood of success.” See, e.g., Allegheny Energy, Inc. v. DOE, Inc., 171 F.3d 153, 158 (3d Cir.1999).

12 A finding that Plaintiffs are likely to succeed on the merits is not, as Defendants suggest, a “legal conclusion that a single-gender education is so inherently unique that Defendants are constitutionally required to provide parity.” (D.I. 17 ¶ 19) It may be that the State could lawfully fund two all-boys schools and only one all-girls school; it may also be that the State could lawfully fund one all-boys school and no all-girls schools, so long as the State was also willing to entertain new applications for single-sex charter schools. These are not the facts before the Court, so the Court draws no conclusions as to them.

13 Public school districts and, in Delaware, charter schools, see 14 Del. C. § 503, are defined as “Local Educational Agencies.” See 20 U.S.C. § 1401(19) (defining Local Educational Agency as “public authority” created for “administrative control” of elementary and secondary schools).

14 Plaintiffs’ idea seems to be that since each student only attends one school (at a time), she need be provided at any one time only with a single-sex “or” coeducational school, but she also must be provided the opportunity to choose between the two options.

15 Importantly, the Court’s order expressly allows Defendants, at all times—including during the 2014–15 school year—to exercise its ordinary powers of oversight, including by seeking to revoke Reach’s charter and by imposing reasonable conditions on Reach’s continued operations.

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End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 20 Reich v. Occupational Safety and Health Review Com’n, 102 F.3d 1200 (1997) 17 O.S.H. Cas. (BNA) 1858, 1995-1997 O.S.H.D. (CCH) P 31,216...

102 F.3d 1200 United States Court of Appeals, Eleventh Circuit.

Robert B. REICH, Secretary of Labor, Petitioner, [3] Federal Courts v. Matters of Procedure in General OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION; Jacksonville Shipyards, In general, claims for money do not become Inc., Respondents. moot as result of defendants’ acts following the occurrence giving rise to the claims. No. 95–2807. | Jan. 7, 1997.

1 Cases that cite this headnote Secretary of Labor appealed decision of Occupational Safety and Health Review Commission OSHRC No. 92–888, Stuart E. Weisberg, J., dismissing Occupational Safety and Health Act (OSHA) citation proceeding against employer as moot. The Court of Appeals, [4] Federal Courts Edmondson, Circuit Judge, held that employer’s cessation Injunctions of business did not render proceeding moot since, inter alia, existence of case or controversy did not depend on Mootness analysis for injunctive relief claims employer’s postviolation acts. would not be applied to money penalty claim; unlike injunctive relief which addresses only Vacated and remanded. ongoing or future violations, civil penalties address past violations, and liability attaches when violation occurs.

West Headnotes (5) 4 Cases that cite this headnote

[1] Federal Courts Voluntary cessation of challenged conduct [5] Labor and Employment In general, case does not become moot by Procedure party’s cessation of allegedly illegal conduct. Employer’s cessation of business did not render Occupational Safety and Health Act (OSHA) Cases that cite this headnote citation proceeding against it moot; existence of case or controversy did not depend on employer’s postviolation acts or date that tribunal set for hearing, and to allow cessation of business to render proceeding moot might [2] Injunction greatly diminish effectiveness of money Mootness and ripeness; ineffectual remedy penalties as deterrence. Occupational Safety and Health Act of 1970, §§ 2–33, 29 U.S.C.A. §§ Claim for injunctive relief may become moot if: 651–678. (1) it can be said with assurance that there is no reasonable expectation that the alleged violation will recur, and (2) interim relief or events have 2 Cases that cite this headnote completely and irrevocably eradicated effects of alleged violation.

13 Cases that cite this headnote © 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Tab E-12 Reich v. Occupational Safety and Health Review Com’n, 102 F.3d 1200 (1997) 17 O.S.H. Cas. (BNA) 1858, 1995-1997 O.S.H.D. (CCH) P 31,216...

Attorneys and Law Firms an employer’s voluntary cessation of illegal conduct does not render a proceeding moot, because the citation is *1200 Charles F. James, Barbara Werthman, Bruce Justh, based on the employer’s status at the time the violation U.S. Dept. of Labor, Washington, DC, for petitioner. occurred. The case was remanded to the ALJ to determine whether JSI was still an “employer” under OSHA. Robert E. Mann, Dianne M. D’Onofrio, Chicago, IL, for Jacksonville Shipyards. On remand, the ALJ dismissed the case as moot based on an unrebutted affidavit of JSI’s president that all Petition for Review of an Order of the Occupational employees had been terminated. The Secretary petitioned Safety and Health Review Commission. the Commission to review the ALJ’s decision, and the Commission denied review. The ALJ’s second dismissal Before EDMONDSON, Circuit Judge, FAY, Senior of the case became a final order of the Commission, and Circuit Judge, and ALDRICH*, Senior District Judge. the Secretary appealed. Opinion

*1201 EDMONDSON, Circuit Judge: II. Discussion This appeal raises the question whether a proceeding for [1] [2] A case becomes moot “when the issues presented are civil penalties under the Occupational Safety and Health no longer ‘live’ or the parties lack a legally cognizable Act (OSHA), 29 U.S.C. § 651–678, becomes moot when interest in the outcome.” Powell v. McCormack, 395 U.S. an employer permanently ceases doing business. Because 486, 496, 89 S.Ct. 1944, 1950–51, 23 L.Ed.2d 491 (1969). we conclude that this case is not moot, we vacate the The Commission made a legal determination that the order of dismissal and remand for further proceedings. OSHA proceeding was “moot” in the ordinary sense—that is, no live case or controversy—of that word.1 In general, a case does not become moot by a party’s cessation of allegedly illegal conduct. United States v. I. Background W.T. Grant Co., 345 U.S. 629, 632, 73 S.Ct. 894, 897, 97 L.Ed. 1303 (1953); Atlantic States Legal Foundation v. Jacksonville Shipyards, Inc. (“JSI”) was formerly Tyson Foods, 897 F.2d 1128, 1135 (11th Cir.1990). The engaged in the ship repair business in Florida. In August Supreme Court has recognized an exception to this 1991, two JSI employees were killed in a work-related principle in certain cases where injunctive relief is sought. fall at JSI’s Mayport Naval Station facility. The Secretary County of Los Angeles v. Davis, 440 U.S. 625, 99 S.Ct. of Labor (the Secretary) issued citations totaling 1379, 59 L.Ed.2d 642 (1979). A claim for injunctive relief $692,000, including citations for alleged willful violations may become moot if: leading directly to the deaths. JSI contested the citations and the proposed penalties. The Occupational Safety and Health Commission (the Commission) assigned the case (1) it can be said with assurance that there is no to an Administrative Law Judge (ALJ) for hearing and reasonable expectation that the alleged violation will disposition. recur and (2) interim relief or events have completely and irrevocably eradicated the effects of the alleged By November 1992, JSI had released almost all of its violation. workforce, retaining only a small number of Id., at 631, 99 S.Ct. at 1383 (internal quotations and administrative employees to wind-up; and it had sold citations omitted). almost all of its assets. At this time, JSI filed a motion *1202 Appellee JSI urges us to decide mootness for civil with the ALJ seeking to have the case dismissed as moot. money penalties under the standard set forth in Davis for The ALJ granted the motion. injunctive relief. JSI advances these points: (1) that the proceedings are moot because its cessation of business The Secretary petitioned the Commission to review the means that the violations cannot recur and the effects of decision. The Commission, in a two to one decision, the violations have been eradicated; and (2) that JSI can concluded that an OSHA citations proceeding is moot have no liability under OSHA because it is no longer an where the employer has terminated its employees and “employer” within the meaning of the Act. where there is no likelihood of resuming the employment [3] [4] relationship. The dissenting commissioner maintained that We know—to say the least—that, in general, claims

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2 Reich v. Occupational Safety and Health Review Com’n, 102 F.3d 1200 (1997) 17 O.S.H. Cas. (BNA) 1858, 1995-1997 O.S.H.D. (CCH) P 31,216...

for money do not become moot as a result of the defendants’ acts following the occurrence giving rise to JSI also argues, and the Commission agreed, that JSI is no the claims.2 Courts have traditionally treated monetary longer an “employer” for purposes of OSHA. See 29 relief claims differently than injunctive relief claims for U.S.C. § 652(5) (defining “employer” as person engaged the purpose of mootness challenges. See, e.g. Tyson, 897 in business who has employees). This argument fails F.2d at 1134; Powell, 395 U.S. at 496 n. 8, 89 S.Ct. at because, for purposes of civil money penalties, a tribunal 1951 n. 8; Castaneda v. Dura–Vent Corp., 648 F.2d 612, looks to the employer’s status at the time of the violation, 615 (9th Cir.1981). We reject the appellee’s suggestion not at the time of trial. See, e.g. Gwaltney, 890 F.2d at that we use the mootness analysis for injunctive relief to 696–97 (characterizing past violations as “the only decide whether a money penalty claim is moot. Unlike possible basis for assessing a penalty”). Accepting the injunctive relief which addresses only ongoing or future Commission’s view of mootness would mean the violations, civil penalties address past violations; liability existence of a “case or controversy” is dependent on an attaches at the time the violation occurs. See, e.g., employer’s post-violation acts as well as the date a Chesapeake Bay Foundation, Inc. v. Gwaltney of tribunal sets for a hearing in the proceedings. This Smithfield, Ltd., 890 F.2d 690, 696 (4th Cir.1989) innovative view seems to inject unneeded confusion into (liability for civil penalties “is fixed by the happening of traditional mootness principles. We agree with the an event ... that occurred in the past.”). Secretary’s view of the pertinent statute, *1203 29 U.S.C. § 666: JSI was an “employer” when the OSHA violations We are guided by our decision in Atlantic States Legal occurred as well as when JSI received citations, and it Foundation, Inc. v. Tyson Foods, Inc., 897 F.2d 1128 remains one for the proceedings to assess the penalties (11th Cir.1990). In Tyson, a private plaintiff brought an arising from the citations. action for civil penalties under the Clean Water Act, 33 U.S.C. § 1365, against the defendant corporation for Although we do not rely much on OSHA-related policy violations of permit limitations on the discharge of considerations in deciding this case, we think our decision pollutants. After the complaint was filed, but before trial, is consistent with the policies that OSHA was enacted to the defendant began complying with the limitation advance. We expect that to adopt JSI’s proposed rule for requirements. The district court dismissed the case as mootness would frustrate the purpose of OSHA. OSHA moot because the defendant was no longer in violation of was enacted to “assure so far as possible every working the Act. We reversed, holding that “the mooting of man and woman in the Nation safe and healthful working injunctive relief will not moot the request for civil conditions....” 29 U.S.C. § 651(b). Because of the large penalties as long as such penalties were rightfully sought number of workplaces which OSHA must regulate, at the time the suit was filed.” Id. at 1134. Accord Atlantic relying solely on workplace inspections is an impractical States Legal Foundation, Inc. v. Pan American Tanning means of enforcement. We accept that OSHA must rely Corp., 993 F.2d 1017, 1021 (2d Cir.1993); Natural on the threat of money penalties to compel compliance by Resources Defense Council v. Texaco Refining & employers. See Atlas Roofing Co. v. OSHRC, 518 F.2d Marketing, Inc., 2 F.3d 493, 503 (3d Cir.1993); Gwaltney, 990, 1001 (5th Cir.1975) aff’d, 430 U.S. 442, 97 S.Ct. 890 F.2d at 696–97. 1261, 51 L.Ed.2d 464 (1977) (OSHA penalties act as “pocket-book deterrence”). [5] JSI argues that the facts of this case are distinguishable from a case such as Tyson where the employer has come To let the cessation of business by an employer render a into compliance with the statute but remains in business. civil penalty proceeding moot might greatly diminish the In those post-complaint compliance cases, JSI asserts, effectiveness of money penalties as a deterrence. there is a risk that the wrong will be repeated; but the risk Employers in violation of OSHA could become does not exist where the employer has ceased all complacent in the knowledge that future civil penalties operations. could be avoided by ceasing operations on the eve of the Commission hearing. Violators would be encouraged “to JSI’s argument does not fit the reasoning in Tyson. In delay litigation as long as possible, knowing that they will Tyson, we did not base our decision on a determination thereby escape liability even for post-complaint that the defendant corporation continued to operate and, violations, so long as violations have ceased at the time therefore, presented a risk of future violations. Although the suit comes to trial.” Tyson, 897 F.2d at 1137. We injunctive relief was mooted because “the allegedly worry about creating an economic incentive to avoid a wrongful behavior could not reasonably be expected to penalty by going out of business and, perhaps, then recur,” we held in Tyson that the claim for civil penalties reincorporating under a different name. was not moot. Id. at 1134.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 Reich v. Occupational Safety and Health Review Com’n, 102 F.3d 1200 (1997) 17 O.S.H. Cas. (BNA) 1858, 1995-1997 O.S.H.D. (CCH) P 31,216...

More important, employers who were going out of Commission’s order and remand for further proceedings.4 business for ordinary commercial reasons would have little incentive to comply with safety regulations to the VACATED and REMANDED. end if monetary penalties could be evaded once the business quit altogether. As long as a business operates, it should feel itself to be effectively under the applicable laws and regulations—even on the last day. And, the All Citations continuing potential of penalties—more so than injunctive relief—makes these feelings real.3 102 F.3d 1200, 17 O.S.H. Cas. (BNA) 1858, 1995-1997 O.S.H.D. (CCH) P 31,216, 10 Fla. L. Weekly Fed. C 643 Because the Commission’s dismissal for mootness was not in accordance with the law, we vacate the

* Honorable Ann Aldrich, Senior U.S. District Judge for the Northern District of Ohio, sitting by designation.

1 We decide the case before us and the issues it raises. By the way, we do not independently decide today that Article III mootness principles necessarily control administrative agency tribunals. See generally Climax Molybdenum Co. v. Secretary of Labor, MSHA, 703 F.2d 447, 451 (10th Cir.1983) (“[A]n agency possesses substantial discretion in determining whether the resolution of an issue before it is precluded by mootness. However, in exercising this discretion, an agency receives guidance from the policies that underlie the ‘case or controversy’ requirement of Article III.”); Tennessee Gas Pipeline Co. v. Federal Power Commission, 606 F.2d 1373, 1380 (D.C.Cir.1979) (“The limitations imposed by Article III on what matters federal courts may hear affect administrative agencies only indirectly.”).

2 At oral argument, we asked counsel for JSI whether he was aware of a decision which had considered a money claim to have become moot as a result of the defendant’s own acts. He responded, “I do not know of any such cases which hold that, your Honor. We searched, and we could not find any.”

3 We understand that criminal penalties can be sought for some violations. We doubt that those kinds of penalties will or should face most employers who violate OSHA. So, we do not believe the existence of possible criminal penalties has much impact on the mootness question presented here.

4 We do not rule out today that JSI’s having ceased to do business might be important to the amount of penalties; the appropriate amount is for the Commission to set.

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4 Jurisdiction KeyCite Yellow Flag - Negative Treatment Declined to Extend by Navo South Development Partners, Ltd. Court of Appeals exercises plenary review of a v. Denton County Elec. Co-op., Inc., E.D.Tex., October 23, 2009 district court’s subject matter jurisdiction. 236 F.3d 240 United States Court of Appeals, Fifth Circuit. Cases that cite this headnote

SIMI INVESTMENT COMPANY, INC., Plaintiff–Appellee, v. HARRIS COUNTY, TEXAS, Defendant–Appellant. [3] Constitutional Law Streets, Highways, and Sidewalks No. 99–20686. | Dec. 21, 2000. Property owner’s § 1983 substantive due process claim, alleging that county had Property owner sued county in state court for damages unlawfully prevented owner from gaining access and injunctive relief under state and federal constitutions, to adjacent city street, was not subsumed by alleging that county unlawfully prevented it from gaining owner’s unripe Fifth Amendment takings claim. access to city street adjacent to property. After county U.S.C.A. Const.Amends. 5, 14; 42 U.S.C.A. § removed action, parties cross-moved for partial summary 1983. judgment. The United States District Court for the Southern District of Texas, Lynn N. Hughes, J., 13 F.Supp.2d 603, ruled in owner’s favor. County appealed. 5 Cases that cite this headnote The Court of Appeals, King, Chief Judge, held that: (1) substantive due process claim was not subsumed by unripe takings claim; (2) county waived res judicata defense; (3) county violated owner’s substantive due [4] process rights in claiming ownership to nonexistent park Federal Courts to deny owner access to city street; and (4) owner could State or federal matters in general not recover attorney fees for work performed prior to assertion of § 1983 claim. State law claims, standing alone, do not provide federal jurisdiction. Affirmed in part, vacated in part, and remanded. 3 Cases that cite this headnote

West Headnotes (31) [5] Declaratory Judgment [1] Federal Civil Procedure Jurisdiction of Federal Courts Proceedings Declaratory Judgment Act claims, without District court may enter summary judgment another basis for jurisdiction, cannot support after providing notice and instructing the parties district court’s jurisdiction. 28 U.S.C.A. § 2201. to submit all relevant evidence. 4 Cases that cite this headnote Cases that cite this headnote

[6] Constitutional Law [2] Federal Courts Ripeness; prematurity

Tab E-13 Simi Inv. Co., Inc. v. Harris County, Tex., 236 F.3d 240 (2000)

Final decision required for substantive due 17 Cases that cite this headnote process claim to be ripe for review was satisfied where county’s decision to claim ownership of purported park, offered as justification for denying property owner access to city street, had [10] been final for more than 40 years. U.S.C.A. Constitutional Law Const.Amend. 14. Rights and interests protected; fundamental rights

2 Cases that cite this headnote Substantive due process analysis is appropriate only in cases in which government arbitrarily abuses its power to deprive individuals of constitutionally protected rights. U.S.C.A. Const.Amend. 14. [7] Constitutional Law Substantive Due Process in General Federal Courts 23 Cases that cite this headnote Due process

When a state interferes with property interests, a substantive due process claim may survive a [11] takings analysis and, therefore, provide Constitutional Law jurisdiction for a federal court. U.S.C.A. Property Rights and Interests Const.Amends. 5, 14. To prevail on a substantive due process claim, plaintiff must first establish that it held a 18 Cases that cite this headnote constitutionally protected property right to which the Fourteenth Amendment’s due process protection applies. U.S.C.A. Const.Amend. 14.

[8] Constitutional Law 31 Cases that cite this headnote Streets, Highways, and Sidewalks

Claim that county unlawfully prevented property owner from gaining access to adjacent city [12] street, in violation of substantive due process, Constitutional Law was governed by deferential rational basis test. Source of right or interest U.S.C.A. Const.Amend. 14. State law governed issue of whether property owner had property right protected by due 4 Cases that cite this headnote process under Fourteenth Amendment. U.S.C.A. Const.Amend. 14.

7 Cases that cite this headnote [9] Federal Courts Governments and Political Subdivisions

Whether rational relationship exists between [13] government action challenged on substantive Constitutional Law due process grounds and legitimate Real property in general governmental interest is a question of law Constitutional Law reviewed de novo. U.S.C.A. Const.Amend. 14. Streets, Highways, and Sidewalks Highways

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2 Simi Inv. Co., Inc. v. Harris County, Tex., 236 F.3d 240 (2000)

Right of access Cases that cite this headnote County’s alleged interference with property owner’s access to abutting street right-of-way violated Texas law, and thus implicated property interest protected by due process under [17] Fourteenth Amendment. U.S.C.A. Nuisance Const.Amend. 14. Nature and extent of injury or danger

Under Texas law, “continuing nuisance” is a 6 Cases that cite this headnote condition of such character that it may continue indefinitely.

1 Cases that cite this headnote [14] Easements Extent of Right Easements Damages [18] Nuisance Under Texas law, abutting property owner Nature and elements of private nuisance in possesses an easement of access which is a general property right not limited to a right of access to the system of public roads, and diminishment in Under Texas law, “private nuisance” is a the value of property resulting from a loss of nontrespassory invasion of another’s interest in access constitutes damage. the private use and enjoyment of land. Restatement (Second) of Torts § 821D.

1 Cases that cite this headnote 1 Cases that cite this headnote

[15] Nuisance [19] What Constitutes Nuisance in General Constitutional Law Reasonableness, rationality, and relationship Property owner alleged private, continuing to object nuisance under Texas law when it alleged that county had unlawfully denied property owners Under rational relationship test governing access to adjacent city street, thereby substantive due process claim, question is unreasonably interfering with property owners’ whether a rational relationship exists between rights. Restatement (Second) of Torts § 821D. the challenged policy and a conceivable legitimate objective; if the question is at least debatable, there is no substantive due process Cases that cite this headnote violation. U.S.C.A. Const.Amend. 14.

26 Cases that cite this headnote

[16] Nuisance Time to sue, limitations, and laches [20] Under Texas law, limitations is not a defense to Federal Civil Procedure an action to abate a continuing nuisance. Res judicata and pendency of another action

County waived issue of res judicata effect of

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 Simi Inv. Co., Inc. v. Harris County, Tex., 236 F.3d 240 (2000)

[24] prior state-court decision resolving earlier Federal Civil Procedure dispute involving same strip of land as that Res judicata and pendency of another action underlying property owner’s substantive due process claim when county failed to raise issue Denying res judicata defense was not abuse of until six months after district court’s ruling on discretion where defendant did not assert motion for partial summary judgment and three defense until three years after original suit was years after filing of initial complaint. U.S.C.A. filed and more than six months after liability Const.Amend. 14. issues were resolved in interlocutory judgment.

3 Cases that cite this headnote Cases that cite this headnote

[21] [25] Federal Civil Procedure Constitutional Law Res judicata and pendency of another action Streets, Highways, and Sidewalks Highways Res judicata is an affirmative defense which is Right of access considered waived if not specifically pleaded in the answer or in an amended answer. Fed.Rules County acted arbitrarily and without legitimate Civ.Proc.Rule 15(a), 28 U.S.C.A. governmental purpose, in violation of property owner’s substantive due process rights, when it claimed ownership of nonexistent five-foot by 4 Cases that cite this headnote 3000-foot park solely to deny private property owner lawful access to abutting city street, to which owner was entitled under state law, particularly when interference appeared to be [22] designed to benefit other private interests and Federal Civil Procedure continued 20 years after county ceded control Time for amendment over street to city. U.S.C.A. Const.Amend. 14. District courts have discretion to allow late amendments to answers when no prejudice 6 Cases that cite this headnote would result to the other party, and the ends of justice so require.

Cases that cite this headnote [26] Federal Courts Costs and attorney fees

Court of Appeals reviews district court’s award [23] of attorney fees for abuse of discretion, and its Federal Courts factual findings relating to the award of fees for Pleading clear error. Court of Appeals reviews for abuse of discretion district court’s decision to grant or deny late 1 Cases that cite this headnote amendment to answer.

Cases that cite this headnote [27] Civil Rights Results of litigation; prevailing parties

Property owner that prevailed on § 1983 claim © 2015 Thomson Reuters. No claim to original U.S. Government Works. 4 Simi Inv. Co., Inc. v. Harris County, Tex., 236 F.3d 240 (2000)

asserting substantive due process violation by county was entitled to award of attorney fees. U.S.C.A. Const.Amend. 14; 42 U.S.C.A. §§ 1983, 1988. [31] Federal Civil Procedure Witness fees 3 Cases that cite this headnote Courts may award expert fees in excess of the statutory limitations when the losing party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons. [28] Civil Rights Services or activities for which fees may be awarded 1 Cases that cite this headnote

Property owner that prevailed on § 1983 claim against county could not recover attorney fees for work performed before owner’s state-court case was removed to federal court and complaint was amended to add § 1983 claim, given Attorneys and Law Firms absence of showing that state suit was part of enforcement of § 1983 claim. 42 U.S.C.A. §§ *242 H. Dixon Montague (argued), Alan B. Daughtry, 1983, 1988. Kathleen A. Gallagher, Vinson & Elkins, Houston, TX, for Plaintiff–Appellee.

2 Cases that cite this headnote Bruce S. Powers (argued), Houston, TX, for Defendant–Appellant.

Appeal from the United States District Court for the Southern District of Texas. [29] Civil Rights Services or activities for which fees may be Before KING, Chief Judge, and REYNALDO G. GARZA awarded and PARKER, Circuit Judges.

Opinion When a state proceeding is a necessary preliminary action to the enforcement of a KING, Chief Judge: federal claim, associated attorney fees may be available under federal civil rights statute in some circumstances, subject to the discretion of Defendant–Appellant Harris County, Texas appeals the the district court. 42 U.S.C.A. § 1988. district court’s judgment against the County, arguing that the district court erred in holding that the County had unconstitutionally interfered with the property rights of 1 Cases that cite this headnote Plaintiff–Appellee Simi Investment Company, Inc. The district court found that the County had unlawfully prevented Simi from gaining access to the city street adjacent to its property in contravention of Texas law. [30] Federal Courts Specifically, the district court held that the County had Costs and attorney fees abused its governmental power *243 and violated Simi’s substantive due process rights by inventing and claiming Court of Appeals reviews awards of expert fees ownership of a nonexistent five-foot by 3000–foot county under an abuse of discretion standard. park, which blocked Simi’s lawful access to the street. For the following reasons, we AFFIRM the judgment of the district court, including the grant of attorneys’ fees; 1 Cases that cite this headnote however, we VACATE and REMAND to determine the amount of those attorneys’ fees in a manner consistent

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 5 Simi Inv. Co., Inc. v. Harris County, Tex., 236 F.3d 240 (2000)

with this opinion. extending Fannin Street “with such extension to run in a North–South direction along the Eastern side of the Property described above, *244 with the remaining Western portion of said Property to be used for street purposes or included in a park and stadium site lying I. FACTUAL AND PROCEDURAL BACKGROUND along the West side of said Property.” Pursuant to this deed, the County Commissioners Court issued an order on This dispute centers around the real property (the “Simi December 11, 1961, stating that “Harris County is to Property”) owned by Simi Investment Company, Inc. move back the existing fences to the new right of way (“Simi”) which is located in downtown Houston in close line.”2 Subsequently, Fannin Street was constructed as proximity to the Houston Astrodome stadium.1 More described in the deed on the eastern side of the conveyed specifically, the Simi Property is situated adjacent to property, and fences were erected directly abutting the Fannin Street at the intersection of Interstate Loop 610 Simi Property. (“Loop 610”) and Fannin Street. Simi sought from the City of Houston (“City”) access to Fannin Street from the The original maps accompanying the County’s acquisition Simi Property, but was denied access by the City because of the right-of-way and describing the location and Harris County (the “County”) claimed an interest in an alignment of Fannin Street could not be found, and, thus intervening five-foot sliver of land that runs alongside this are not a part of the record. The first site-specific property, separating it from Fannin Street. document in the record is dated October 16, 1961, and was created when engineers for the County prepared a This land dispute finds its origin in the early 1960s when plat of the area depicting the land to be conveyed to the the construction of the Astrodome led to increased County for the right-of-way. The plat showed the granted development in the area surrounding what is now the Simi land directly abutting the Simi property line. This plat, Property. Two of the major investors in the area were Roy however, was not a survey and did not include the exact Hofheinz and R.E. Smith. Hofheinz was a former Harris location of Fannin Street within the right-of-way. County judge and had been the chair of the County’s governing board, the County Commissioners Court. At some time after 1961, this plat was altered to include Hofheinz was also President of the Houston Sports the placement of Fannin Street and also, most relevant for Association (the “HSA”), which leased the Astrodome this case, a strip of land set off from the eastern side of from the County. Hofheinz–Smith owned property north Fannin Street lying in between the street and the adjoining of the Simi Property site, which was also located along private properties. This five-foot by 3000–foot strip of the eastern side of Fannin Street. As a result, land3 is the county “park” now at issue. Hofheinz–Smith and the HSA had control of much of the property surrounding the Astrodome. As drawn in the revised plat, the Fannin Street right-of-way runs north-south, directly abutting the In conjunction with building the Astrodome, the County Hofheinz–Smith property. However, once past the acquired rights-of-way for streets leading to the stadium. southern boundary of the Hofheinz–Smith property line, In 1961, the County Commissioners Court requested the the right-of-way is shown to make a ninety-degree turn consent of the City to acquire one of those rights-of-way west for five feet, and then it continues south to the 610 by extending the length of Fannin Street to Loop 610. The Loop. The result is the creation of a five-foot strip of land City Council approved the location and alignment of the that separates all of the property south of the proposed street, and the land was purchased from the Hofheinz–Smith property from Fannin Street, but leaves Trustees of the Hermann Hospital Estate and conveyed to the Hofheinz–Smith property directly abutting the Fannin the County for this purpose. The Hermann Hospital Estate Street right-of-way. No description or reason is apparent right-of-way consisted of a 20.67 acre tract of land that for this offset, nor why the offset begins just south of the was approximately 220 feet wide and 4100 feet in length, Hofheinz–Smith property.4 This plat also includes the running north-south alongside the Astrodome site. This words “location questionable” drawn to indicate the north-south right-of-way was bounded on the west by the uncertain location of Fannin Street. There is no revised Astrodome and surrounding grounds, and on the east by date on the altered plat. The County contends that this plat several privately owned properties (including the depicts the correct location of all relevant boundaries, Hofheinz–Smith property and what is now the Simi with Fannin Street running north-south within the original Property). right-of-way and a thin county park on the east side also running parallel to Fannin Street. The deed granting the land to the County provided that the property was being purchased with the intention of © 2015 Thomson Reuters. No claim to original U.S. Government Works. 6 Simi Inv. Co., Inc. v. Harris County, Tex., 236 F.3d 240 (2000)

From this uncertain beginning, the County’s “park” has approval was sought from the County for an easement. withstood several legal and administrative challenges to its existence and control. First, in 1964, Texaco, Inc. Control of Fannin Street, itself, was ceded from the requested access to Fannin Street from property it owned County to the City of Houston in 1974. In that year, the on the corner of Fannin and the 610 Loop. This request County removed Fannin Street from its road logs. was submitted to the County Commissioner and was then forwarded to the County Engineer. For an unknown From 1981 to 1984, Simi began acquiring property along reason, the County Engineer sought approval from Fannin Street.6 In 1994, Simi submitted to the City a Hofheinz, as President of the HSA. Hofheinz stated that request for driveway access from its property to Fannin the HSA was unalterably opposed to the access because Street. Richard Scott, the Technical Director/City the strip of land east of Fannin was included in the Engineer of the Department of Public Works and original HSA lease of land for the Astrodome site and, Engineering for the City, responded that the City “would therefore, was under HSA’s control. This assertion was be in a position to process [the] application, and likely factually erroneous because HSA was never granted *245 approve it,” but for the fact that the County has claimed control of the land. However, Hofheinz’s objection led the an interest in the strip of land. Simi then applied to the County to deny Texaco access to Fannin Street. County for access. This request was denied based on the assertion that the County owned parkland located between Similarly, in 1969, property owners sought a mandatory Fannin Street and the Simi Property. injunction against the County, requesting that the fence abutting their properties be removed to grant access to Simi sued the County in state court. Simi sought damages Fannin Street. A take-nothing judgment was affirmed by a and injunctive relief pursuant to Article 1, Section 17 of Texas court of appeals, which denied the property owners the Texas Constitution and the Fifth and Fourteenth access across the County’s land. See Lovett v. County of Amendments to the United States Constitution. In Harris, 462 S.W.2d 405, 408 (Tex.Civ.App.—Houston addition, Simi sought a declaration that its land directly [1st Dist.] 1970, writ ref’d n.r.e). The court found that the abutted the right-of-way of Fannin Street. The County erection of the fence was not an unconstitutional taking removed the suit to federal court. Simi filed a motion to under Texas law because the intervening strip of land remand, stating that its federal takings claim was not ripe. separating the property owners from Fannin Street had not The district court did not rule on this motion for remand. been dedicated for street purposes. See id.5 In federal court, Simi added a 42 U.S.C. § 19837 substantive *246 due process claim, alleging that the Most recently, in 1984, Sterling B. McCall, Jr., the owner County’s denial of access to an adjoining right-of-way of McCall Toyota, requested that he be allowed to keep a arbitrarily and capriciously denied Simi a property driveway that had been built on his property which interest established under Texas law. provided the property with ingress and egress onto Fannin [1] Street. This request was denied by the County The district court held two conferences during which Commissioners Court, and McCall was required to fence the parties were required to submit all relevant documents in the driveway to block access to Fannin Street. and exhibits and to stipulate to the agreed facts. Both parties then moved for partial summary judgment based The area designated as a park has also been subject to on this established record.8 encumbrances that over its history have helped define its status and ownership. In 1974, Entex, a gas company, On August 26, 1998, the district court issued an constructed a gas line running north-south along the east Interlocutory Judgment and an Opinion on Judgment side of Fannin Street. This gas line was buried inside the solely on the issue of the existence of the park. The land now claimed as a park. The district court found that district court reserved deciding the issue of damages or “[n]o Commissioner’s Court Order or other document can attorneys’ fees. The court found in its Interlocutory be found to show the County authorized an easement in Judgment that: (1) “Harris County had never established a the ‘park’ to Entex.” In 1978, the City of Houston park”; (2) “Harris County had no interest in an approved a plan and constructed an eight-inch water line intervening 5–foot by 3,000–foot strip east of Fannin that crossed the park. Again, the district court found no Street and west of [the Simi Property] making illegal its Commissioners Court order authorizing the easement interference with the owners’ relation to the City of across the park for the water line. Finally, in 1993, the Houston and Fannin Street”; (3) “Harris County had Metropolitan Transit Authority of Harris County ceded to the [C]ity of Houston all of its right, title, and (“METRO”) approved construction of a sidewalk on the interest in the eastern-most 100 feet of land conveyed to it park property, running alongside the Simi Property. No by the Hermann Estate”; and (4) “[t]he City of Houston’s

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Fannin Street right of way abuts directly and fully the decide the case. We find that the district court had subject west boundary of [the Simi Property].” matter jurisdiction by reason of Simi’s § 1983 substantive due process claim. After the Interlocutory Judgment, two hearings were held on damages and attorneys’ fees. In addition, Simi In its Opinion on Judgment, the district court provided introduced supplemental evidence into the record three grounds for its jurisdiction. First, the court found involving the County’s reasons for denying property that “[t]he facts pleaded state claims under the Texas owners access to Fannin Street. The district court issued a Constitution to which no accommodative delay is due.... Final Judgment on April 21, 1999, incorporating the Whatever the eventual fate of Simi’s claim for Interlocutory Judgment and adding that the County was compensation, Simi is entitled to use this court’s authority liable for $823,540 in damages, $367,000 in attorneys’ to correct the county’s continuing non-possessory fees, and $116,994.32 in expenses. On May 13, 1999, the interference with its land.” See Simi, 13 F.Supp.2d 603, district court issued Supplemental Findings that: (1) the 605 (S.D.Tex.1998) (citations omitted). Second, the County arbitrarily interfered with Simi’s property rights; district court found that Simi had stated claims against the (2) the interference had no relation to a legitimate County under the Fourteenth Amendment, the Civil governmental interest; (3) the interference was an abuse Rights Act of 1866, and 42 U.S.C. § 1983. See id. As of governmental power; (4) the County persisted in these claims are ripe without exhaustion of state remedies, defending its claim to the park in bad faith and used the the court found proper jurisdiction. Finally, the district litigation to vex and oppress Simi; and (5) the County court held that Simi is entitled to seek declaratory relief deliberately violated Simi’s rights under the United States under both Texas and federal law. See id. Constitution.9 [4] [5] The County correctly argues that the state law The County timely appeals. claims, standing alone, do not provide federal jurisdiction. Further, we agree that Declaratory Judgment Act claims, without another basis for jurisdiction, cannot support the district court’s jurisdiction. See Lawson v. Callahan, 111 F.3d 403, 405 (5th Cir.1997) (“[I]t is well settled that [the II. STANDARD OF REVIEW Declaratory Judgment Act] does not confer subject matter jurisdiction on a federal court where none otherwise We review a grant of summary judgment10 de novo, exists.”). The County thus contends that the only potential applying the same criteria *247 used by the district court federal claim available to Simi is a “takings” claim under in the first instance. See Norman v. Apache Corp., 19 F.3d the Fifth and Fourteenth Amendments, and that Simi has 1017, 1021 (5th Cir.1994); Conkling v. Turner, 18 F.3d conceded that such a claim is not ripe for review.11 While 1285, 1295 (5th Cir.1994). Summary judgment is proper we agree that the takings claim is not ripe for review, this “if the pleadings, depositions, answers to interrogatories, argument does not dispose of Simi’s suit because the § and admissions on file, together with the affidavits, if any, 1983 substantive due process claim was properly before show that there is no genuine issue as to any material fact the district court. and that the moving party is entitled to judgment as a matter of law.” FED.R.CIV.P. 56(c); see also Celotex In order to unpack the jurisdictional basis for the district Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 court’s holding, we revisit our recent decision in John L.Ed.2d 265 (1986). Corp. v. City of Houston, 214 F.3d 573, 582 (5th Cir.2000), in which we held that substantive due process claims alleging deprivations of property are not necessarily subsumed under the Takings Clause. As this is III. SUBJECT MATTER JURISDICTION precisely the issue raised by the County, *248 we find John Corp. to be dispositive as to the question of [2] We exercise plenary review of a district court’s subject jurisdiction. matter jurisdiction. See Rutherford v. Harris County, Tex., 197 F.3d 173, 189–90 (5th Cir.1999); John Corp. recognized that “[i]ndividuals may look to Taylor–Callahan–Coleman Counties v. Dole, 948 F.2d several constitutional provisions for protection against 953, 956 (5th Cir.1991). state action that results in a deprivation of their property.” Id. at 577. One of those provisions is the substantive due [3] As a threshold matter, the County argues that the process component of the Fourteenth Amendment which district court lacked federal subject matter jurisdiction to guarantees that individuals shall not be deprived of their

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property without due process of law. See U.S. CONST. multiple violations are alleged, we are not in the habit amend. XIV, § 1; see also John Corp., 214 F.3d at 577 of identifying as a preliminary matter the claim’s (“Substantive due process, by barring certain government ‘dominant’ character. Rather, we examine each actions regardless of the fairness of the procedures used to constitutional provision in turn.”). Thus, simply implement them, [ ] serves to prevent governmental because an explicit provision applies does not mean power from being used for purposes of oppression.” that that provision makes inapplicable *249 all (alterations in original) (citations and internal quotation substantive due process protections. See Albright, 510 marks omitted)). Another provision is the Takings Clause U.S. at 288, 114 S.Ct. 807 (Souter, J., concurring) of the Fifth Amendment. See U.S. CONST. amend. V; see (suggesting that due process is reserved for “otherwise also John Corp., 214 F.3d at 577; Samaad v. City of homeless substantial claims”). Dallas, 940 F.2d 925, 933 (5th Cir.1991) (“The Takings Clause of the Fifth Amendment directs that ‘private John Corp., 214 F.3d at 582.13 Our limited holding in property [shall not] be taken for public use, without just John Corp. is similarly limited here; we find only that compensation.’ The Supreme Court has held that the when a state interferes with property interests, a clause applies to the states through the Fourteenth substantive due process claim may survive a takings Amendment.” (citations omitted)). In the instant case, analysis and, therefore, provide jurisdiction for a federal once Simi had its case removed to federal court, it court. explicitly pled a due process claim, recognizing that it did not have a takings claim.12 As alleged, there exists illegitimate governmental conduct that has deprived Simi of its property rights for the benefit [6] [7] Nevertheless, the County argues that we must decide of private interests. Because Simi submitted sufficient this case under the Takings Clause because “[w]here a evidence to support its § 1983 substantive due process particular Amendment ‘provides an explicit textual source claim based on an allegedly arbitrary and unlawful of constitutional protection’ against a particular sort of attempt to interfere with private property rights, we reject government behavior, ‘that Amendment, not the more the County’s argument that the district court did not have generalized notion of “substantive due process,” must be federal subject matter jurisdiction. the guide for analyzing these claims’.” Albright v. Oliver, 510 U.S. 266, 273, 114 S.Ct. 807, 127 L.Ed.2d 114 (1994) (quoting Graham v. Connor, 490 U.S. 386, 395, 109 S.Ct. 1865, 104 L.Ed.2d 443 (1989)). Again, John Corp. controls our analysis. We take no issue with the IV. SUBSTANTIVE DUE PROCESS principle inherent in the Supreme Court’s [8] [9] The determination that the district court had Albright/Graham analysis; however, in the instant case, jurisdiction to decide the federal question of substantive we find a takings analysis does not exhaust Simi’s due process, however, does not resolve the merits of constitutional claims. John Corp. found that under Simi’s claim. Our review of the County’s actions must be Albright/Graham, a more explicit provision does not measured against the deferential “rational basis” test that necessarily preempt due process protections, and that governs substantive due process. See FM Prop. Operating substantive due process claims can survive a related Co. v. City of Austin, 93 F.3d 167, 174 (5th Cir.1996) takings argument: (“[G]overnment action comports with substantive due This does not mean, however, that the applicability of process if the action is rationally related to a legitimate the more explicit provision pre-empts due process governmental interest.”). “Whether this ‘rational relation’ protections. See [County of Sacramento v.] Lewis, 523 in fact exists is a question of law that we review de novo.” U.S. 833, 842–44, 118 S.Ct. 1708, 140 L.Ed.2d 1043 Hidden Oaks Ltd. v. City of Austin, 138 F.3d 1036, 1044 (1998); [United States v.] James Daniel Good Real (5th Cir.1998). Property, 510 U.S. 43, 49, 114 S.Ct. 492, 126 L.Ed.2d 490 (1993) (“We have rejected the view that the “A violation of substantive due process, for example, applicability of one constitutional amendment occurs only when the government deprives someone of pre-empts the guarantees of another.”). Moreover, it is liberty or property; or, to use the current jargon, only clear that a particular action may implicate more than when the government works a deprivation of a one constitutional protection. See Soldal [v. Cook constitutionally protected interest.” Brennan v. Stewart, County, Ill.], 506 U.S. 56, 70, 113 S.Ct. 538, 121 834 F.2d 1248, 1257 (5th Cir.1988) (internal quotation L.Ed.2d 450 (1992) (“Certain wrongs affect more than marks and citations omitted); see also DeBlasio v. Zoning a single right and, accordingly, can implicate more than Bd. of Adjustment, 53 F.3d 592, 601 (3d Cir.1995) (“[I]n one of the Constitution’s commands. Where such the context of land use regulation, that is, in situations

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where the governmental decision in question impinges addition to their right in common with the general public upon a landowner’s use and enjoyment of property, a to use them. Generally, the most important of these land-owning plaintiff states a substantive due process private rights is the access to and from the highway or claim where he or she alleges that the decision limiting street.”); State v. Meyer, 403 S.W.2d 366, 370 the intended land use was arbitrary or capricious.”). (Tex.1966); Lethu Inc. v. City of Houston, 23 S.W.3d 482, 485 (Tex.App.—Houston [1st Dist.] 2000, no pet.); State [10] Substantive due process analysis is appropriate only in v. Northborough Ctr., Inc., 987 S.W.2d 187, 190 cases in which government arbitrarily abuses its power to (Tex.App.—Houston [14th Dist.] 1999, pet. denied). As deprive individuals of constitutionally protected rights. the district court found, “Simi’s western boundary is the Therefore, recognizing that reliance on substantive due same as the Hermann–Fannin–County–City eastern process must be taken with the “utmost care,” Collins v. boundary; they abut by definition.” Therefore, if Simi is City of Harker Heights, 503 U.S. 115, 125, 112 S.Ct. correct in its assertion that no park exists or has ever 1061, 117 L.Ed.2d 261 (1992), we emphasize the existed, its property unquestionably abuts the Fannin particularly odd factual situation in this case, and the Street right-of-way, and the County’s interference with length and degree of governmental abuse and, thus, limit this access is a violation of Texas law.14 our holding to the type of blatant governmental interference with property rights that is now before us.

B. The Substantive Due Process Violation [19] A. The Constitutional Right at Issue Satisfied that the County’s blockage of access implicates a constitutionally *251 protected property [11] [12] To prevail on a substantive due process claim, Simi right, we must ask next whether this denial is rationally must first establish that it held a constitutionally protected related to a legitimate governmental interest. See FM property right to which the Fourteenth *250 Prop., 93 F.3d at 174. “The question is only whether a Amendment’s due process protection applies. See Spuler rational relationship exists between the [policy] and a v. Pickar, 958 F.2d 103, 106 (5th Cir.1992) (citing Baker conceivable legitimate objective. If the question is at least v. McCollan, 443 U.S. 137, 146–47, 99 S.Ct. 2689, 61 debatable, there is no substantive due process violation.” L.Ed.2d 433 (1979)); see also Hidden Oaks, 138 F.3d at Id. (alteration in original) (citations omitted). Even under 1046 (“In order to assert a violation of this amendment, this low threshold, we are unpersuaded that a rational one must at least demonstrate the deprivation of a basis exists to justify the County’s interference with protected property interest established through some Simi’s property rights. independent source such as state law.” (internal quotation marks and citations omitted)). The nature of the property In brief, it is apparent from the record that the County interest therefore must be determined by Texas law. See cannot demonstrate that a five-foot park ever existed in Spuler, 958 F.2d at 106; see also Hidden Oaks, 138 F.3d between Fannin Street and the Simi Property. Further, we at 1046 (“Under this analysis, the hallmark of property ... can ascertain no rational reason for the County to deny is an individual entitlement grounded in state law, which abutting owners access to the street when the City of cannot be removed except for cause.” (internal quotation Houston now has complete jurisdiction over Fannin marks and citations omitted)). Street. Most troubling, however, the record reflects what the district court found to be an illegitimate plan to benefit [13] [14] [15] [16] [17] [18] Under Texas law, this first issue is the private interests of Hofheinz–Smith whose properties resolved in Simi’s favor. “It is the settled rule in this state were financially benefitted by the denial of access to the that an abutting property owner possesses an easement of other properties abutting Fannin Street. As will be access which is a property right; that this easement is not discussed in detail below, the evidence demonstrates that limited to a right of access to the system of public roads; the County acted arbitrarily in inventing a park and, thus, and that diminishment in the value of property resulting acted without a rational basis in depriving Simi of a from a loss of access constitutes damage.” State v. Heal, constitutionally protected interest. 917 S.W.2d 6, 9 (Tex.1996) (internal quotation marks omitted) (quoting DuPuy v. City of Waco, 396 S.W.2d The dispositive question in this case is whether or not 103, 108 (Tex.1965)); see also City of Beaumont v. there ever was a park. The district court found that the Marks, 443 S.W.2d 253, 255 (Tex.1969) (“It is well County had never established a park. We agree. settled that abutting property owners ... have certain property rights in existing streets and highways in First, the County has failed to provide any official © 2015 Thomson Reuters. No claim to original U.S. Government Works. 10 Simi Inv. Co., Inc. v. Harris County, Tex., 236 F.3d 240 (2000)

documentation of the existence of a park. None of the five 1970, writ ref’d n.r.e.). As a procedural matter, we find surveys included in the record shows any sign of a county that the County has waived this issue for purposes of res park. The 1978 survey prepared by R.A. Peyton & judicata as it inexplicably failed to raise this argument Associates for the City of Houston shows an eight-inch until six months after the district court’s Interlocutory water main crossing Fannin Street without reference to an Judgment and three years after the initial complaint.16 intervening county park. The 1988 survey prepared for However, as the case provides a discussion about the the Holly Hall Home for the Retired, located north of the disputed land, we address its reasoning. Simi Property does not show a park. The 1991 survey prepared by the South Texas Surveying Associates Inc. Lovett involved a suit by landowners whose property shows Simi’s property directly abutting Fannin Street. overlapped some of the current Simi Property. These The 1993 survey prepared by PGAL Engineering for landowners sought a mandatory injunction against the METRO in order to install a sidewalk on the strip makes County to remove a six-foot chain-link fence, which ran no mention of a county park. Finally, in 1996, Karen Rose along the property line and separated the Fannin Street Engineering & Surveying completed a survey that shows right-of-way and their properties. See id. at 406. The court the east line of the Fannin Street right-of-way and the denied the request for an injunction finding that: (1) Simi property line to be the same. All of the above Fannin Street did not abut the landowners’ property; (2) a surveys were signed and sealed by registered professional 16.6 foot strip of land intervened between Fannin Street surveyors. and the landowners’ property; (3) neither the deed nor the City of Houston had dedicated the 16.6 feet of land as These surveys also support Simi’s claim that the Fannin being used for street purposes; and (4) there was no taking Street right-of-way has always abutted the eastern of land under Article I, Section 17 of the Texas properties, including the Simi Property. The district court Constitution. See id. at 406–07. found that the Hermann Hospital Estate deed determined the proper boundaries of the right-of-way. The deed This holding, while seemingly supportive of the County’s provided that the Fannin right-of-way would run along the claim, fails to carry the argument. First, we note that the east side of the Astrodome property with “the remaining Lovett court affirmed the lower court’s decision which, as western portion of said Property to be used for street the Lovett court noted, did not include any findings of fact purposes or included in a park and stadium site lying or conclusions of law.17 Second and more important for along the West side of said Property.” Under this deed, no our purposes, no showing was made that any county park parkland was reserved on the east of Fannin Street, and existed, or even that the County argued that a park existed the right-of-way apparently was intended to extend to on the land. All that Lovett proves is that, as of 1970, the Simi’s property line. No County Commissioners order County held ownership to the eastern part of Fannin changed this initial understanding of the right-of-way.15 In Street, a conclusion with which all parties agree. Third, fact, this understanding was confirmed when the County the Lovett decision supports the contention that the Fannin moved back the fences to the existing property line Street right-of-way (if not *253 the street) extended to the abutting what is now Simi’s property. boundary of the Simi Property. As this is where the disputed fence was placed, it is apparent the county land In contrast, the sole descriptive evidence presented by the abuts the Simi Property. Finally, the state law takings County was the altered version of the 1961 unsigned and holding is irrelevant to our analysis involving the unofficial plat. The altered version of the plat is of *252 existence of a substantive due process violation. limited persuasive authority because it provides no information about the purpose or date of the alteration, Even accepting the factual findings of the Lovett court, and includes the language “location questionable” to the issue left open is what happened to the 16.6 foot strip denote the uncertain placement of Fannin Street. Without once the County yielded jurisdiction over Fannin Street to some justification for why a five-foot setoff was created the City of Houston in 1974. It is undisputed that Fannin just south of the Hofheinz–Smith land, conveniently Street was ceded to the City, but there is no record that in blocking all of the other property owners, we are doing so, the County retained an interest in a remaining compelled to find that this plat cannot carry the burden of five-foot strip of land. Once the City of Houston took establishing the County’s park. responsibility for the street and the accompanying traffic and maintenance responsibilities, we are hard pressed to [20] [21] [22] [23] [24] The County also relies on Lovett v. find a reason for the County’s retention of five feet out of County of Harris, a Texas Court of Civil Appeals case the original 16.6 feet of land. that decided an earlier dispute about this strip of land. See 462 S.W.2d 405 (Tex.Civ.App.—Houston [1st Dist.] Furthermore, the County’s claim that a park has always

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existed is belied by the fact that the park has not been damaging to the County’s argument, the only basis in the treated as such by the County. City gas lines, water lines, record to explain the County’s interference with access and a sidewalk were all constructed on the park without appears to be that—as the district court recognized—this receiving proper authorization or an easement from the impediment would benefit the privately held County. As the district court found in its “Chronology”: Hofheinz–Smith properties and the HSA.

The County and Simi Investment The record clearly suggests that creation of a park worked agree that the County cannot sell or to enhance the value of the Hofheinz–Smith properties.18 otherwise encumber its park land As the district court found, “interestingly, *254 that unless the encumbrance is ridiculously narrow park limits the access of only those approved by Commissioners Court property owners who would compete with the Order with public notice under a Hofheinz–Smith interests.” Simi, 13 F.Supp.2d at 607. state statute. The County and Simi Proof of this influence began in 1964 when the County Investment agree that no denied Texaco the right of access to Fannin Street on the Commissioners Court Order can be basis of Hofheinz’s objection. Furthermore, we note that found authorizing Entex, Houston, the original request to gain access to the street was denied or METRO to construct facilities not because of the County’s own claim to the land or an on the property and further, that assertion of a park, but because of Hofheinz’s erroneous there is no evidence that the County assertion that HSA owned the strip of land. complied with the statutory notice requirements to convey an interest That the County acted to benefit solely private interests in this property to Entex, the City, does not necessarily demonstrate a substantive due or METRO. process violation. For substantive due process purposes, “the true purpose of the [policy], (i.e., the actual purpose Simi, 13 F.Supp.2d at 611–12. Further, owners of other that may have motivated its proponents, assuming this can properties along Fannin Street have developed their land be known) is irrelevant for rational basis analysis.” FM in a manner that demonstrates that no park exists. For Prop., 93 F.3d at 174. However, the County failed to put example, the owners of the Holly Hall tract north of the forth any alternative rational basis for the continued Simi Property along Fannin Street developed their interference with private property rights.19 Certainly in property with a twenty-five foot setback from the street, 1994, twenty years after the County had ceded control pursuant to local ordinance. This twenty-five foot setback over Fannin Street to the City of Houston, there was no would not have been necessary if a five-foot park rational basis for blocking access to the street. Once intervened between the street and the property. jurisdiction shifted to the City, whatever interests in maintaining traffic control or other governmental From the foregoing, we agree with the district court that responsibilities that could be hypothesized to justify “Harris County has no interest in an intervening 5–foot by interference with access to Fannin Street disappear. 3,000–foot strip east of Fannin Street and west of Without a park and without a rational basis for impeding Knight’s Main Street Addition [the Simi Property] and access, the County’s arguments fail to survive even a Holly Hall property, making illegal its interference with rational basis review. the owners’ relation to the City of Houston and Fannin [25] Street.... [and] Harris County has ceded to the city of We, therefore, affirm the district court’s findings that Houston all of its right, title, and interest in the the County acted arbitrarily and without a legitimate eastern-most 100 feet of land conveyed to it by the governmental purpose. We hold that the invention of a Hermann Estate.” Simi, 13 F.Supp.2d at 612. park solely to deny private property holders lawful access to an abutting street is an abuse of governmental power, Measured against the rational basis test, a nonexistent which on this peculiar factual foundation rises to the level park used by County officials to interfere with private of a substantive due process violation. Having property interests is clearly arbitrary, capricious, and successfully pled a deprivation of a constitutional right violative of due process. “While the ‘rational basis’ under § 1983, Simi is entitled to the relief granted by the standard is the least demanding test used by the courts to district court. uphold [governmental] action, it is not ‘toothless.’ ” Berger v. City of Mayfield Heights, 154 F.3d 621, 625 (6th Cir.1998) (quoting Mathews v. Lucas, 427 U.S. 495, 510, 96 S.Ct. 2755, 49 L.Ed.2d 651 (1976)). More V. ATTORNEYS’ FEES © 2015 Thomson Reuters. No claim to original U.S. Government Works. 12 Simi Inv. Co., Inc. v. Harris County, Tex., 236 F.3d 240 (2000)

[26] [27] It is undisputed that attorneys’ fees are provided Simi brought its initial suit in state court and did not under 42 U.S.C. § 1988 *255 for litigants who allege a § 1983 violation. Without a demonstration that successfully bring § 1983 claims. See 42 U.S.C. § 1988 this state suit was part of the enforcement of the § 1983 (“[T]he court, in its discretion, may allow the prevailing claim, legal fees relating to that litigation cannot be party ... a reasonable attorney’s fee as part of the costs.”). recovered under § 1988. Following Brantley, we find that “We review a district court’s award of attorneys’ fees for the state suit was not a part of the enforcement of § 1983, abuse of discretion, and its factual findings relating to the and therefore, attorneys’ fees relating to the state action award of attorneys’ fees for clear error.” Freiler v. are not recoverable. See Brantley, 804 F.2d at 325. Tangipahoa Parish Bd. of Educ., 185 F.3d 337, 348 (5th Cir.1999). Having found that Simi has proven a We are also concerned that the district court may have successful § 1983 claim predicated on substantive due based its award on a record that includes billing reports of process, we agree that Simi is entitled to receive Simi’s counsel dating back to 1990, well before the state attorneys’ fees.20 and federal lawsuits were initiated. These records, and the district judge’s assertion at the hearing on attorneys’ fees [28] However, we find that the district court abused its that counsel had worked on the case for six years, discretion in awarding attorneys’ fees based on legal work compels us to find that the district court may have not provided in furtherance of Simi’s § 1983 claim. While awarded an incorrect amount of attorneys’ fees. Further, the record does not permit us to determine precisely what the district court apparently calculated the attorneys’ fees factors were controlling in the court’s determination of with interest based on a time frame that may have the fee, our reading of the record leads us to be concerned included the state court proceedings. Because we find that that Simi’s state court legal fees which preceded its the district court abused its discretion in considering amended § 1983 suit21 were included in the calculation. attorneys’ fees not related to the § 1983 action, we vacate the original award and remand it for reconsideration. [29] This court has held that attorneys’ fees resulting from state court litigation that does not seek to enforce federal *256 [30] [31] Having prevailed on appeal, Simi is entitled constitutional rights, but which does precede a successful to legal fees for the appeal. On remand, we also ask the § 1983 suit, are not attorneys’ fees contemplated by § district court to decide on a reasonable fee.22 1988. See Brantley v. Surles, 804 F.2d 321, 325 (5th Cir.1986). This conclusion necessarily follows from the purpose of § 1988, which is to enforce § 1983 or other federal civil rights statutes. Of course, where a state proceeding is a necessary preliminary action to the VI. CONCLUSION enforcement of a federal claim, these attorneys’ fees may be available in some circumstances, subject to the For the above stated reasons, we AFFIRM the judgment discretion of the district court. See Redd v. Lambert, 674 of the district court in all respects, except for the award of F.2d 1032, 1037 (5th Cir.1982); see also Barrow v. Falck, attorneys’ fees, which we VACATE and REMAND for 977 F.2d 1100, 1104 (7th Cir.1992) (“Section 1988 further consideration consistent with this opinion. permits a court to shift to defendant only those legal fees incurred in proceedings to enforce a few listed federal statutes. When proceedings in state courts or agencies are All Citations part of the enforcement of § 1983, then time reasonably devoted to them is compensable.” (citing New York 236 F.3d 240 Gaslight Club, Inc. v. Carey, 447 U.S. 54, 71, 100 S.Ct. 2024, 64 L.Ed.2d 723 (1980))).

1 We are guided through the curious history and development of this particular strip of land by the stipulated record of exhibits which was submitted by the parties and was adopted by the district court as the entire record. On August 12, 1996, the district court entered a Conference Memorandum which stated that the case would be resolved by analyzing the documentary evidence submitted. On September 23, 1996, the district court entered a second Conference Memorandum recording that the parties had stipulated to exhibits 1 through 25 and that the exhibits and other documents submitted would constitute the whole record. On August 26, 1998, the district court allowed Simi to supplement the record with documents not previously turned over by the County. In addition, we rely on the

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“Chronology” included as an addendum to the district court opinion. See Simi Investment Co. Inc. v. Harris County, Tex., 13 F.Supp.2d 603, 609–13 (S.D.Tex.1998) (addendum to opinion).

2 The district court found that “[a]fter exhaustive search by the County and Simi, no later order of the Commissioners Court was found that modified in any way the alignment of the Fannin Street right of way described in the Hermann deed and the commissioners order of December 11, 1961.” Presumably, the original location of the fence denotes the proper right-of-way line.

3 From our review of the record, the 3000–foot measure is an apparent approximation that was adopted by the district court and has been accepted by both parties.

4 The result of the offset is that the Hofheinz–Smith properties are granted full access to Fannin Street, but all properties south of the Hofheinz–Smith land are denied access.

5 The reasoning of the Lovett decision will be discussed in detail infra.

6 Simi owns Lots 1, 2, 3, and 4 in Block 68; Lots 1, 2, 3, 4, 5, and 6 in Block 69; Lots 1, 5, and 6 in Block 70 in Knight’s Main Street Addition.

7 42 U.S.C. § 1983 reads in relevant part:Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.... 42 U.S.C. § 1983 (1994).

8 The County raises a preliminary challenge to the entry of summary judgment based on this stipulated record. We find no merit in this challenge as it is well established that a district court may enter summary judgment after providing notice and instructing the parties to submit all relevant evidence. See Celotex v. Catrett, 477 U.S. 317, 326, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (“[D]istrict courts are widely acknowledged to possess the power to enter summary judgments sua sponte, so long as the losing party was on notice that she had to come forward with all of her evidence.”). In conference, the district court asked the parties to submit all relevant documents and exhibits. It was from this evidentiary basis that the district court decided to grant the request for partial summary judgment. We find no error in these actions.

9 The County challenges these Supplemental Findings as not supported by the evidence. We disagree. From the extensive exhibits and documentary evidence submitted by both parties, the district court could well establish a basis for liability. In short, without proof that a county park ever existed, the County’s justification for interfering with Simi’s access to Fannin Street fails, and becomes an arbitrary and capricious act. We, therefore, find no error in a damages award based on that liability, and find no error in the Supplemental Findings based on the district court’s review of the evidence.

10 The County appeals the Final Judgment issued on April 21, 1999. While not designated as such, we interpret this Final Judgment as a final decision on summary judgment resolving all issues in favor of Simi. Simi had initially moved for partial summary judgment requesting a declaration that the County was interfering with its property. The County cross-moved for summary judgment on this issue. The district court’s Interlocutory Judgment resolved the partial summary judgment motion in Simi’s favor. In its Final Judgment, the district court incorporated the Interlocutory Judgment into its order and resolved all outstanding issues.

11 As stated, Simi opposed removal to federal court on the grounds that a ripe federal takings question was not presented for adjudication. See Williamson County Regional Planning Comm’n v. Hamilton Bank, 473 U.S. 172, 199, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985).

12 Simi’s precise claim is that the County arbitrarily interfered with its property rights, not that the County sought to acquire or regulate the use of the property. Simi argues that in the forty-year history of this strip of land, the County never tried to “take” the Simi Property in a constitutionally significant sense, but rather abused its power to frustrate Simi’s rightful use of that land. Similarly, the County did not seek to condemn Simi’s right of access to the property in an inverse condemnation action. The County has simply wrongfully interfered with Simi’s right of access for no legitimate public purpose.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 14 Simi Inv. Co., Inc. v. Harris County, Tex., 236 F.3d 240 (2000)

13 The recognition that the Takings Clause does not subsume all substantive due process claims does not end the ripeness inquiry. There also must be a final decision from which to appeal. As we stated in John Corp., “a careful analysis must be undertaken” to determine if there has been a final decision, the lack of which would render the claim not ripe. Id. at 584 (“If the Court considered the claim to be a due process, rather than a takings claim, the absence of a final decision still made that claim unripe.”). As the County’s decision to claim ownership of the park has been final for over forty years, and was in 1994 the justification for denying Simi access to Fannin Street, we are persuaded that a final decision has been made.

14 The County’s interference with Simi’s property right of access to the abutting street also provides reason for rejecting another of the County’s procedural arguments—namely that the statute of limitations bars Simi’s claim. Under Texas law, “limitations is not a defense to an action to abate a continuing nuisance.” Stein v. Highland Park Indep. Sch. Dist., 540 S.W.2d 551, 554 (Tex.Civ.App.—Texarkana 1976, writ ref’d n.r.e.); City of Dallas v. Early, 281 S.W. 883 (Tex.Civ.App.—Dallas 1926, writ dism’d). We agree with the district court that Simi has alleged a continuing nuisance, asking for abatement and damages of its denial of access to an abutting street. “A continuing nuisance is a condition of such character that it may continue indefinitely.” Jamail v. Stoneledge Condo. Owners Ass’n, 970 S.W.2d 673, 676 (Tex.App.—Austin 1998, no pet.) (citing 66 C.J.S. NUISANCE § 4 (1950)). “A private nuisance is a nontrespassory invasion of another’s interest in the private use and enjoyment of land.” Id. (citing RESTATEMENT (SECOND) OF TORTS § 821D). In the instant case, the denial of access unreasonably interferes with the rights of property owners. It is therefore a private, continuing nuisance under Texas law, which precludes the statute of limitations defense asserted by the County. The district court did recognize, however, that “limitations may bar the recovery of damages that accrued more than two years before suit”. Simi, 13 F.Supp.2d at 606; see also Stein, 540 S.W.2d at 554 (“[A]ppellant [would not] be barred from recovery of damages for injuries suffered during the two years immediately prior to filing of her suit.”). From our review of the record, it appears that the district court limited its determination of damages to damage occurring within this time period. In the October 29, 1999, hearing on damages, the district court made reference to a four-year time-frame for damages. As the original suit was filed in 1996, the 1999 determination of a four-year time period fits well within the statutory time limit for recovering damages.

15 As the district court recognized, “A county can act only through an official ‘commissioners court order’ to alter a thoroughfare.” Simi, 13 F.Supp.2d at 607 (citing TEX. TRANSP. CODE ANN. § 251.051(b)(2) (1996), which states in relevant part: “A unanimous vote of the commissioners court is required ... to alter a public road, except to shorten it end to end.”). The County has not provided any subsequent Commissioners Court order suggesting that the Fannin Street right-of-way was ever altered.

16 Nevertheless, the County contends that res judicata bars Simi’s claim because this prior state court judgment supports the County’s ownership of the strip of land. Again, we need not reach the merits of this claim, because the County failed to raise this issue as an affirmative defense. “Res judicata is an affirmative defense which is considered waived if not specifically pleaded in the answer or in an amended answer permitted under FED.R.CIV.P. 15(a).” Banc One Capital Partners Corp. v. Kneipper, 67 F.3d 1187, 1199 (5th Cir.1995); Mozingo v. Correct Mfg. Corp., 752 F.2d 168, 172 (5th Cir.1985) (“[R]es judicata, and hence collateral estoppel, is an affirmative defense which if not pled is considered waived.”). District courts, of course, have discretion to allow late amendments “when no prejudice would result to the other party, and the ends of justice so require.” See Mozingo, 752 F.2d at 172. Our review is under an abuse of discretion standard. See Morgan Guar. Trust Co. v. Blum, 649 F.2d 342, 345–46 (5th Cir. Unit B July 1981). In the instant case, the County did not raise the defense until three years after the original suit was filed and more than six months after the district court resolved the liability issues in its Interlocutory Judgment. We find that the district court did not abuse its discretion in denying the County’s res judicata defense.

17 The Lovett court stated: The appellants, as movants in the trial court, had the burden of proof. No findings of fact or conclusions of law were requested or made, so we cannot say that the trial judge necessarily held with respect to all of these matters as the points of error assert that he did. His decision may well have been based, in part, on the appellants’ failure to sustain their burden of proof as to some of their allegations. Lovett, 462 S.W.2d at 407.

18 Two letters included in the record from County officials support the understanding that the County had interfered with the private property owners to benefit Hofheinz–Smith and the HSA. A March 14, 1985 letter from Richard Doss, County Engineer for the County, to El Franco Lee, Commissioner, stated in relevant part, [T]he lots ... were denied access to Fannin Street to prevent the establishment of businesses that could conceivably compete with the stadium operation. Surely, before any permission were granted the Houston Sports Association should be consulted. © 2015 Thomson Reuters. No claim to original U.S. Government Works. 15 Simi Inv. Co., Inc. v. Harris County, Tex., 236 F.3d 240 (2000)

Similarly, an August 20, 1991 letter from Ricardo Rivero, Technical Assistant, to County Engineer Terry A. Anderson reiterated this understanding, “[T]he lots and streets in Knights Main Street Addition [the Simi Property] were denied access to Fannin Street to prevent the establishment of businesses which conceivably would compete with the operation of the Dome stadium.” While we recognize that these letters are not binding on the County, they are probative, supporting the district court’s Supplemental Finding that “[t]he [County’s] interference had no relation to a legitimate governmental responsibility of the county whether characterized as public health, safety, or general welfare.”

19 We note that a second letter from Richard Doss to El Franco Lee on November 14, 1985, provides a mixed private/public reason for the denial of access, and comes the closest to proving a legitimate reason for the denial of access. In that letter, Doss discusses the fence that abuts the Simi Property: “The fence was erected to minimize interruption to traffic on Fannin en route to the stadium and to prevent business competition with the stadium.” While the latter purpose is clearly illegitimate (benefitting purely private interests), the former could offer the requisite “rational” justification for impeding access. The flaw, however, is that this letter only addresses the fence abutting the Simi Property, and makes no mention of an intervening county park. As all parties have conceded that the County once owned the eastern property up to the Simi property line, this letter does little to demonstrate that a park existed and, in fact, seems to support Simi’s theory that the right-of-way has always abutted its property. The question we cannot answer is what legitimate interest the County had in maintaining that fence more than a decade after it had ceded control of the Fannin Street right-of-way to the City of Houston.

20 It is apparent from the record that, in considering the award, the district court explained its reasons for the award and complied with the requirements of Johnson v. Georgia Highway Express, 488 F.2d 714, 717–19 (1974). Our sole concern is the timetable used to judge the attorneys’ fees.

21 As stated, Simi’s § 1983 claim was first raised in its November 18, 1996, first amended complaint.

22 We find no merit in the County’s argument that the district court exceeded its authority in awarding expert witness fees. We review awards of expert fees under an abuse of discretion standard. See Holmes v. Cessna Aircraft Co., 11 F.3d 63, 64 (5th Cir.1994). The district court found in its Supplemental Findings that “the county persisted in defending its wrongful interference claim in bad faith; long after title questions had been clearly answered from the county’s own records, it used this litigation to vex and oppress Simi.” Under Alyeska Pipeline Service Co. v. Wilderness Society, courts may award expert fees in excess of the statutory limitations when “the losing party has ‘acted in bad faith, vexatiously, wantonly, or for oppressive reasons.’ ” 421 U.S. 240, 258–59, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975); see also United States ex rel Wallace v. Flintco Inc., 143 F.3d 955, 972 n. 14 (5th Cir.1998). The district court found that the County acted vexatiously and oppressively, and from the record, we cannot conclude that such a finding was an abuse of discretion. We therefore affirm the award of expert fees.

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 16 Society of Separationists, Inc. v. Herman, 959 F.2d 1283 (1992) 60 USLW 2710

959 F.2d 1283 United States Court of Appeals, Fifth Circuit. [2] Injunction SOCIETY OF SEPARATIONISTS, INC., Clear, likely, threatened, anticipated, or Plaintiffs–Appellants, intended injury v. Guy HERMAN, Judge of the Travis County Court To obtain equitable relief for past wrongs, at Law, et al., Defendants–Appellees. plaintiff must demonstrate either continuing harm or real and immediate threat of repeated No. 90–8660. | April 17, 1992. injury in the future. U.S.C.A. Const. Art. 3, § 2, cl. 1. Prospective juror who had been imprisoned for contempt when she refused to swear or affirm to tell the truth 48 Cases that cite this headnote brought civil rights action against judge and others. The United States District Court for the Western District of Texas, Walter S. Smith, Jr., J., dismissed action. Prospective juror appealed. The Court of Appeals, 939 F.2d 1207, affirmed in part and remanded in part. [3] Civil Rights Rehearing en banc was ordered, 946 F.2d 1573, and Injury and Causation Patrick E. Higginbotham, Circuit Judge, held that prospective juror lacked standing to seek prospective Prospective juror who had been imprisoned for relief. contempt because she refused on religious grounds either to swear or to affirm to answer Affirmed. voir dire questions truthfully lacked standing to obtain prospective relief; prospective juror Wiener, Circuit Judge, filed a concurring and dissenting suffered no continuing harm as a result of opinion. judge’s actions nor could she show real and immediate threat that she would again appear Goldberg, Circuit Judge, filed a dissenting opinion. before same judge as prospective juror and that same judge would again exclude her from jury service and jail her for contempt. U.S.C.A. Const. Art. 3, § 2, cl. 1.

West Headnotes (5) 20 Cases that cite this headnote [1] Federal Civil Procedure In general; injury or interest Federal Civil Procedure Causation; redressability [4] Courts Injunction by United States Court Against At the least, standing insists that complaint of Proceedings in State Court injury be real and immediate rather than conjectural, that injury be traceable to Principles of comity and federalism, in addition defendant’s allegedly unlawful conduct, and that to Article III’s jurisdictional bar, mandate that relief from injury be likely to flow from Court of Appeals intervene in management of favorable ruling. U.S.C.A. Const. Art. 3, § 2, cl. state courts only in the extraordinary case. 1. U.S.C.A. Const. Art. 3, § 2, cl. 1.

41 Cases that cite this headnote 1 Cases that cite this headnote

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Tab E-14 Society of Separationists, Inc. v. Herman, 959 F.2d 1283 (1992) 60 USLW 2710

Robin Murray–O’Hair and the Society of Separationists alleged that a state judge excluded O’Hair from a venire and held her in contempt because she refused on religious grounds either to swear or to affirm to answer voir dire [5] Civil Rights questions truthfully. They sought damages as well as Third Party Rights; Decedents declaratory and injunctive relief for violating their rights under the Free Exercise Clause of the First Amendment. National atheist organization dedicated to The district court granted defendants’ motion for separation of church and state lacked standing to summary judgment, and a divided panel of this court seek prospective relief which would dictate how agreed that immunity barred an award of damages. The state judges should handle prospective juror’s panel granted a declaratory judgment, however, which refusal to swear or affirm to tell the truth in the dictated how state judges should handle a prospective future; organization failed to show that its juror’s refusal to swear or affirm in the future. We granted members would otherwise have standing to sue rehearing en banc and, without reaching the underlying in their own right since other members were not merits, conclude that plaintiffs lack standing to seek a aggrieved by particular judge’s exclusion of one prospective remedy. member from venire, it appeared likely that organization’s claim would require participation of individual members, and there was neither certifiable class of similarly situated persons nor real and immediate threat to such a class. I. U.S.C.A. Const. Art. 3, § 2, cl. 1. O’Hair is an atheist and a member of the Society of Separationists, a national atheist organization dedicated to 15 Cases that cite this headnote the separation of church and state. In December of 1987, she was summoned and appeared for jury duty in Travis County, Texas. A deputy court clerk told the prospective jurors to rise and take the oath which Texas requires before voir dire questioning. O’Hair objected to taking an oath, explaining that she was an atheist and could not Attorneys and Law Firms participate in such religious exercises. Judge Guy Herman called her to the bench and told her that in lieu of an oath, *1283 John W. Vinson, Austin, Tex., for she could affirm that she would answer the voir dire plaintiffs-appellants. questions truthfully. She stated that she also considered an affirmation religious and therefore could not affirm. Judge *1284 Ken Oden, Travis County Atty., James W. Collins, Herman told her to be seated while the other jurors were Director, Civ. Div., Austin, Tex., for sworn in. He then directed her to his regular courtroom defendants-appellees. for a full hearing. Javier P. Guajardo, Asst. Atty. Gen., Renea Hicks, Sp. Asst. Atty. Gen., Dan Morales, Atty. Gen., Austin, Tex., At this hearing, O’Hair was accompanied by her attorney. for intervenor State of Tex. The judge said that he respected O’Hair’s constitutional right to freedom of religion and therefore would “offer an Appeal from the United States District Court for the affirmation without any recognition or any statement, any Western District of Texas. reference to God or anything of that nature.” O’Hair again refused, repeating her belief that an affirmation was just Before POLITZ, Chief Judge, GOLDBERG, KING, as religious as an oath. The judge then explained that GARWOOD, JOLLY, HIGGINBOTHAM, DAVIS, O’Hair could be held in civil contempt if she refused and JONES, SMITH, DUHÉ, WIENER, BARKSDALE, that he was not asking her to take an oath and swear to EMILIO M. GARZA and DeMOSS, Circuit Judges. God as to her qualifications for jury service. He was only asking her to affirm that she would give true answers to Opinion whatever questions were propounded to her. O’Hair replied that an affirmation was in her understanding a PATRICK E. HIGGINBOTHAM, Circuit Judge: religious statement. No specific form of affirmation was tendered by Judge Herman. The judge did not ask O’Hair what form of assurance of truthfulness would meet her © 2015 Thomson Reuters. No claim to original U.S. Government Works. 2 Society of Separationists, Inc. v. Herman, 959 F.2d 1283 (1992) 60 USLW 2710

objections, and O’Hair offered none. When she continued from a favorable ruling. Id. to refuse to affirm, Judge Herman found her in civil [2] contempt. She was jailed and released on bond In City of Los Angeles v. Lyons, 461 U.S. 95, 103 S.Ct. approximately six hours later. O’Hair filed a petition in 1660, 75 L.Ed.2d 675 (1983), the Supreme Court made Travis County district court for a writ of habeas corpus, clear that plaintiffs may lack standing to seek prospective which was rendered moot when Judge Herman commuted relief even though they have standing to sue for damages. her contempt sentence to the six hours served. Lyons was a Los Angeles area resident who was subjected to a chokehold by city police officers when he O’Hair and the Society of Separationists then sued Judge was stopped for a traffic violation. He obtained a Herman, Travis County Judge Bill Aleshire, Travis preliminary injunction which prohibited the police County, the “Travis County court system,” and the clerk, department from using the chokehold unless death or sheriff, and court bailiffs of Travis County in federal serious bodily injury were threatened. The Court reversed. district court. They asked the court, inter alia, to “declare It observed that “ ‘past exposure to illegal conduct does the juror oath practice as engaged in by defendants (a not in itself show a present case or controversy regarding judicial coercion of a religious exercise) *1285 to be injunctive relief ... if unaccompanied by any continuing, unconstitutional under the First Amendment” and to present adverse effects.’ ” Lyons, 103 S.Ct. at 1665 “grant injunctive relief, both temporary and permanent, (quoting O’Shea v. Littleton, 414 U.S. 488, 495–96, 94 against the continuation of such unconstitutional jury oath S.Ct. 669, 676, 38 L.Ed.2d 674 (1974)). To obtain practices by judges and other public officials.” They also equitable relief for past wrongs, a plaintiff must sought $2 million in actual damages and $3 million in demonstrate either continuing harm or a real and punitive damages.1 immediate threat of repeated injury in the future. Lyons lacked standing to obtain an injunction because it was The district court granted defendants’ motion for entirely speculative that police officers would stop him summary judgment. A divided panel of this court again and choke him without provocation. Similar affirmed in part, reasoning that all of the defendants other reasoning has been applied to suits for declaratory than Judge Herman were either immune, were nonexistent judgments. Ashcroft v. Mattis, 431 U.S. 171, 97 S.Ct. entities, or were otherwise improperly named. They found 1739, 52 L.Ed.2d 219 (1977); Golden v. Zwickler, 394 Judge Herman immune from suit for damages, but U.S. 103, 89 S.Ct. 956, 22 L.Ed.2d 113 (1969). recognized that judicial immunity did not bar prospective [3] equitable relief. They concluded that the judge erred in O’Hair lacks standing to obtain prospective relief for debating the correctness of O’Hair’s religious beliefs the same reason that Lyons did. She suffers no continuing rather than asking her what sort of pledge she could make harm as a result of Judge Herman’s actions. Nor can she to commit herself to tell the truth. Although they found show a real and immediate threat that she will again injunctive relief unnecessary, they issued a declaratory appear before Judge Herman as a prospective juror and judgment requiring judges to ask prospective jurors who that Judge Herman will again exclude her from jury object to the oath or affirmation requirement what form of service and jail her for contempt. There are over half a serious public commitment would accord with their million residents in Travis county and twenty trial judges. constitutionally protected beliefs. The chance that O’Hair will be selected again for jury service and that Judge Herman will be assigned again to oversee her selection as a juror is slim. Judge Herman’s regular duties do not include such matters. Even if O’Hair were likely to *1286 appear before Judge Herman in the II. future, there is little indication that they would interact in [1] the same fashion. It is clear that the judge was not acting Article III of the Constitution confines the federal pursuant to any state or local rule or statute, or even some courts to deciding actual cases and controversies. Allen v. personal policy, when he failed to ask O’Hair if there Wright, 468 U.S. 737, 104 S.Ct. 3315, 3324, 82 L.Ed.2d were alternative ways in which she would be willing to 556 (1984). The rule that litigants must have standing to commit herself to tell the truth.2 Nor is there any reason to invoke the power of the federal courts is perhaps the most believe that O’Hair was acting on religious scruples in important doctrine stemming from the case or controversy failing to propose such an alternative. Whatever the requirement. Id. Standing defies precise definition, but at abstract merit of O’Hair’s complaint, it springs from a the least insists that the complained of injury be real and lack of communication between judge and prospective immediate rather than conjectural, that the injury be juror that is inherently contextual and episodic. traceable to the defendant’s allegedly unlawful conduct, and that relief from the injury must be likely to follow © 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 Society of Separationists, Inc. v. Herman, 959 F.2d 1283 (1992) 60 USLW 2710

This court and others have often held that plaintiffs lack monitoring of the operation of state court functions that is standing to seek prospective relief against judges because antipathetic to established principles of comity.” 414 U.S. the likelihood of future encounters is speculative. In at 501, 94 S.Ct. at 679. Adams v. McIlhany, 764 F.2d 294, 299 (5th Cir.1985), a Texas judge held a woman in contempt and jailed her Even if we were inclined to fan cold embers for the heat because she had impugned his integrity in a letter. We of a present case or controversy, we would be loath to found the judge immune from suit for damages and held award *1287 declaratory relief on the facts of this case. that no case or controversy existed with respect to The Court has observed on more than one occasion that declaratory or injunctive relief. We explained that it was “[t]he Declaratory Judgment Act was an authorization, most unlikely that the plaintiff would again come into not a command.” Public Affairs Associates, Inc. v. conflict with the judge in similar circumstances, and with Rickover, 369 U.S. 111, 112, 82 S.Ct. 580, 582, 7 L.Ed.2d the same results. In Schepp v. Fremont County, 900 F.2d 604 (1962); Eccles v. Peoples Bank, 333 U.S. 426, 431, 1448, 1452–53 (10th Cir.1990), the Tenth Circuit 68 S.Ct. 641, 644, 92 L.Ed. 784 (1948). “Especially confronted a § 1983 suit against a state judge who where governmental action is involved, courts should not revoked plaintiff’s probation. The court held that the intervene unless the need for equitable relief is clear, not judge was immune from suit for damages and that there remote or speculative.” Eccles, 333 U.S. at 431, 68 S.Ct. was no actual controversy warranting the issuance of at 644. There is nothing to indicate, and we decline to declaratory relief. The probability that plaintiff would presume, that Judge Herman will fail to take cognizance ever again be subject to probation revocation proceedings of applicable constitutional principles in future before this judge was extremely remote. Similar cases are proceedings. Cf. Hamill v. Wright, 870 F.2d 1032, legion. See e.g., Penthouse Int’l, Ltd. v. Meese, 939 F.2d 1035–36 (5th Cir.1989). 1011, 1019–20 (D.C.Cir.1991); Johnson v. Moore, 948 F.2d 517, 521–22 (9th Cir.1991); Foster v. Basham, 932 There is, of course, a practical effect of the panel’s F.2d 732 (8th Cir.1991); Northern Virginia Women’s decision. Issuing a declaratory judgment would support an Medical Center v. Balch, 617 F.2d 1045, 1048–49 (9th award of attorney’s fees against Judge Herman under § Cir.1980); see also Brown v. Edwards, 721 F.2d 1442, 1988. This is an “end run” around a defendant’s 1446–47 (5th Cir.1984). immunity. It is appropriate that we recognize that reality in determining whether declaratory relief is warranted. [4] We must not shrink from our duty to decide a See Green v. Mansour, 474 U.S. 64, 106 S.Ct. 423, 428, controversy, but that duty includes faithful obedience to 88 L.Ed.2d 371 (1985); Hewitt v. Helms, 482 U.S. 755, the limits of our mandate. It is beyond our mandate to 107 S.Ct. 2672, 2677, 96 L.Ed.2d 654 (1987). We should issue prospective relief every time a state actor arguably be hesitant to inhibit state judges from exercising the infringes a constitutional right. As the Supreme Court said discretion that comes with their job by imposing costs in Lyons, “[i]n exercising their equitable powers federal solely to protect against a hypothetical risk of future courts must recognize ‘the special delicacy of the harm. The practical concerns, combined with concerns of adjustment to be preserved between federal power and equity, comity, and federalism, tip the balance decisively State administration of its own law.’ ” 103 S.Ct. at 1670. in favor of restraint. Principles of comity and federalism, in addition to Article III’s jurisdictional bar, mandate that we intervene in the In finding that O’Hair lacks standing to obtain prospective management of state courts only in the extraordinary case. relief, we need not embrace or disturb our decision in Id.; Pulliam v. Allen, 466 U.S. 522, 104 S.Ct. 1970, 1979, O’Hair v. White, 675 F.2d 680 (5th Cir.1982) (en banc). 80 L.Ed.2d 565 (1984). There we found that Madalyn Murray O’Hair had standing to assert that § 4 of the Texas Constitution The Court has been reluctant to superintend state judges excluded her from jury service because of her lack of in the past. In O’Shea v. Littleton, 414 U.S. 488, 94 S.Ct. religious belief. A state law that on its face arguably 669, 38 L.Ed.2d 674 (1974), nineteen black residents of excluded atheists from serving on juries clearly presented Cairo, Illinois requested an injunction against a state an ongoing threat to Madalyn O’Hair’s right not to be judge and magistrate who they alleged had intentionally excluded from jury service on religious grounds. Likewise discriminated against them in setting bond and courts have held that members of racial minorities have sentencing. The Court held that the complaint failed to standing to obtain prospective relief from jury selection allege a case or controversy. It refused to assume that systems that are consistently administered so as to plaintiffs would violate the law, be charged, tried, and exclude them from jury service. See, e.g., Carter v. Jury subjected to discrimination by defendants. It emphasized Commission of Greene County, 396 U.S. 320, 90 S.Ct. that the requested injunction “would constitute a form of 518, 24 L.Ed.2d 549 (1970) (blacks had standing to obtain

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4 Society of Separationists, Inc. v. Herman, 959 F.2d 1283 (1992) 60 USLW 2710

injunction when statistics clearly indicated that blacks share O’Hair’s views of the oath or affirmation were being systematically excluded in jury selection requirement is an insufficient predicate for the conclusion process); Ciudadanos Unidos de San Juan v. Hidalgo that they themselves are facing injury. Warth v. Seldin, County Grand Jury Commissioners, 622 F.2d 807 (5th 422 U.S. 490, 502, 95 S.Ct. 2197, 2207, 45 L.Ed.2d 343 Cir.1980) (Mexican–Americans had standing to obtain (1975). We cannot exercise jurisdiction merely because prospective relief when jury commissioners O’Hair and the Society purport to represent “all systematically excluded them from grand jury service individuals eligible for jury service who have deep-seated over a ten year period). convictions against mouthing any religious dogma as a condition to jury service.” See Plaintiff’s Complaint at 1. This case is of an entirely different stripe. O’Hair In Golden v. Zwickler, supra, the Court rejected the challenges no Texas law or policy. The state of Texas was argument that Zwickler had a right to “a general not even named as a defendant. O’Hair makes no showing adjudication of unconstitutionality in his own interest as that Judge Herman or other judges in Travis County or well as that of others who would with like anonymity elsewhere in Texas deliberately apply the oath or practice free speech in a political environment.” 394 U.S. affirmation requirement so as to exclude atheists. Instead, at 110, 89 S.Ct. at 960. Constitutional questions must be she objects to the specific events which led to her presented in the context of specific live grievances. Id. incarceration by a single judge whom she is unlikely to There is no live grievance here. encounter again and whose administration of the oath or affirmation requirement is likely to vary in different Second, it appears likely that the Society’s claim would circumstances. require the participation of individual members. It is often difficult for religious organizations to assert free exercise The Supreme Court recently alluded to a similar situation claims on behalf of their members because the religious in Powers v. Ohio, 499 U.S. 400, 111 S.Ct. 1364, 1373, beliefs and practices of the membership differ. See Harris 113 L.Ed.2d 411 (1991). In holding that a defendant has v. McRae, 448 U.S. 297, 100 S.Ct. 2671, 2690, 65 standing to object to race-based exclusions of jurors L.Ed.2d 784 (1980).3 Nothing in this record supports the through peremptory challenges, the Court noted the notion that Society members share O’Hair’s views barriers to such suits by an excluded juror. It explained regarding the religious nature of an affirmance. that “[u]nlike a challenge to systematic practices of the Speculation that this is so would be perverse indeed in a jury clerk and commissioners such as we considered in free exercise case. This is a fact intensive case—an Carter, it would be difficult for an individual juror to episodic exchange between a single venire person and a show a likelihood that discrimination at the voir dire stage state trial judge. will recur.” Id., 111 S.Ct. at 1373 (citing Lyons ). Absent evidence of some systematic practice, an excluded juror This case differs from those in which the Court has found generally lacks standing to seek prospective relief, since that the presence of a class generates a continuing the juror’s repeated contacts are with the system itself and controversy even though the claim of the named plaintiff not any individual players within it. has become moot. See e.g., County of Riverside v. McLaughlin, 500 U.S. 44, 111 S.Ct. 1661, 114 L.Ed.2d 49 [5] *1288 The presence of the Society of Separationists in (1991); United States Parole Comm’n v. Geraghty, 445 this suit does not alter our conclusion. “An association has U.S. 388, 100 S.Ct. 1202, 63 L.Ed.2d 479 (1980); Sosna standing to bring suit on behalf of its members when: (a) v. Iowa, 419 U.S. 393, 95 S.Ct. 553, 42 L.Ed.2d 532 its members would otherwise have standing to sue in their (1975). Here, there is neither a certifiable class of own right; (b) the interests it seeks to protect are germane similarly situated individuals nor a real and immediate to the organization’s purpose; and (c) neither the claim threat to such a class. Even if there were, they would have asserted nor the relief requested requires the participation to demonstrate that a case or controversy existed at the of individual members in the lawsuit.” Hunt v. time the complaint was filed. Riverside, 111 S.Ct. at 1667. Washington State Apple Advertising Comm’n, 432 U.S. O’Hair and the Society filed their complaint two years 333, 343, 97 S.Ct. 2434, 2441, 53 L.Ed.2d 383 (1977). after O’Hair’s encounter with Judge Herman. Any The Society fails the first and the third requirements of controversy had long since subsided. the Hunt test. Neither O’Hair nor the Society has standing to obtain First, it has failed to show that its members would declaratory relief against Judge Herman. We do not sit to otherwise have standing to sue in their own right. Other review the actions of state judges in microscopic detail Society members are not aggrieved by Judge Herman’s when there is no continuing harm and no real threat of exclusion of O’Hair from a venire. The fact that they may repeated injury. Article III “forecloses the conversion of

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courts of the United States into judicial versions of litigation); Contractors Ass’n of Eastern Pennsylvania, college debating forums.” Valley Forge Christian College Inc. v. Philadelphia, 945 F.2d 1260, 1264–66 (3rd v. Americans United for Separation of Church and State, Cir.1991); and Gillis v. U.S. Dept of Health and Human 454 U.S. 464, 102 S.Ct. 752, 759, 70 L.Ed.2d 700 (1982). Services, 759 F.2d 565, 572–73 (6th Cir.1985). But see The panel held that the claim for *1289 money damages Associated General Contractors v. Otter Tail Power Co., was barred by judicial immunity. We agree. 611 F.2d 684, 691 (8th Cir.1979). Indeed, in National Maritime Union, the Circuit Court for the District of Affirmed. Columbia went so far as to assert that the Supreme Court itself, in UAW v. Brock, 477 U.S. 274, 106 S.Ct. 2523, 91 L.Ed.2d 228 (1986), determined that conflicting member interests will not preclude associational standing. 824 F.2d at 1232–33. WIENER, Circuit Judge, concurring in part and dissenting in part: The majority’s second reason for finding that participation of the individual members of the Society is Judge Goldberg’s dissent eloquently and forcefully raises necessary appears to be that a free exercise claim, by its a number of serious problems with the doctrine of very nature, requires particularized information from all standing as currently articulated, and, perhaps more members. For this proposition the majority cites Harris v. significantly, offers the Supreme Court a principled way McRae, 448 U.S. 297, 320–21, 100 S.Ct. 2671, 2689–90, to limit the Lyons doctrine so that justice can be done in 65 L.Ed.2d 784 (1980), in which Justice Stewart, writing cases like O’Hair’s. Nonetheless, given that the majority, for the Court, determined that the Women’s Division of with one minor exception, accurately states and applies the Board of Global Ministries of the United Methodist the standing doctrine now sanctioned by that Court, I find Church had no standing under the third Hunt prong to myself unable to join Judge Goldberg’s well-crafted challenge the Hyde Amendment on behalf of its members dissent. I therefore concur in the majority’s holding that because a free exercise claim “ordinarily requires O’Hair does not have standing to procure declaratory individual participation.” But this court has never relief against Judge Herman under Lyons and its extensive interpreted McRae as precluding all free exercise claims progeny because she cannot show a real and immediate brought by associations on behalf of their members. See, threat that Judge Herman will again exclude her from jury e.g., Church of Scientology v. Cazares, 638 F.2d 1272, service and jail her for refusing to “affirm.” I also concur 1276–80 (5th Cir.1981) (distinguishing McRae and in the majority’s holding that the Society lacks standing to finding church to have standing under the third Hunt seek prospective relief for its members as it cannot meet prong to bring a free exercise claim on behalf of its the first prong of the test for associational standing set members). The critical aspect of McRae, moreover, was forth in Hunt v. Washington State Apple Advertising that the Women’s Division conceded a diversity of views Comm’n, 432 U.S. 333, 343, 97 S.Ct. 2434, 2441, 53 within its membership as to the permissibility, necessity, L.Ed.2d 383 (1977). and advisability of abortion. In this case, by contrast, the majority presumes *1290 a diversity of views, stating My disagreement with the majority, and thus my reason that nothing in the record supports the notion that Society for writing separately, stems from the sweeping language, members share O’Hair’s views regarding the religious unsupported speculation, and possibly incorrect analysis, nature of an affirmance. Does not the fact that the Society that the majority employs in concluding that the Society is a co-petitioner in this suit indicate that at least a fails the thirdprong of the Hunt test. The majority seems substantial number of its members hold the same view of to offer two reasons why the Society fails this prong. One an affirmation as does O’Hair? is that the Society’s members may differ as to the religious nature of an affirmance. If by this statement the Furthermore, numerous cases raising issues other than majority means to say that the Society lacks standing free exercise make clear that the third Hunt prong does because its members may have conflicting interests on the not mean that an association lacks standing if the outcome of the litigation, then it needlessly decides an participation of any member is necessary. See, e.g., issue not previously addressed by this court, and, in so Hospital Council of Western Pennsylvania v. Pittsburgh, doing, adopts a rule that has been rejected by most 949 F.2d 83, 89 (3rd Cir.1991) (“[A]ssociation may assert circuits that have decided that issue. See National a claim that requires participation of some members.”). Maritime Union v. Commander, Military Sealift The third Hunt prong merely paraphrases the more Command, 824 F.2d 1228, 1231–34 (D.C.Cir.1987) elaborate discussion of individual participation in Warth (conflicting interests among members will not defeat v. Seldin, 422 U.S. 490, 95 S.Ct. 2197, 45 L.Ed.2d 343 union’s standing to urge the interests of some members in © 2015 Thomson Reuters. No claim to original U.S. Government Works. 6 Society of Separationists, Inc. v. Herman, 959 F.2d 1283 (1992) 60 USLW 2710

(1975). In Warth, the Court explained that “so long as the instead of engaging in constitutionally repugnant debate nature of the claim and of the relief sought does not make with O’Hair about the validity of her religious beliefs the individual participation of each injured party vis-a-vis an affirmation, Judge Herman had calmly but indispensable to proper resolution of the cause, the firmly insisted that O’Hair propose a truth-ensuring association may be an appropriate representative of its statement that she felt she could make without violating members, entitled to invoke this court’s jurisdiction.” 422 the tenets of Atheism as she in good faith professes them, U.S. at 511, 95 S.Ct. at 2212 (emphasis added). In this the judge would have maintained an unassailable position, case, however, it is not immediately apparent why the doing all that the courts and the Constitution require. That individual participation of all Society members would be is clear from the panel majority opinion and the dissenting required for this free exercise claim. opinion, both penned by Judge Goldberg.

What really disturbs me, no less than it disturbs Judge Fortunately, the substance of Judge Goldberg’s opinions Goldberg, is that neither O’Hair nor the Society has any subsists, shining as a lamp to brighten the constitutional way to pursue redress of the First Amendment violations path for the eyes of all trial judges, both state and federal, perpetrated by the state trial judge in this case. My within the boundaries of this circuit *1291 whenever one disturbance is not, I fear, shared by many of my of those jurists happens to encounter a prospective juror colleagues, in most of whom I sense a degree of relief that or witness who has either religious or anti-religious the issue of standing pretermits the need to address concerns about oaths or affirmations. Albeit today’s Appellees’ free exercise claims. majority opinion keeps Judge Goldberg’s opinions from constituting precedent, their lesson is “out there” for all O’Hair, and likely her famous grandmother as well, must judges of good will to heed. have thought that Santa Claus, the Easter bunny, and the tooth fairy had combined their efforts to deliver the jury For the foregoing reasons I specially concur in part and summons that launched this case on its odyssey. I have dissent in part. the impression that many of my colleagues are thankful to the Supreme Court (if not to that same mythical trio) for providing the insurmountable obstacle of standing that interdicts this court’s obligation to deal with the discomfiting First Amendment claims of these perennial Atheist gadflies. In that regard, however, we would all do GOLDBERG, Circuit Judge, dissenting: well to heed the sagacious words of Justice Holmes: This has become a case of the tail wagging the dog. If there is any principle of the I cannot join the majority opinion because it wags the tail Constitution that more imperatively while emaciating the body of the panel opinion. For the calls for attachment than any other reasons expressed in the panel opinion, 939 F.2d 1207 it is the principle of free (5th Cir.1991), I adhere to the view that Judge Herman thought—not free thought for those trespassed upon O’Hair’s constitutional right to freedom who agree with us but freedom for of religion when he excluded her from jury service and the thought that we hate. jailed her for refusing to “affirm” without first proposing that she make a non-religious, conscious-binding United States v. Schwimmer, 279 U.S. 644, 653, 49 S.Ct. declaration of a commitment to tell the truth. And because 448, 451, 73 L.Ed. 889 (1929). The practical effect of there is not only a likelihood of recurrence, but a lack of standing, pursuant to Lyons, is the denial of a statistical certainty that O’Hair and members of the remedy for the type of unconstitutional abuse visited by Society of Separationists will again be summoned for jury Judge Herman directly on O’Hair, and indirectly on the duty before Judge Herman, I find no jurisdictional Society, as long as occurrences of that nature are impediment to their bringing this lawsuit to challenge anecdotal and do not rise to the frequency or consistency Judge Herman’s practice. required to confer standing.

True, Judge Herman started down the path of propriety in his handling of O’Hair’s free exercise objection to participating in an act of affirmation. In fact, the judge I. reached the penultimate stepping stone on that path before he deviated from the proper to the impermissible. If, The undercurrent of the standing requirement is the notion

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that courts should only adjudicate those cases in which Lyons was no more likely than the next guy to be injured the plaintiffs have a “ ‘personal stake in the outcome in again. order to assure that concrete adverseness which sharpens the presentation of issues’ necessary for the proper O’Hair and members of the Society of Separationists do resolution of constitutional questions.” City of Los not stand in the shoes of the next guy. Indeed, they are Angeles v. Lyons, 461 U.S. 95, 103 S.Ct. 1660, 1665, 75 susceptible to injury precisely because they are not like L.Ed.2d 675 (1983) (quoting Baker v. Carr, 369 U.S. 186, the average Joe: they are not willing to conform to the 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663 (1962)). The popular view that an affirmation is not a religious plaintiffs in this “case” have a personal stake in the exercise. Thus, they are the plaintiffs to bring this action outcome and the constitutional issues presented are razor for prospective relief. True, all citizens can expect to be sharp: the plaintiffs are atheists who object to the summoned to serve their duty as jurors. But only these mingling of religion in governmental activities. They plaintiffs, by virtue of their distinctive views about brought this lawsuit based upon the practice employed by religious activities, are threatened by Judge Herman’s Judge Herman of the Travis County Court—on more than practice. They are uniquely vulnerable to future injury. one occasion1 —requiring that prospective jurors make an This is not a case in which “the asserted injury is a “affirmation.” Whatever one might think of the generalized grievance shared in substantially equal constitutionality of Judge Herman’s practice, compare measure by all or most citizens.” O’Hair v. White, 675 Society of Separationists, 939 F.2d at 1215–17 (majority F.2d 680, 687 (5th Cir.1982) (en banc). Such an injury opinion) with id. at 1220–24 (Garwood, J., dissenting), no will not suffice to confer standing upon a plaintiff. Id. one should doubt that this litigation presents a case and (citing Schlesinger v. Reservists Comm. to Stop the War, controversy within the meaning of Article III of the 418 U.S. 208, 220, 94 S.Ct. 2925, 2931–32, 41 L.Ed.2d Constitution. 706 (1974)). Rather, this is a case in which the threatened injury will be suffered by a limited, identifiable group of citizens—atheists and others whose religious beliefs (or lack of beliefs) cause them to be offended by the demand for an affirmation. See, e.g., Ferguson v. C.I.R., 921 F.2d A. 588 (5th Cir.1991) (prospective oath-taker refused to “affirm” because she understood two passages from the The majority’s conclusion that the plaintiffs lack standing Bible to prohibit affirmations). rests entirely on its application of the Supreme Court’s decision in Lyons to the facts of this case. Simply put, Although no single plaintiff can predict with certainty Lyons restates the proposition, articulated by the Court in when exactly he will be summoned to serve, we can rest O’Shea v. Littleton, 414 U.S. 488, 495–96, 94 S.Ct. 669, assured that these plaintiffs will be summoned in due 675–76, 38 L.Ed.2d 674 (1974), and Rizzo v. Goode, 423 time, particularly under the random jury selection system. U.S. 362, 372, 96 S.Ct. 598, 604–05, 46 L.Ed.2d 561 This fact assumes special significance because in Lyons (1976), that past exposure to harm will not, in and of the Court found no standing for the following reason: itself, confer standing upon a litigant to obtain equitable relief “[a]bsent a sufficient likelihood that he will again [I]t is surely no more than be wronged in a similar way....” Lyons, 103 S.Ct. at 1670. speculation to assert either that The majority reasons that, like the plaintiff in Lyons, Lyons himself will again be O’Hair cannot show a real and immediate threat that she involved in one of those will again be harmed in a similar way. See maj. op. at unfortunate instances, or that he 1285. will be arrested in the future and provoke the use of a chokehold by Lyons involved a challenge to a chokehold maneuver resisting arrest, attempting to employed by Los Angeles police officers. The Supreme escape, or threatening deadly or Court found no standing to obtain prospective relief serious bodily injury. because the plaintiff, although injured by the chokehold in the past, could not establish a threat of a similar injury in the future. Pivotal to this conclusion was the fact that the Lyons, 103 S.Ct. at 1668. In essence, the plaintiff in Lyons plaintiff could not distinguish himself from any other was seeking redress based upon a “chain of speculative citizen as being a future victim of the unconstitutional act. contingencies: that he would be arrested and provoke the The past harm suffered by the plaintiff in that case had no officer to use the chokehold in an unconstitutional bearing on the likelihood that he would again be harmed manner.” Nelsen v. King County, 895 F.2d 1248, 1252 by the defendant. *1292 In other words, the plaintiff in (9th Cir.1990) (explaining Lyons ).

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Unlike Lyons, the threat of future of injury in this case does not depend on a “chain of speculative contingencies,” but rather on certain probabilities beyond B. the plaintiffs’ control. We are dealing here with jury duty, an obligation of citizenship. The plaintiffs can reasonably The majority’s reliance on Lyons and its progeny is anticipate similar encounters with Judge Herman in the misguided for yet another reason. Unlike this case, the future when they are summoned to serve as jurors in plaintiffs’ assertion of standing in those cases cited by the Travis County. The record reflects that Judge Herman majority was predicated upon the contingency that the continues to serve on the County Court, and accordingly, plaintiff would commit a crime that would set in motion a there is a quantifiable, mathematical certainty that he will chain of events culminating in the defendant’s again preside over jury impanelment and encounter unconstitutional act. There was absolutely no measure of O’Hair or some other member the Society of certainty that the plaintiffs in those cases would suffer the Separationists among the prospective jurors.2 For some, future injury and the likelihood that they would turn in the fact that the probability is quantifiable, and not large part on events within their own control. “contingency riddled,” would independently establish that the likelihood of recurrence is sufficient for standing Our court found no standing in Adams v. McIlhany, 764 purposes. “Our analysis cannot be reduced to considering F.2d 294, 299 (5th Cir.1985), cert. denied, 474 U.S. 1101, probability merely in terms of quantitative percentages.” 106 S.Ct. 883, 88 L.Ed.2d 918 (1986), because the Nelsen, 895 F.2d at 1250. Perhaps *1293 we should also recurrence depended upon the plaintiff’s son committing a “describe ‘probability’ [of future injury] qualitatively, as crime, being rearrested, charged, and sentenced before the requiring a very significant possibility,” id. (quoting defendant judge in order for the judge to hold the plaintiff Sample v. Johnson, 771 F.2d 1335, 1343 (9th Cir.1985), in contempt for writing a derogatory letter about the cert. denied, 475 U.S. 1019, 106 S.Ct. 1206, 89 L.Ed.2d judge. We also found no standing in Brown v. Edwards, 319 (1986)), or, as the Supreme Court phrased it in a 721 F.2d 1442, 1446–47 (5th Cir.1984), because the post-Lyons decision, as requiring a “credible threat” of plaintiff did not allege or prove that he was “in any way future injury. Kolender v. Lawson, 461 U.S. 352, 103 likely, or more likely than any other Mississippian, to be S.Ct. 1855, 1857 n. 3, 75 L.Ed.2d 903 (1983). Under this again subjected to arrest or charging by any Mississippi qualitative analysis, the plaintiffs have standing because constable.” Most recently, this circuit found no standing there is a “significant possibility” and “credible threat” in Johnson v. Moore, 958 F.2d 92, 94 (5th Cir.1992), that they will be summoned for jury service. because “[i]t would require conjecture or hypothesis to find that Johnson [would] again act in such a way as to be The fact that Judge Herman alone is accountable for the arrested on a misdemeanor charge” and thus subject threat of future injury does not take the legs out from himself to the unconstitutional act of the defendant-judge. under the plaintiffs’ position. Although Judge Herman was not “acting pursuant to any state or local rule or The Tenth Circuit found no standing in Schepp v. statute” when he demanded an affirmation from O’Hair, Fremont County, 900 F.2d 1448, 1452–53 (10th see maj. op. at 1286, there is evidence in the record that Cir.1990), for essentially the same reason: The probability he continues to engage in a similar practice: While of recurrence was too remote where it depended on the impaneling a jury following the incident with O’Hair, plaintiff violating probation so as to be subjected to Judge Herman demanded an “affirmation” from another probation-revocation proceedings. The Eighth and Ninth atheist who was summoned for jury duty and excluded Circuits found no standing in cases brought by inmates him from service without first proposing that he make a *1294 challenging conditions of confinement in non-religious, conscience-binding declaration as an correctional institutions from which they had been alternative to an affirmation. See supra note 2. Thus, the transferred because there was no showing that the record reflects the genesis of a pattern3 or “personal plaintiffs were likely to return to the institutions. Foster v. policy”4 of exclusion by Judge Herman based on the Basham, 932 F.2d 732, 734 (8th Cir.1991); Johnson v. juror’s religious beliefs, which cannot be dismissed as Moore, 948 F.2d 517, 519 (9th Cir.1991). merely “contextual” or “episodic.” See maj. op. at 1286. We need not wait until Judge Herman excludes or In Nelsen, another Ninth Circuit case, the court found no incarcerates others before we can evaluate the standing, recognizing that cases like Lyons and O’Shea constitutionality of Judge Herman’s practice and award turned on the fact that the plaintiff had to commit an the appropriate declaratory relief. unlawful act in order to expose himself to repeated injury. Nelsen, 895 F.2d at 1252. In Nelsen the plaintiffs challenged the constitutionality of the conditions in a drug © 2015 Thomson Reuters. No claim to original U.S. Government Works. 9 Society of Separationists, Inc. v. Herman, 959 F.2d 1283 (1992) 60 USLW 2710

rehabilitation center where they had been confined. Over plaintiffs alleged that law required that they acknowledge a dissent, the panel majority concluded that standing was the existence of a supreme being. Over two dissenting lacking because the plaintiffs “failed to demonstrate any opinions, a majority of the en banc court found that the ... systematic pattern or policy that would suggest that plaintiffs had standing to bring the lawsuit even though their return to the [drug rehabilitation] [c]enter [was] the plaintiffs arguably could not demonstrate a high inevitable.” Id. at 1254.5 probability that they would be summoned for, and excluded from, jury duty. The majority wrote: Even the Supreme Court case underpinning the Lyons decision, O’Shea v. Littleton, 414 U.S. 488, 94 S.Ct. 669, O’Hair’s final asserted basis for 38 L.Ed.2d 674 (1974), turned on a “chain of speculative standing is that section 4 [of the contingencies, particularly a chain that include[d] the Texas Constitution] caused her to violation of an unchallenged law.” Nelsen, 895 F.2d at be excluded from jury duty because 1252. The Supreme Court found no standing because the she refused to swear to her belief in plaintiffs would have had to violate the law, be charged a supreme being.... O’Hair is ... and tried before the defendants, in order to be subjected to aggrieved by being excluded from the unconstitutional conduct. O’Shea, 414 U.S. at 496, 94 jury duty because of her lack of S.Ct. at 676; see also Ashcroft v. Mattis, 431 U.S. 171, religious belief.... She clearly has 172 & n. 2, 97 S.Ct. 1739, 1740 & n. 2, 52 L.Ed.2d 219 standing to challenge that system. (1977) (holding that the plaintiff, whose first son was killed by police while attempting to escape arrest, had no 675 F.2d at 691. Contra id. at 702 (Tjoflat, J., concurring standing to obtain a declaratory judgment on the in part and dissenting in part) (“I would hold that O’Hair constitutionality of the state statute authorizing the use of lacks standing to assert [her] claim [that she is excluded deadly force in apprehending a fleeing felon where from jury service based on her religious beliefs] because complaint merely alleged that plaintiff’s other son might she alleges not that she has been excluded from jury be arrested and attempt to flee). service but only that she would be ”); id. at 703 (Reavley, J., dissenting) (embracing Judge Tjoflat’s dissent). While these cases, relied upon by the majority, distill a principle of black letter law for standing—that In Ciudadanos Unidos de San Juan v. Hidalgo County prospective relief is only available if there is a sufficient Grand Jury Commissioners this court held that likelihood of recurrence—they do not govern this case. Mexican–Americans had standing to obtain prospective Unlike Lyons, O’Shea, Ashcroft, Adams, Brown, Johnson relief from systematic exclusion from grand jury service. (5th Cir.), Schepp, Foster, Johnson (9th Cir.), and Concluding that “O’Shea [did] not control the disposition Nelsen,6 the plaintiffs in this case “do not have to induce a of these cases,” we explained that: police encounter before the possibility of injury can occur. The [plaintiffs] are subject to constitutional injury Under these allegations, the threat based on completely innocent behavior....” LaDuke v. of future injury is palpable. Unlike Nelson, 762 F.2d 1318, 1326 (9th Cir.1985) (emphasis the contingency riddled complaint added) (holding that the plaintiffs had standing to obtain in O’Shea, the complainants here injunction against the INS for its policy of conducting claim an injury that turns on a random searches and seizures of residents of migrant farm single contingency that the jury dwellings), amended, 796 F.2d 309 (9th Cir.1986).7 commissioners will act exactly as Rather, the more apposite precedents, are the ones they have for the past ten years ... downplayed by the majority: O’Hair v. White, 675 F.2d Unlike O’Shea ... [plaintiffs’] 680 (5th Cir.1982) (en banc) and Ciudadanos Unidos de injury here depends solely upon the San Juan v. Hidalgo County Grand Jury Comm’r, 622 action of the [defendants]. F.2d 807 (5th Cir.1980), cert. denied, 450 U.S. 964, 101 S.Ct. 1479, 67 L.Ed.2d 613 (1981). 622 F.2d at 820–21; see also Carter v. Jury Commission of Greene County, 396 U.S. 320, 90 S.Ct. 518, 523, 24 In O’Hair v. White this court concluded that the plaintiffs, L.Ed.2d 549 (1970) (“Surely there is no jurisdictional or Madalyn Murray–O’Hair *1295 and the Society of procedural bar to an attack upon systematic jury Separationists, had standing to challenge a Texas law that discrimination by way of a civil suit such as the one infringed upon their right not to be excluded from jury brought here.”). service on religious grounds. The constitutional challenge was virtually identical to the one pressed here. The Both O’Hair v. White and Ciudadanos compel a

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conclusion that the plaintiffs in this case have standing.8 members); National Maritime Union v. Commander, O’Hair and members of the Society of Separationists are Military Sealift Command, 824 F.2d 1228, 1231–34 just as threatened by exclusion from jury service as the (D.C.Cir.1987); Gillis v. U.S. Dept. of Health & Human plaintiffs in those cases. The majority’s effort to Servs., 759 F.2d 565, 572–73 (6th Cir.1985). Contra distinguish those cases as involving either a “state law Associated Gen. Contractors v. Otter Tail Power Co., 611 that on its face arguably excluded atheists from serving on F.2d 684, 691 (8th Cir.1979) (rejecting associational juries” or “jury selection systems that [were] consistently standing when factual or potential conflicts exist among administered so as to exclude [minorities] from jury members). See generally UAW v. Brock, 477 U.S. 274, service” is unpersuasive. See maj. op. at 1287. Standing to 106 S.Ct. 2523, 2532–33, 91 L.Ed.2d 228 (1986) obtain equitable relief in any case depends on the threat of (declining to “reject the principles of associational future injury—in this case, as in O’Hair v. White, the standing,” notwithstanding argument that associations threat that the plaintiffs will be excluded from jury service “will not always be able to represent adequately the because of their views on religion. In O’Hair v. White and interests of their injured members.”). Ciudadanos this court was necessarily satisfied that this threat of future was sufficient to establish the plaintiffs’ It is also quite plain that in this challenge to Judge standing to seek prospective relief. Surely the threat of Herman’s practice of demanding an affirmation as a future injury to any one plaintiff in O’Hair v. White and condition of jury service, the individual plaintiffs are not Ciudadanos was no more “credible,” “distinct,” “indispensable to proper resolution of the cause....” Warth “palpable,” “real,” or “immediate” than the threat of v. Seldin, 422 U.S. 490, 511, 95 S.Ct. 2197, 2212, 45 future injury plaguing the plaintiffs in this case. O’Hair L.Ed.2d 343 (1975). The plaintiffs merely seek a and other members of the Society of Separationists have declaration that Judge Herman may not exclude or standing to obtain equitable relief.9 incarcerate a prospective juror for refusing to affirm until he has proposed that the prospective juror make a nonreligious, conscience-binding declaration of a commitment to tell the truth. “[T]he claim asserted and the relief requested affect the membership as a whole” *1296 II. and therefore, “the claim does not require individualized participation.” Church of Scientology v. Cazares, 638 From this conclusion, it follows that the Society of F.2d 1272, 1276–80 (5th Cir.1981) (association had Separationists itself has the requisite “associational standing to bring free exercise challenge on behalf of its standing” to bring this lawsuit. See maj. op. at 1288 members). (applying the three prong test articulated in Hunt v. Washington State Apple Advertising Comm’n, 432 U.S. *1297 At least twice since Hunt, this court has held that 333, 343, 97 S.Ct. 2434, 2441, 53 L.Ed.2d 383 (1977)). I the Society had standing to raise constitutional claims on need not comment at length to make this point. I have behalf of its members. See O’Hair v. White, 675 F.2d at explained why I believe that O’Hair and other members 691–92 (holding that the Society satisfied the of the association have demonstrated a sufficient threat of requirements of Hunt and thus had standing to litigate future injury to establish that they have standing in their alleged violations of its members voting rights); Murray own right to challenge Judge Herman’s practice.10 That v. City of Austin, 947 F.2d 147, 152 (5th Cir.1991) satisfies the first prong of the Hunt test. The majority does (“because Murray has standing, the Society, of which he not dispute that the “interests [that the Society of is a member, also has standing” to litigate the Separationists] seeks to protect are germane to the constitutionality of the inclusion of a religious symbol in organization’s purpose.” Hunt, 432 U.S. at 343, 97 S.Ct. a city insignia). As in those two cases, I would find that at 2441. So much for the second prong. the three-prong Hunt test poses no obstacle to the Society’s associational standing in this case. As for the third prong, the majority suggests that “the Society’s claim would require the participation of individual members ... [because] Society members’ views [may] differ as to the religious nature of an affirmance.” Maj. op. at 1288. Even if that bit of speculation were III. accurate—that members of the Society take differing positions on affirmations—associational standing does This is a case about the First Amendment, the cornerstone not require harmony of member interests. See Contractors of all other rights and freedoms which we, as citizens of Ass’n. v. Philadelphia, 945 F.2d 1260, 1266 (3d Cir.1991) this great Nation, have come to enjoy, and perhaps even (finding litigation not contrary to interests of a majority of take for granted. It is very disturbing to think that we © 2015 Thomson Reuters. No claim to original U.S. Government Works. 11 Society of Separationists, Inc. v. Herman, 959 F.2d 1283 (1992) 60 USLW 2710

would contort the doctrine of standing and employ it as an exercise in connection with the performance of a civic evasive device for dodging sensitive constitutional duty when that citizen can expect to be summoned again. questions, especially when First Amendment rights are at This court has historically opened its ears and hearts to stake. Accord maj. op. at 1286 (“We must not shrink from the wailing cries of those deprived of treasured rights. I our duty to decide a controversy....”). Not surprisingly, would hold that these plaintiffs have standing to raise courts have consistently applied the standing doctrine their claims, and in so doing, preserve the reputation of liberally, not grudgingly, in the context of First this court as an open, not a closed, circuit. Amendment litigation.11 I respectfully, but fervently, dissent. Standing is not a static concept. Rather, it is an evolutionary doctrine that continues to mature. Although the doctrine appropriately restricts the flood of noxious litigation, we must insure that it does not narrow the All Citations avenue for raising concrete constitutional claims. I cannot believe that the Framers would say that a federal court 959 F.2d 1283, 60 USLW 2710 lacks jurisdiction to hear a case brought by a citizen who has been jailed for her refusal to participate in a religious

1 Appended to the complaint was the affidavit of one other atheist who had been excused from jury service by Judge Herman because he refused to affirm. This individual was not held in contempt or jailed, however.

2 The Texas laws requiring oaths or affirmations have been narrowed by the Texas courts to mean that such oaths are to be administered in the manner most binding on the individual conscience. Madeley v. Kern, 488 F.2d 865 (5th Cir.1974); Craig v. State, 480 S.W.2d 680 (Tex.Cr.App.1972). See also Tex. Const. Art. 1 § 5; Vaughn v. State, 146 Tex.Crim. 586, 177 S.W.2d 59 (1944). These authorities establish what is really undisputed between the parties, namely that, apart from recognition that it is being made subject to the pains and penalties of perjury, Texas law does not require any particular form of words for an oath or affirmation.

3 The Society does not raise a free exercise claim in its own behalf. When a religious organization itself suffers an actual or threatened injury as a result of defendant’s actions, it may have standing in its own right. See Serbian Eastern Orthodox Diocese v. Milivojevich, 426 U.S. 696, 96 S.Ct. 2372, 49 L.Ed.2d 151 (1976).

1 See infra note 2.

2 The majority’s assertion that “Judge Herman’s regular duties do not include such matters” as impaneling juries, maj. op. at 1285, finds no support in the record. Indeed, there is evidence in the record that not long after he excluded Ms. O’Hair from jury service, Judge Herman was again called upon to impanel a jury. Among the prospective jurors, he encountered an individual who interposed a similar objection to the affirmation process. As with O’Hair, Judge Herman excluded that individual from jury service on that basis. See maj. op. at 1285 n. 1. Of course, if there is any question about whether Judge Herman continues to impanel juries, a remand would be appropriate to allow the district court to make factual findings, rather than speculating on appeal as to the likelihood that these plaintiffs will appear before Judge Herman in the future.

3 Cf. Ikuno v. Yip, 912 F.2d 306, 309 (9th Cir.1990) (“two acts is an accepted minimum” for establishing a “pattern” under the RICO statute) (citing H.J., Inc. v. Northwestern Bell tel. Co., 492 U.S. 229, 109 S.Ct. 2893, 2899, 106 L.Ed.2d 195 (1990)).

4 Contra maj. op. at 1286 (“It is clear that the judge was not acting pursuant to any ... personal policy, when he failed to ask O’Hair if there were alternative ways in which she would be willing to commit herself to tell the truth.”).

5 The dissenting judge believed that standing did exist because plaintiffs had tendered unrebutted evidence proving that was a 35% to 75% probability that the plaintiffs themselves would return to the facility. The dissent concluded that “appellants have established there is credible threat they will again suffer the harm they have alleged.” Id. at 1255 (Pregerson, J., dissenting).

6 Foster and Johnson (9th Cir.) are different because they involved inmates transferred to different penal institutions,

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thus mooting out any claim for prospective relief. It appears that there was no threat that they would be transferred back to the original facility. Perhaps if the plaintiffs committed an offense some time later, they might serve time in that institution. Such speculation, of course, cannot establish a “credible threat” of future injury.

7 Moreover, this case is different because, as one legal scholar has observed, “Lyons must be understood in large part as a decision of substantive law. In particular, the case seems to represent a further extension and reification of the Court’s general, sweeping respect and deference for men in uniform that has overridden a wide range of substantive law claims.” Laurence H. Tribe, American Constitutional Law 122 (2d ed. 1988).

8 Lyons represented an application, not an extension, of O’Shea. Lyons, 103 S.Ct. at 1667 (“No extension of O’Shea ... is necessary to hold that respondent Lyons has failed to demonstrate a case or controversy with the City that would justify the equitable relief sought.”). Thus, Ciudadanos and O’Hair v. White, both of which found that the plaintiffs had standing, were not undercut by the Supreme Court’s subsequent decision in Lyons.

9 The majority’s citation (maj. op. at 1287) to Powers v. Ohio, 111 S.Ct. 1364, 1373, 113 L.Ed.2d 411 (1991), is misplaced. The Powers Court merely observed that a juror could not “easily obtain declaratory or injunctive relief when discrimination occurs through an individual prosecutor’s exercise of peremptory challenges.” Such would be the case because the use of a peremptory strike depends so much on the subject matter of the underlying prosecution. The threat of future injury would be particularly remote and turn on a “chain of speculative contingencies.”

10 Because the Society represents the interests of similarly situated plaintiffs, it would be fitting, in my view, to aggregate the probabilities of future injury to determine whether the Society has standing to bring suit on behalf of its members. Contrast ASARCO Inc. v. Kadish, 490 U.S. 605, 109 S.Ct. 2037, 2044, 104 L.Ed.2d 696 (1989) ( “[T]he doctrine of standing to sue is not a kind of gaming device that can be surmounted merely by aggregating the allegations of different kinds of plaintiffs, each of whom may have claims that are remote or speculative taken by themselves.”). By this I mean that under the first prong of Hunt—which asks whether the association’s “members would otherwise have standing to sue in their own right,” 432 U.S. at 343, 97 S.Ct. at 2441—the likelihood of future injury should be measured by the probability that any one member of the associational plaintiff would be injured, rather than the probability that a particular member of the associational plaintiff might be injured. I believe that aggregating the probabilities is appropriate in a case like this one, which does not involve a generalized grievance and implicates both Lyons and Hunt, because it more accurately reflects the reality, immediacy, and palpability of the threatened injury to the associational plaintiff and its membership.

11 Cf. Grand Rapids School Dist. v. Ball, 473 U.S. 373, 380 n. 5, 105 S.Ct. 3216, 3220 n. 5, 87 L.Ed.2d 267 (1985) (citing “the numerous cases in which [the Supreme Court has] adjudicated Establishment Clause challenges by state taxpayers to programs for aiding nonpublic schools”); Flast v. Cohen, 392 U.S. 83, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968) (Establishment Clause challenge to federal aid-to-education program based upon federal taxpayer standing); Everson v. Board of Education, 330 U.S. 1, 67 S.Ct. 504, 91 L.Ed. 711 (1947) (local taxpayer standing to raise Establishment Clause challenge to school district expenditures); Murray v. City of Austin, 947 F.2d 147, 152 (5th Cir.1991) (concluding that the Society of Separationists and its member had standing to raise Establishment Clause challenge to inclusion of religious symbol in city insignia); see generally Tribe, supra note 3, at 116 (“The Court has been particularly generous in entertaining challenges under the establishment clause of the first amendment to state or local aid to church-related schools.”).

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

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[1] Environmental Law KeyCite Yellow Flag - Negative Treatment Jurisdiction in general Called into Doubt by Lexmark Intern., Inc. v. Static Control Components, Inc., U.S., March 25, 2014 Section of Emergency Planning and Community 118 S.Ct. 1003 Right–To–Know Act (EPCRA) providing that Supreme Court of the United States district court has “jurisdiction in actions brought under” subsection authorizing certain civil STEEL COMPANY, aka Chicago Steel and Pickling actions does not render elements of cause of Company, petitioner, action under referenced subsection v. jurisdictional, but merely specifies court’s CITIZENS FOR A BETTER ENVIRONMENT. powers to enforce violated requirement and to impose civil penalties; reference to actions No. 96–643. | Argued Oct. 6, 1997. | Decided March “brought under” that subsection means suits 4, 1998. contending that subsection contains a certain requirement. Emergency Planning and Environmental group brought action against steel Community Right–To–Know Act of 1986, § manufacturer under Emergency Planning and Community 326(a, c), 42 U.S.C.A. § 11046(a, c). Right–To–Know Act of 1986 (EPCRA) for failure to make required reporting. Upon receiving group’s 65 Cases that cite this headnote statutory notice of intent to sue, manufacturer filed overdue forms, and manufacturer subsequently moved for dismissal. The United States District Court for the Northern District of Illinois, George M. Marovich, J., dismissed. Group appealed. The Seventh Circuit Court of [2] Federal Courts Appeals, 90 F.3d 1237, reversed and remanded. Certiorari Subject-matter jurisdiction in general was granted. The Supreme Court, Justice Scalia, held that: (1) EPCRA section providing that district court has Absence of valid, as opposed to arguable, cause “jurisdiction in actions brought under” subsection of action does not implicate “subject-matter authorizing certain civil actions does not render elements jurisdiction,” i.e., courts’ statutory or of cause of action under referenced subsection constitutional power to adjudicate case. jurisdictional; (2) court may not decide cause of action U.S.C.A. Const. Art. 3, § 2, cl. 1. before resolving whether court has Article III jurisdiction; and (3) environmental group failed to satisfy redressability requirement for standing. 543 Cases that cite this headnote

Vacated and remanded with instructions to direct that complaint be dismissed. [3] Justice O’Connor filed concurring opinion, in which Federal Courts Justice Kennedy joined. Waiver, estoppel, and consent Federal Courts Justice Breyer filed opinion concurring in part and Substantiality of federal question concurring in judgment. Federal Courts Pleadings and Motions Justice Stevens filed opinion concurring in judgment, in which Justices Souter and Ginsburg joined in part. Jurisdiction is not defeated by possibility that averments might fail to state cause of action on which petitioners could actually recover; rather, district court has jurisdiction if right of petitioners to recover under their complaint will West Headnotes (27) be sustained if Constitution and laws of United States are given one construction and will be defeated if they are given another, unless claim

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clearly appears to be immaterial and made solely 3, § 2, cl. 1. for purpose of obtaining jurisdiction or claim is wholly insubstantial and frivolous. U.S.C.A. Const. Art. 3, § 2, cl. 1. 222 Cases that cite this headnote

224 Cases that cite this headnote [6] Courts Acts and proceedings without jurisdiction [4] Federal Courts Without jurisdiction, court cannot proceed at all Cases “Arising Under” Federal Law; in any cause; jurisdiction is power to declare Federal-Question Jurisdiction law, and when it ceases to exist, the only Federal Courts function remaining to court is that of Substantiality of federal question announcing the fact and dismissing cause. U.S.C.A. Const. Art. 3, § 2, cl. 1. Dismissal for lack of subject-matter jurisdiction because of inadequacy of federal claim is proper only when claim is so insubstantial, implausible, 613 Cases that cite this headnote foreclosed by prior decisions of Supreme Court, or otherwise completely devoid of merit as not to involve federal controversy. U.S.C.A. Const. Art. 3, § 2, cl. 1. [7] Federal Courts Jurisdiction, powers, and authority in general 831 Cases that cite this headnote On every writ of error or appeal, first and fundamental question is that of jurisdiction, first, of Supreme Court, and then of court from which record comes; this question Supreme Court is [5] bound to ask and answer for itself, even when Constitutional Law Nature and scope in general not otherwise suggested, and without respect to Federal Courts relation of parties to it. U.S.C.A. Const. Art. 3, § Necessity of Objection; Power and Duty of 2, cl. 1. Court

Federal court may not, via doctrine of 171 Cases that cite this headnote “hypothetical jurisdiction,” decide cause of action before resolving whether court has Article III jurisdiction; doing so would carry courts beyond bounds of authorized judicial [8] action and thus offend fundamental principles of Federal Courts separation of powers, and would produce Necessity of Objection; Power and Duty of nothing more than hypothetical judgment, which Court would come to same thing as advisory opinion, disapproved by Supreme Court from the Requirement that jurisdiction be established as beginning; abrogating SEC v. American Capital threshold matter springs from nature and limits Investments, Inc., 98 F.3d 1133; Smith v. Avino, of judicial power of United States, and is 91 F.3d 105; Clow v. Dept. of Housing and inflexible and without exception. U.S.C.A. Urban Development, 948 F.2d 614; Const. Art. 3, § 2, cl. 1. Cross–Sound Ferry Services, Inc. v. ICC, 934 F.2d 327; United States v. Parcel of Land, 928 694 Cases that cite this headnote F.2d 1; Browning–Ferris Industries v. Muszynski, 899 F.2d 151. U.S.C.A. Const. Art.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2 Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998) 118 S.Ct. 1003, 46 ERC 1097, 140 L.Ed.2d 210, 28 Envtl. L. Rep. 20,434...

In general; injury or interest [9] Constitutional Law Standing to sue is part of common Nature and scope in general understanding of what it takes to make justiciable case. U.S.C.A. Const. Art. 3, § 2, cl. Statutory and, especially, constitutional 1. elements of jurisdiction are essential ingredient of separation and equilibration of powers, restraining courts from acting at certain times, 88 Cases that cite this headnote and even restraining them from acting permanently regarding certain subjects. U.S.C.A. Const. Art. 3, § 2, cl. 1. [13] Constitutional Law 29 Cases that cite this headnote Nature and scope in general

Federal courts must stay within their constitutionally prescribed sphere of action, whether or not exceeding that sphere will harm [10] Federal Courts one of the other two branches of government. Jurisdiction, Powers, and Authority in U.S.C.A. Const. Art. 3, § 2, cl. 1. General

For federal court to pronounce upon meaning or 1 Cases that cite this headnote constitutionality of state or federal law when it has no jurisdiction to do so is, by very definition, for court to act ultra vires. U.S.C.A. Const. Art. 3, § 2, cl. 1. [14] Federal Civil Procedure In general; injury or interest 75 Cases that cite this headnote Supreme Court’s standing jurisprudence, though it may sometimes have impact on presidential powers, derives from Article III, not Article II. U.S.C.A. Const. Art. 2, § 3; U.S.C.A. Const. [11] Federal Courts Art. 3, § 2, cl. 1. Criminal Justice

While every criminal investigation conducted by 29 Cases that cite this headnote Executive is “case,” and every policy issue resolved by congressional legislation involves “controversy,” these are not the sort of cases and controversies that Article III, § 2 refers to, since [15] Constitution’s central mechanism of separation Federal Civil Procedure of powers depends largely upon common In general; injury or interest understanding of what activities are appropriate Federal Civil Procedure to legislatures, to executives, and to courts. Causation; redressability U.S.C.A. Const. Art. 3, § 2, cl. 1. Irreducible constitutional minimum of standing contains three requirements: first and foremost, 81 Cases that cite this headnote there must be alleged, and ultimately proven, an “injury in fact”—a harm suffered by plaintiff that is concrete and actual or imminent, not conjectural or hypothetical; second, there must be “causation”—a fairly traceable connection [12] Federal Civil Procedure between plaintiff’s injury and complained-of © 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998) 118 S.Ct. 1003, 46 ERC 1097, 140 L.Ed.2d 210, 28 Envtl. L. Rep. 20,434...

conduct of defendant; third, there must be group copies of compliance reports, order “redressability”—a likelihood that requested requiring manufacturer to pay civil penalties to relief will redress alleged injury. U.S.C.A. United States Treasury, award of costs of Const. Art. 3, § 2, cl. 1. litigation, and any such further relief as court deemed appropriate. Emergency Planning Community Right–To–Know Act of 1986, §§ 560 Cases that cite this headnote 312, 313, 326(a, c, f), 42 U.S.C.A. §§ 11022, 11023, 11046(a, c, f).

22 Cases that cite this headnote [16] Federal Courts Injury, harm, causation, and redress

Triad of injury in fact, causation, and [19] redressability comprises core of Article III’s Federal Courts case-or-controversy requirement, and party Scope and Extent of Review invoking federal jurisdiction bears burden of establishing its existence. U.S.C.A. Const. Art. On appeal from motion to dismiss on pleadings, 3, § 2, cl. 1. Supreme Court had to presume that general allegations in complaint encompassed specific facts necessary to support those allegations. 382 Cases that cite this headnote Fed.Rules Civ.Proc.Rule 12(b), 28 U.S.C.A.

30 Cases that cite this headnote [17] Federal Civil Procedure Causation; redressability [20] Redressability, like other prongs of standing Federal Civil Procedure inquiry, does not depend on defendant’s status Causation; redressability as a governmental entity. U.S.C.A. Const. Art. 3, § 2, cl. 1. Although suitor may derive great comfort and joy from fact that United States Treasury is not cheated, that wrongdoer gets his just deserts, or 12 Cases that cite this headnote that nation’s laws are faithfully enforced, that psychic satisfaction is not acceptable Article III remedy, for purposes of redressability requirement for standing, as it does not redress [18] cognizable Article III injury; essence of Declaratory Judgment redressability requirement is that relief that does Subjects of relief in general not remedy injury suffered cannot bootstrap plaintiff into federal court. U.S.C.A. Const. Art. None of relief sought by environmental group 3, § 2, cl. 1. alleging violations of Emergency Planning and Community Right–To–Know Act (EPCRA) by steel manufacturer would reimburse group for 310 Cases that cite this headnote losses caused manufacturer’s late reporting, or eliminate any effects of that late reporting upon group, and thus, group failed to satisfy redressability requirement for standing; [21] complaint asked for declaratory judgment that Federal Civil Procedure manufacturer violated EPCRA, authorization to Causation; redressability periodically inspect manufacturer’s facility and records, order requiring manufacturer to provide Plaintiff cannot achieve standing to litigate © 2015 Thomson Reuters. No claim to original U.S. Government Works. 4 Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998) 118 S.Ct. 1003, 46 ERC 1097, 140 L.Ed.2d 210, 28 Envtl. L. Rep. 20,434...

substantive issue by bringing suit for cost of U.S.C.A. § 11046(a)(1). bringing suit; litigation must give plaintiff some other benefit besides reimbursement of costs that are byproduct of litigation itself. U.S.C.A. 121 Cases that cite this headnote Const. Art. 3, § 2, cl. 1.

107 Cases that cite this headnote [25] Injunction Persons entitled to apply; standing

Generalized interest in deterrence supporting [22] Federal Courts claim for injunctive relief is insufficient to Rights and interests at stake; adverseness satisfy redressibility requirement for Article III standing. U.S.C.A. Const. Art. 3, § 2, cl. 1. Interest in attorney’s fees is insufficient to create Article III case or controversy where none exists on merits of underlying claim. U.S.C.A. Const. 50 Cases that cite this headnote Art. 3, § 2, cl. 1.

132 Cases that cite this headnote [26] Federal Civil Procedure In general; injury or interest

Presumption of future injury when defendant [23] has voluntarily ceased its illegal activity in Environmental Law Persons Entitled to Sue or Seek Review; response to litigation is not substitute for Standing allegation of present or threatened injury upon which initial standing must be based. U.S.C.A. Section of Emergency Planning and Community Const. Art. 3, § 2, cl. 1. Right–To–Know Act (EPCRA) providing for recovery of costs covers only “costs of litigation,” which cannot alone support standing. 11 Cases that cite this headnote Emergency Planning Community Right–To–Know Act of 1986, § 326(f), 42 U.S.C.A. § 11046(f). [27] Federal Courts 17 Cases that cite this headnote Injunctions Injunction Persons entitled to apply; standing

Past exposure to illegal conduct does not in [24] Environmental Law itself show present case or controversy Cognizable interests and injuries, in general regarding injunctive relief, as required for standing, if unaccompanied by any continuing, Deterring future violations of Emergency present adverse effects. U.S.C.A. Const. Art. 3, Planning and Community Right–To–Know Act § 2, cl. 1. (EPCRA) can be “remedial,” for purposes of redressability requirement for Article III standing, when threatened injury is one of 50 Cases that cite this headnote gravamens of complaint. U.S.C.A. Const. Art. 3, § 2, cl. 1; Emergency Planning Community Right–To–Know Act of 1986, § 326(a)(1), 42

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**1006 *83 Syllabus* statutory standing question before a constitutional Alleging that petitioner manufacturer had violated the standing question, distinguished. In no case has this Court Emergency Planning and **1007 Community called the existence of a cause of action “jurisdictional,” Right–To–Know Act of 1986 (EPCRA) by failing to file and decided that question before resolving a dispute timely toxic- and hazardous-chemical storage and concerning the existence of an Article III case or emission reports for past years, respondent environmental controversy. Such a principle would turn every statutory protection organization filed this private enforcement question in an EPCRA citizen suit into a question of action for declaratory and injunctive relief under jurisdiction that this Court would have to EPCRA’s citizen-suit provision, 42 U.S.C. § 11046(a)(1). consider—indeed, raise sua sponte—even if not raised The District Court held that, because petitioner had below. Pp. 1009–1012. brought its filings up to date by the time the complaint was filed, the court lacked jurisdiction to entertain a suit (b) This Court declines to endorse the “doctrine of for a present violation; and that, because EPCRA does not hypothetical jurisdiction,” under which several Courts of allow suit for a purely historical violation, respondent’s Appeals have found it proper to proceed immediately to allegation of untimely filing was not a claim upon which the merits question, despite jurisdictional objections, at relief could be granted. The Seventh Circuit reversed, least where (1) the merits question is more readily concluding that EPCRA authorizes citizen suits for purely resolved, and (2) the prevailing party on the merits would past violations. be the same as the prevailing party were jurisdiction denied. That doctrine carries the courts beyond the Held: Because none of the relief sought would likely bounds of authorized judicial action and thus offends remedy respondent’s alleged injury in fact, respondent fundamental separation-of-powers principles. In a long lacks standing to maintain this suit, and this Court and the and venerable line of cases, this Court has held that, lower courts lack jurisdiction to entertain it. Pp. without proper jurisdiction, a court cannot proceed at all, 1009–1021. but can only note the jurisdictional defect and dismiss the suit. See, e.g., Capron v. Van Noorden, 2 Cranch 126, 2 (a) The merits issue in this case—whether § 11046(a) L.Ed. 229; Arizonans for Official English v. Arizona, 520 permits citizen suits for purely past violations—is not also U.S. 43, 73, 117 S.Ct. 1055, 1071-1072, 137 L.Ed.2d 170. “jurisdictional,” and so does not occupy the same status as Bell v. Hood, supra; National Railroad Passenger Corp. standing to sue as a question that must be resolved first. It v. National Assn. of Railroad Passengers, 414 U.S. 453, is firmly established that a district court’s subject-matter 465, n. 13, 94 S.Ct. 690, 696, n. 13, 38 L.Ed.2d 646; jurisdiction is not defeated by the absence of a valid (as Norton v. Mathews, 427 U.S. 524, 531, 96 S.Ct. 2771, opposed to arguable) cause of action, see, e.g., Bell v. 2775, 49 L.Ed.2d 672; Secretary of Navy v. Avrech, 418 Hood, 327 U.S. 678, 682, 66 S.Ct. 773, 776, 90 L.Ed. U.S. 676, 678, 94 S.Ct. 3039, 3040, 41 L.Ed.2d 1033 (per 939. Subject-matter jurisdiction exists if the right to curiam); United States v. Augenblick, 393 U.S. 348, 89 recover will be sustained under one reading of the S.Ct. 528, 21 L.Ed.2d 537; Philbrook **1008 v. Glodgett, Constitution and laws and defeated under another, id., at 421 U.S. 707, 721, 95 S.Ct. 1893, 1902, 44 L.Ed.2d 525; 685, 66 S.Ct., at 777–778, unless the claim clearly and Chandler v. Judicial Council of Tenth Circuit, 398 appears to be immaterial, wholly insubstantial and U.S. 74, 86–88, 90 S.Ct. 1648, 1654–1656, 26 L.Ed.2d frivolous, or otherwise so devoid of merit as not to 100, distinguished. For a court to pronounce upon a law’s involve a federal controversy, see, e.g., Oneida Indian meaning or constitutionality when it has no jurisdiction to Nation of N.Y. v. County of Oneida, 414 U.S. 661, 666, 94 do so is, by very definition, an ultra vires act. Pp. S.Ct. 772, 776–777, 39 L.Ed.2d 73. Here, respondent 1012–1016. wins under one construction of EPCRA and loses under another, and its claim is not frivolous or immaterial. It is (c) Respondent lacks standing to sue. Standing is the unreasonable to read § 11046(c)—which provides that “irreducible constitutional minimum” necessary to make a “[t]he district court shall have jurisdiction in actions justiciable “case” or “controversy” under Article III, § 2. brought under subsection (a) ... to enforce [an EPCRA] Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 requirement ... and to impose any civil penalty provided S.Ct. 2130, 2136, 119 L.Ed.2d 351. It contains three for violation of that requirement”—as making all the requirements: injury in fact to the plaintiff, causation of elements of the § 11046(a) cause of action *84 that injury by the defendant’s complained-of conduct, and jurisdictional, rather than as merely specifying the a likelihood that the requested relief will redress that remedial powers of the court. Gwaltney of Smithfield, Ltd. injury. E.g., ibid. Even assuming, as respondent asserts, v. Chesapeake Bay Foundation, Inc., 484 U.S. 49, 108 that petitioner’s failure to report EPCRA information in a S.Ct. 376, 98 L.Ed.2d 306, as well as cases deciding a timely manner, and the lingering effects of that failure,

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constitute a concrete injury in fact to respondent and its plaintiff below, has standing to bring this action. members that satisfies Article III, cf. id., at 578, 112 S.Ct., at 2145–2146, the complaint nevertheless fails the redressability test: None of the specific items of relief sought—a declaratory judgment that petitioner violated EPCRA; *85 injunctive relief authorizing respondent to I make periodic inspections of petitioner’s facility and records and requiring petitioner to give respondent copies Respondent, an association of individuals interested in of its compliance reports; and orders requiring petitioner environmental protection, sued petitioner, a small to pay EPCRA civil penalties to the Treasury and to manufacturing company in Chicago, for past violations of reimburse respondent’s litigation expenses—and no EPCRA. EPCRA establishes a framework of state, conceivable relief under the complaint’s final, general regional, and local agencies designed to inform the public request, would serve to reimburse respondent for losses about the presence of hazardous and toxic chemicals, and caused by petitioner’s late reporting, or to eliminate any to provide for emergency response in the event of effects of that late reporting upon respondent. Pp. health-threatening release. Central to its operation are 1016–1020. reporting requirements compelling users of specified toxic and hazardous chemicals to file annual *87 “emergency 90 F.3d 1237, vacated and remanded. and hazardous chemical inventory forms” and “toxic chemical **1009 release forms,” which contain, inter SCALIA, J., delivered the opinion of the Court, in which alia, the name and location of the facility, the name and REHNQUIST, C.J., and O’CONNOR, KENNEDY, and quantity of the chemical on hand, and, in the case of toxic THOMAS, JJ., joined, and in which BREYER, J., joined chemicals, the waste-disposal method employed and the as to Parts I and IV. O’CONNOR, J., filed a concurring annual quantity released into each environmental opinion, in which KENNEDY, J., joined, post, p. 1020. medium. 42 U.S.C. §§ 11022 and 11023. The BREYER, J., filed an opinion concurring in part and hazardous-chemical inventory forms for any given concurring in the judgment, post, p. 1020. STEVENS, J., calendar year are due the following March 1st, and the filed an opinion concurring in the judgment, in which toxic-chemical release forms the following July 1st. §§ SOUTER, J., joined as to Parts I, III, and IV, and 11022(a)(2) and 11023(a). GINSBURG, J., joined as to Part III, post, p. 1021. GINSBURG, J., filed an opinion concurring in the Enforcement of EPCRA can take place on many fronts. judgment, post, p. 1032. The Environmental Protection Agency (EPA) has the most powerful enforcement arsenal: it may seek criminal, civil, or administrative penalties. § 11045. State and local Attorneys and Law Firms governments can also seek civil penalties, as well as injunctive relief. §§ 11046(a)(2) and (c). For purposes of Sanford M. Stein, Chicago, IL, for Petitioner. this case, however, the crucial enforcement mechanism is the citizen-suit provision, § 11046(a)(1), which likewise David A. Strauss, Chicago, IL, for Respondent. authorizes civil penalties and injunctive relief, see § 11046(c). This provides that “any person may commence Irving L. Gornstein, Washington, DC, for U.S. as amicus a civil action on his own behalf against ... [a]n owner or curiae, by special leave of Court. operator of a facility for failure,” among other things, to “[c]omplete and submit an inventory form under section Opinion 11022(a) of this title ... [and] section 11023(a) of this title.” § 11046(a)(1). As a prerequisite to bringing such a *86 Justice SCALIA delivered the opinion of the Court. suit, the plaintiff must, 60 days prior to filing his complaint, give notice to the Administrator of the EPA, the State in which the alleged violation occurs, and the This is a private enforcement action under the citizen–suit alleged violator. § 11046(d). The citizen suit may not go provision of the Emergency Planning and Community forward if the Administrator “has commenced and is Right–To–Know Act of 1986 (EPCRA), 100 Stat. 1755, diligently pursuing an administrative order or civil action 42 U.S.C. § 11046(a)(1). The case presents the merits to enforce the requirement concerned or to impose a civil question, answered in the affirmative by the United States penalty.” § 11046(e). Court of Appeals for the Seventh Circuit, whether EPCRA authorizes suits for purely past violations. It also In 1995 respondent sent a notice to petitioner, the presents the jurisdictional question whether respondent, Administrator, and the relevant Illinois authorities, © 2015 Thomson Reuters. No claim to original U.S. Government Works. 7 Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998) 118 S.Ct. 1003, 46 ERC 1097, 140 L.Ed.2d 210, 28 Envtl. L. Rep. 20,434...

alleging—accurately, as it turns out—that petitioner had absence of a valid (as opposed to arguable) cause of failed since 1988, the first year of EPCRA’s filing action does not implicate subject-matter jurisdiction, i.e., deadlines, to complete and *88 to submit the requisite the courts’ statutory or constitutional power to adjudicate hazardous-chemical inventory and toxic-chemical release the case. See generally 5A Charles Alan Wright & Arthur forms under §§ 11022 and 11023. Upon receiving the R. Miller, Federal Practice and Procedure § 1350, p. 196, notice, petitioner filed all of the overdue forms with the n. 8 and cases cited (2d ed.1990). As we stated in Bell v. relevant agencies. The EPA chose not to bring an action Hood, 327 U.S. 678, 682, 66 S.Ct. 773, 776, 90 L.Ed. 939 against petitioner, and when the 60–day waiting period (1946), “[j]urisdiction ... is not defeated ... by the expired, respondent filed suit in Federal District Court. possibility that the averments might fail to state a cause of Petitioner promptly filed a motion to dismiss under action on which petitioners could actually recover.” Federal Rules of Civil Procedure 12(b)(1) and (6), Rather, the district court has jurisdiction if “the right of contending that, because its filings were up to date when the petitioners to recover under their complaint will be the complaint was filed, the court had no jurisdiction to sustained if the Constitution and laws of the United States entertain a suit for a present violation; and that, because are given one construction and will be defeated if they are EPCRA does not allow suit for a purely historical given another,” id., at 685, 66 S.Ct., at 777, unless the violation, respondent’s allegation of untimeliness in filing claim “clearly appears to be immaterial and made solely was not a claim upon which relief could be granted. for the purpose of obtaining jurisdiction or where such a claim is wholly insubstantial and frivolous.” Id., at The District Court agreed with petitioner on both points. 682–683, 66 S.Ct., at 776; see also Bray v. Alexandria App. to Pet. for Cert. A24–A26. The Court of Appeals Women’s Health Clinic, 506 U.S. 263, 285, 113 S.Ct. reversed, concluding that citizens may seek penalties 753, 767–768, 122 L.Ed.2d 34 (1993); The Fair v. Kohler against EPCRA violators who file after the statutory Die & Specialty Co., 228 U.S. 22, 25, 33 S.Ct. 410, deadline and after receiving notice. 90 F.3d 1237 (C.A.7 411–412, 57 L.Ed. 716 (1913). Dismissal for lack of 1996). We granted certiorari, 519 U.S. 1147, 117 S.Ct. subject-matter jurisdiction because of the inadequacy of 1079, 137 L.Ed.2d 214 (1997). the federal claim is proper only when the claim is “so insubstantial, implausible, foreclosed by prior decisions of this Court, or otherwise completely devoid of merit as not to involve a federal controversy.” Oneida Indian Nation of N.Y. v. County of Oneida, 414 U.S. 661, 666, 94 S.Ct. II 772, 777, 39 L.Ed.2d 73 (1974); see also Romero v. [1] International Terminal Operating Co., 358 U.S. 354, 359, We granted certiorari in this case to resolve a conflict 79 S.Ct. 468, 473, 3 L.Ed.2d 368 (1959). Here, between the interpretation of EPCRA adopted by the respondent wins under one construction of EPCRA and Seventh Circuit and the interpretation previously adopted loses under another, and Justice STEVENS does not by the Sixth Circuit in Atlantic States Legal Foundation, argue that respondent’s claim is frivolous or immaterial— Inc. v. United Musical Instruments, U.S.A., Inc., 61 F.3d *90 in fact, acknowledges that the language of the 473 (1995)—a case relied on by the District Court, and citizen-suit provision is ambiguous. Post, at 1031. acknowledged by the Seventh Circuit to be “factually indistinguishable,” 90 F.3d, at 1241–1242. Petitioner, Justice STEVENS relies on our treatment of a similar however, both in its petition for certiorari and in its briefs issue as jurisdictional in Gwaltney of Smithfield, Ltd. v. on the merits, has raised the issue of respondent’s Chesapeake Bay Foundation, Inc., 484 U.S. 49, 108 S.Ct. standing to maintain the suit, and hence this Court’s 376, 98 L.Ed.2d 306 (1987). Post, at 1022. The statute at jurisdiction to entertain it. Though there is some dispute issue in that case, however, after creating the cause of on this point, see Part III, infra, this would normally be action, went on to say that “[t]he district courts shall have considered a threshold question that must be resolved in jurisdiction, without regard to the amount in controversy respondent’s favor before proceeding to the *89 merits. or the citizenship of the parties,” to provide various forms Justice STEVENS’ opinion concurring in the judgment, of relief. 33 U.S.C. § 1365(a) (emphasis added). The however, claims that the question whether § 11046(a) italicized phrase strongly suggested (perhaps permits this cause of action is also “jurisdictional,” and so misleadingly) that the provision was addressing genuine has equivalent claim to being resolved first. Whether that subject-matter jurisdiction. The corresponding provision is so has significant implications for this case and for in the present case, however, reads as follows: many others, **1010 and so the point warrants extended discussion. “The district court shall have jurisdiction in actions [2] [3] [4] brought under subsection (a) of this section against an It is firmly established in our cases that the owner or operator of a facility to enforce the © 2015 Thomson Reuters. No claim to original U.S. Government Works. 8 Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998) 118 S.Ct. 1003, 46 ERC 1097, 140 L.Ed.2d 210, 28 Envtl. L. Rep. 20,434...

requirement concerned and to impose any civil penalty 33, 38, 73 S.Ct. 67, 69–70, 97 L.Ed. 54 (1952). But even provided for violation of that requirement.” 42 U.S.C. § if it is authoritative on the point as to the distinctive 11046(c). statute there at issue, it is fanciful to think that Gwaltney revised our established jurisprudence that the failure of a It is unreasonable to read this as making all the elements cause of action does not automatically produce a failure of the cause of action under subsection (a) jurisdictional, of jurisdiction, or adopted the expansive principle that a rather than as merely specifying the remedial powers of statute saying “the district court shall have jurisdiction to the court, viz., to enforce the violated requirement and to remedy violations [in specified ways]” *92 renders the impose civil penalties. “Jurisdiction,” it has been existence of a violation necessary for subject-matter observed, “is a word of many, too many, meanings,” jurisdiction. United States v. Vanness, 85 F.3d 661, 663, n. 2 (C.A.D.C.1996), and it is commonplace for the term to be Justice STEVENS’ concurrence devotes a large portion of used as it evidently was here. See, e.g., 7 U.S.C. § its discussion to cases in which a statutory standing 13a–1(d) (“In any action brought under this section, the question was decided before a question of constitutional Commission may seek and the court shall have standing. See post, at 1022–1024. They also are irrelevant jurisdiction to impose ... a civil penalty in the amount of here, because it is not a statutory standing question that not more than the higher of $100,000 or triple the Justice STEVENS would have us decide first. He wishes monetary gain to the person for each violation”); 15 to resolve, not whether EPCRA authorizes this plaintiff to U.S.C. § 2622(d) (“In actions brought under this sue (it assuredly does), but whether the scope of the subsection, the district courts shall have jurisdiction to EPCRA right of action includes past violations. Such a grant all appropriate relief, including injunctive relief and question, we have held, goes to the merits and not to compensatory and exemplary damages”); 42 U.S.C. § statutory standing. See Northwest Airlines, Inc. v. County 7622(d) (“In actions brought under this subsection, the of Kent, 510 U.S. 355, 365, 114 S.Ct. 855, 862, 127 district courts shall have jurisdiction to grant all L.Ed.2d 183 (1994) (“The question whether a federal appropriate relief *91 including, but not limited to, statute creates a claim for relief is not jurisdictional”); injunctive relief, compensatory, and exemplary Romero v. International Terminal Operating Co., supra, damages”). at 359, 79 S.Ct., at 473; Montana—Dakota Util. Co. v. Northwestern Public Service Co., 341 U.S. 246, 249, 71 It is also the case that the Gwaltney opinion does not S.Ct. 692, 694, 95 L.Ed. 912 (1951). display the slightest awareness that anything turned upon whether the existence **1011 of a cause of action for past Though it is replete with extensive case discussions, case violations was technically jurisdictional—as indeed citations, rationalizations, and syllogoids, see post, at nothing of substance did. The District Court had statutory 1025, n. 12, and n. 2 infra, Justice STEVENS’ opinion jurisdiction over the suit in any event, since continuing conspicuously lacks one central feature: a single case in violations were also alleged. See 484 U.S., at 64, 108 which this Court has done what he proposes, to wit, call S.Ct., at 385. It is true, as Justice STEVENS points out, the existence of a cause of action “jurisdictional,” and that the issue of Article III standing which is addressed at decide that question before resolving a dispute concerning the end of the opinion should technically have been the existence of an Article III case or controversy. Of addressed at the outset if the statutory question was not course, even if there were not solid precedent jurisdictional. But that also did not really matter, since contradicting Justice STEVENS’ position, the Article III standing was in any event found. The short of consequences are alone enough to condemn it. It would the matter is that the jurisdictional character of the turn every statutory question in an EPCRA citizen suit elements of the cause of action in Gwaltney made no into a question of jurisdiction. Under Justice STEVENS’ substantive difference (nor even any procedural difference analysis, § 11046(c)’s grant of “jurisdiction in actions that the Court seemed aware of), had been assumed by the brought under [§ 11046(a) ]” withholds jurisdiction over parties, and was assumed without discussion by the Court. claims involving purely past violations if past violations We have often said that drive-by jurisdictional rulings of are not in fact covered by § 11046(a). By parity of this sort (if Gwaltney can even be called a ruling on the reasoning, if there is a dispute as to whether the omission point rather than a dictum) have no precedential effect. of a particular item constituted a failure to “complete” the See Lewis v. Casey, 518 U.S. 343, 352, n. 2, 116 S.Ct. form; or as to *93 whether a particular manner of delivery 2174, 2180, n. 2, 135 L.Ed.2d 606 (1996); Federal complied in time with the requirement to “submit” the Election Comm’n v. NRA Political Victory Fund, 513 U.S. form; and if the court agreed with the defendant on the 88, 97, 115 S.Ct. 537, 542–543, 130 L.Ed.2d 439 (1994); point; the action would not be “brought under [§ 11046(a) United States v. L.A. Tucker Truck Lines, Inc., 344 U.S. ],” and would be dismissed for lack of jurisdiction rather

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[6] [7] [8] than decided on the merits. Moreover, those statutory We decline to endorse such an approach because it arguments, since they are “jurisdictional,” would have to carries the courts beyond the bounds of authorized be considered by this Court even though not raised earlier judicial action and thus offends fundamental principles of in the litigation—indeed, this Court would have to raise separation of powers. This conclusion should come as no them sua sponte. See **1012 Mt. Healthy City Bd. of Ed. surprise, since it is reflected in a long and venerable line v. Doyle, 429 U.S. 274, 278–279, 97 S.Ct. 568, 571–572, of our cases. “Without jurisdiction the court cannot 50 L.Ed.2d 471 (1977); Great Southern Fire Proof Hotel proceed at all in any cause. Jurisdiction is power to Co. v. Jones, 177 U.S. 449, 453, 20 S.Ct. 690, 691–692, declare the law, and when it ceases to exist, the only 44 L.Ed. 842 (1900). Congress of course did not create function remaining to the court is that of announcing the such a strange scheme. In referring to actions “brought fact and dismissing the cause.” Ex parte McCardle, 7 under” § 11046(a), § 11046(c) means suits contending Wall. 506, 514, 19 L.Ed. 264 (1868). “On every writ of that § 11046(a) contains a certain requirement. If Justice error or appeal, the first and fundamental question is that STEVENS is correct that all cause-of-action questions of jurisdiction, first, of this court, and then of the court may be regarded as jurisdictional questions, and thus from which the record comes. This question the court is capable of being decided where there is no genuine case bound to ask and answer for itself, even when not or controversy, it is hard to see what is left of that otherwise suggested, and without respect to the relation of limitation in Article III. the parties to it.” Great Southern Fire Proof Hotel Co. v. Jones, supra, at 453, 20 S.Ct., at 691–692. The requirement that jurisdiction be established as a threshold matter “spring[s] from the nature and limits of *95 the judicial power of the United States” and is “inflexible and III without exception.” Mansfield, C. & L.M.R. Co. v. Swan, [5] 111 U.S. 379, 382, 4 S.Ct. 510, 511, 28 L.Ed. 462 (1884). In addition to its attempt to convert the merits issue in this case into a jurisdictional one, Justice STEVENS’ This Court’s insistence that proper jurisdiction appear concurrence proceeds, post, at 1023–1027, to argue the begins at least as early as 1804, when we set aside a bolder point that jurisdiction need not be addressed first judgment for the defendant at the instance of the losing anyway. Even if the statutory question is not “fram[ed] ... plaintiff who had himself failed to allege the basis for in terms of ‘jurisdiction,’ ” but is simply “characterize[d] federal jurisdiction. Capron v. Van Noorden, 2 Cranch ... as whether respondent’s complaint states a ‘cause of 126, 2 L.Ed. 229 (1804). Just last Term, we restated this action,’ ” “it is also clear that we have the power to decide principle in the clearest fashion, unanimously setting the statutory question first.” Post, at 1024. This is aside the Ninth Circuit’s merits decision in a case that had essentially the position embraced by several Courts of lost the elements of a justiciable controversy: Appeals, which find it proper to proceed immediately to the merits question, despite jurisdictional objections, at **1013 “ ‘[E]very federal appellate court has a special least where (1) the merits question is more readily obligation to ‘satisfy itself not only of its own resolved, and (2) the prevailing party on the merits would jurisdiction, but also that of the lower courts in a cause be the same as the prevailing party were jurisdiction under review,’ even though the parties are prepared to denied. See, e.g., SEC v. American *94 Capital concede it. Mitchell v. Maurer, 293 U.S. 237, 244 [55 Investments, Inc., 98 F.3d 1133, 1139–1142 (C.A.9 1996), S.Ct. 162, 165, 79 L.Ed. 338] (1934). See Juidice v. cert. denied, sub nom. Shelton v. Barnes, 520 U.S. 1185, Vail, 430 U.S. 327, 331–332 [97 S.Ct. 1211, 117 S.Ct. 1468, 137 L.Ed.2d 681 (1997); Smith v. Avino, 1215–1216, 51 L.Ed.2d 376] (1977) (standing). ‘And if 91 F.3d 105, 108 (C.A.11 1996); Clow v. U.S. the record discloses that the lower court was without Department of Housing and Urban Development, 948 jurisdiction this court will notice the defect, although F.2d 614, 616, n. 2 (C.A.9 1991); Cross–Sound Ferry the parties make no contention concerning it. [When Services, Inc. v. ICC, 934 F.2d 327, 333 (C.A.D.C.1991); the lower federal court] lack[s] jurisdiction, we have United States v. Parcel of Land, 928 F.2d 1, 4 (C.A.1 jurisdiction on appeal, not of the merits but merely for 1991); Browning–Ferris Industries v. Muszynski, 899 the purpose of correcting the error of the lower court in F.2d 151, 154–159 (C.A.2 1990). The Ninth Circuit has entertaining the suit.’ United States v. Corrick, 298 denominated this practice—which it characterizes as U.S. 435, 440 [56 S.Ct. 829, 831, 80 L.Ed. 1263] “assuming” jurisdiction for the purpose of deciding the (1936) (footnotes omitted).’ ” Arizonans for Official merits—the “doctrine of hypothetical jurisdiction.” See, English v. Arizona, 520 U.S. 43, 73, 117 S.Ct. 1055, e.g., United States v. Troescher, 99 F.3d 933, 934, n. 1 1071-1072, 137 L.Ed.2d 170 (1997), quoting from (1996).1 Bender v. Williamsport Area School Dist., 475 U.S. 534, 541, 106 S.Ct. 1326, 1331, 89 L.Ed.2d 501 (1986) © 2015 Thomson Reuters. No claim to original U.S. Government Works. 10 Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998) 118 S.Ct. 1003, 46 ERC 1097, 140 L.Ed.2d 210, 28 Envtl. L. Rep. 20,434...

(brackets in original). action existed before determining whether (if so) the plaintiff came within the “zone of interests” for which the Justice STEVENS’ arguments contradicting all this cause of action was available. 414 U.S., at 465, n. 13, 94 jurisprudence—and asserting that a court may decide the S.Ct., at 696, n. 13. The latter question is an issue of cause of action before resolving Article III statutory standing. It has nothing to do with whether there jurisdiction—are readily refuted. First, his concurrence is case or controversy under Article III.2 seeks to convert Bell v. Hood, 327 U.S. 678, 66 S.Ct. 773, 90 L.Ed. 939 (1946), into a case in which the **1014 *98 Much more extensive defenses of the practice cause-of-action question was decided before an Article III of deciding the cause of action before resolving Article III standing *96 question. Post, at 1024, n. 8. “Bell,” Justice jurisdiction have been offered by the Courts of Appeals. STEVENS asserts, “held that we have jurisdiction to They rely principally upon two cases of ours, Norton v. decide [whether the plaintiff has stated a cause of action] Mathews, 427 U.S. 524, 96 S.Ct. 2771, 49 L.Ed.2d 672 even when it is unclear whether the plaintiff’s injuries can (1976), and Secretary of Navy v. Avrech, 418 U.S. 676, 94 be redressed.” Post, at 1024. The italicized phrase (the S.Ct. 3039, 41 L.Ed.2d 1033 (1974) (per curiam). Both italics are his own) invites the reader to believe that are readily explained, we think, by their extraordinary Article III redressability was at issue. Not only is this not procedural postures. In Norton,the case came to us on true, but the whole point of Bell was that it is not true. In direct appeal from a three-judge District Court, and the Bell, which was decided before Bivens v. Six Unknown jurisdictional question was whether the action was Agents of Fed. Bureau of Narcotics, 403 U.S. 388, 91 properly brought in that forum rather than in an ordinary S.Ct. 1999, 29 L.Ed.2d 619 (1971), the District Court had district court. We declined to decide that jurisdictional dismissed the case on jurisdictional grounds because it question, because the merits question was decided in a believed that (what we would now call) a Bivens action companion case, Mathews v. Lucas, 427 U.S. 495, 96 would not lie. This Court held that the nonexistence of a S.Ct. 2755, 49 L.Ed.2d 651 (1976), with the consequence cause of action was no proper basis for a jurisdictional that the jurisdictional question could have no effect on the dismissal. Thus, the uncertainty about “whether the outcome: If the three-judge court had been properly plaintiff’s injuries can be redressed” to which Justice convened, we would have affirmed, and if not, we would STEVENS refers is simply the uncertainty about whether have vacated and remanded for a fresh decree from which a cause of action existed—which is precisely what Bell an appeal could be taken to the Court of Appeals, the holds not to be an Article III “redressability” question. It outcome of which was foreordained by Lucas. Norton v. would have been a different matter if the relief requested Mathews, supra, at 531, 96 S.Ct., at 2775. Thus, Norton by the plaintiffs in Bell (money damages) would not have did not use the pretermission of the jurisdictional question remedied their injury in fact; but it of course would. as a device for reaching a question of law that otherwise Justice STEVENS used to understand the fundamental would have gone unaddressed. Moreover, the Court distinction between arguing no cause of action and seems to have regarded the merits judgment that it entered arguing no Article III redressability, having written for on the basis of Lucas as equivalent to a jurisdictional the Court that the former argument is “not squarely dismissal for failure to present a substantial federal directed at jurisdiction itself, but rather at the existence of question. The Court said: “This disposition [Lucas] a remedy for the alleged violation of ... federal rights,” renders the merits in the present case a decided issue and which issue is “ ‘not of the jurisdictional sort which the thus one no longer substantial in the jurisdictional sense.” Court raises on its own motion.’ ” Lake Country Estates, 427 U.S., at 530–531, 96 S.Ct., at 2774–2775. We think it Inc. v. Tahoe Regional Planning Agency, 440 U.S. 391, clear that this peculiar case, involving a merits issue 398, 99 S.Ct. 1171, 1175–1176, 59 L.Ed.2d 401 (1979) dispositively resolved in a companion case, was not (STEVENS, J.), (quoting Mt. Healthy Bd. of Ed. v. Doyle, meant to overrule, sub silentio, two centuries of 429 U.S., at 279, 97 S.Ct., at 572). jurisprudence affirming the necessity of determining jurisdiction before proceeding to the merits. See Clow, Justice STEVENS also relies on National Railroad 948 F.2d, at 627 (O’Scannlain, J., dissenting). Passenger Corp. v. National Assn. of Railroad Passengers, 414 U.S. 453, 94 S.Ct. 690, 38 L.Ed.2d 646 Avrech also involved an instance in which an intervening (1974). Post, at 1024–1025. But in that case, we did not Supreme Court decision definitively answered the merits determine whether a cause of action existed before *99 question. The jurisdictional question in the case had determining *97 that the plaintiff had Article III standing; been raised by the Court sua sponte after oral argument, there was no question of injury in fact or effectiveness of and supplemental briefing had been ordered. Secretary of the requested remedy. Rather, National Railroad Navy v. Avrech, supra, at 677, 94 S.Ct., at 3039–3040. Passenger Corp. determined whether a statutory cause of Before the Court came to a decision, however, the merits

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issue in the case had been conclusively resolved in Parker adequately. Normally, the Court acknowledged, its v. Levy, 417 U.S. 733, 94 S.Ct. 2547, 41 L.Ed.2d 439 obligation to inquire into the jurisdiction of the District (1974), a case argued the same day as Avrech. The Court Court might prevent this disposition. But here, the Court was unwilling to decide the jurisdictional question concluded, “the substantive issue decided by the District without oral argument, 418 U.S., at 677, 94 S.Ct., at Court would have been decided by that court even if it 3039–3040, but acknowledged (with some had concluded that the Secretary was not properly a understatement) that **1015 “even the most diligent and party,” and “the only practical difference that resulted ... zealous advocate could find his ardor somewhat was that its injunction was directed against him as well as dampened in arguing a jurisdictional issue where the against [the Commissioner],” which the Secretary “has decision on the merits is ... foreordained,” id., at 678, 94 [not] properly contended to be wrongful before this S.Ct., at 3040. Accordingly, the Court disposed of the Court.” 421 U.S., at 721–722, 95 S.Ct., at 1902–1903. case on the basis of the intervening decision in Parker, in And finally, in Chandler v. Judicial Council of Tenth a minimalist two-page per curiam opinion. The first thing Circuit, 398 U.S. 74, 90 S.Ct. 1648, 26 L.Ed.2d 100 to be observed about Avrech is that the supposed (1970), we reserved the question whether we had jurisdictional issue was technically not that. The issue was jurisdiction to issue a writ of prohibition or mandamus whether a court–martial judgment could be attacked because the petitioner had not exhausted all available collaterally by a suit for backpay. Although Avrech, like avenues before seeking relief under the All Writs Act, 28 the earlier case of United States v. Augenblick, 393 U.S. U.S.C. § 1651, and because there was no record to 348, 89 S.Ct. 528, 21 L.Ed.2d 537 (1969), characterized review. 398 U.S., at 86–88, 90 S.Ct., at 1654–1656. The this question as jurisdictional, we later held squarely that exhaustion question itself was at least arguably it was not. See Schlesinger v. Councilman, 420 U.S. 738, jurisdictional, and was clearly treated as such. Id., at 86, 753, 95 S.Ct. 1300, 1310–1311, 43 L.Ed.2d 591 (1975). 90 S.Ct., at 1654–1655.3 In any event, the peculiar circumstances of Avrech hardly permit it to be cited for the precedent–shattering general **1016 [9] [10] *101 While some of the above cases must proposition that an “easy” merits question may be decided be acknowledged to have diluted the absolute purity of on the assumption of jurisdiction. To the contrary, the fact the rule that Article III jurisdiction is always an that the Court ordered briefing on the jurisdictional antecedent question, none of them even approaches question sua sponte demonstrates its adherence to approval of a doctrine of “hypothetical jurisdiction” that traditional and constitutionally dictated requirements. See enables a court to resolve contested questions of law Cross–Sound Ferry Services, Inc. v. ICC, 934 F.2d, at when its jurisdiction is in doubt. Hypothetical jurisdiction 344–345, and n. 10 (Thomas, J., concurring in part and produces nothing more than a hypothetical concurring in denial of petition for review). judgment—which comes to the same thing as an advisory opinion, disapproved by this Court from the beginning. Other cases sometimes cited by the lower courts to Muskrat v. United States, 219 U.S. 346, 362, 31 S.Ct. support “hypothetical jurisdiction” are similarly 250, 256, 55 L.Ed. 246 (1911); Hayburn’s Case, 2 Dall. distinguishable. United States v. Augenblick, as we have 409 (1792). Much more than legal niceties are at stake discussed, did not involve a jurisdictional issue. In here. The statutory and (especially) constitutional Philbrook v. Glodgett, 421 U.S. 707, 721, 95 S.Ct. 1893, elements of jurisdiction are an essential ingredient of 1902, 44 L.Ed.2d 525 (1975), the jurisdictional question separation and equilibration of powers, restraining the was whether, *100 in a suit under 28 U.S.C. § 1343(3) courts from acting at certain times, and even restraining against the Commissioner of the Vermont Department of them from acting permanently regarding certain subjects. Social Welfare for deprivation of federal rights under See United States v. Richardson, 418 U.S. 166, 179, 94 color of state law by denying payments under a federally S.Ct. 2940, 2947–2948, 41 L.Ed.2d 678 (1974); funded welfare program, the plaintiff could join a similar Schlesinger v. Reservists Comm. to Stop the War, 418 claim against the Secretary of Health, Education, and U.S. 208, 227, 94 S.Ct. 2925, 2935, 41 L.Ed.2d Welfare. The merits issue of statutory construction 706(1974). For a court to pronounce upon the meaning or involved in the claim against the Secretary was precisely the constitutionality of a state or federal law when it has the same as that involved in the claim against the no jurisdiction *102 to do so is, by very definition, for a Commissioner, and the Secretary (while challenging court to act ultra vires. jurisdiction) assured the Court that he would comply with any judgment entered against the Commissioner. The Court’s disposition of the case was to dismiss the Secretary’s appeal under what was then this Court’s Rule 40(g), for failure to brief the jurisdictional question IV

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[11] [12] [13] [14] Having reached the end of what seems like a complaint to see how it measures up to Article III’s long front walk, we finally arrive at the threshold requirements. This case is on appeal from a Rule 12(b) jurisdictional question: whether respondent, the plaintiff motion to dismiss on the pleadings, so we must presume below, has standing to sue. Article III, § 2, of the that the general allegations in the complaint encompass Constitution extends the “judicial Power” of the United the specific facts necessary to support those allegations. States only to “Cases” and “Controversies.” We have Lujan v. National Wildlife Federation, 497 U.S. 871, 889, always taken this to mean cases and controversies of the 110 S.Ct. 3177, 3189, 111 L.Ed.2d 695 (1990). The sort traditionally amenable to, and resolved by, the complaint contains claims “on behalf of both [respondent] judicial process. Muskrat v. United States, supra, at itself and its members.”6 App. 4. It describes respondent 356–357, 31 S.Ct., at 253–254. Such a meaning is fairly as an organization that seeks, uses, and acquires data implied by the text, since otherwise the purported reported under EPCRA. It says that respondent “reports to restriction upon the judicial power would scarcely be a its members and the public about storage and releases of restriction at all. Every criminal investigation conducted toxic chemicals into the environment, advocates changes by the Executive is a “case,” and every policy issue in environmental regulations and statutes, prepares reports resolved by congressional legislation involves a for its members and the public, seeks the reduction of “controversy.” These are not, however, the sort of cases toxic chemicals and further seeks to promote the effective and controversies that Article III, § 2, refers to, since “the enforcement of environmental laws.” Id., at 5. The Constitution’s central mechanism of separation of powers complaint asserts that respondent’s “right to know about depends largely upon common understanding of what [toxic-chemical] releases and its interests in protecting activities are appropriate to legislatures, to executives, and improving the environment and the health of its and to courts.” Lujan v. Defenders of Wildlife, 504 U.S. members have been, are being, and will be adversely 555, 559–560, 112 S.Ct. 2130, 2136, 119 L.Ed.2d 351 affected by [petitioner’s] actions in failing to provide (1992). Standing to sue is part of the common timely and required information under EPCRA.” Ibid. understanding of what it takes to make a justiciable case. The complaint also alleges that respondent’s members, Whitmore v. Arkansas, 495 U.S. 149, 155, 110 S.Ct. 1717, who live in or frequent the area near petitioner’s facility, 1723, 109 L.Ed.2d 135 (1990).4 use the EPCRA-reported information “to learn about *105 toxic chemical releases, the use of hazardous substances [15] [16] [17] The “irreducible constitutional minimum of in their communities, to plan emergency preparedness in standing” contains three requirements. Lujan v. Defenders the event of accidents, and to attempt to reduce the toxic of Wildlife, *103 supra, at 560, 112 S.Ct., at 2136. First chemicals in areas in which they live, work and visit.” and foremost, there must be alleged (and ultimately Ibid. The members’ “safety, health, recreational, proved) an “injury in fact”—a harm suffered by the economic, aesthetic and environmental interests” **1018 plaintiff that is “concrete” and “actual or imminent, not in the information, it is claimed, “have been, are being, ‘conjectural’ or ‘hypothetical.’ ” Whitmore v. Arkansas, and will be adversely affected by [petitioner’s] actions in supra, at 149, 155, 110 S.Ct., at 1723 (quoting Los failing to file timely and required reports under EPCRA.” Angeles v. Lyons, 461 U.S. 95, 101–102, 103 S.Ct. 1660, Ibid. 1665, 75 L.Ed.2d 675 (1983)). Second, there must be causation—a fairly traceable connection between the As appears from the above, respondent asserts petitioner’s plaintiff’s **1017 injury and the complained-of conduct failure to provide EPCRA information in a timely fashion, of the defendant. Simon v. Eastern Ky. Welfare Rights and the lingering effects of that failure, as the injury in Organization, 426 U.S. 26, 41–42, 96 S.Ct. 1917, fact to itself and its members. We have not had occasion 1925–1926, 48 L.Ed.2d 450 (1976). And third, there must to decide whether being deprived of information that is be redressability—a likelihood that the requested relief supposed to be disclosed under EPCRA—or at least being will redress the alleged injury. Id., at 45–46, 96 S.Ct., at deprived of it when one has a particular plan for its 1927–1928; see also Warth v. Seldin, 422 U.S. 490, 505, use—is a concrete injury in fact that satisfies Article III. 95 S.Ct. 2197, 2208, 45 L.Ed.2d 343 (1975). This triad of Cf. Lujan v. Defenders of Wildlife, 504 U.S., at 578, 112 injury in fact, causation, and redressability5 constitutes the S.Ct., at 2145–2146. And we need not reach that question core of Article III’s case-or-controversy *104 in the present case because, assuming injury in fact, the requirement, and the party invoking federal jurisdiction complaint fails the third test of standing, redressability. bears the burden of establishing its existence. See FW/PBS, Inc. v. Dallas, 493 U.S. 215, 231, 110 S.Ct. 596, The complaint asks for (1) a declaratory judgment that 607–608, 107 L.Ed.2d 603 (1990). petitioner violated EPCRA; (2) authorization to inspect periodically petitioner’s facility and records (with costs [18] [19] We turn now to the particulars of respondent’s borne by petitioner); (3) an order requiring petitioner to

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provide respondent copies of all compliance reports that psychic satisfaction is not an acceptable Article III submitted to the EPA; (4) an order requiring petitioner to remedy because it does not redress a cognizable Article pay civil penalties of $25,000 per day for each violation III injury. See, e.g., Allen v. Wright, 468 U.S. 737, of §§ 11022 and 11023; (5) an award of all respondent’s 754–755, 104 S.Ct. 3315, 3326–3327, 82 L.Ed.2d 556 “costs, in connection with the investigation and (1984); Valley Forge Christian College v. Americans prosecution of this matter, including reasonable attorney United for Separation of Church and State, Inc., 454 U.S. and expert witness fees, as authorized by Section 326(f) 464, 482–483, 102 S.Ct. 752, 763–765, 70 L.Ed.2d 700 of [EPCRA]”; and (6) any such further relief as the court (1982). Relief that does not remedy the injury suffered deems appropriate. App. 11. None of the specific items of cannot bootstrap a plaintiff into federal court; that is the relief sought, and none that we can envision as very essence of the redressability requirement. “appropriate” under the general request, would serve to [21] [22] [23] reimburse respondent for losses caused by the late Item (5), the “investigation and prosecution” reporting, *106 or to eliminate any effects of that late costs “as authorized by Section 326(f),” would assuredly reporting upon respondent.7 benefit respondent as opposed to the citizenry at large. Obviously, however, a plaintiff cannot achieve standing The first item, the request for a declaratory judgment that to litigate a substantive issue by bringing suit for the cost petitioner violated EPCRA, can be disposed of of bringing suit. The litigation must give the plaintiff summarily. There being no controversy over whether some other benefit besides reimbursement of costs that petitioner failed to file reports, or over whether such a are a byproduct of the litigation itself. An “interest in failure constitutes a violation, the declaratory judgment is attorney’s fees is ... insufficient to create an Article III not only worthless to respondent, it is seemingly case or controversy where none exists on the merits of the worthless to all the world. See Lewis v. Continental Bank underlying claim.” Lewis v. Continental Bank Corp., Corp., 494 U.S. 472, 479, 110 S.Ct. 1249, 1254, 108 supra, at 480, 110 S.Ct., at 1255 (citing Diamond v. L.Ed.2d 400 (1990). Charles, 476 U.S. 54, 70–71, 106 S.Ct. 1697, 1707–1708, 90 L.Ed.2d 48 (1986)). Respondent asserts that the [20] Item (4), the civil penalties authorized by the statute, “investigation costs” it seeks were incurred prior to the see § 11045(c), might be viewed as a sort of litigation, in digging up the emissions and storage compensation or redress to respondent if they were information that petitioner should have filed, and that payable to respondent. But they are not. These respondent needed for its own purposes. See Brief for penalties–the only damages authorized by EPCRA—are Respondent 37–38. The recovery of such expenses payable to the United States Treasury. In requesting them, unrelated *108 to litigation would assuredly support therefore, respondent seeks not remediation of its own Article III standing, but the problem is that § 326(f), injury—reimbursement for the costs it incurred as a result which is the entitlement to monetary relief that the of the late filing—but vindication of the rule of law—the complaint invokes, covers only the “costs of litigation.”8 § “undifferentiated public interest” in faithful execution of 11046(f). Respondent finds itself, in other words, impaled EPCRA. Lujan v. Defenders of Wildlife, supra, at 577, upon the horns of a dilemma: For the expenses to be 112 S.Ct., at 2145; see also Fairchild v. Hughes, 258 U.S. reimbursable under the statute, they must be costs of 126, 129–130, 42 S.Ct. 274, 275, 66 L.Ed. 499 (1922). litigation; but reimbursement of the costs of litigation This does not suffice. Justice STEVENS thinks it is cannot alone support standing.9 enough that respondent will be gratified by seeing [24] [25] petitioner punished for its infractions and that the *107 The remaining relief respondent seeks (item (2), punishment will deter the risk of future harm. Post, at giving respondent authority to inspect petitioner’s facility 1028-1029. If that were so, our holdings in Linda R.S. v. and records, and item (3), compelling petitioner to Richard D., 410 U.S. 614, 93 S.Ct. 1146, 35 L.Ed.2d 536 provide respondent copies of EPA compliance reports) is (1973), and Simon v. Eastern Ky. Welfare Rights injunctive in nature. It cannot conceivably remedy any Organization, 426 U.S. 26, 96 S.Ct. 1917, 48 L.Ed.2d 450 past wrong but is aimed at deterring petitioner from (1976), are inexplicable. Obviously, such a principle violating EPCRA in the future. See Brief for Respondent would make the redressability requirement **1019 36. The latter objective can of course be “remedial” for vanish. By the mere bringing of his suit, every plaintiff Article III purposes, when threatened injury is one of the demonstrates his belief that a favorable judgment will gravamens of the complaint. If respondent had alleged a make him happier. But although a suitor may derive great continuing violation or the imminence of a future comfort and joy from the fact that the United States violation, the injunctive relief requested would remedy Treasury is not cheated, that a wrongdoer gets his just that alleged harm. But there is no such allegation deserts, or that the Nation’s laws are faithfully enforced, here—and on the facts of the case, there seems no basis

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for it. Nothing supports the requested injunctive relief except respondent’s generalized interest in deterrence, The judgment is vacated, and the case is remanded with *109 which is insufficient for purposes of Article III. See instructions to direct that the complaint be dismissed. Los Angeles v. Lyons, 461 U.S., at 111, 103 S.Ct., at 1670. It is so ordered. [26] [27] The United States, as amicus curiae, argues that the injunctive relief does constitute remediation because “there is a presumption of [future] injury when the defendant has voluntarily ceased its illegal activity in Justice O’CONNOR, with whom Justice KENNEDY response to litigation,” even if that **1020 occurs before joins, concurring. a complaint is filed. Brief for United States as Amicus Curiae 27–28, and n. 11. This makes a sword out of a I join the Court’s opinion. I agree that our precedent shield. The “presumption” the Government refers to has supports the Court’s holding that respondent lacks Article been applied to refute the assertion of mootness by a III standing because its injuries cannot be redressed by a defendant who, when sued in a complaint that alleges judgment that would, in effect, require only the payment present or threatened injury, ceases the complained-of of penalties to the United States Treasury. As the Court activity. See, e.g., United States v. W.T. Grant Co., 345 notes, ante, at 1019, had respondent alleged a continuing U.S. 629, 632, 73 S.Ct. 894, 897, 97 L.Ed. 1303 (1953). It or imminent violation of the Emergency Planning and is an immense and unacceptable stretch to call the Community Right–To–Know Act of 1986 (EPCRA), 42 presumption into service as a substitute for the allegation U.S.C. § 11046, the requested injunctive relief may well of present or threatened injury upon which initial standing have redressed the asserted injury. must be based. See Los Angeles v. Lyons, supra, at 109, 103 S.Ct., at 1669. To accept the Government’s view I also agree with the Court’s statement that federal courts would be to overrule our clear precedent requiring that the should be certain of their jurisdiction before reaching the allegations of future injury be particular and concrete. merits of a case. As the Court acknowledges, however, O’Shea v. Littleton, 414 U.S. 488, 496–497, 94 S.Ct. 669, several of our decisions “have diluted the absolute purity 676–677, 38 L.Ed.2d 674 (1974). “Past exposure to illegal of the rule that Article III jurisdiction is always an conduct does not in itself show a present case or antecedent question.” Ante, at 1016. The opinion of the controversy regarding injunctive relief ... if Court adequately describes why the assumption of unaccompanied by any continuing, present adverse jurisdiction was defensible in those cases, see ante, at effects.” Id., at 495–496, 94 S.Ct., at 676; see also Renne 1014–1015, and why it is not in this case, see ante, at v. Geary, 501 U.S. 312, 320, 111 S.Ct. 2331, 2338, 115 1011. I write separately to note that, in my view, the L.Ed.2d 288 (1991) (“[T]he mootness exception for Court’s opinion should not be read as cataloging an disputes capable of repetition yet evading review ... will exhaustive list of circumstances under which federal not revive a dispute which became moot before the action courts may exercise judgment in “reserv[ing] difficult commenced”). Because respondent alleges only past questions of ... jurisdiction when the case alternatively infractions of EPCRA, and not a continuing violation or *111 could be resolved on the merits in favor of the same the likelihood of a future violation, injunctive relief will party,” Norton v. Mathews, 427 U.S. 524, 532, 96 S.Ct. not redress its injury. 2771, 2775, 49 L.Ed.2d 672 (1976).

Justice BREYER, concurring in part and concurring in the judgment. *** I agree with the Court that the respondent in this case Having found that none of the relief sought by respondent lacks Article III standing. I further agree that federal would likely remedy its alleged injury in fact, we must courts often, and typically should, decide standing conclude that respondent lacks standing to maintain this questions at the outset of a case. That order of decision suit, *110 and that we and the lower courts lack (first jurisdiction then the merits) helps better **1021 to jurisdiction to entertain it. However desirable prompt restrict the use of the federal courts to those adversarial resolution of the merits EPCRA question may be, it is not disputes that Article III defines as the federal judiciary’s as important as observing the constitutional limits set business. But my qualifying words “often” and upon courts in our system of separated powers. EPCRA “typically” are important. The Constitution, in my view, will have to await another day. does not require us to replace those words with the word © 2015 Thomson Reuters. No claim to original U.S. Government Works. 15 Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998) 118 S.Ct. 1003, 46 ERC 1097, 140 L.Ed.2d 210, 28 Envtl. L. Rep. 20,434...

“always.” The Constitution does not impose a rigid 297 U.S. 288, 345–348, 56 S.Ct. 466, 482–484, 80 L.Ed. judicial “order of operations,” when doing so would cause 688 (1936) (BRANDEIS, J., concurring), the Court serious practical problems. should answer the statutory question first. Moreover, because EPCRA, properly construed, does not confer This Court has previously made clear that courts may jurisdiction over citizen suits for wholly past violations, “reserv[e] difficult questions of ... jurisdiction when the the Court should leave the constitutional question for case alternatively could be resolved on the merits in favor another day. of the same party.” Norton v. Mathews, 427 U.S. 524, 532, 96 S.Ct. 2771, 2775, 49 L.Ed.2d 672 (1976). That rule makes theoretical sense, for the difficulty of the jurisdictional question makes reasonable the court’s jurisdictional assumption. And that rule makes enormous I practical sense. Whom does it help to have appellate judges spend their time and energy puzzling over the The statutory issue in this case can be viewed in one of correct answer to an intractable jurisdictional matter, two ways: whether EPCRA confers “jurisdiction” over when (assuming an easy answer on the substantive merits) citizen suits for wholly past violations, or whether the the same party would win or lose regardless? More statute *113 creates such a “cause of action.” Under either importantly, to insist upon a rigid “order of operations” in analysis, the Court has the power to answer the statutory today’s world of federal-court caseloads that have grown question first. enormously over a generation means unnecessary delay and consequent added cost. See L. Mecham, Judicial EPCRA frames the question in terms of “jurisdiction.” Business of the United States Courts: 1996 Report of the Section 326(c) states: Director 16, 18, 23; Report of the Proceedings of the “The district court shall have jurisdiction in actions Judicial Conference of the United States *112 106, 115, brought under [§ 326(a) ] against an owner or operator 143 (1971) (indicating that between 1971 and 1996, of a facility to enforce the requirement concerned and annual appellate court caseloads increased from 132 to to impose any civil penalty provided for violation of 311 cases filed per judgeship, and district court caseloads that requirement.” 42 U.S.C. § 11046(c). increased from 341 to 490 cases filed per judgeship). It means a more cumbersome system. It thereby increases, Thus, if § 326(a) authorizes citizen suits for wholly past to at least a small degree, the risk of the “justice delayed” violations, the district court has jurisdiction over these that means “justice denied.” actions; if it does not, the court lacks jurisdiction. For this reason, I would not make the ordinary sequence Given the text of the statute, it is not surprising that the an absolute requirement. Nor, even though the case before parties and the District Court framed the question in us is ordinary, not exceptional, would I simply reserve jurisdictional **1022 terms. Respondent’s complaint judgment about the matter. Ante at 1020 (O’CONNOR, J., alleged that the District Court had “subject matter concurring). I therefore join only Parts I and IV of the jurisdiction under Section 326(a) of EPCRA, 42 U.S.C. § Court’s opinion. 11046(a).” App. 3. The merits questions that were raised by respondent’s complaint were whether Steel Company violated EPCRA and, if so, what relief should be granted. Justice STEVENS, with whom Justice SOUTER joins as The District Court, however, made no ruling on the merits to Parts I, III, and IV, and with whom Justice when it granted Steel Company’s motion to dismiss. It GINSBURG joins as to Part III, concurring in the held that dismissal was required because respondent had judgment. merely alleged “a failure to timely file the required reports, a violation of the Act for which there is no This case presents two questions: (1) whether the jurisdiction for a citizen suit.” App. to Pet. for Cert. A26.1 Emergency Planning and Community Right-To-Know Steel Company has also framed the *114 question as a Act of 1986 (EPCRA), 42 U.S.C. § 11001 et seq., confers jurisdictional one in its briefs before this Court.2 federal jurisdiction over citizen suits for wholly past violations; and (2) if so, whether respondent has standing The threshold issue concerning the meaning of § 326 is under Article III of the Constitution. The Court has virtually identical to the question that we decided in elected to decide the constitutional question first and, in Gwaltney of Smithfield, Ltd. v. Chesapeake Bay doing so, has created new constitutional law. Because it is Foundation, Inc., 484 U.S. 49, 108 S.Ct. 376, 98 L.Ed.2d always prudent to avoid passing unnecessarily on an 306 (1987). In that case, we considered whether § 505(a) undecided constitutional question, see Ashwander v. TVA, © 2015 Thomson Reuters. No claim to original U.S. Government Works. 16 Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998) 118 S.Ct. 1003, 46 ERC 1097, 140 L.Ed.2d 210, 28 Envtl. L. Rep. 20,434...

of the Clean Water Act allows suits for wholly past F.2d 1239, 1244–1252 (C.A.D.C.1983). On writ of violations.3 We unanimously characterized that question certiorari to this Court, the United States, as petitioner, as a matter of “jurisdiction”: argued both issues: that the respondents did not come within the “zone of interests” of the statute, and that they “In this case, we must decide whether § 505(a) of the did not have standing under Article III of the Clean Water Act, also known as the Federal Water Constitution.5 A unanimous Court bypassed the Pollution Control Act, 33 U.S.C. § 1365(a), confers constitutional standing question in order to decide the federal jurisdiction over citizen suits for wholly past statutory question. It therefore construed the statute, and violations.” Id., at 52, 108 S.Ct., at 378–379. concluded that respondents could not bring suit under the See also Block v. Community Nutrition Institute, 467 statute. The only mention of the constitutional question U.S. 340, 353, n. 4, 104 S.Ct. 2450, 2457, n. 4, 81 came in a footnote at the end of the opinion: “Since L.Ed.2d 270 (1984) (citing National Railroad congressional preclusion of judicial review is in effect Passenger Corp. v. National Assn. of Railroad jurisdictional, we need not address the standing issue Passengers, 414 U.S. 453, 456, 465, n. 13, 94 S.Ct. decided by the Court of Appeals in this case.” Block, 467 690, 692, 696, n. 13, 38 L.Ed.2d 646 (1974).) If we U.S., at 353, n. 4, 104 S.Ct., at 2457, n. 4 (citing National resolve the comparable statutory issue in the same way Railroad Passenger Corp., 414 U.S., at 456, 465, and n. in this case, federal courts will have no jurisdiction to 13, 94 S.Ct., at 692, 696, and n. 13). address the merits in future similar cases. Thus, this is not a case in which the choice between resolving the Finally, in Gladstone, Realtors v. Village of Bellwood, statutory question or the standing question first is a 441 U.S. 91, 99 S.Ct. 1601, 60 L.Ed.2d 66 (1979), we choice between a merits issue and a jurisdictional *115 were also faced with a choice between a statutory and issue; rather, it is a choice between two jurisdictional constitutional jurisdictional question. Id., at 93, 99 S.Ct., issues. at 1605 (“This case presents both statutory and We have routinely held that when presented with two constitutional questions concerning standing to sue under jurisdictional questions, the Court may choose which one Title VIII”). The statutory question was whether to answer first. In Sierra Club v. Morton, 405 U.S. 727, respondents had standing to sue under § 812 of the Fair 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972), for example, we Housing Act. The Court, *117 reluctant to address the were presented with a choice between a statutory constitutional question, opted to decide the statutory jurisdictional question and a question of Article III question first so as to avoid the constitutional question if standing. In that case, the United States, as respondent, possible: argued that petitioner lacked standing under the “The issue [of the meaning of § 812] is a critical one, Administrative Procedure Act and under the Constitution.4 for if the District Court correctly understood and Rather than taking up the constitutional issue, the Court applied § 812 [in denying respondents standing under stated: the statute], we do not reach the question whether the minimum requirements of Art. III have been satisfied. If the Court of Appeals is correct [in holding that **1023 “Where ... Congress has authorized public respondents have statutory standing], however, then the officials to perform certain functions according to law, constitutional question is squarely presented.” Id., at and has provided by statute for judicial review of those 101, 99 S.Ct., at 1608. actions under certain circumstances, the inquiry as to standing must begin with a determination of whether See also Bennett v. Spear, 520 U.S. 154, 164, 117 S.Ct. the statute in question authorizes review at the behest 1154, 1162, 137 L.Ed.2d 281 (1997) (footnote omited) of the plaintiff.” Id., at 732, 92 S.Ct., at 1364–1365 (opinion of SCALIA, J.) (stating that “[t]he first question (emphasis added). in the present case is whether the [Endangered Species The Court concluded that petitioner lacked standing Act’s] citizen-suit provision ... negates the under the statute, id., at 732–741, 92 S.Ct., at zone-of-interests test,” and turning to the constitutional 1364–1369, and, therefore, did not need to *116 decide standing question only after determining that standing whether petitioner had suffered a sufficient injury existed under the statute); United Food and Commercial under Article III. Workers v. Brown Group, Inc., 517 U.S. 544, 548–550, Similarly, in Block v. Community Nutrition Institute, 467 116 S.Ct. 1529, 1532–1533, 134 L.Ed.2d 758 (1996) U.S. 340, 104 S.Ct. 2450, 81 L.Ed.2d 270 (1984), the (analyzing the statutory question before turning to the Court was faced with a choice between a statutory constitutional **1024 standing question); Cross–Sound jurisdictional issue and a question of Article III standing. Ferry Services, Inc. v. ICC, 934 F.2d 327, 341 The Court of Appeals had held that the respondents had (C.A.D.C.1991) (THOMAS, J., concurring in part and standing under both the statute and the Constitution. 698 concurring in denial of petition for review) (courts exceed © 2015 Thomson Reuters. No claim to original U.S. Government Works. 17 Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998) 118 S.Ct. 1003, 46 ERC 1097, 140 L.Ed.2d 210, 28 Envtl. L. Rep. 20,434...

the scope of their power “only if the ground passed over jurisdiction become immaterial.” Id., at 465, n. 13, 94 is jurisdictional and the ground rested upon is S.Ct., at 696 n. 13.12 non-jurisdictional, for courts properly rest on one jurisdictional ground instead of another”). Thus, our Thus, regardless of whether we characterize this issue in precedents clearly support the proposition that, given a terms of “jurisdiction” or “causes of action,” the Court choice between two jurisdictional questions—one clearly has the power to address the statutory question statutory and the other constitutional—the Court has the first. Gwaltney itself powerfully demonstrates this point. power to answer the statutory question first. As noted, that case involved a statutory question virtually identical to the one presented here—whether the statute Rather than framing the question in terms of permitted citizens to sue for wholly past violations. While “jurisdiction,” it is also possible to characterize the the Court framed the question as one of “jurisdiction,” statutory issue in this case as whether respondent’s supra, at 1022, it could also be said that the case complaint states a “cause *118 of action.”6 Framed this presented the question whether the plaintiffs had a “cause way, it is also clear that we have the power to decide the of action.” Regardless of the label, the Court resolved the statutory question first. As our holding in Bell v. Hood, statutory question without pausing to consider whether 327 U.S. 678, 681–685, 66 S.Ct. 773, 775–778, 90 L.Ed. the plaintiffs had standing *121 to sue for wholly past 939 (1946), demonstrates, just as a court always has violations.13 Of course, the fact that we did not discuss jurisdiction to determine its own jurisdiction, United standing in Gwaltney does not establish that the plaintiffs States v. Mine Workers, 330 U.S. 258, 290, 67 S.Ct. 677, had standing there. Nonetheless, it supports the 694, 91 L.Ed. 884 (1947), a federal court also has proposition that—regardless of how the issue is jurisdiction to decide whether a plaintiff who alleges that characterized—the Court has the power to address the she has been injured by a violation of federal law has virtually identical statutory question in this case as well. stated a cause of action.7 Indeed, Bell held that we have jurisdiction to decide this question even when it is unclear The Court disagrees, arguing that the standing question whether the plaintiff’s injuries can be redressed.8 Thus, must be addressed first. Ironically, however, before “first” Belldemonstrates that the Court *119 has the power to addressing standing, the Court takes a long excursion that decide whether a cause of action exists even when it is entirely loses sight of the basic reason why standing is a unclear whether the plaintiff has standing.9 matter of such importance to the proper functioning of the judicial process. The “gist of the question of standing” is National Railroad Passenger Corp. also makes it clear whether plaintiffs have “alleged such a personal stake in that we have the power to **1025 decide this question the outcome of the controversy as to assure that concrete before addressing other threshold issues. In that case, we adverseness which sharpens the presentation of issues were faced with the interrelated questions of “whether the upon which the court so largely depends for **1026 Amtrak Act can be read to create a private right of action illumination of difficult constitutional questions.”14 The to enforce compliance with its provisions; whether a Court completely disregards this core purpose of standing federal district court has jurisdiction under the terms of in its discussion of “hypothetical jurisdiction.” Not only is the Act to entertain such a suit [under 28 U.S.C. § 1337]10; that portion of the Court’s opinion pure dictum because it and whether respondent has [statutory] standing to bring is entirely unnecessary to an explanation of the Court’s such a suit.” 414 U.S., at 455–456, 94 S.Ct., at 692. In decision; it is also not informed by any adversary choosing its method of analysis, the Court stated: submission by either party. Neither the topic of “hypothetical jurisdiction,” nor any of the cases analyzed, *120 “[H]owever phrased, the threshold question distinguished, and criticized in Part III, was the subject of clearly is whether the Amtrak Act or any other any comment in any of the briefs submitted by the parties provision of law creates a cause of action whereby a or their amici. It therefore did not benefit from the private party such as the respondent can enforce duties “concrete adverseness” that the standing doctrine is meant and obligations imposed by the Act; for it is only if to ensure. The discussion, in short, “comes *122 to the such a right of action exists that we need consider same thing as an advisory opinion, disapproved by this whether the respondent had standing to bring the action Court from the beginning.” Ante, at 1016; see also and whether the District Court had jurisdiction to Muskrat v. United States, 219 U.S. 346, 362, 31 S.Ct. entertain it.” Id., at 456, 94 S.Ct., at 692 (emphasis 250, 256, 55 L.Ed. 246 (1911) (stressing that Article III added).11 limits federal courts to “deciding cases or controversies After determining that there was no cause of action under arising between opposing parties”).15 the statute, the Court concluded: “Since we hold that no right of action exists, questions of standing and *123 The doctrine of “hypothetical jurisdiction” is

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irrelevant because this case presents **1027 us with a members of Penfield’s Zoning, Planning, and Town choice between two threshold questions that are Boards); Linda R.S., 410 U.S., at 615–616, 619, 93 S.Ct., intricately interrelated—as there is only a standing at 1147–1148, 1149–1150 (suit against prosecutor); see problem if the statute confers jurisdiction over suits for also Renne v. Geary, 501 U.S. 312, 314, 111 S.Ct. 2331, wholly past violations. The Court’s opinion reflects this 2335, 115 L.Ed.2d 288 (1991) (suit against the city and fact, as its analysis of the standing issue is predicated on County of San Francisco, its board of supervisors, and the hypothesis that § 326 may be read to confer other local officials).19 **1028 None of these cases jurisdiction over citizen suits for wholly past violations. involved an attempt by one private party to impose a If, as I think it should, the Court were to reject that statutory sanction on another private party.20 hypothesis and construe § 326,16 the standing discussion *124 would be entirely unnecessary. Thus, ironically, the In addition, in every other case in which this Court has Court is engaged in a version of the “hypothetical held that there is no standing because of a lack of jurisdiction” that it has taken pains to condemn at some redressability, the injury to the plaintiff by the defendant length. was indirect (e.g., dependent on the action of a third party). This is true in the two cases that the Court cites for the “redressability” prong, ante, at 1016; see also Simon, 426 U.S., at 40–46, 96 S.Ct., at 1925–1928 (“[T]he ‘case or controversy’ limitation of Art. III ... requires that a II federal court act only to redress injury that fairly can be traced to the challenged action of the defendant, *126 and There is an important reason for addressing the statutory not injury that results from the independent action of question first: to avoid unnecessarily passing on an some third party not before the court ” (emphasis added)); undecided constitutional question. New York Transit Warth, 422 U.S., at 504–508, 95 S.Ct., at 2207–2210 Authority v. Beazer, 440 U.S. 568, 582–583, 99 S.Ct. (stating that “the indirectness of the injury ... may make it 1355, 1364–1365, 59 L.Ed.2d 587 (1979); Ashwander v. substantially more difficult to meet the minimum TVA, 297 U.S. 288, 345–348, 56 S.Ct. 466, 482–484, 80 requirement of Art. III,” and holding that the injury at L.Ed. 688 (1936) (Brandeis, J., concurring).17 Whether issue was too indirect to be redressable), as well as in correct or incorrect, the Court’s constitutional holding every other case in which the Court denied standing represents a significant extension of prior case law. because of a lack of redressability, Leeke, 454 U.S., at 86–87, 102 S.Ct., at 70–71 (injury indirect because it The Court’s conclusion that respondent does not have turned on the action of a prosecutor, a party not before the standing comes from a mechanistic application of the Court); Linda R.S., 410 U.S., at 617–618, 93 S.Ct., at “redressability” aspect of our standing doctrine. 1148–1149 (stating that “[t]he party who invokes “Redressability,” of course, does not appear anywhere in [judicial] power must be able to show ... that he has the text of the Constitution. Instead, it is a judicial sustained or is immediately in danger of sustaining some creation of the past 25 years, see Simon v. Eastern Ky. direct injury” (emphasis in original) (internal quotation Welfare Rights Organization, 426 U.S. 26, 38, 41–46, 96 marks omitted); injury indirect because it turned on the S.Ct. 1917, 1924, 1925–1928, 48 L.Ed.2d 450 (1976); action of the father, a party not before the Court); see also Linda R.S. v. Richard D., 410 U.S. 614, 617–618, 93 S.Ct. 3 K. Davis & R. Pierce, Administrative Law Treatise 30 1146, 1148–1149, 35 L.Ed.2d 536 (1973)—a judicial (3d ed.1994).21 Thus, as far as I am aware, the Court has interpretation of the “Case” requirement of Article III, never held—until today—that a plaintiff who is directly Lujan v. Defenders of Wildlife, 504 U.S. 555, 559–561, injured22 by a defendant lacks standing to sue because of a 112 S.Ct. 2130, 2135–2137, 119 L.Ed.2d 351 (1992).18 lack of redressability.23 *125 In every previous case in which the Court has *127 The Court acknowledges that respondent would denied standing because of a lack of redressability, the have had standing if Congress had authorized some plaintiff was challenging some governmental action or payment to respondent. Ante, at 1018 (“[T]he civil inaction. Leeke v. Timmerman, 454 U.S. 83, 85–87, 102 penalties authorized by the statute ... might be viewed as a S.Ct. 69, 70–71, 70 L.Ed.2d 65 (1981) (per curiam) (suit sort of compensation or redress to respondent **1029 if against Director of the Department of Corrections and they were payable to respondent”). Yet the Court fails to another prison official); Simon, 426 U.S., at 28, 96 S.Ct., specify why payment to respondent—even if only a at 1919–1920 (suit against the Secretary of the Treasury peppercorn—would redress respondent’s injuries, while and the Commissioner of Internal Revenue); Warth v. payment to the Treasury does not. Respondent clearly Seldin, 422 U.S. 490, 493, 95 S.Ct. 2197, 2202, 45 believes that the punishment of Steel Company, along L.Ed.2d 343 (1975) (suit against the town of Penfield and © 2015 Thomson Reuters. No claim to original U.S. Government Works. 19 Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998) 118 S.Ct. 1003, 46 ERC 1097, 140 L.Ed.2d 210, 28 Envtl. L. Rep. 20,434...

with future deterrence of Steel Company and others, the air, and/or use areas near [Steel Company’s] facility”). redresses its injury, and there is no basis in our previous standing holdings to suggest otherwise. Moreover, under the Court’s own reasoning, respondent would have had standing if Congress had authorized some When one private party is injured by another, the injury payment to respondent. Ante, at 1018 (“[T]he civil can be redressed in at least two ways: by awarding penalties authorized by the statute ... might be viewed as a compensatory damages or by imposing a sanction on the sort of compensation or redress to respondent if they were wrongdoer that will minimize the risk that the payable to respondent”). This conclusion is unexceptional harm-causing conduct will be repeated. Thus, in some given that respondent has a more particularized interest cases a tort is redressed by an award of punitive damages; than a plaintiff in a qui tam suit, an action that is deeply even when such damages are payable to the sovereign, rooted in our history. United States ex rel. Marcus v. they provide a form of redress for the individual as well. Hess, 317 U.S. 537, 541, n. 4, 63 S.Ct. 379, 383, n. 4, 87 L.Ed. 443 (1943) (“ ‘Statutes providing for actions by a History supports the proposition that punishment or common informer, who himself has no interest whatever deterrence can redress an injury. In past centuries in in the controversy other than that given by statute, have England,24 in the American Colonies, and in the United been in *130 existence for hundreds of years in England, *128 States,25 private persons regularly prosecuted and in this country ever since the foundation of our criminal cases. The interest in punishing the defendant Government’ ”) (quoting Marvin v. Trout, 199 U.S. 212, and deterring violations of law by the defendant and 225, 26 S.Ct. 31, 34–35, 50 L.Ed. 157 (1905)); Adams v. others was sufficient to support the “standing” of the Woods, 2 Cranch 336, 341, 2 L.Ed. 297 (1805) (opinion private prosecutor even if the only remedy was the of Marshall, C.J.) (“Almost every fine or forfeiture under sentencing of the defendant to jail or to the gallows. a penal statute, may be recovered by an action of debt [qui Given this history, the Framers of Article III surely would tam ] as well as by information [by a public prosecutor]”); have considered such proceedings to be “Cases” that 3 W. Blackstone, Commentaries 160 (1768); Caminker, would “redress” an injury even though the party bringing The Constitutionality of Qui Tam Actions, 99 Yale L.J. suit did not receive any monetary compensation.26 341, 342, and n. 3 (1989) (describing qui tam actions authorized by First Congress); see also Lujan v. The Court’s expanded interpretation of the redressability Defenders of Wildlife, 504 U.S., at 572–573, 112 S.Ct., at requirement has another consequence. Under EPCRA, 2142–2143. *129 Congress gave enforcement power to state and local governments. 42 U.S.C. § 11046(a)(2). Under the Court’s Yet it is unclear why the separation of powers question reasoning, however, state and local governments would should turn on whether the plaintiff receives monetary not have standing to sue for past violations, as a payment compensation. In either instance, a private citizen is to the Treasury would no more “redress” the injury of enforcing the law. If separation-of-powers does not these governments than it would redress respondent’s preclude standing when Congress creates a legal right that injury. This would be true even if Congress explicitly authorizes compensation to the plaintiff, it is unclear why granted state and local governments this power. Such a separation of powers should dictate a contrary result when conclusion is unprecedented. Congress has created a legal right but has directed that payment be made to the Federal Treasury. It could be argued that the Court’s decision is rooted in another separation-of-powers concern: that this citizen Indeed, in this case (assuming for present purposes that suit somehow interferes with the Executive’s power to respondent correctly reads the statute) not only has “take Care that the Laws be faithfully executed,” Art. II, § Congress authorized standing, but the Executive Branch 3. It is hard to see, however, how EPCRA’s citizen-suit has also endorsed its interpretation of Article III. Brief for provision impinges on the power of the Executive. As an United States as Amicus Curiae 7–30. It is this Court’s initial matter, this is not a case in which respondent decision, not anything that Congress or the Executive has merely possesses the “ ‘undifferentiated public interest’ ” done, that encroaches on the domain of other branches of in seeing EPCRA enforced. Ante, at 1018; see also the Federal Government.27 **1030 Lujan v. Defenders of Wildlife, 504 U.S., at 577, 112 S.Ct., at 2145. Here, respondent—whose members *131 It is thus quite clear that the Court’s holding today live near Steel Company—has alleged a sufficiently represents a significant new development in our particularized injury under our precedents. App. 5 constitutional jurisprudence. Moreover, it is equally clear (complaint alleges that respondent’s members “reside, that the Court has the power to answer the statutory own property, engage in recreational activities, breathe question first. It is, therefore, not necessary to reject the

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Court’s resolution of the standing issue in order to 484 U.S., at 60, 108 S.Ct., at 383. conclude that it would be prudent to answer the question Second, EPCRA places a ban on citizen suits once EPA of statutory construction before announcing new has commenced an enforcement action. 42 U. S C. § constitutional doctrine. 11046(e).29 In Gwaltney, we considered a similar provision and concluded that it indicated a congressional intent to prohibit citizen suits for wholly past violations: *133 “The bar on citizen suits when governmental III enforcement action is under way suggests that the citizen suit is meant to supplement rather than supplant EPCRA’s citizen-suit provision states, in relevant part: governmental action. ... Permitting citizen suits for wholly past violations of the Act could undermine the “[A]ny person may commence a civil action on his own supplementary role envisioned for the citizen suit. This behalf against ... [a]n owner or operator of a facility for danger is best illustrated by an example. Suppose that failure to do **1031 any of the following: ... Complete the Administrator identified a violator of the Act and and submit an inventory form under section 11022(a) issued a compliance order .... Suppose further that the of this title ... [or][c]omplete and submit a toxic Administrator agreed not to assess or otherwise seek chemical release form under section 11023(a) of this civil penalties on the condition that the violator take title.” 42 U.S.C. §§ 11046(a)(1)(A)(iii)-(iv). some extreme corrective action, such as to install particularly effective but expensive machinery, that it Unfortunately, this language is ambiguous. It could mean, otherwise would not be obliged to take. If citizens as the Sixth Circuit has held, that a citizen only has the could file suit, months or years later, in order to seek right to sue for a “failure ... to complete and submit” the the civil penalties that the Administrator chose to forgo, required forms. Under this reading, once the owner or then the Administrator’s discretion to enforce the Act operator has filed the forms, the district court no longer in the public interest would be curtailed considerably. has jurisdiction. Atlantic States Legal Foundation v. The same might be said of the discretion of state United Musical, 61 F.3d 473, 475 (1995). Alternatively, it enforcement authorities. Respondents’ interpretation of could be, as the Seventh Circuit held, that the phrases the scope of the citizen suit would change the nature of “under section 11022(a)” and “under section 11023(a)” the citizens’ role from interstitial to potentially incorporate the requirements of those sections, including intrusive.” 484 U.S., at 60–61, 108 S.Ct., at 383. the requirement that the reports be filed by particular **1032 Finally, even if these two provisions did not dates. 90 F.3d 1237, 1243 (1996). resolve the issue, our settled policy of adopting acceptable constructions of statutory provisions in order to avoid the *132 Although the language of the citizen-suit provision unnecessary adjudication of constitutional is ambiguous, other sections of EPCRA indicate that questions—here, the unresolved standing Congress did not intend to confer jurisdiction over citizen question—strongly supports a construction of the statute suits for wholly past violations. First, EPCRA requires the that does not authorize suits for wholly past violations. As private litigant to give the alleged violator notice at least we stated in Edward J. DeBartolo Corp. v. Florida Gulf 60 days before bringing suit. 42 U.S.C. § 11046(d)(1).28 In Coast Building & Constr. Trades Council, 485 U.S. 568, Gwaltney, we considered the import of a substantially 575, 108 S.Ct. 1392, 1397–1398, 99 L.Ed.2d 645 (1988): identical notice requirement, and concluded that it “This cardinal principle has its roots in Chief Justice indicated a congressional intent to allow suit only for Marshall’s opinion for the Court in Murray v. Schooner ongoing and future violations: Charming Betsy, 2 Cranch 64, 118 [2 L.Ed. 208] (1804), and has for so long been applied by this Court that it is “[T]he purpose of notice to the alleged violator is to beyond debate.” See also *134 NLRB v. Catholic Bishop give it an opportunity to bring itself into complete of Chicago, 440 U.S. 490, 500–501, 99 S.Ct. 1313, compliance with the Act and thus likewise render 1318–1319, 59 L.Ed.2d 533 (1979); Machinists v. Street, unnecessary a citizen suit. If we assume, as respondents 367 U.S. 740, 749–750, 81 S.Ct. 1784, 1789–1790, 6 urge, that citizen suits may target wholly past L.Ed.2d 1141 (1961); Crowell v. Benson, 285 U.S. 22, 62, violations, the requirement of notice to the alleged 52 S.Ct. 285, 296–297, 76 L.Ed. 598 (1932); Lucas v. violator becomes gratuitous. Indeed, respondents, in Alexander, 279 U.S. 573, 577, 49 S.Ct. 426, 428, 73 L.Ed. propounding their interpretation of the Act, can think of 851 (1929); Panama R. Co. v. Johnson, 264 U.S. 375, no reason for Congress to require such notice other 390, 44 S.Ct. 391, 395, 68 L.Ed. 748 (1924); United than that ‘it seemed right’ to inform an alleged violator States ex rel. Attorney General v. Delaware & Hudson that it was about to be sued. Brief for Respondents 14.”

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Co., 213 U.S. 366, 407–408, 29 S.Ct. 527, 535–536, 53 for wholly past violations? For the reasons stated by L.Ed. 836 (1909); Parsons v. Bedford, 3 Pet. 433, Justice STEVENS in Part III of his opinion, I agree that 448–449, 7 L.Ed. 732 (1830) (opinion of Story, J.). the answer is “No.” I would follow the path this Court marked in Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Foundation, Inc., 484 U.S. 49, 60–61, 108 S.Ct. 376, 382–383, 98 L.Ed.2d 306 (1987), and resist expounding or offering advice on the constitutionality of what IV Congress might have done, but did not do. For these reasons, I concur in the Court’s judgment, but do not join its opinion. All Citations Justice GINSBURG, concurring in the judgment. 523 U.S. 83, 118 S.Ct. 1003, 46 ERC 1097, 140 L.Ed.2d 210, 28 Envtl. L. Rep. 20,434, 98 Cal. Daily Op. Serv. Congress has authorized citizen suits to enforce the 1512, 98 Daily Journal D.A.R. 2102, 98 CJ C.A.R. 1025, Emergency Planning and Community Right-To-Know 11 Fla. L. Weekly Fed. S 369 Act of 1986, 42 U.S.C. § 11001 et seq. Does that authorization, as Congress designed it, permit citizen suits

* The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337, 26 S.Ct. 282, 287, 50 L.Ed. 499.

1 Our disposition makes it appropriate to address the approach taken by this substantial body of Court of Appeals precedent. The fact that Justice STEVENS’ concurrence takes essentially the same approach makes his contention that this discussion is an “excursion,” and “unnecessary to an explanation” of our decision, post, at 1025, 1026, particularly puzzling.

2 Justice STEVENS thinks it illogical that a merits question can be given priority over a statutory standing question (National Railroad Passenger Corp.) and a statutory standing question can be given priority over an Article III question (the cases discussed post, at 1022–1024), but a merits question cannot be given priority over an Article III question. See post, at 1025, n. 12. It seems to us no more illogical than many other “broken circles” that appear in life and the law: that Executive agreements may displace state law, for example, see United States v. Belmont, 301 U.S. 324, 330–331, 57 S.Ct. 758, 760–761, 81 L.Ed. 1134 (1937), and that unilateral Presidential action (renunciation) may displace Executive agreements, does not produce the “logical” conclusion that unilateral Presidential action may displace state law. The reasons for allowing merits questions to be decided before statutory standing questions do not support allowing merits questions to be decided before Article III questions. As National Railroad Passenger Corp. points out, the merits inquiry and the statutory standing inquiry often “overlap,” 414 U.S., at 456, 94 S.Ct., at 692. The question whether this plaintiff has a cause of action under the statute, and the question whether any plaintiff has a cause of action under the statute are closely connected—indeed, depending upon the asserted basis for lack of statutory standing, they are sometimes identical, so that it would be exceedingly artificial to draw a distinction between the two. The same cannot be said of the Article III requirement of remediable injury in fact, which (except with regard to entirely frivolous claims) has nothing to do with the text of the statute relied upon. Moreover, deciding whether any cause of action exists under a particular statute, rather than whether the particular plaintiff can sue, does not take the court into vast, uncharted realms of judicial opinion giving; whereas the proposition that the court can reach a merits question when there is no Article III jurisdiction opens the door to all sorts of “generalized grievances,” Schlesinger v. Reservists Comm. to Stop the War, 418 U.S. 208, 217, 94 S.Ct. 2925, 2930, 41 L.Ed.2d 706 (1974), that the Constitution leaves for resolution through the political process.

3 Justice STEVENS adds three cases to the list of those that might support “hypothetical jurisdiction.” Post, at 1026, and n. 15. They are all inapposite. In Moor v. County of Alameda, 411 U.S. 693, 93 S.Ct. 1785, 36 L.Ed.2d 596 (1973), we declined to decide whether a federal court’s pendent jurisdiction extended to state-law claims against a new party, because we agreed with the District Court’s discretionary declination of pendent jurisdiction. Id., at 715–716, 93 S.Ct., at 1798–1799. Thus, the case decided not a merits question before a jurisdictional question, but a discretionary jurisdictional question before a nondiscretionary jurisdictional question. Similarly in Ellis v. Dyson, 421 U.S. 426, 436, 95 S.Ct. 1691, 1696–1697, 44 L.Ed.2d 274 (1975), the “authoritative ground of decision” upon which the District Court

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relied in lieu of determining whether there was a case or controversy was Younger abstention, which we have treated as jurisdictional. And finally, the issue pretermitted in Neese v. Southern R. Co., 350 U.S. 77, 76 S.Ct. 131, 100 L.Ed. 60 (1955) (per curiam), was not Article III jurisdiction at all, but the substantive question whether the Seventh Amendment permits an appellate court to review the district court’s denial of a Motion for New Trial on the ground that the verdict was excessive. We declined to consider that question because we agreed with the District Court’s decision to deny the motion on the facts in the record. The more numerous the look-alike-but-inapposite cases Justice STEVENS cites, the more strikingly clear it becomes: His concurrence cannot identify a single opinion of ours deciding the merits before a disputed question of Article III jurisdiction.

4 Our opinion is not motivated, as Justice STEVENS suggests, by the more specific separation-of-powers concern that this citizen’s suit “somehow interferes with the Executive’s power to ‘take Care that the Laws be faithfully executed,’ Art. II, § 3,” post, at 1029. The courts must stay within their constitutionally prescribed sphere of action, whether or not exceeding that sphere will harm one of the other two branches. This case calls for nothing more than a straightforward application of our standing jurisprudence, which, though it may sometimes have an impact on Presidential powers, derives from Article III and not Article II.

5 Contrary to Justice STEVENS’ belief that redressability “is a judicial creation of the past 25 years,” post, at 1027, the concept has been ingrained in our jurisprudence from the beginning. Although we have packaged the requirements of constitutional “case” or “controversy” somewhat differently in the past 25 years—an era rich in three-part tests—the point has always been the same: whether a plaintiff “personally would benefit in a tangible way from the court’s intervention.” Warth, 422 U.S., at 508, 95 S.Ct., at 2210. For example, in Marye v. Parsons, 114 U.S. 325, 328–329, 5 S.Ct. 932, 933–934, 29 L.Ed. 205 (1885), we held that a bill in equity should have been dismissed because it was a clear case of “damnum absque injuriâ.” Although the complainant alleged a breach of contract by the State, the complainant “asks no relief as to that, for there is no remedy by suit to compel the State to pay its debts .... The bill as framed, therefore, calls for a declaration of an abstract character.” Because courts do not “si[t] to determine questions of law in thesi,” we remanded with directions to dismiss the bill. Id., at 328–330, 5 S.Ct., at 933–934. Also contrary to Justice STEVENS’ unprecedented suggestion, post, at 1027, redressability—like the other prongs of the standing inquiry–does not depend on the defendant’s status as a governmental entity. There is no conceivable reason why it should. If it is true, as Justice STEVENS claims, that all of the cases in which the Court has denied standing because of a lack of redressability happened to involve government action or inaction, that would be unsurprising. Suits that promise no concrete benefit to the plaintiff, and that are brought to have us “determine questions of law in thesi,” Marye, supra, at 330, 5 S.Ct., at 934, are most often inspired by the psychological smart of perceived official injustice, or by the government-policy preferences of political activists. But the principle of redressability has broader application than that.

6 EPCRA states that “any person may commence a civil action on his own behalf ....” 42 U.S.C. § 11046(a)(1) (emphasis added). “[P]erson” includes an association, see § 11049(7), so it is arguable that the statute permits respondent to vindicate only its own interests as an organization, and not the interests of its individual members. Since it makes no difference to our disposition of the case, we assume without deciding that the interests of individual members may be the basis of suit.

7 Justice STEVENS claims that redressability was found lacking in our prior cases because the relief required action by a party not before the Court. Post, at 1028-1028. Even if that were so, it would not prove that redressability is lacking only when relief depends on the actions of a third party. But in any event, Justice STEVENS has overlooked decisions that destroy his premise. See Los Angeles v. Lyons, 461 U.S. 95, 105, 103 S.Ct. 1660, 1666–1667, 75 L.Ed.2d 675 (1983); O’Shea v. Littleton, 414 U.S. 488, 495–496, 94 S.Ct. 669, 675–676, 38 L.Ed.2d 674 (1974). He also seems to suggest that redressability always exists when the defendant has directly injured the plaintiff. If that were so, the redressability requirement would be entirely superfluous, since the causation requirement asks whether the injury is “fairly ... trace[able] to the challenged action of the defendant, and not ... th[e] resul[t] [of] the independent action of some third party not before the court.” Simon v. Eastern Ky. Welfare Rights Organization, 426 U.S. 26, 41–42, 96 S.Ct. 1917, 1926, 48 L.Ed.2d 450 (1976).

8 Section 326(f) reads: “The court, in issuing any final order in any action brought pursuant to this section, may award costs of litigation (including reasonable attorney and expert witness fees) to the prevailing or the substantially prevailing party whenever the court determines such an award is appropriate.” 42 U.S.C. § 11046(f).

9 Justice STEVENS contends, post, at 1027, n. 16, that this argument involves us in a construction of the statute, and thus belies our insistence that jurisdictional issues be resolved first. It involves us in a construction of the statute only to the extent of rejecting as frivolous the contention that costs incurred for respondent’s own purposes, not in preparation for litigation (and hence sufficient to support Article III standing), are nonetheless “costs of litigation” under the statute. As we have described earlier, our cases make clear that frivolous claims are themselves a jurisdictional defect. See © 2015 Thomson Reuters. No claim to original U.S. Government Works. 23 Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998) 118 S.Ct. 1003, 46 ERC 1097, 140 L.Ed.2d 210, 28 Envtl. L. Rep. 20,434...

supra, at 1010.

1 See also Don’t Waste Arizona, Inc. v. McLane Foods, Inc., 950 F.Supp. 972, 977–978 (D.Ariz.1997) (“[T]his Court has jurisdiction to hear this citizen suit brought pursuant to 42 U.S.C. § 11046(a) for a wholly past violation of the EPCRA”); Delaware Valley Toxics Coalition v. Kurz–Hastings, 813 F.Supp. 1132, 1141 (E.D.Pa.1993) (“This court concludes that 42 U.S.C. § 11046(a)(1) does provide the federal courts with jurisdiction for wholly past violations of the EPCRA”); Atlantic States Legal Foundation v. Whiting Roll–Up Door Manufacturing Corp., 772 F.Supp. 745, 750 (W.D.N.Y.1991) (“The plain language of EPCRA’s reporting, enforcement and civil penalty provisions, when logically viewed together, compel a conclusion that EPCRA confers federal jurisdiction over citizen lawsuits for past violations”).

2 Brief for Petitioner 12 (“A statute conferring jurisdiction on the federal courts should ... be strictly construed, and any doubts resolved against jurisdiction. Here there are serious doubts that Congress intended citizens to sue for past EPCRA violations, and all citizen plaintiffs can highlight is a slight difference in language and attempt to stretch that difference into federal jurisdiction”); see also id., at 26, 30.

3 Gwaltney contended that “because its last recorded violation occurred several weeks before respondents filed their complaint, the District Court lacked subject-matter jurisdiction over respondents’ action.” Gwaltney, 484 U.S., at 55, 108 S.Ct., at 380.

4 405 U.S., at 753–755, 92 S.Ct., at 1375–1376 (App. to opinion of Douglas, J., dissenting) (Extract from Oral Argument of the Solicitor General); Brief for Respondent in Sierra Club v. Morton, O.T.1970, No. 70–34, p. 18 (“The irreducible minimum requirement of standing reflects the constitutional limitation of judicial power to ‘Cases’ and ‘Controversies’—‘whether the party invoking federal court jurisdiction has “a personal stake in the outcome of the controversy” ... and whether the dispute touches upon the “legal relations of parties having adverse legal interests.” ’ Flast v. Cohen, 392 U.S. 83, 101 [88 S.Ct. 1942, 1953, 20 L.Ed.2d 947 (1968)]”); see also Brief for County of Tulare as Amicus Curiae in Sierra Club v. Morton, O.T.1970, No. 70–34, pp. 13–14 (“This Court long ago held that to have standing ... a party must show he has sustained or is immediately in danger of sustaining some direct injury ... and not merely that he suffers in some indefinite way in common with people generally. This is an outgrowth of Article III of the Constitution which limits the jurisdiction of federal courts to cases and controversies. U.S. CONST. art III, § 2” (citation and internal quotation marks omitted)).

5 Brief for Petitioners in Block v. Community Nutrition Institute, O.T.1983, No. 83–458, pp. 32–50 (arguing that respondents failed to meet the injury-in-fact and redressability requirements of Article III); see also Brief for Respondents in Block v. Community Nutrition Institute, O.T.1983, No. 83–458, pp. 17–28; Reply Brief for Petitioners in Block v. Community Nutrition Institute, O.T.1983, No. 83–458, pp. 15–17.

6 As Justice Cardozo stated, “ ‘ “cause of action” may mean one thing for one purpose and something different for another.’ ” Davis v. Passman, 442 U.S. 228, 237, 99 S.Ct. 2264, 2272, 60 L.Ed.2d 846 (1979) (quoting United States v. Memphis Cotton Oil Co., 288 U.S. 62, 67–68, 53 S.Ct. 278, 280, 77 L.Ed. 619 (1933)). Under one meaning of the term, it is clear that citizens have a “cause of action” to sue under the statute. Under that meaning, “cause of action is a question of whether a particular plaintiff is a member of the class of litigants that may, as a matter of law, appropriately invoke the power of the court.” Davis, 442 U.S., at 240, and n. 18, 99 S.Ct., at 2274 and n. 18 (emphasis deleted); see also id., at 239, 99 S.Ct., at 2274 (“The concept of a ‘cause of action’ is employed specifically to determine who may judicially enforce the statutory rights or obligations” (emphasis added)). Since EPCRA expressly gives citizens the right to sue, 42 U.S.C. § 11046(a)(1), there is no question that citizens are “member[s] of the class of litigants that may, as a matter of law, appropriately invoke the power of the court,” Davis, 442 U.S., at 240, and n. 18, 99 S.Ct., at 2274 and n. 18.

7 “Jurisdiction ... is not defeated ... by the possibility that the averments might fail to state a cause of action on which petitioners could actually recover.” Bell, 327 U.S., at 682, 66 S.Ct., at 776.

8 In Bell, a precursor to Bivens v. Six Unknown Named Fed. Narcotics Agents, 403 U.S.388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971), petitioners brought suit in federal court “to recover damages in excess of $3,000 from ... agents of the Federal Bureau of Investigation” for allegedly violating their Fourth and Fifth Amendment rights. 327 U.S., at 679, 66 S.Ct., at 774. The question whether petitioners’ injuries were redressable—“whether federal courts can grant money recovery for damages said to have been suffered as a result of federal officers violating the Fourth and Fifth Amendments”—was an open one, id., at 684, 66 S.Ct., at 777 (which the Court did not decide until Bivens, 403 U.S., at 389, 91 S.Ct., at 2001). Nonetheless, even though it was unclear whether there was a remedy, the Court held that federal courts have jurisdiction to determine whether a cause of action exists. 327 U.S., at 685, 66 S.Ct., at 777–778.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 24 Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998) 118 S.Ct. 1003, 46 ERC 1097, 140 L.Ed.2d 210, 28 Envtl. L. Rep. 20,434...

9 The Court incorrectly states that I “used to understand the fundamental distinction between arguing no cause of action and arguing no Article III redressability,” ante, at 1013. The Court gives me too much credit. I have never understood any fundamental difference between arguing: (1) plaintiff’s complaint does not allege a cause of action because the law does “not provide a remedy” for the plaintiff’s injury; and (2) plaintiff’s injury is “not redressable.” In Lake Country Estates, Inc. v. Tahoe Regional Planning Agency, 440 U.S. 391, 398, 99 S.Ct. 1171, 1175–1176, 59 L.Ed.2d 401 (1979), we stated that the absence of a remedy, i.e. the lack of redressability, was not the sort of jurisdictional issue that the Court raises on its own motion. That was the law when that case was decided, and it would still be the law today if the Court had not supplemented the standing analysis set forth in Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663 (1962), with its current fascination with “redressability.” What has changed is not the admittedly imperfect state of my understanding, but rather the state of the Court’s standing doctrine.

10 Section 1337 states, in relevant part: “[D]istrict courts shall have original jurisdiction of any civil action or proceeding arising under any Act of Congress regulating commerce or protecting trade and commerce against restraints and monopolies.” 28 U.S.C. § 1337(a); see also Potomac Passengers Assn. v. Chesapeake & Ohio R. Co., 475 F.2d 325, 339 (C.A.D.C.1973), rev’d on other grounds, National Railroad Passenger Corp. v. National Assn. of Railroad Passengers, 414 U.S. 453, 94 S.Ct. 690, 38 L.Ed.2d 646 (1974).

11 The Court distinguished this “threshold question” from respondent’s claim “on the merits,” id., at 455, n. 3, 94 S.Ct., at 692, n. 3.

12 In insisting that the Article III standing question must be answered first, the Court finds itself in a logical dilemma. For if “A” (whether a cause of action exists) can be decided before “B” (whether there is statutory standing), id., at 456, 465, n. 13, 94 S.Ct., at 692, 696, n. 13; and if “B” (whether there is statutory standing) can be decided before “C” (whether there is Article III standing), e.g., Block v. Community Nutrition Institute, 467 U.S. 340, 353, n. 4, 104 S.Ct. 2450, 2458, n. 4, 81 L.Ed.2d 270 (1984); then logic dictates that “A” (whether a cause of action exists) can be decided before “C” (whether there is Article III standing)—precisely the issue of this case.

13 In Gwaltney, in addition to answering the question whether the statute confers jurisdiction over citizen suits for wholly past violations, we considered whether the allegation of ongoing injury sufficed to support jurisdiction. The fact that we discussed “standing” in connection with that secondary issue, 484 U.S., at 65–66, 108 S.Ct., at 385–386, adds significance to the omission of even a passing reference to any standing issue in connection with the principal holding.

14 Baker v. Carr, 369 U.S., at 204, 82 S.Ct., at 703.

15 The Court boldly distinguishes away no fewer than five of our precedents. In each of these five cases, the Court avoided deciding a jurisdictional issue by assuming that jurisdiction existed for the purpose of that case. In Norton v. Mathews, 427 U.S. 524, 532, 96 S.Ct. 2771, 2775, 49 L.Ed.2d 672 (1976), for example, we stated: “It ... is evident that, whichever disposition we undertake, the effect is the same. It follows that there is no need to decide the theoretical question of jurisdiction in this case. In the past, we similarly have reserved difficult questions of our jurisdiction when the case alternatively could be resolved on the merits in favor of the same party. See Secretary of the Navy v. Avrech, 418 U.S. 676, 94 S.Ct. 3039, 41 L.Ed.2d 1033 (1974). The Court has done this even when the original reason for granting certiorari was to resolve the jurisdictional issue. See United States v. Augenblick, 393 U.S. 348, 349–352, 89 S.Ct. 528, 529–532, 21 L.Ed.2d 537 (1969) .... Making the assumption, then, without deciding, that our jurisdiction in this cause is established, we affirm the judgment in favor of the Secretary ....” See also Philbrook v. Glodgett, 421 U.S. 707, 720–722, 95 S.Ct. 1893, 1901–1903, 44 L.Ed.2d 525 (1975) (opinion of REHNQUIST, J.) (declining to reach “subtle and complex” jurisdictional issue and assuming that jurisdiction existed); Secretary of Navy v. Avrech, 418 U.S. 676, 677–678, 94 S.Ct. 3039, 3039–3040, 41 L.Ed.2d 1033 (1974) (per curiam) (“[a]ssuming, arguendo, that the District Court had jurisdiction”; leaving “to a future case the resolution of the jurisdictional issue”); Chandler v. Judicial Council of Tenth Circuit, 398 U.S. 74, 89, 90 S.Ct. 1648, 1656, 26 L.Ed.2d 100 (1970) (“Whether the Council’s action was administrative action not reviewable in this Court, or whether it is reviewable here, plainly petitioner has not made a case for the extraordinary relief of mandamus or prohibition”); United States v. Augenblick, 393 U.S. 348, 351–352, 89 S.Ct. 528, 531–532, 21 L.Ed.2d 537 (1969) (assuming, arguendo, that jurisdiction existed). Moreover, in addition to the five cases that the Court distinguishes, there are other cases that support the notion that a court can assume jurisdiction. See, e.g., Moor v. County of Alameda, 411 U.S. 693, 715, 93 S.Ct. 1785, 1799, 36 L.Ed.2d 596 (1973) (“Whether there exists judicial power to hear the state law claims against the County is, in short, a subtle and complex question with far-reaching implications. But we do not consider it appropriate to resolve this

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 25 Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998) 118 S.Ct. 1003, 46 ERC 1097, 140 L.Ed.2d 210, 28 Envtl. L. Rep. 20,434...

difficult issue in the present case, for we have concluded that even assuming, arguendo, the existence of power to hear the claim, the District Court [did not err]”); Neese v. Southern R. Co., 350 U.S. 77, 76 S.Ct. 131, 100 L.Ed. 60 (1955) (per curiam) (“We reverse the judgment of the Court of Appeals without reaching the constitutional challenge to that court’s jurisdiction.... Even assuming such appellate power to exist ..., [the Court of Appeals erred]”); see also Ellis v. Dyson, 421 U.S. 426, 436, 95 S.Ct. 1691, 1697, 44 L.Ed.2d 274 (1975) (REHNQUIST, J., concurring) (“While it would have been more in keeping with conventional adjudication had [the District Court] first inquired as to the existence of a case or controversy, ... I cannot fault the District Court for disposing of the case on what it quite properly regarded at that time as an authoritative ground of decision. Indeed, this Court has on occasion followed essentially the same practice”). Because this case involves a choice between two threshold questions that are intricately interrelated, I do not take a position on the propriety of courts assuming jurisdiction. Nonetheless, I strongly disagree with the Court’s decision to reach out and decide this question, especially in light of the fact that we have not had the benefit of briefing and argument. See Philbrook, 421 U.S., at 721, 95 S.Ct., at 1902 (opinion of REHNQUIST, J.) (declining to answer a “complex question of federal jurisdiction” because of “the absence of substantial aid from the briefs of either of the parties”); Avrech, 418 U.S., at 677, 94 S.Ct., at 3040 (“Without the benefit of further oral argument, we are unwilling to decide the difficult jurisdictional issue which the parties have briefed”); ante, at 1014 (noting that the Avrech Court “was unwilling to decide the jurisdictional question without oral argument” and emphasizing the importance of zealous advocacy to sharpen issues).

16 Indeed, the Court acknowledges—as it must—that the Court has the power to construe the statute, as it is impossible to resolve the standing issue without construing some provisions of EPCRA. Thus, in order to determine whether respondent’s investigation and prosecution costs are sufficient to confer standing, the Court construes § 326(f) of EPCRA, which authorizes the district court to “award costs of litigation” to the prevailing party. Ante, at 1018–1019. Yet if § 326(f) were construed to cover the cost of the investigation that preceded the filing of respondent’s complaint, even under the Court’s reasoning respondent would have alleged a “redressable” injury and would have standing. See ibid.

17 There are two other reasons that counsel in favor of answering the statutory question first. First, it is the statutory question that has divided the courts of appeals and that we granted certiorari to resolve. See Pet. for Cert. i. Second, the meaning of the statute is a matter of general and national importance, whereas the Court’s answer to the constitutional question depends largely on a construction of the allegations of this particular complaint, ante, at 1017 (“We turn now to the particulars of respondent’s complaint to see how it measures up to Article III’s requirements”).

18 In an attempt to demonstrate that redressability has always been a component of the standing doctrine, the Court cites our decision in Marye v. Parsons, 114 U.S. 325, 5 S.Ct. 932, 29 L.Ed. 205 (1885), a case in which neither the word “standing” nor the word “redressability” appears.

19 Although the Court discussed redressability, Renne did not in fact turn on that issue. While the Court stated that “[t]here is reason to doubt ... that the injury alleged ... can be redressed” by the relief sought, 501 U.S., at 319, 111 S.Ct., at 2337, it then went on to hold that the claims were nonjusticiable because “respondents have not demonstrated a live controversy ripe for resolution by the federal courts,” id., at 315, 320–324, 111 S.Ct., at 2338–2340.

20 This distinction is significant, as our standing doctrine is rooted in separation-of-powers concerns. E.g., Lujan v. Defenders of Wildlife, 504 U.S. 555, 573–578, 112 S.Ct. 2130, 2143–2148, 119 L.Ed.2d 351 (1992); Allen v. Wright, 468 U.S. 737, 750, 104 S.Ct. 3315, 3324, 82 L.Ed.2d 556 (1984); see also infra, at 1029–1030.

21 “It is an established principle that to entitle a private individual to invoke the judicial power to determine the validity of executive or legislative action he must show that he has sustained or is immediately in danger of sustaining a direct injury as the result of that action....” Ex parte Lévitt, 302 U.S. 633, 634, 58 S.Ct. 1, 1, 82 L.Ed. 493 (1937).

22 Assuming that EPCRA authorizes suits for wholly past violations, then Congress has created a legal right in having EPCRA reports filed on time. Although this is not a traditional injury: “[W]e must be sensitive to the articulation of new rights of action that do not have clear analogs in our common-law tradition .... Congress has the power to define injuries and articulate chains of causation that will give rise to a case or controversy where none existed before ....” Lujan v. Defenders of Wildlife, 504 U.S., at 580, 112 S.Ct., at 2146 (KENNEDY, J., concurring in part and concurring in judgment); see also Havens Realty Corp. v. Coleman, 455 U.S. 363, 373–374, 102 S.Ct. 1114, 1121–1122, 71 L.Ed.2d 214 (1982); Warth v. Seldin, 422 U.S. 490, 500, 95 S.Ct. 2197, 2205–2206, 45 L.Ed.2d 343 (1975).

23 In another context, the Court has specified that there is a critical distinction between whether a defendant is directly or indirectly harmed. In Lujan v. Defenders of Wildlife, a case involving a challenge to Executive action, the Court stated: “When the suit is one challenging the legality of government action or inaction, the nature and extent of facts that © 2015 Thomson Reuters. No claim to original U.S. Government Works. 26 Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998) 118 S.Ct. 1003, 46 ERC 1097, 140 L.Ed.2d 210, 28 Envtl. L. Rep. 20,434...

must be averred (at the summary judgment stage) or proved (at the trial stage) in order to establish standing depends considerably upon whether the plaintiff is himself an object of the action (or forgone action) at issue. If he is, there is ordinarily little question that the action or inaction has caused him injury, and that a judgment preventing or requiring the action will redress it. When, however, as in this case, a plaintiff’s asserted injury arises from the government’s allegedly unlawful regulation (or lack of regulation) of someone else, much more is needed. In that circumstance, causation and redressability ordinarily hinge on the response of the regulated (or regulable) third party to the government action or inaction—and perhaps on the response of others as well.” 504 U.S., at 561–562, 112 S.Ct., at 2137 (emphasis in original).

24 “Several scholars have attempted to trace the historical origins of private prosecution in the United States. Without exception, these scholars have determined that the notion of private prosecutions originated in early common law England, where the legal system primarily relied upon the victim or the victim’s relatives or friends to bring a criminal to justice. According to these historians, private prosecutions developed in England as a means of facilitating private vengeance.” Bessler, The Public Interest and the Unconstitutionality of Private Prosecutors, 47 Ark.L.Rev. 511, 515 (1994) (footnotes omitted).

25 “American citizens continued to privately prosecute criminal cases in many locales during the nineteenth century. In Philadelphia, for example, all types of cases were privately prosecuted, with assault and battery prosecutions being the most common. However, domestic disputes short of assault also came before the court. Thus, ‘parents of young women prosecuted men for seduction; husbands prosecuted their wives’ paramours for adultery; wives prosecuted their husbands for desertion.’ Although many state courts continued to sanction the practice of private prosecutions without significant scrutiny during the nineteenth century, a few state courts outlawed the practice.” Id., at 518-519 (footnotes omitted); A. Steinberg, The Transformation of Criminal Justice: Philadelphia, 1800–1880, p. 5 (1989) (“Private prosecution and the minor judiciary were firmly rooted in Philadelphia’s colonial past. Both were examples of the creative American adaptation of the English common law. By the 17th century, private prosecution was a fundamental part of English common law”); see also F. Goodnow, Principles of the Administrative Law of the United States 412–413 (1905).

26 When such a party obtains a judgment that imposes sanctions on the wrongdoer, it is proper to presume that the wrongdoer will be less likely to repeat the injurious conduct that prompted the litigation. The lessening of the risk of future harm is a concrete benefit.

27 Ironically, although the Court insists that the standing question must be answered first, it relies on the merits when it answers the standing question. Proof that Steel Company repeatedly violated the law by failing to file EPCRA reports for eight years should suffice to establish the District Court’s power to impose sanctions, or at least to decide what sanction, if any, is appropriate. Evidence that Steel Company was ignorant of the law and has taken steps to avoid future violations is highly relevant to the merits of the question whether any remedy is necessary, but surely does not deprive the District Court of the power to decide the remedy issue. Cf. United States v. W.T. Grant Co., 345 U.S. 629, 633, 73 S.Ct. 894, 897, 97 L.Ed. 1303 (1953) (“Here the defendants told the court that the interlocks no longer existed and disclaimed any intention to revive them. Such a profession does not suffice to make a case moot although it is one of the factors to be considered in determining the appropriateness of granting an injunction against the now-discontinued acts”).

28 “No action may be commenced under subsection (a)(1)(A) of this section prior to 60 days after the plaintiff has given notice of the alleged violation to the Administrator, the State in which the alleged violation occurs, and the alleged violator. Notice under this paragraph shall be given in such manner as the Administrator shall prescribe by regulation.”

29 “No action may be commenced under subsection (a) of this section against an owner or operator of a facility if the Administrator has commenced and is diligently pursuing an administrative order or civil action to enforce the requirement concerned or to impose a civil penalty under this Act with respect to the violation of the requirement.”

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 27 Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998) 118 S.Ct. 1003, 46 ERC 1097, 140 L.Ed.2d 210, 28 Envtl. L. Rep. 20,434...

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 28 Suryanto v. Attorney General of U.S., 398 Fed.Appx. 830 (2010)

5; Immigration and Nationality Act, § 245(a), 8 398 Fed.Appx. 830 U.S.C.A. § 1255(a). This case was not selected for publication in the Federal Reporter. Not for Publication in West’s Federal Reporter. 3 Cases that cite this headnote See Fed. Rule of Appellate Procedure 32.1 generally governing citation of judicial decisions issued on or after Jan. 1, 2007. See also Third Circuit LAR, App. I, IOP 5.7. (Find CTA3 App. I, IOP 5.7) United States Court of Appeals, Third Circuit. *831 On Petition for Review from an Order of the Board of Immigration Appeals (Board No. A95–846–410), Andreas SURYANTO, Petitioner Immigration Judge: Donald Vincent Ferlise. v. ATTORNEY GENERAL OF the UNITED STATES, Attorneys and Law Firms Respondent. Bruce C. Wong, Esq., Duxford Law Group, San Nos. 06–1424, 08–4342. | Submitted Under Third Francisco, CA, for Petitioner. CircuitLAR 34.1(a) Oct. 19, 2010. | Filed: Oct. 22, Annetta Foster Givhan, Esq., Office of United States 2010. Attorney, Philadelphia, PA, Thomas W. Hussey, Esq., Thankful T. Vanderstar, Esq., United States Department of Justice, Washington, DC, for Respondent. Synopsis Background: Alien petitioned for review of orders of Before: HARDIMAN, GREENAWAY, JR., and Board of Immigration Appeals (BIA) denying application NYGAARD, Circuit Judges. for asylum, withholding of removal, and relief under Convention Against Torture and denying motion to reopen.

OPINION OF THE COURT Holding: The Court of Appeals, Hardiman, Circuit Judge, held that the alien did not have a due process property or HARDIMAN, Circuit Judge. liberty interest in adjustment of his immigration status. **1 In these consolidated appeals, Andreas Suryanto petitions for review of two orders of the Board of Petitions denied. Immigration Appeals (BIA). We will deny both petitions.

West Headnotes (1) I.

Because we write for the parties, we state only the facts [1] Aliens, Immigration, and Citizenship and procedural history necessary to our decision. Adjustment of status Suryanto is an Indonesian Chinese Christian who was Constitutional Law placed in removal proceedings after overstaying his visa. Admission and exclusion; deportation He conceded removability, but applied for asylum, withholding of removal, and protection under the The alien did not have a due process property or Convention Against Torture (CAT), arguing that he faced liberty interest in adjustment of his immigration religious and ethnic persecution in Indonesia. After a status, since the decision whether to adjust an hearing on the merits, the Immigration Judge (IJ) issued alien’s status was entrusted to the discretion of an oral decision denying Suryanto relief and granting his the Attorney General. U.S.C.A. Const.Amend. © 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Tab E-16 Suryanto v. Attorney General of U.S., 398 Fed.Appx. 830 (2010)

request for voluntary departure. The Board of Christmas service at Suryanto’s church in Jakarta, a bomb Immigration Appeals (BIA) summarily affirmed the IJ’s exploded in the parking lot. A few minutes later, after he order. Following the BIA’s decision, Suryanto incorrectly had gone out to see what had happened, a second bomb filed a petition for review in the Ninth Circuit, which exploded inside the church, causing several injuries, some transferred the case here. After his case was transferred, of them serious. In January 2001, as Suryanto and other Suryanto married a United States citizen, and we held his young members of the congregation were returning home appeal in abeyance pending adjudication of his I–130 from cleaning the church, they were again accosted. application. Following approval of his I–130 application, When Suryanto refused to turn over his money, he was Suryanto filed a motion with the BIA to reopen and beaten and warned: “don’t even try to repair or rebuild remand his case. The BIA denied this petition, and that church.” Id. at 53. Suryanto filed a second petition for review. Soon after this incident, Suryanto left for Singapore at his mother’s behest. After two months, however, he returned to Indonesia because Singapore was too “busy” and because it was “very difficult to find a job.” Id. at 22. Five A. months later, in September 2001, Suryanto came to the United States. Suryanto argues that he is entitled to relief because he has suffered persecution in Indonesia as a result of his In addition to his claims of past persecution, Suryanto Chinese ethnicity and Christian faith, and because he testified that he fears future persecution because of fears future persecution if he is forced to return. At his ongoing hostility toward ethnic Chinese Christians in removal hearing, Suryanto recounted incidents of Indonesia. harassment and violence to support his claim. While a student in primary school, children frequently demanded money from Suryanto, and on ten or more occasions he was physically assaulted, although sometimes the attack was limited to a slap or a push. Suryanto testified that he B. was targeted for these attacks because “they assume that every Chinese has money.” Tr. 25. Although Suryanto had “basically been a credible witness,” the IJ found that Suryanto did not suffer past Suryanto described two specific incidents of violence in persecution. IJ Opinion 8. The IJ concluded that greater detail. First, in 1990 he and a friend were beaten Suryanto’s run-ins with children seeking money were a by seven or eight peers after rebuffing their demand for result of his “refus[al] to give individuals money. Not money. Second, about a year later, two older teenage boys because he was Chinese.” Id. at 9. The IJ also held that accosted Suryanto and choked him until he “couldn’t the bombing of Suryanto’s church was not an “act of breathe.” Id. at 30. Suryanto believed he was targeted persecution,” but rather “an isolated act of aggression and both times because of his Chinese ethnicity. terrorism.” Id. This finding was buttressed by the fact that “[t]here were no problems before or subsequent to that Suryanto also related instances of violence and incident at that church.” Id. The IJ also noted that the harassment directed toward his family. For example, attack made on Suryanto during his return from cleaning Suryanto’s father opened an electronics store in the late the church did not constitute religious persecution 1980s and gang members demanded protection money because it did not impair his freedom of worship. Finally, from him. Suryanto’s father initially refused to pay, and the IJ concluded that Suryanto did not “truly ... fear for the gang members beat him and his employees. Suryanto his life” in Indonesia, as evidenced by his prompt return claimed that these incidents “only happen[ed] in the from Singapore. Id. at 4. The IJ found that had Suryanto Chinese [stores],” and were thus likely motivated by truly feared for his life, he would have remained in ethnic animus. Id. at 41. In May 1998, during the Singapore “notwithstanding the fact that ... life is very widespread anti-government riots in *832 Indonesia, busy and hectic there, and notwithstanding the fact that he Suryanto’s father’s electronics store was burned down did not have a job at that time.” Id. at 5. and his family was forced to hide in their home for a period of three days. Alternatively, the IJ held that Suryanto “could obviously avoid any future persecution by relocating to another **2 In addition to this ethnically-motivated harassment, section of his country....” Id. at 11. Suryanto conceded Suryanto described two religiously-motivated attacks that that he “has had no problems as an adult” in the province he experienced. On December 24, 2000, during a where his parents reside, and that his family is free to © 2015 Thomson Reuters. No claim to original U.S. Government Works. 2 Suryanto v. Attorney General of U.S., 398 Fed.Appx. 830 (2010)

practice religion there. Id. group, or political opinion was or will be at least one central reason for [his] persecut[ion].” 8 U.S.C. § 1158(b)(1)(B)(i). “Persecution” is defined as “threats to life, confinement, torture, and economic restrictions so severe that they constitute a threat to life or freedom.” Lie C. v. Ashcroft, 396 F.3d 530, 536 (3d Cir.2005) (quoting Fatin v. INS, 12 F.3d 1233, 1240 (3d Cir.1993)). A Suryanto petitioned for review of the IJ’s decision and the “well-founded fear of persecution” must be both BIA affirmed without opinion. Because Suryanto genuinely held by the petitioner and objectively improperly sought review of the BIA decision in the reasonable. Id. An alien may establish a presumption that Court of Appeals for the Ninth Circuit, the case was a well-founded fear exists by demonstrating that he transferred here on January 25, 2006.1 suffered persecution in the past. 8 C.F.R. § 208.13(b)(1). *833 **3 On May 25, 2007, Suryanto married a United After careful review of the record, we are unable to States citizen. He then moved the BIA to reopen his case, conclude that any reasonable factfinder would have been so we held his petition in abeyance pending further action compelled to disagree with the IJ. In Lie v. by the BIA. After the BIA denied his motion, Suryanto Ashcroft—another case involving an ethnically Chinese filed a second petition for review, claiming a due process Christian from Indonesia—we stated that “[s]imple deprivation. We consolidated both petitions. robbery, in isolation, while unfortunate and troubling, does not seem to meet th[e] stringent standard” required to establish persecution under the statute. 396 F.3d at 536. The same conclusion applies here: although the robberies II. Suryanto suffered were terrible, a reasonable factfinder would not be compelled to conclude that they were severe enough to constitute persecution under the statute. Likewise, a reasonable factfinder would not be compelled A. to conclude that the bombing of Suryanto’s church and the subsequent warning constituted persecution. Where, as here, the BIA affirms the IJ’s decision without opinion, we review the IJ’s decision. Zhang v. Gonzales, **4 Moreover, there is insufficient evidence to compel a 405 F.3d 150, 155 (3d Cir.2005). We review the IJ’s reasonable factfinder to conclude that the robberies were factual determinations under the substantial evidence motivated by Suryanto’s race, as opposed to his perceived standard, which requires us to defer to the IJ’s findings wealth. In Lie, the robbers referred to the petitioner as a “unless any reasonable adjudicator would be compelled to “Chinese pig,” but we agreed with the BIA that “a single conclude to the contrary.” 8 U.S.C. § 1252(b)(4)(B). We ethnic slur was insufficient to establish that the thieves review the BIA’s denial of the motion to reopen for an were motivated by Lie’s or her husband’s ethnicity.” Id. abuse of discretion. Borges v. Gonzales, 402 F.3d 398, at 535 (internal quotation marks omitted). Similarly, 404 (3d Cir.2005). although Suryanto has offered some evidence supporting his contention that the harassment he suffered was a result of ethnic animus, the majority of his testimony *834 supports the IJ’s conclusion that financial gain was the motivating force. B.

An alien is eligible for asylum, pursuant to 8 U.S.C. § Furthermore, a reasonable factfinder could conclude (as 1158(b)(1)(A), if he qualifies as a “refugee” within the the IJ did) that Suryanto does not subjectively hold a meaning of 8 U.S.C. § 1101(a)(42)(A), that is, if he “is well-founded fear of persecution based on his voluntary unable or unwilling to return to” the country of his return to Indonesia from Singapore. nationality “because of persecution or a well-founded fear of persecution on account of race, religion, nationality, For all the foregoing reasons, we will affirm the IJ’s membership in a particular social group, or political conclusion that Suryanto is not eligible for asylum, which opinion.” The applicant bears the burden of showing that also dooms his claim for withholding of removal. See he qualifies as a refugee, see Guo v. Ashcroft, 386 F.3d Kibinda v. Att’y Gen., 477 F.3d 113, 123 (3d Cir.2007). 556, 561 (3d Cir.2004), and he “must establish that race, religion, nationality, membership in a particular social

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 Suryanto v. Attorney General of U.S., 398 Fed.Appx. 830 (2010)

III. process protection. Mudric, 469 F.3d at 99 (“No constitutional injury occurred from the INS delays in this Suryanto next claims the BIA’s denial of his motion to case because Mudric simply had no due process reopen following his marriage deprived him of due entitlement to the wholly discretionary benefits of which process of law. We review this claim de novo. he and his mother were allegedly deprived....”). Suryanto’s due process claim therefore must fail. We find no constitutional infirmity in the BIA’s action. “[A] cognizable liberty or property interest must exist in the first instance for a procedural due process claim to lie.” Mudric v. Att’y Gen., 469 F.3d 94, 98 (3d Cir.2006). Here, Suryanto seeks reopening to vindicate his supposed IV. interest in adjusting his immigration status. Ordinarily, the Attorney General has discretion to adjust an alien’s For the foregoing reasons, we will deny both of status.2 See 8 U.S.C. § 1255(a); Mudric, 469 F.3d at Suryanto’s petitions for review. 98–99. When the decision to grant or withhold a benefit is entrusted to the discretion of a government actor, one has no constitutional property interest in obtaining that relief. All Citations Conn. Bd. of Pardons v. Dumschat, 452 U.S. 458, 465, 101 S.Ct. 2460, 69 L.Ed.2d 158 (1981). Accordingly, 398 Fed.Appx. 830, 2010 WL 4146155 Suryanto does not have a sufficient property or liberty interest in the adjustment of his status to qualify for due

1 The Government claims we lack jurisdiction, citing the requirement of 8 U.S.C. § 1252(b)(1) that a “petition for review [of an order of removal] must be filed not later than 30 days after the date of the final order.” Suryanto did, however, file his petition within the requisite timeframe; he simply filed it in the wrong venue. See id. § 1252(b)(2). Because the venue requirement is nonjurisdictional, Bonhometre v. Gonzales, 414 F.3d 442, 446 n. 5 (3d Cir.2005), we reject the Government’s argument in this regard.

2 In the instant case it appears that the Attorney General may have been statutorily required to deny adjustment because Suryanto failed to voluntarily depart within the timeline set by the IJ. See 8 U.S.C. § 1229a(b)(7) (an alien who fails to voluntarily depart is ineligible for relief under § 1255, governing adjustment of status, for 10 years). Because we find that Suryanto does not have a viable due process claim, however, there is no need for us to address this issue.

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4 Town of Castle Rock, Colo. v. Gonzales, 545 U.S. 748 (2005) 125 S.Ct. 2796, 162 L.Ed.2d 658, 73 USLW 4611, 05 Cal. Daily Op. Serv. 5642...

KeyCite Yellow Flag - Negative Treatment Distinguished by Robinson v. Lioi, 4th Cir.(Md.), July 30, 2013 125 S.Ct. 2796 West Headnotes (12) Supreme Court of the United States

TOWN OF CASTLE ROCK, COLORADO, [1] Constitutional Law Petitioner, Rights, Interests, Benefits, or Privileges v. Involved in General Jessica GONZALES, individually and as next best friend of her deceased minor children, Rebecca The procedural component of the Due Process Gonzales, Katheryn Gonzales, and Leslie Gonzales. Clause does not protect everything that might be described as a benefit. U.S.C.A. Const.Amend. No. 04–278. | Argued March 21, 2005. | Decided 14. June 27, 2005.

31 Cases that cite this headnote Synopsis Background: Wife brought civil rights action against municipality and police officers based on officers’ refusal to enforce domestic abuse restraining order against [2] Constitutional Law husband. The United States District Court for the District Benefits, rights and interests in of Colorado, Wiley Daniel, J., dismissed the action for failure to state a claim. The Tenth Circuit Court of To have a protected property interest in a Appeals, 307 F.3d 1258, reversed. Upon rehearing en benefit, for due process purposes, a person must banc, the Tenth Circuit Court of Appeals, Seymour, have more than an abstract need or desire and Circuit Judge, 366 F.3d 1093, reversed the District more than a unilateral expectation of it. Court’s decision and remanded. U.S.C.A. Const.Amend. 14.

101 Cases that cite this headnote Holdings: Following grant of certiorari, the United States Supreme Court, Justice Scalia held that: [1] Supreme Court would not defer to the Tenth Circuit Court of Appeals’ determination that Colorado law gave [3] Constitutional Law wife a right to have police enforce restraining order; Benefits, rights and interests in [2] Colorado law did not create personal entitlement to To have a protected property interest in a police enforcement of restraining orders; and benefit, for due process purposes, a person must have a legitimate claim of entitlement to it. [3] wife did not have protected property interest in police U.S.C.A. Const.Amend. 14. enforcement of restraining order.

168 Cases that cite this headnote Reversed.

Justice Souter filed concurring opinion, in which Justice Breyer joined. [4] Constitutional Law Justice Stevens filed dissenting opinion, in which Justice Source of right or interest Ginsburg joined. Property interests, in the due process context, are created and their dimensions are defined by © 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Tab E-17 Town of Castle Rock, Colo. v. Gonzales, 545 U.S. 748 (2005) 125 S.Ct. 2796, 162 L.Ed.2d 658, 73 USLW 4611, 05 Cal. Daily Op. Serv. 5642...

existing rules or understandings that stem from but instead relied upon language that appeared an independent source such as state law. in many state restraining law statutes. U.S.C.A. U.S.C.A. Const.Amend. 14. Const.Amend. 14; West’s C.R.S.A. § 18–6–803.5(3)(a, b).

100 Cases that cite this headnote 35 Cases that cite this headnote

[5] Constitutional Law [8] Rights, Interests, Benefits, or Privileges Constitutional Law Involved in General Orders for protection Municipal Corporations A benefit is not a protected entitlement, for due Injuries by Mobs or Other Wrongdoers process purposes, if government officials may grant or deny it in their discretion. U.S.C.A. Colorado law did not create a personal Const.Amend. 14. entitlement to police enforcement of domestic abuse restraining orders, for purpose of determining whether wife had protected 154 Cases that cite this headnote property interest in police enforcement of restraining order against husband, in civil rights action against police and municipality, arising from failure to enforce it; although restraining [6] order statute provided that police “shall use” Constitutional Law every reasonable means to enforce a restraining Source of right or interest order, tradition of police discretion coexisted with similar mandatory arrest provisions, Although the underlying substantive interest in enforcement was not always possible or property is created by an independent source practical, statute provided for alternative to such as state law, federal constitutional law immediate enforcement, which was the seeking determines whether that interest rises to the level of an arrest warrant, an entitlement to procedure of a legitimate claim of entitlement protected by only, and although statute provided for a the Due Process Clause. U.S.C.A. protected person’s direct power to initiate Const.Amend. 14. contempt proceedings against restrained person if order was violated, it did not expressly give 157 Cases that cite this headnote protected person a right to request or demand an arrest. U.S.C.A. Const.Amend. 14; West’s C.R.S.A. §§ 18–6–803.5(3)(a, b), 18–6–803.6(1).

[7] Federal Courts 118 Cases that cite this headnote Scope and Extent of Review

The Supreme Court would not defer to the Tenth Circuit Court of Appeals’ determination that Colorado law gave wife a right to have police [9] Constitutional Law enforce a domestic abuse restraining order Rights, Interests, Benefits, or Privileges against her husband, for purpose of determining Involved in General ultimate question of whether wife had protected property interest in police enforcement, in wife’s A person cannot safely be deemed “entitled” to civil rights action against police and something, for purpose of determining whether municipality, arising from failure to enforce person has protected due process interest, when order; the Court of Appeals’ opinion did not the identity of the alleged entitlement is vague. draw upon state-specific case law or expertise, © 2015 Thomson Reuters. No claim to original U.S. Government Works. 2 Town of Castle Rock, Colo. v. Gonzales, 545 U.S. 748 (2005) 125 S.Ct. 2796, 162 L.Ed.2d 658, 73 USLW 4611, 05 Cal. Daily Op. Serv. 5642...

U.S.C.A. Const.Amend. 14. U.S.C.A. Const.Amend. 14.

10 Cases that cite this headnote 79 Cases that cite this headnote

[10] Constitutional Law **2798 *748 Syllabus* Orders for protection Respondent filed this suit under 42 U.S.C. § 1983 alleging Municipal Corporations that petitioner violated the Fourteenth Amendment’s Due Injuries by Mobs or Other Wrongdoers Process Clause when its police officers, acting pursuant to official policy or custom, failed to respond to her repeated Wife did not have protected property interest in reports over several hours that her estranged husband had police enforcement of restraining order, issued taken their three children in violation of her restraining pursuant to Colorado law, against her husband, order against him. Ultimately, the husband murdered the and thus, she could not prevail in civil rights children. The District Court granted the town’s motion to action against police and municipality for an dismiss, but an en banc majority of the Tenth Circuit alleged due process violation, arising from reversed, finding that respondent had alleged a cognizable failure to enforce it; even assuming that procedural due process claim because a Colorado statute Colorado law created an entitlement to police established the state legislature’s clear intent to require enforcement of the restraining order, it was an police to enforce restraining orders, and thus its intent that indirect benefit, rather than a direct benefit. the order’s recipient have an entitlement to its U.S.C.A. Const.Amend. 14; West’s C.R.S.A. § enforcement. The court therefore ruled, among other 18–6–803.5(3)(a, b). things, that respondent had a protected property interest in the enforcement of her restraining order.

63 Cases that cite this headnote Held: Respondent did not, for Due Process Clause purposes, have a property interest in police enforcement of the restraining order against her husband. Pp. 2802–2810. [11] Constitutional Law (a) The Due Process Clause’s procedural component does Protections Provided and Deprivations not protect everything **2799 that might be described as Prohibited in General a government “benefit”: “To have a property interest in a benefit, a person ... must ... have a legitimate claim of An indirect and incidental result of the entitlement to it.” Board of Regents of State Colleges v. government’s enforcement action does not Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 33 L.Ed.2d 548. amount to a deprivation of any interest in life, Such entitlements are created by existing rules or liberty, or property, for due process purposes. understandings stemming from an independent source U.S.C.A. Const.Amend. 14. such as state law. E.g., ibid. Pp. 2802–2803.

24 Cases that cite this headnote (b) A benefit is not a protected entitlement if officials have discretion to grant or deny it. See, e.g., Kentucky Dept. of Corrections v. Thompson, 490 U.S. 454, 462–463, 109 S.Ct. 1904, 104 L.Ed.2d 506. It is inappropriate here to defer to the Tenth Circuit’s [12] Constitutional Law determination that Colorado law gave respondent a right Investigative activity in general to police enforcement of the restraining order. This Court therefore proceeds to its own analysis. Pp. 2803–2804. A state-law created benefit that a third party may receive from having someone else arrested (c) Colorado law has not created a personal entitlement to for a crime generally does not trigger protections enforcement of restraining orders. It does not appear that under the Due Process Clause, neither in its state law truly made such enforcement mandatory. A procedural nor in its substantive manifestations. well-established tradition of policediscretion *749 has © 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 Town of Castle Rock, Colo. v. Gonzales, 545 U.S. 748 (2005) 125 S.Ct. 2796, 162 L.Ed.2d 658, 73 USLW 4611, 05 Cal. Daily Op. Serv. 5642...

long coexisted with apparently mandatory arrest statutes. incidentally, provides *750 a sufficient answer to” cases Cf. Chicago v. Morales, 527 U.S. 41, 47, n. 2, 62, n. 32, finding government-provided services to be entitlements. 119 S.Ct. 1849, 144 L.Ed.2d 67. Against that backdrop, a Id., at 788, 100 S.Ct. 2467. Pp. 2809–2810. true mandate of police action would require some stronger indication than the Colorado statute’s direction to “use 366 F.3d 1093, reversed. every reasonable means to enforce a restraining order” or even to “arrest ... or ... seek a warrant.” A Colorado SCALIA, J., delivered the opinion of the Court, in which officer would likely have some discretion to determine REHNQUIST, C. J., and O’CONNOR, KENNEDY, that—despite probable cause to believe a restraining order SOUTER, THOMAS, and BREYER, JJ., joined. has been violated—the violation’s circumstances or SOUTER, J., filed a concurring opinion, in which competing duties counsel decisively against enforcement BREYER, J., joined, post, p. 2811. STEVENS, J., filed a in a particular instance. The practical necessity for dissenting opinion, in which GINSBURG, J., joined, post, discretion is particularly apparent in a case such as this, p. 2813. where the suspected violator is not actually present and his whereabouts are unknown. In such circumstances, the statute does not appear to require officers to arrest but Attorneys and Law Firms only to seek a warrant. That, however, would be an entitlement to nothing but procedure, which cannot be the John P. Elwood, for the United States as amicus curiae, basis for a property interest. Pp. 2804–2808. by special leave of the Court, supporting the petitioner.

(d) Even if the statute could be said to make enforcement Thomas S. Rice, Eric M. Ziporin, Counsel of Record, “mandatory,” that would not necessarily mean that Senter, Goldfarb & Rice, L.L.C., Denver, Colorado, John respondent has an entitlement to enforcement. Her alleged C. Eastman, c/o Chapman University School of Law, interest stems not from common law or contract, but only Orange, CA, Erik S. Jaffe, Erik S. Jaffe, P.C., from a State’s statutory scheme. If she was given a Washington, D.C., Counsel for Petitioners. statutory entitlement, the Court would expect to see some Brian J. Reichel, Counsel of Record, Law Office of Brian indication of that in the statute itself. Although the statute J. Reichel, Broomfield, CO, David T. Odom, Odom & spoke of “protected person[s]” such as respondent, it did Associates, P.C., Naperville, IL, Counsel for Respondent. so in connection with matters other than a right to enforcement. Most importantly, it spoke directly to the Opinion protected person’s power to “initiate” contempt proceedings if the order was issued in a civil action, Justice SCALIA delivered the opinion of the Court. which contrasts tellingly with its conferral of a power merely to “request” initiation of criminal contempt proceedings—and even more dramatically with its We decide in this case whether an individual who has complete silence about any power to “request” (much less obtained a state-law restraining order has a demand) that an arrest be made. Pp. 2808–2809. constitutionally *751 protected property interest in having the police enforce the restraining order when they have (e) Even were the Court to think otherwise about probable cause to believe it has been violated. Colorado’s creation of an entitlement, it is not clear that an individual entitlement to enforcement of a restraining order could constitute a “property” interest for due process purposes. Such a right would have no ascertainable monetary value and would arise I incidentally, not out of some new species of government benefit or service, but out of a function that government The horrible facts of this case are contained in the actors have always performed—arresting people when complaint that respondent Jessica Gonzales filed in they have probable cause. A benefit’s indirect nature was Federal District Court. (Because the case comes to us on fatal to a due process claim in O’Bannon v. Town Court appeal from a dismissal of the complaint, we assume its Nursing Center, 447 U.S. 773, 787, 100 S.Ct. 2467, 65 allegations are true. See Swierkiewicz v. Sorema N. A., L.Ed.2d 506. Here, **2800 as there, “[t]he simple 534 U.S. 506, 508, n. 1, 122 S.Ct. 992, 152 L.Ed.2d 1 distinction between government action that directly (2002).) Respondent alleges that petitioner, the town of affects a citizen’s legal rights ... and action that is directed Castle Rock, Colorado, violated the Due Process Clause against a third party and affects the citizen only ... of the Fourteenth Amendment to the United States Constitution when its police officers, acting pursuant to © 2015 Thomson Reuters. No claim to original U.S. Government Works. 4 Town of Castle Rock, Colo. v. Gonzales, 545 U.S. 748 (2005) 125 S.Ct. 2796, 162 L.Ed.2d 658, 73 USLW 4611, 05 Cal. Daily Op. Serv. 5642...

official policy or custom, failed to respond properly to her visit “ ‘arranged by the parties’ ”; the modified order also repeated reports that her estranged husband was violating allowed him to visit *753 the home to collect the children the terms of a restraining order.1 for such “parenting time.” Id., at 1097 (majority opinion).

The restraining order had been issued by a state trial court According to the complaint, at about 5 or 5:30 p.m. on several weeks earlier in conjunction with respondent’s Tuesday, June 22, 1999, respondent’s husband took the divorce proceedings. The original form order, issued on three daughters while they were playing outside the May 21, 1999, and served on respondent’s husband on family home. No advance arrangements had been made June 4, 1999, commanded him not to “molest or disturb for him to see the daughters that evening. When the **2801 peace of [respondent] or of any child,” and to respondent noticed the children were missing, she remain at least 100 yards from the family home at all suspected her husband had taken them. At about 7:30 times. 366 F.3d 1093, 1143 (C.A.10 2004) (en banc) p.m., she called the Castle Rock Police Department, (appendix to dissenting opinion of O’Brien, J.). The which dispatched two officers. The complaint continues: bottom of the preprinted form noted that the reverse side “When [the officers] arrived ..., she showed them a copy contained “IMPORTANT NOTICES FOR of the TRO and requested that it be enforced and the three RESTRAINED PARTIES AND LAW ENFORCEMENT children be returned to her immediately. [The officers] OFFICIALS.” Ibid. (emphasis deleted). The preprinted stated that there was nothing they could do about the TRO *752 text on the back of the form included the following and suggested that [respondent] call the Police “WARNING”: Department again if the three children did not return home by 10:00 p.m.” App. to Pet. for Cert. 126a.2 “A KNOWING VIOLATION OF A RESTRAINING ORDER IS A CRIME .... A At approximately 8:30 p.m., respondent talked to her VIOLATION WILL ALSO CONSTITUTE husband on his cellular telephone. He told her “he had the CONTEMPT OF COURT. YOU MAY BE three children [at an] amusement park in Denver.” Ibid. ARRESTED WITHOUT NOTICE IF A LAW She called the police again and **2802 asked them to ENFORCEMENT OFFICER HAS PROBABLE “have someone check for” her husband or his vehicle at CAUSE TO BELIEVE THAT YOU HAVE the amusement park and “put out an [all points bulletin]” KNOWINGLY VIOLATED THIS ORDER.” Id., at for her husband, but the officer with whom she spoke 1144 (emphasis in original). “refused to do so,” again telling her to “wait until 10:00 p.m. and see if” her husband returned the girls. Id., at The preprinted text on the back of the form also included 126a–127a. a “NOTICE TO LAW ENFORCEMENT OFFICIALS,” which read in part: At approximately 10:10 p.m., respondent called the police and said her children were still missing, but she was now “YOU SHALL USE EVERY REASONABLE told to wait until midnight. She called at midnight and MEANS TO ENFORCE THIS RESTRAINING told the dispatcher her children were still missing. She ORDER. YOU SHALL ARREST, OR, IF AN went to her husband’s apartment and, finding nobody ARREST WOULD BE IMPRACTICAL UNDER THE there, called the police at 12:10 a.m.; she was told to wait CIRCUMSTANCES, SEEK A WARRANT FOR THE for an officer to arrive. When none came, she went to the ARREST OF THE RESTRAINED PERSON WHEN police station at *754 12:50 a.m. and submitted an YOU HAVE INFORMATION AMOUNTING TO incident report. The officer who took the report “made no PROBABLE CAUSE THAT THE RESTRAINED reasonable effort to enforce the TRO or locate the three PERSON HAS VIOLATED OR ATTEMPTED TO children. Instead, he went to dinner.” Id., at 127a. VIOLATE ANY PROVISION OF THIS ORDER AND THE RESTRAINED PERSON HAS BEEN At approximately 3:20 a.m., respondent’s husband arrived PROPERLY SERVED WITH A COPY OF THIS at the police station and opened fire with a semiautomatic ORDER OR HAS RECEIVED ACTUAL NOTICE OF handgun he had purchased earlier that evening. Police THE EXISTENCE OF THIS ORDER.” Ibid. (same). shot back, killing him. Inside the cab of his pickup truck, they found the bodies of all three daughters, whom he had On June 4, 1999, the state trial court modified the terms already murdered. Ibid. of the restraining order and made it permanent. The modified order gave respondent’s husband the right to On the basis of the foregoing factual allegations, spend time with his three daughters (ages 10, 9, and 7) on respondent brought an action under Rev. Stat. § 1979, 42 alternate weekends, for two weeks during the summer, U.S.C. § 1983, claiming that the town violated the Due and, “ ‘upon reasonable notice,’ ” for a midweek dinner © 2015 Thomson Reuters. No claim to original U.S. Government Works. 5 Town of Castle Rock, Colo. v. Gonzales, 545 U.S. 748 (2005) 125 S.Ct. 2796, 162 L.Ed.2d 658, 73 USLW 4611, 05 Cal. Daily Op. Serv. 5642...

Process Clause because its police department had “an protect a young boy from beatings by his father that left official policy or custom of failing to respond properly to him severely brain damaged. Id., at 191–193, 109 S.Ct. complaints of restraining order violations” and 998. We held that the so-called “substantive” component “tolerate[d] the non-enforcement of restraining orders by of the Due Process Clause does not “requir[e] the State to its police officers.” App. to Pet. for Cert. 129a.3 The protect the life, liberty, and property of its citizens against complaint also alleged that the town’s actions “were taken invasion by private actors.” Id., at 195, 109 S.Ct. 998. We either willfully, recklessly or with such gross negligence noted, however, that the petitioner had not properly as to indicate wanton disregard and deliberate preserved the argument that—and we thus “decline[d] to indifference to” respondent’s civil rights. Ibid. consider” whether—state “child protection statutes gave [him] an ‘entitlement’ to receive protective services in Before answering the complaint, the defendants filed a accordance with the terms of the statute, an entitlement motion to dismiss under Federal Rule of Civil Procedure which would enjoy due process protection.” Id., at 195, n. 12(b)(6). The District Court granted the motion, 2, 109 S.Ct. 998. concluding that, whether construed as making a [1] [2] [3] [4] substantive due process or procedural due process claim, *756 The procedural component of the Due respondent’s complaint failed to state a claim upon which Process Clause does not protect everything that might be relief could be granted. described as a “benefit”: “To have a property interest in a benefit, a person clearly must have more than an abstract A panel of the Court of Appeals affirmed the rejection of need or desire” and “more than a unilateral expectation of a substantive due process claim, but found that respondent it. He must, instead, have a legitimate claim of entitlement had alleged a cognizable procedural due process claim. to it.” Board of Regents of State Colleges v. Roth, 408 307 F.3d 1258 (C.A.10 2002). On rehearing en banc, a U.S. 564, 577, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972). divided *755 court reached the same disposition, Such entitlements are, “ ‘of course, ... not created by the concluding that respondent had a “protected property Constitution. Rather, they are created and their interest in the enforcement of the terms of her restraining dimensions are defined by existing rules or order” and that the town had deprived her of due process understandings that stem from an independent source because “the police never ‘heard’ nor seriously such as state law.’ ” Paul v. Davis, 424 U.S. 693, 709, 96 entertained her request to enforce and protect her interests S.Ct. 1155, 47 L.Ed.2d 405 (1976) (quoting Roth, supra, in the restraining order.” 366 F.3d, at 1101, 1117. We at 577, 92 S.Ct. 2701); see also Phillips v. Washington granted certiorari. 543 U.S. 955, 125 S.Ct. 417, 160 Legal Foundation, 524 U.S. 156, 164, 118 S.Ct. 1925, L.Ed.2d 316 (2004). 141 L.Ed.2d 174 (1998).

II A [5] The Fourteenth Amendment to the United States Our cases recognize that a benefit is not a protected Constitution provides that a State shall not “deprive any entitlement if government officials may grant or deny it in person of life, liberty, or property, without due process of their discretion. See, e.g., Kentucky Dept. of Corrections law.” Amdt. 14, § 1. In 42 U.S.C. § 1983, Congress has v. Thompson, 490 U.S. 454, 462–463, 109 S.Ct. 1904, 104 created a federal cause of action for “the deprivation of L.Ed.2d 506 (1989). The Court of Appeals in this case any rights, privileges, or immunities secured by the determined that Colorado law created an entitlement to **2803 Constitution and laws.” Respondent claims the enforcement of the restraining order because the benefit of this provision on the ground that she had a “court-issued restraining order ... specifically dictated that property interest in police enforcement of the restraining its terms must be enforced” and a “state statute order against her husband; and that the town deprived her command[ed]” enforcement of the order when certain of this property without due process by having a policy objective conditions were met (probable cause to believe that tolerated nonenforcement of restraining orders. that the order had been violated and that the object of the order had received notice of its existence). 366 F.3d, at As the Court of Appeals recognized, we left a similar 1101, n. 5; see also id., at 1100, n. 4; id., at 1104–1105, question unanswered in DeShaney v. Winnebago County and n. 9. Respondent contends that we are obliged “to Dept. of Social Servs., 489 U.S. 189, 109 S.Ct. 998, 103 give deference to the Tenth Circuit’s analysis of Colorado L.Ed.2d 249 (1989), another case with “undeniably law on” whether she had an entitlement to enforcement of tragic” facts: Local child-protection officials had failed to the restraining order. Tr. of Oral Arg. 52. © 2015 Thomson Reuters. No claim to original U.S. Government Works. 6 Town of Castle Rock, Colo. v. Gonzales, 545 U.S. 748 (2005) 125 S.Ct. 2796, 162 L.Ed.2d 658, 73 USLW 4611, 05 Cal. Daily Op. Serv. 5642...

B [6] We will not, of course, defer to the Tenth Circuit on the [8] ultimate issue: whether what Colorado law has given The critical language in the restraining order came not respondent constitutes a property interest for purposes of from any part of the order itself (which was signed by the the Fourteenth Amendment. That determination, despite state-court trial judge and directed to the restrained party, its *757 state-law underpinnings, is ultimately one of respondent’s husband), but from the preprinted notice to federal constitutional law. “Although the underlying law-enforcement personnel that appeared on **2805 the substantive interest is created by ‘an independent source back of the order. See supra, at 2801. That notice such as state law,’ federal constitutional law **2804 effectively restated the statutory provision describing determines whether that interest rises to the level of a “peace officers’ duties” related to the crime of violation ‘legitimate claim of entitlement’ protected by the Due of a restraining order. At the time of the conduct at issue Process Clause.” Memphis Light, Gas & Water Div. v. in this case, that provision read as follows: Craft, 436 U.S. 1, 9, 98 S.Ct. 1554, 56 L.Ed.2d 30 (1978) (quoting Roth, supra, at 577, 92 S.Ct. 2701; emphasis “(a) Whenever a restraining order is issued, the added); cf. United States ex rel. TVA v. Powelson, 319 protected person shall be provided with a copy of such U.S. 266, 279, 63 S.Ct. 1047, 87 L.Ed. 1390 (1943). *759 order. A peace officer shall use every reasonable Resolution of the federal issue begins, however, with a means to enforce a restraining order. determination of what it is that state law provides. In the context of the present case, the central state-law question “(b) A peace officer shall arrest, or, if an arrest would is whether Colorado law gave respondent a right to police be impractical under the circumstances, seek a warrant enforcement of the restraining order. It is on this point for the arrest of a restrained person when the peace that respondent’s call for deference to the Tenth Circuit is officer has information amounting to probable cause relevant. that:

[7] “(I) The restrained person has violated or attempted to We have said that a “presumption of deference [is] violate any provision of a restraining order; and given the views of a federal court as to the law of a State within its jurisdiction.” Phillips, supra, at 167, 118 S.Ct. “(II) The restrained person has been properly served 1925. That presumption can be overcome, however, see with a copy of the restraining order or the restrained Leavitt v. Jane L., 518 U.S. 137, 145, 116 S.Ct. 2068, 135 person has received actual notice of the existence and L.Ed.2d 443 (1996) (per curiam), and we think deference substance of such order. inappropriate here. The Tenth Circuit’s opinion, which reversed the Colorado District Judge, did not draw upon a “(c) In making the probable cause determination deep well of state-specific expertise, but consisted described in paragraph (b) of this subsection (3), a primarily of quoting language from the restraining order, peace officer shall assume that the information received the statutory text, and a state-legislative-hearing from the registry is accurate. A peace officer shall transcript. See 366 F.3d, at 1103–1109. These texts, enforce a valid restraining order whether or not there moreover, say nothing distinctive to Colorado, but use is a record of the restraining order in the registry.” mandatory language that (as we shall discuss) appears in Colo.Rev.Stat. § 18–6–803.5(3) (Lexis 1999) many state and federal statutes. As for case law: The only (emphases added). state-law cases about restraining orders that the Court of Appeals relied upon were decisions of Federal District The Court of Appeals concluded that this statutory Courts in Ohio and Pennsylvania and state courts in New provision—especially taken in conjunction with a Jersey, Oregon, and Tennessee. Id., at 1104–1105, n. 9, statement from its legislative history,6 and with another 1109.4 Moreover, if we were simply to acceptthe *758 statute restricting *760 criminal and civil liability for Court of Appeals’ conclusion, we would necessarily have officers making arrests7—established the Colorado to decide conclusively a federal constitutional question Legislature’s clear intent “to alter the fact that the police (i.e., whether such an entitlement constituted property were not enforcing domestic abuse restraining orders,” under the Due Process Clause and, if so, whether and thus its intent “that the recipient of a domestic abuse petitioner’s customs or policies provided too little process restraining order have an entitlement to its enforcement.” to protect it). We proceed, then, to our own analysis of 366 F.3d, at 1108. Any other result, it said, “would render whether Colorado law gave respondent a right to domestic abuse restraining orders utterly valueless.” Id., enforcement of the restraining order.5 at 1109.

This last statement is sheer hyperbole. Whether or not

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respondent had a right to enforce the restraining order, it examination and trial.” Colo.Rev.Stat. § 31–4–112 (Lexis rendered certain otherwise lawful conduct by her husband 2004). It is hard to imagine that a Colorado peace officer both criminal and in contempt of court. See §§ would not have some discretion to determine 18–6–803.5(2)(a), (7). The creation of grounds on which that—despite probable cause to believe a restraining order he could be arrested, criminally prosecuted, and held in has been violated—the circumstances of the violation or contempt was hardly “valueless”—even if the prospect of the competing duties of that officer or his agency counsel those sanctions ultimately failed to prevent him from decisively against enforcement in a particular instance.8 committing three murders and a suicide. *762 The practical necessity for discretion is particularly apparent in a case such as this one, where the suspected We do not believe that these provisions of Colorado law violator is not actually present and his whereabouts are truly made enforcement of restraining orders mandatory. unknown. Cf. Donaldson v. Seattle, 65 Wash.App. 661, A well established tradition of police discretion has 671–672, 831 P.2d 1098, 1104 (1992) (“There is a vast **2806 long coexisted with apparently mandatory arrest difference between a mandatory duty to arrest [a violator statutes. who is on the scene] and a mandatory duty to conduct a follow up investigation [to locate an absent violator].... A “In each and every state there are long-standing statutes mandatory duty to investigate ... would be completely that, by their terms, seem to preclude nonenforcement open-ended as to priority, duration and intensity”). by the police.... However, for a number of reasons, including their legislative history, insufficient The dissent correctly points out that, in the specific resources, and sheer physical impossibility, it has been context of domestic violence, mandatory-arrest statutes recognized that such statutes cannot be interpreted have been found **2807 in some States to be more literally.... [T]hey clearly do not mean that a police mandatory than traditional mandatory-arrest statutes. officer may not lawfully decline to ... make an arrest. Post, at 2816–2819 (opinion of STEVENS, J.). The As to third parties in these states, the full-enforcement Colorado statute mandating arrest for a domestic-violence statutes simply have no effect, and their significance is offense is different from but related to the one at issue *761 further diminished.” 1 ABA Standards for here, and it includes similar though not identical phrasing. Criminal Justice 1–4.5, commentary, pp. 1–124 to See Colo.Rev.Stat. § 18–6–803.6(1) (Lexis 1999) (“When 1–125 (2d ed.1980) (footnotes omitted). a peace officer determines that there is probable cause to believe that a crime or offense involving domestic The deep-rooted nature of law-enforcement discretion, violence ... has been committed, the officer shall, without even in the presence of seemingly mandatory legislative undue delay, arrest the person suspected of its commands, is illustrated by Chicago v. Morales, 527 U.S. commission ... ”). Even in the domestic-violence context, 41, 119 S.Ct. 1849, 144 L.Ed.2d 67 (1999), which however, it is unclear how the mandatory-arrest paradigm involved an ordinance that said a police officer “ ‘shall applies to cases in which the offender is not present to be order’ ” persons to disperse in certain circumstances, id., arrested. As the dissent explains, post, at 2817, and n. 8, at 47, n. 2, 119 S.Ct. 1849. This Court rejected out of much of the impetus for mandatory-arrest statutes and hand the possibility that “the mandatory language of the policies derived from the idea that it is better for police ordinance ... afford[ed] the police no discretion.” Id., at officers to arrest the aggressor in a domestic-violence 62, n. 32, 119 S.Ct. 1849. It is, the Court proclaimed, incident than to attempt to mediate the dispute or merely simply “common sense that all police officers must use to ask the offender to leave the scene. Those other options some discretion in deciding when and where to enforce are only available, of course, when the offender is present city ordinances.” Ibid. (emphasis added). at the *763 scene. See Hanna, No Right to Choose: Mandated Victim Participation in Domestic Violence Against that backdrop, a true mandate of police action Prosecutions, 109 Harv. L.Rev. 1849, 1860 (1996) would require some stronger indication from the Colorado (“[T]he clear trend in police practice is to arrest the Legislature than “shall use every reasonable means to batterer at the scene ... ” (emphasis added)). enforce a restraining order” (or even “shall arrest ... or ... seek a warrant”), §§ 18–6–803.5(3)(a), (b). That language As one of the cases cited by the dissent, post, at is not perceptibly more mandatory than the Colorado 2818–2819, recognized, “there will be situations when no statute which has long told municipal chiefs of police that arrest is possible, such as when the alleged abuser is not they “shall pursue and arrest any person fleeing from in the home.” Donaldson, 65 Wash.App., at 674, 831 justice in any part of the state” and that they “shall P.2d, at 1105 (emphasis added). That case held that apprehend any person in the act of committing any Washington’s mandatory-arrest statute required an arrest offense ... and, forthwith and without any warrant, bring only in “cases where the offender is on the scene,” and such person before a ... competent authority for © 2015 Thomson Reuters. No claim to original U.S. Government Works. 8 Town of Castle Rock, Colo. v. Gonzales, 545 U.S. 748 (2005) 125 S.Ct. 2796, 162 L.Ed.2d 658, 73 USLW 4611, 05 Cal. Daily Op. Serv. 5642...

that it “d[id] not create an on-going mandatory duty to liberty interest in prison regulations phrased in mandatory conduct an investigation” to locate the offender. Id., at terms, in part because “[s]uch guidelines are not set forth 675, 831 P.2d, at 1105. Colorado’s restraining-order solely to benefit the prisoner”). The serving of public statute appears to contemplate a similar distinction, rather than private ends is the normal course of the providing that when arrest is “impractical”—which was criminal law because criminal acts, “besides the injury likely the case when the whereabouts of respondent’s [they do] to individuals, ... strike at the very being of husband were unknown—the officers’ statutory duty is to society; which cannot possibly subsist, where actions of “seek a warrant” rather than “arrest.” § 18–6–803.5(3)(b). this sort are suffered to escape with impunity.” 4 W. Blackstone, Commentaries on the Laws of England 5 [9] Respondent does not specify the precise means of (1769); see also Huntington v. Attrill, 146 U.S. 657, 668, enforcement that the Colorado restraining-order statute 13 S.Ct. 224, 36 L.Ed. 1123 (1892). This principle assertedly mandated—whether her interest lay in having underlies, for example, a Colorado district attorney’s police arrest her husband, having them seek a warrant for discretion to prosecute a domestic assault, even though his arrest, or having them “use every reasonable means, the victim withdraws her charge. See People v. Cunefare, up to and including arrest, to enforce the order’s terms,” 102 P.3d 302, 311–312 (Colo.2004) (en banc) (Bender, J., Brief for Respondent 29–30.9 Such indeterminacy is not concurring in part, dissenting in part, and dissenting in the hallmark of a duty that is mandatory. Nor can part to the judgment). someone be safely deemed “entitled” to something when the identity of the alleged entitlement is vague. See Roth, Respondent’s alleged interest stems only from a State’s 408 U.S., at 577, 92 S.Ct. 2701 (considering *764 statutory scheme—from a restraining order that was whether “certain benefits” were “secure[d]” by rule or authorized by and tracked precisely the statute on which understandings); cf. Natale v. Ridgefield, 170 F.3d 258, the Court of Appeals relied. She does not assert that she 263 (C.A.2 1999) (“There is no reason ... to restrict the has any common-law or contractual entitlement to ‘uncertainty’ that will preclude existence of a federally enforcement. If she was given a statutory entitlement, we protectable property interest to the uncertainty that would expect to see some indication of that in the statute inheres in [the] exercise of discretion”). The dissent, after itself. Although Colorado’s statute spoke of “protected suggesting various formulations **2808 of the entitlement person[s]” such as respondent, it did so in connection with in question,10 ultimately contends that the obligations matters other than a right to enforcement. It said that a under the statute were quite precise: either make an arrest “protected person shall be **2809 provided with a copy or (if that is impractical) seek an arrest warrant, post, at of [a restraining] order” when it is issued, § 2820. The problem with this is that the seeking of an 18–6–803.5(3)(a); that a law enforcement agency “shall arrest warrant would be an entitlement to nothing but make all reasonable efforts to contact the protected party procedure—which we have held inadequate even to upon the arrest of the restrained person,” § support standing, see Lujan v. Defenders of Wildlife, 504 18–6–803.5(3)(d); and that the agency “shall give [to the U.S. 555, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992); much protected *766 person] a copy” of the report it submits to less can it be the basis for a property interest. See post, at the court that issued the order, § 18–6–803.5(3)(e). 2811–2813 (SOUTER, J., concurring). After the warrant Perhaps most importantly, the statute spoke directly to the is sought, it remains within the discretion of a judge protected person’s power to “initiate contempt whether to grant it, and after it is granted, it remains proceedings against the restrained person if the order within the discretion of the police whether and when to [was] issued in a civil action or request the prosecuting execute it.11 Respondent would have been assured nothing attorney to initiate contempt proceedings if the order but the seeking of a warrant. This is not the sort of [was] issued in a criminal action.” § 18–6–803.5(7). The “entitlement” out of which a property interest is created. protected person’s express power to “initiate” civil contempt proceedings contrasts tellingly with the mere Even if the statute could be said to have made ability to “request” initiation of criminal contempt enforcement of restraining orders “mandatory” because of proceedings—and even more dramatically with the the domestic-violence context of the underlying statute, complete silence about any power to “request” (much less that would not *765 necessarily mean that state law gave demand) that an arrest be made. respondent an entitlement to enforcement of the mandate. Making the actions of government employees obligatory The creation of a personal entitlement to something as can serve various legitimate ends other than the conferral vague and novel as enforcement of restraining orders of a benefit on a specific class of people. See, e.g., Sandin cannot “simply g[o] without saying.” Post, at 2821, n. 16 v. Conner, 515 U.S. 472, 482, 115 S.Ct. 2293, 132 (STEVENS, J., dissenting). We conclude that Colorado L.Ed.2d 418 (1995) (finding no constitutionally protected has not created such an entitlement.

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III

We conclude, therefore, that respondent did not, for purposes of the Due Process Clause, have a property C interest in police enforcement of the restraining order [10] against her husband. It is accordingly unnecessary to Even if we were to think otherwise concerning the address the Court of Appeals’ determination (366 F.3d, at creation of an entitlement by Colorado, it is by no means 1110–1117) that the town’s custom or policy prevented clear that an individual entitlement to enforcement of a the police from giving her due process when they restraining order could constitute a “property” interest for deprived her of that alleged interest. See American Mfrs. purposes of the Due Process Clause. Such a right would Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 61, 119 S.Ct. 977, not, of course, resemble any traditional conception of 143 L.Ed.2d 130 (1999).14 property. Although that alone does not disqualify it from due process protection, as Roth and its progeny show, the [12] In light of today’s decision and that in DeShaney, the right to have a restraining order enforced does not “have benefit that a third party may receive from having some ascertainable monetary value,” as even our someone else arrested for a crime generally does not “Roth-type property-as-entitlement” cases have implicitly trigger protections under the Due Process Clause, neither required. Merrill, The Landscape of Constitutional in its procedural nor in its “substantive” manifestations. Property, 86 Va. L.Rev. 885, 964 (2000).12 Perhaps most This result reflects our continuing reluctance to treat the radically, the alleged property *767 interest here arises Fourteenth Amendment as “ ‘a font of tort law,’ ” Parratt incidentally, not out of some new species of government v. Taylor, 451 U.S. 527, 544, 101 S.Ct. 1908, 68 L.Ed.2d benefit or service, but out of a function that government 420 (1981) (quoting Paul v. Davis, 424 U.S., at 701, 96 actors have always performed—to wit, arresting people S.Ct. 1155), but it does not mean States are powerless to who they have probable cause to believe have committed provide victims with personally enforceable remedies. a criminal offense.13 Although the framers of the Fourteenth Amendment and the Civil Rights Act of 1871, 17 Stat. 13 (the original **2810 [11] The indirect nature of a benefit was fatal to the source of § 1983), did not create a system by which police due process claim of the nursing-home residents in departments are generally held financially accountable for O’Bannon v. Town Court Nursing Center, 447 U.S. 773, crimes that better policing might have *769 prevented, the 100 S.Ct. 2467, 65 L.Ed.2d 506 (1980). We held that, people of Colorado are free to craft such a system under while the withdrawal of “direct benefits” (financial state law. Cf. DeShaney, 489 U.S., at 203, 109 S.Ct. 998.15 payments under Medicaid for certain medical services) triggered due process protections, id., at 786–787, 100 **2811 The judgment of the Court of Appeals is S.Ct. 2467, the same was not true for the “indirect benefit[s]” conferred on Medicaid patients when the Reversed. Government enforced “minimum standards of care” for nursing-home facilities, id., at 787, 100 S.Ct. 2467. “[A]n indirect and incidental result of the Government’s enforcement action ... does not amount to a deprivation of any interest in life, liberty, or property.” Ibid. In this case, as in O’Bannon, “[t]he simple distinction between government action that directly affects a citizen’s legal Justice SOUTER, with whom Justice BREYER joins, rights ... and action that is directed against a third party concurring. and affects the citizen only indirectly or incidentally, provides a sufficient answer to” respondent’s reliance on I agree with the Court that Jessica Gonzales has shown no cases that found government-provided *768 services to be violation of an interest protected by the Fourteenth entitlements. Id., at 788, 100 S.Ct. 2467. The O’Bannon Amendment’s Due Process Clause, and I join the Court’s Court expressly noted, ibid., that the distinction between opinion. The Court emphasizes the traditional public direct and indirect benefits distinguished Memphis Light, focus of law enforcement as reason to doubt that these Gas & Water Div. v. Craft, 436 U.S. 1, 98 S.Ct. 1554, 56 particular legal requirements to provide police services, L.Ed.2d 30 (1978), one of the government-services cases however unconditional their form, presuppose enforceable on which the dissent relies, post, at 2822. individual rights to a certain level of police protection. Ante, at 2808. The *770 Court also notes that the terms of the Colorado statute involved here recognize and preserve the traditional discretion afforded law enforcement

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officers. Ante, at 2805–2808, and n. 8. Gonzales’s claim S.Ct. 1741, 75 L.Ed.2d 813 (1983); see also Doe v. of a property right thus runs up against police discretion District of Columbia, 93 F.3d 861, 868 (C.A.D.C.1996) in the face of an individual demand to enforce, and (per curiam); Doe v. Milwaukee County, 903 F.2d 499, discretion to ignore an individual instruction not to 502–503 (C.A.7 1990). In putting to rest the notion that enforce (because, say, of a domestic reconciliation); no the scope of an otherwise discernible property interest one would argue that the beneficiary of a Colorado order could be limited by related state-law procedures, this like the one here would be authorized to control a court’s Court observed that “[t]he categories of substance and contempt power or order the police to refrain from procedure are distinct .... ‘Property’ cannot be defined by arresting. These considerations argue against inferring the procedures provided for its deprivation.” Cleveland any guarantee of a level of protection or safety that could Bd. of Ed. v. Loudermill, 470 U.S. 532, 541, 105 S.Ct. be understood as the object of a “legitimate claim of 1487, 84 L.Ed.2d 494 (1985). Just as a State cannot entitlement,” Board of Regents of State Colleges v. Roth, diminish a property right, once conferred, by attaching 408 U.S. 564, 577, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972), less than generous procedure to its deprivation, ibid., in the nature of property arising under Colorado law.* neither does a State create a property right merely by Consequently, the classic predicate for federal due ordaining beneficial procedure unconnected to some process protection of interests under state law is missing. articulable substantive guarantee. This is not to say that state rules of executive procedure may not provide Gonzales implicitly recognizes this, when she makes the significant reasons to infer an articulable property right following argument: meant to be protected; but it is to say that we have not identified property *772 with procedure as such. State “Ms. Gonzales alleges that ... she was denied the rules of executive procedure, however important, may be process laid out in the statute. The police did not nothing more than rules of executive procedure. consider her request in a timely fashion, but instead repeatedly required her to call the station over several Thus, in every instance of property recognized by this hours. The statute promised a process by which her Court as calling for federal procedural protection, the restraining order would be given vitality through property has been distinguishable from the procedural careful and prompt consideration of an enforcement obligations imposed on state officials to protect it. request .... Denial of that process drained all of the Whether welfare benefits, Goldberg v. Kelly, 397 U.S. value from her property interest in the restraining 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970), attendance at order.” Brief for Respondent 10. public schools, Goss v. Lopez, 419 U.S. 565, 95 S.Ct. 729, 42 L.Ed.2d 725 (1975), utility services, Memphis Light, The argument is unconventional because the state-law Gas & Water Div. v. Craft, 436 U.S. 1, 98 S.Ct. 1554, 56 benefit for which it claims federal procedural protection is L.Ed.2d 30 (1978), public employment, Perry v. itself a variety of procedural regulation, a set of rules to Sindermann, 408 U.S. 593, 92 S.Ct. 2694, 33 L.Ed.2d 570 be followed by officers exercising the State’s executive (1972), professional licenses, Barry v. Barchi, 443 U.S. power: use *771 all reasonable means to enforce, arrest 55, 99 S.Ct. 2642, 61 L.Ed.2d 365 (1979), and so on, the upon demonstrable probable cause, get a warrant, and so property interest recognized in our cases has always on, see ante, at 2800–2801. existed apart from state procedural protection before the Court has recognized a constitutional claim to protection When her argument is understood as unconventional in by federal process. To accede to Gonzales’s argument this sense, a further reason **2812 appears for rejecting would therefore work a sea change in the scope of federal its call to apply Roth, a reason that would apply even if due process, for she seeks federal process as a substitute the statutory mandates to the police were absolute, simply for state process. (And she seeks damages under leaving the police with no discretion when the beneficiary Rev. Stat. § 1979, 42 U.S.C. § 1983, for denial of process of a protective order insists upon its enforcement. The to which she claimed a federal right.) There is no Due Process Clause extends procedural protection to articulable distinction between the object of Gonzales’s guard against unfair deprivation by state officials of asserted entitlement and the process she desires in order substantive state-law property rights or entitlements; the to protect her entitlement; both amount to certain steps to federal process protects the property created by state law. be taken by the police to protect her family and herself. But Gonzales claims a property interest in a Gonzales’s claim would thus take us beyond Roth or any state-mandated process in and of itself. This argument is other recognized theory of Fourteenth Amendment due at odds with the rule that “[p]rocess is not an end in itself. process, by collapsing the distinction between property Its constitutional purpose is to protect a substantive protected and the process that protects it, and would interest to which the individual has a legitimate claim of federalize every mandatory state-law direction to entitlement.” Olim v. Wakinekona, 461 U.S. 238, 250, 103 © 2015 Thomson Reuters. No claim to original U.S. Government Works. 11 Town of Castle Rock, Colo. v. Gonzales, 545 U.S. 748 (2005) 125 S.Ct. 2796, 162 L.Ed.2d 658, 73 USLW 4611, 05 Cal. Daily Op. Serv. 5642...

executive officers whose performance on the job can majority does not contest, see ante, at 2810, that if **2813 be vitally significant to individuals affected. respondent did have a cognizable property interest in this case, the deprivation of that interest violated due process. The procedural directions involved here are just that. As the Court notes, respondent has alleged that she They presuppose no enforceable substantive entitlement, presented the police with a copy of the restraining order and Roth does not raise them to federally enforceable issued by the Colorado court and requested that it be status in the name of due process. enforced. Ante, at 2800, n. 1. In response, she contends, the officers effectively ignored her. If these allegations are true, a federal statute, Rev. Stat. § 1979, 42 U.S.C. § 1983, provides her with a remedy against the petitioner, even if Colorado law does not. See Cleveland Bd. of Ed. v. Loudermill, 470 U.S. 532, 105 S.Ct. 1487, 84 L.Ed.2d 494 (1985). *773 Justice STEVENS, with whom Justice GINSBURG joins, dissenting. The central question in this case is therefore whether, as a matter of Colorado law, respondent had a right to police The issue presented to us is much narrower than is assistance comparable to the right she would have suggested by the far-ranging arguments of the parties and possessed to any other service the government or a private their amici. Neither the tragic facts of the case, nor the firm might have undertaken to provide. See Board of importance of according proper deference to law Regents of State Colleges v. Roth, 408 U.S. 564, 577, 92 enforcement professionals, should divert our attention S.Ct. 2701, 33 L.Ed.2d 548 (1972) ( “Property interests, from that issue. That issue is whether the restraining order of course, are not created by the Constitution. Rather, they entered by the Colorado trial court on June 4, 1999, are created and their dimensions are defined by existing created a “property” interest that is protected from rules or understandings that stem from an independent arbitrary deprivation by the Due Process Clause of the source such as state law—rules or understandings that Fourteenth Amendment. secure certain benefits and that support **2814 claims of entitlement to those benefits”). It is perfectly clear, on the one hand, that neither the Federal Constitution itself, nor any federal statute, granted There was a time when our tradition of judicial restraint respondent or her children any individual entitlement to would have led this Court to defer to the judgment of police protection. See DeShaney v. Winnebago County more qualified tribunals in seeking the correct answer to Dept. of Social Servs., 489 U.S. 189, 109 S.Ct. 998, 103 that difficult question of Colorado law. Unfortunately, L.Ed.2d 249 (1989). Nor, I assume, does any Colorado although the majority properly identifies the “central statute create any such entitlement for the ordinary state-law question” in this case as “whether Colorado law citizen. On the other hand, it is equally clear that federal gave respondent a right to police enforcement of the law imposes no impediment to the creation of such an restraining order,” ante, at 2804, it has chosen to ignore entitlement by Colorado law. Respondent certainly could our settled practice by providing its own answer to that have entered into a contract with a private security firm, question. Before identifying the flaws in the Court’s obligating the firm to provide protection to respondent’s ruling on the merits, I shall briefly comment on our past family; respondent’s interest in such a contract would practice. unquestionably constitute “property” within the meaning of the Due Process Clause. If a Colorado statute enacted for her benefit, or a valid order entered by a Colorado judge, created the functional equivalent of such a private *775 I contract by granting respondent an entitlement to mandatory individual protection by the local police force, The majority’s decision to plunge ahead with its own that state-created right would also qualify as “property” analysis of Colorado law imprudently departs from this entitled to constitutional protection. Court’s longstanding policy of paying “deference [to] the views of a federal court as to the law of a State within its I do not understand the majority to rule out the foregoing jurisdiction.” Phillips v. Washington Legal Foundation, propositions, although it does express doubts. See ante, at 524 U.S. 156, 167, 118 S.Ct. 1925, 141 L.Ed.2d 174 2809 (“[I]t is by no means clear that an individual (1998); see also Bishop v. Wood, 426 U.S. 341, 346, and entitlement to enforcement of a restraining order could n. 10, 96 S.Ct. 2074, 48 L.Ed.2d 684 (1976) (collecting constitute a *774 ‘property’ interest”). Moreover, the cases). This policy is not only efficient, but it reflects “our © 2015 Thomson Reuters. No claim to original U.S. Government Works. 12 Town of Castle Rock, Colo. v. Gonzales, 545 U.S. 748 (2005) 125 S.Ct. 2796, 162 L.Ed.2d 658, 73 USLW 4611, 05 Cal. Daily Op. Serv. 5642...

belief that district courts and courts of appeals are better principles of federalism and comity favor giving a State’s schooled in and more able to interpret the laws of their high court the opportunity to answer important questions respective States.” Brockett v. Spokane Arcades, Inc., 472 of state law, particularly when those questions implicate U.S. 491, 500–501, 105 S.Ct. 2794, 86 L.Ed.2d 394 uniquely local matters such as law enforcement and might (1985); Hillsborough v. Cromwell, 326 U.S. 620, well require the weighing of policy considerations for 629–630, 66 S.Ct. 445, 90 L.Ed. 358 (1946) (endorsing their correct resolution.4 See Elkins v. Moreno, 435 U.S. “great deference to the views of the judges of those courts 647, 662, n. 16, 98 S.Ct. 1338, 55 L.Ed.2d 614 (1978) ‘who are familiar with the intricacies and trends of local (sua sponte certifying a question of state law because it is law and practice’ ”). Accordingly, we have declined to “one in which state governments have the highest show deference only in rare cases in which the court of interest”); cf. Arizonans for Official English v. Arizona, appeals’ resolution of state law was “clearly wrong” or 520 U.S. 43, 77, 117 S.Ct. 1055, 137 L.Ed.2d 170 (1997) otherwise seriously deficient. See Brockett, 472 U.S., at (“Through certification of novel or unsettled questions of 500, n. 9, 105 S.Ct. 2794; accord, Leavitt v. Jane L., 518 state law for authoritative answers by a State’s highest U.S. 137, 145, 116 S.Ct. 2068, 135 L.Ed.2d 443 (1996) court, a federal court may save ‘time, energy, and (per curiam). resources, and hel[p] build a cooperative judicial federalism’ ” (brackets in original)).5 *778 Second, by Unfortunately, the Court does not even attempt to certifying **2816 a potentially dispositive state-law issue, demonstrate that the six-judge en banc majority was the Court would adhere to its wise policy of avoiding the “clearly wrong” in its interpretation of Colorado’s unnecessary adjudication of difficult questions of domestic restraining order statute; nor could such a constitutional law. See Elkins, 435 U.S., at 661–662, 98 showing be made. For it is certainly plausible to construe S.Ct. 1338 (citing constitutional avoidance as a factor “shall use every reasonable means to enforce a restraining supporting certification). Third, certification would order” and “shall arrest,” Colo.Rev.Stat. §§ promote both judicial economy and fairness to the parties. 18–6–803.5(3)(a)–(b) (Lexis 1999) (emphasis added), as After all, the Colorado Supreme Court is the ultimate conveying mandatory directives to the police, particularly authority on the meaning of Colorado law, and if in later when the same statute, at other times, tellingly employs litigation it should disagree with this Court’s provisional different language that suggests police discretion, see § state-law holding, our efforts will have been wasted and 18–6–803.5(6)(a) ( “A peace officer is authorized to use respondent will have been deprived of the opportunity to every reasonable means to protect ... ”; “Such peace have her claims heard under the authoritative view of officer may transport ... ” (emphasis added)).1 Moreover, Colorado law. The unique facts of this case only serve to unlike *776 today’s decision, the Court of Appeals was emphasize the importance of employing a procedure that attentive to the legislative history of the statute, focusing will provide the correct answer to the central question of on a statement by the statute’s sponsor in the Colorado state law. See Brockett, 472 U.S., at 510, 105 S.Ct. 2794 House, ante, at 2805, n. 6 (quoting statement), which it (O’CONNOR, J., concurring) (“Speculation by a federal took to “emphasiz[e] the importance of the police’s court about the meaning of a state statute in the absence mandatory enforcement of domestic restraining orders.” of a prior state court adjudication is particularly gratuitous 366 F.3d 1093, 1107 (C.A.10 2004) (en banc). Far from when, as is the case here, the state courts stand willing to overlooking the traditional presumption of police address questions of state law on certification from a discretion, then, the Court of Appeals’ diligent analysis of federal court”).6 the statute’s text, purpose, and history led it to conclude that **2815 the Colorado Legislature intended precisely to abrogate that presumption in the specific context of domestic restraining orders. That conclusion is eminently reasonable and, I believe, worthy of our deference.2 *779 III

Three flaws in the Court’s rather superficial analysis of the merits highlight the unwisdom of its decision to answer the state-law question de novo. First, the Court II places undue weight on the various statutes throughout the country that seemingly mandate police enforcement Even if the Court had good reason to doubt the Court of but are generally understood to preserve police discretion. Appeals’ determination of state law, it would, in my As a result, the Court gives short shrift to the unique case judgment, be a far wiser course to certify the question to of “mandatory arrest” statutes in the domestic violence the *777 Colorado Supreme Court.3 Powerful context; States passed a wave of these statutes in the considerations support certification in this case. First, 1980’s and 1990’s with the unmistakable goal of © 2015 Thomson Reuters. No claim to original U.S. Government Works. 13 Town of Castle Rock, Colo. v. Gonzales, 545 U.S. 748 (2005) 125 S.Ct. 2796, 162 L.Ed.2d 658, 73 USLW 4611, 05 Cal. Daily Op. Serv. 5642...

eliminating police discretion in this area. Second, the Thus, when Colorado passed its statute in 1994, it joined Court’s formalistic analysis fails to take seriously the fact the ranks of 15 States **2818 that mandated arrest for that the Colorado statute at issue in this case was enacted domestic violence offenses and 19 States that mandated for the benefit of the narrow class of persons who are arrest for domestic restraining order violations. See beneficiaries of domestic restraining orders, and that the Developments in the Law, 106 Harv. L.Rev., at 1537, n. order at issue in this case was specifically intended to 68 (noting statutes in 1993); N. Miller, Institute for Law provide protection to respondent and her children. Finally, and Justice, A Law Enforcement and Prosecution the Court is simply wrong to assert that a citizen’s interest Perspective 7, and n. 74, 8, and n. 90 (2003), in the government’s commitment to provide police http://www.ilj. org/dv/dvvawa2000.htm (as visited June enforcement in certain defined circumstances does not 24, 2005, and available in Clerk of Court’s case file) resemble any “traditional conception of property,” ante, at (listing Colorado among the many States that currently 2809; in fact, a citizen’s property interest in such a have mandatory arrest statutes).9 commitment is just as concrete and worthy of protection as her interest in any other important service the Given the specific purpose of these statutes, there can be government or a private firm has undertaken to provide. no doubt that the Colorado Legislature used the term “shall” advisedly in its domestic restraining order statute. **2817 In 1994, the Colorado General Assembly passed While *782 “shall” is probably best read to mean “may” omnibus legislation targeting domestic violence. The part in other Colorado statutes that seemingly mandate of the legislation at issue in this case mandates enforcement, cf. Colo.Rev.Stat. § 31–4–112 (Lexis 2004) enforcement of a domestic restraining order upon (police “shall suppress all riots, disturbances, and probable cause of a violation, § 18–6–803.5(3), while breaches of the peace, shall apprehend all disorderly another part directs that police officers “shall, without persons in the city ...” (emphases added)), it is clear that undue delay, arrest” a suspect upon “probable cause to the elimination of police discretion was integral to believe that a crime or offense of domestic violence *780 Colorado and its fellow States’ solution to the problem of has been committed,” § 18–6–803.6(1).7 In adopting this underenforcement in domestic violence cases.10 Since the legislation, the Colorado General Assembly joined a text of Colorado’s statute perfectly captures this nationwide movement of States that took aim at the crisis legislative purpose, it is hard to imagine what the Court of police underenforcement in the domestic violence has in mind when it insists on “some stronger indication sphere by implementing “mandatory arrest” statutes. The from the Colorado Legislature.” Ante, at 2806. crisis of underenforcement had various causes, not least of which was the perception by police departments and While Colorado case law does not speak to the question, police officers that domestic violence was a private, it is instructive that other state courts interpreting their “family” matter and that arrest was to be used as a last analogous statutes have not only held that they eliminate resort. Sack, Battered Women and the State: The Struggle the police’s traditional discretion to refuse enforcement, for the Future of Domestic Violence Policy, 2004 Wis. but have *783 also recognized that they create rights L.Rev. 1657, 1662–1663 (hereinafter Sack); id., at 1663 enforceable against the police under state law. For (“Because these cases were considered noncriminal, example, in Nearing v. Weaver, 295 Or. 702, 670 P.2d police assigned domestic violence calls low priority and 137 (1983) (en banc), the court held that although the often did not respond to them for several hours or ignored common law of negligence did not support a suit against them altogether”). In response to these realities, and the police for failing to enforce a domestic restraining emboldened by a well-known 1984 experiment by the order, the statute’s mandatory directive formed the basis Minneapolis police department,8 “many states enacted for the suit because it was “a specific duty imposed by mandatory *781 arrest statutes under which a police statute for the benefit of individuals previously **2819 officer must arrest an abuser when the officer has identified by judicial order.” Id., at 707, 670 P.2d, at probable cause to believe that a domestic assault has 140.11 In Matthews v. Pickett County, 996 S.W.2d 162 occurred or that a protection order has been violated.” (Tenn.1999) (on certification to the Sixth Circuit), the Developments in the Law: Legal Responses to Domestic court confirmed that the statute mandated arrest for Violence, 106 Harv. L.Rev. 1498, 1537 (1993). The violations of domestic restraining orders, and it held that purpose of these statutes was precisely to “counter police the “public duty” defense to a negligence action was resistance to arrests in domestic violence cases by unavailable to the defendant police officers because the removing or restricting police officer discretion; restraining order had created a “special duty” to protect mandatory arrest policies would increase police response the plaintiff. Id., at 165. See also Campbell v. Campbell, and reduce batterer recidivism.” Sack 1670. 294 N.J.Super. 18, 24, 682 A.2d 272, 274 (1996) (domestic restraining order statute “allows no discretion”

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with regard to arrest; “[t]he duty imposed on the police entitlement to enforcement with “indeterminacy.” Ante, at officer is ministerial”); Donaldson v. Seattle, 65 2807. But this objection is also unfounded. Our cases Wash.App. 661, 670, 831 P.2d 1098, 1103 (1992) ( have never required the object of an entitlement to be “Generally, where an officer has legal grounds to make an some mechanistic, unitary thing. Suppose a State entitled arrest he has considerable discretion to do so. In regard to every citizen whose income was under a certain level to domestic violence, the rule is the reverse. If the officer receive health care at a state clinic. The provision of has the legal grounds to arrest pursuant to the statute, he health care is not a unitary thing—doctors and has a mandatory duty to make the arrest”). To what extent administrators must decide what tests are called for and the Colorado Supreme Court would agree with the views what procedures are required, and these decisions often of these courts is, of course, an open question, but it does involve difficult applications of judgment. But it could seem rather brazen for the majority to assume that the not credibly be said that a citizen lacks an entitlement to Colorado Supreme Court *784 would repudiate this health care simply because the content of that entitlement consistent line of persuasive authority from other States. is not the same in every given situation. Similarly, the enforcement of a restraining order is not some Indeed, the Court fails to come to terms with the wave of amorphous, indeterminate thing. Under the statute, if the domestic violence statutes that provides the crucial police have probable cause that a violation has occurred, context for understanding Colorado’s law. The Court enforcement consists of either making an immediate concedes that, “in the specific context of domestic arrest or seeking a warrant and then executing an violence, mandatory-arrest statutes have been found in arrest—traditional, well-defined tasks that law some States to be more mandatory than traditional enforcement officers perform every day.13 mandatory-arrest statutes,” ante, at 2806–2807, but that is a serious understatement. The difference is not a matter of **2821 *786 The Court similarly errs in speculating that degree, but of kind. Before this wave of statutes, the legal the Colorado Legislature may have mandated police rule was one of discretion; as the Court shows, the enforcement of restraining orders for “various legitimate “traditional,” general mandatory arrest statutes have ends other than the conferral of a benefit on a specific always been understood to be “mandatory” in name only, class of people,” ante, at 2808; see also ibid. (noting that see ante, at 2805–2806. The innovation of the domestic the “serving of public rather than private ends is the violence statutes was to make police enforcement, not normal course of the criminal law”). While the Court’s “more mandatory,” but simply mandatory. If, as the Court concern would have some bite were we *787 faced with a says, the existence of a protected “entitlement” turns on broadly drawn statute directing, for example, that the whether “government officials may grant or deny it in police “shall suppress all riots,” there is little doubt that their discretion,” ante, at 2803, the new mandatory the statute at issue in this case conferred a benefit “on a statutes undeniably create an entitlement to police specific class of people”—namely, recipients of domestic enforcement of restraining orders. restraining orders. Here, respondent applied for and was granted a restraining order from a Colorado trial judge, Perhaps recognizing this point, the Court glosses over the who found a risk of “irreparable injury” and found that dispositive question—whether the police enjoyed “physical or emotional harm” would result if the husband discretion to deny enforcement—and focuses on a were not excluded from the family home. 366 F.3d, at different question—which “precise means of 1143 (appendix to dissent of O’Brien, J.). As noted enforcement,” ante, at 2807, were called for in this case. earlier, the restraining order required that the husband not But that question is a red herring. The statute directs that, “molest or disturb” the peace of respondent and the upon probable cause of a violation, “a peace officer shall daughters, and it ordered (with limited exceptions) that arrest, or, if an arrest would be impractical under the the husband stay at least 100 yards away from the family circumstances, seek a warrant for the arrest of a restrained home. Ibid.14 It also directed the police to “use every person.” Colo.Rev.Stat. § 18–6–803.5(3)(b) (Lexis 1999). reasonable means to enforce this ... order,” and to arrest or Regardless of whether the enforcement called for in this seek a warrant upon probable cause of a violation. Id., at case was arrest or the seeking of an arrest warrant (the 1144. Under the terms of the statute, when the order answer to that question probably changed over the course issued, respondent and her daughters became “ ‘protected of the night as the respondent gave the police more person[s].’ ” § 18–6–803.5(1.5)(a) ( “ ‘Protected person’ information about the husband’s whereabouts), the crucial means the person or persons identified in the restraining point is that, under the statute, the police were required to order as the person or persons for whose benefit the provide enforcement; they lacked the discre **2820 tion restraining order was issued”).15 The statute criminalized to do nothing. *785 12 The Court suggests that the fact that the knowing violation of the restraining order, § “enforcement” may encompass different acts infects any 18–6–803.5(1), and, as already discussed, the statute (as

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*788 well as the order itself) mandated police 25 L.Ed.2d 287 (1970); disability benefits, Mathews v. enforcement, §§ 18–6–803.5(3)(a)–(b).16 Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976); public education, Goss v. Lopez, 419 U.S. 565, 95 **2822 Because the statute’s guarantee of police S.Ct. 729, 42 L.Ed.2d 725 (1975); utility services, enforcement is triggered by, and operates only in Memphis Light, Gas & Water Div. v. Craft, 436 U.S. 1, 98 reference to, a judge’s granting of a restraining order in S.Ct. 1554, 56 L.Ed.2d 30 (1978); government favor of an identified “ ‘protected person,’ ” there is employment, Cleveland Bd. of Ed. v. *790 Loudermill, simply no room to suggest that such a person has received 470 U.S. 532, 105 S.Ct. 1487, 84 L.Ed.2d 494 (1985), as merely an “ ‘incidental’ ” or “ ‘indirect’ ” benefit, see well as in other entitlements that defy easy categorization, ante, at 2810. As one state court put it, domestic see, e.g., **2823 Bell v. Burson, 402 U.S. 535, 91 S.Ct. restraining order statutes “identify with precision when, to 1586, 29 L.Ed.2d 90 (1971) (due process requires fair whom, and under what circumstances police protection procedures before a driver’s license may be revoked must be afforded. The legislative purpose in requiring the pending the adjudication of an accident claim); Logan, police to enforce individual restraining orders clearly is to 455 U.S., at 431, 102 S.Ct. 1148 (due process prohibits protect the named persons for whose protection the order the arbitrary denial of a person’s interest in adjudicating a is issued, not to protect the community at large by general claim before a state commission). law enforcement activity.” Nearing, 295 Or., at 712, 670 P.2d, at 143.17 Not only does the Court’s doubt about *789 Police enforcement of a restraining order is a government whether Colorado’s statute created an entitlement in a service that is no less concrete and no less valuable than protected person fail to take seriously the purpose and other government services, such as education.18 The nature of restraining orders, but it fails to account for the relative novelty of recognizing this type of property decisions by other state courts, see supra, at 2818–2819, interest is explained by the relative novelty of the that recognize that such statutes and restraining orders domestic violence statutes creating a mandatory arrest create individual rights to police action. duty; before this innovation, the unfettered discretion that characterized police enforcement defeated any citizen’s “legitimate claim of entitlement” to this service. Novel or not, respondent’s claim finds strong support in the principles that underlie our due process jurisprudence. In IV this case, Colorado law guaranteed the provision of a certain service, in certain defined circumstances, to a Given that Colorado law has quite clearly eliminated the certain class of beneficiaries, and respondent reasonably police’s discretion to deny enforcement, respondent is relied on that guarantee. As we observed in Roth, “[i]t is a correct that she had much more than a “unilateral purpose of the ancient institution of property to protect expectation” that the restraining order would be enforced; those claims upon which people rely in their daily lives, rather, she had a “legitimate claim of entitlement” to reliance that must not be arbitrarily undermined.” *791 enforcement. Roth, 408 U.S., at 577, 92 S.Ct. 2701. 408 U.S., at 577, 92 S.Ct. 2701. Surely, if respondent had Recognizing respondent’s property interest in the contracted with a private security firm to provide her and enforcement of her restraining order is fully consistent her daughters with protection from her husband, it would with our precedent. This Court has “made clear that the be apparent that she possessed a property interest in such property interests protected by procedural due process a contract. Here, Colorado undertook a comparable extend well beyond actual ownership of real estate, obligation, and respondent—with restraining order in chattels, or money.” Id., at 571–572, 92 S.Ct. 2701. The hand—justifiably relied on that undertaking. “types of interests protected as ‘property’ are varied and, Respondent’s claim of entitlement to this promised as often as not, intangible, relating ‘to the whole domain service is no less legitimate than the other claims our of social and economic fact.’ ” Logan v. Zimmerman cases have upheld, and no less concrete than a Brush Co., 455 U.S. 422, 430, 102 S.Ct. 1148, 71 L.Ed.2d hypothetical agreement with a private firm.19 The **2824 265 (1982); see also Perry v. Sindermann, 408 U.S. 593, fact that it is based on a statutory enactment and a judicial 601, 92 S.Ct. 2694, 33 L.Ed.2d 570 (1972) (“ ‘[P]roperty’ order entered for her special protection, rather than on a interests subject to procedural due process protection are formal contract, does not provide a principled basis for not limited by a few rigid, technical forms. Rather, refusing to consider it “property” worthy of constitutional ‘property’ denotes a broad range of interests that are protection.20 secured by ‘existing rules or understandings’ ”). Thus, our cases have found “property” interests in a number of state-conferred benefits and services, including welfare benefits, Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, © 2015 Thomson Reuters. 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*792 V Swierkiewicz v. Sorema N. A., 534 U.S. 506, 514, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002)—the process she was Because respondent had a property interest in the afforded by the police constituted nothing more than a “ enforcement of the restraining order, state officials could ‘sham or a pretense.’ ” Joint Anti—Fascist Refugee not deprive her of that interest without observing fair Comm. v. McGrath, 341 U.S. 123, 164, 71 S.Ct. 624, 95 procedures.21 Her description of the police behavior in this L.Ed. 817 (1951) (Frankfurter, J., concurring). case and the department’s callous policy of failing to respond properly to reports of restraining order violations Accordingly, I respectfully dissent. clearly alleges *793 a due process violation. At the very least, due process requires that the relevant state decisionmaker listen to the claimant and then apply the relevant criteria in reaching his decision.22 The failure to All Citations observe these **2825 minimal procedural safeguards creates an unacceptable risk of arbitrary and “erroneous 545 U.S. 748, 125 S.Ct. 2796, 162 L.Ed.2d 658, 73 deprivation[s],” Mathews, 424 U.S., at 335, 96 S.Ct. 893. USLW 4611, 05 Cal. Daily Op. Serv. 5642, 05 Daily According to respondent’s complaint—which we must Journal D.A.R. 7653, 18 Fla. L. Weekly Fed. S 511 construe liberally at this early stage in the litigation, see

* The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337, 26 S.Ct. 282, 50 L.Ed. 499.

1 Petitioner claims that respondent’s complaint “did not allege ... that she ever notified the police of her contention that [her husband] was actually in violation of the restraining order.” Brief for Petitioner 7, n. 2. The complaint does allege, however, that respondent “showed [the police] a copy of the [temporary restraining order (TRO) ] and requested that it be enforced.” App. to Pet. for Cert. 126a. At this stage in the litigation, we may assume that this reasonably implied the order was being violated. See Steel Co. v. Citizens for Better Environment, 523 U.S. 83, 104, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998).

2 It is unclear from the complaint, but immaterial to our decision, whether respondent showed the police only the original “TRO” or also the permanent, modified restraining order that had superseded it on June 4.

3 Three police officers were also named as defendants in the complaint, but the Court of Appeals concluded that they were entitled to qualified immunity, 366 F.3d 1093, 1118 (C.A.10 2004) (en banc). Respondent did not file a cross-petition challenging that aspect of the judgment.

4 Most of the Colorado-law cases cited by the Court of Appeals appeared in footnotes declaring them to be irrelevant because they involved only substantive due process (366 F.3d, at 1100–1101, nn. 4–5), only statutes without restraining orders (id., at 1101, n. 5), or Colorado’s Government Immunity Act, which the Court of Appeals concluded applies “only to ... state tort law claims” (id., at 1108–1109, n. 12). Our analysis is likewise unaffected by the Immunity Act or by the way that Colorado has dealt with substantive due process or cases that do not involve restraining orders.

5 In something of an anyone-but-us approach, the dissent simultaneously (and thus unpersuasively) contends not only that this Court should certify a question to the Colorado Supreme Court, post, at 2815–2816 (opinion of STEVENS, J.), but also that it should defer to the Tenth Circuit (which itself did not certify any such question), post, at 2814–2815. No party in this case has requested certification, even as an alternative disposition. See Tr. of Oral Arg. 56 (petitioner’s counsel “disfavor[ing]” certification); id., at 25–26 (counsel for the United States arguing against certification). At oral argument, in fact, respondent’s counsel declined Justice STEVENS’ invitation to request it. Id., at 53.

6 The Court of Appeals quoted one lawmaker’s description of how the bill “ ‘would really attack the domestic violence problems’ ”: “ ‘[T]he entire criminal justice system must act in a consistent manner, which does not now occur. The police must make probable cause arrests. The prosecutors must prosecute every case. Judges must apply appropriate sentences, and probation officers must monitor their probationers closely. And the offender needs to be sentenced to offender-specific therapy. “ ‘[T]he entire system must send the same message ... [that] violence is criminal. And so we hope that House Bill 1253 starts us down this road.’ ” 366 F.3d, at 1107 (quoting Tr. of Colorado House Judiciary Hearings on House Bill © 2015 Thomson Reuters. No claim to original U.S. Government Works. 17 Town of Castle Rock, Colo. v. Gonzales, 545 U.S. 748 (2005) 125 S.Ct. 2796, 162 L.Ed.2d 658, 73 USLW 4611, 05 Cal. Daily Op. Serv. 5642...

1253, Feb. 15, 1994; emphasis deleted).

7 Under Colo.Rev.Stat. § 18–6–803.5(5) (Lexis 1999), “[a] peace officer arresting a person for violating a restraining order or otherwise enforcing a restraining order” was not to be held civilly or criminally liable unless he acted “in bad faith and with malice” or violated “rules adopted by the Colorado supreme court.”

8 Respondent in fact concedes that an officer may “properly” decide not to enforce a restraining order when the officer deems “a technical violation” too “immaterial” to justify arrest. Respondent explains this as a determination that there is no probable cause. Brief for Respondent 28. We think, however, that a determination of no probable cause to believe a violation has occurred is quite different from a determination that the violation is too insignificant to pursue.

9 Respondent characterizes her entitlement in various ways. See Brief for Respondent 12 (“ ‘entitlement’ to receive protective services”); id., at 13 (“interest in police enforcement action”); id., at 14 (“specific government benefit” consisting of “the government service of enforcing the objective terms of the court order protecting her and her children against her abusive husband”); id., at 32 (“[T]he restraining order here mandated the arrest of Mr. Gonzales under specified circumstances, or at a minimum required the use of reasonable means to enforce the order”).

10 See post, at 2813 (“entitlement to police protection”); ibid. (“entitlement to mandatory individual protection by the local police force”); ibid. (“a right to police assistance”); post, at 2816 (“a citizen’s interest in the government’s commitment to provide police enforcement in certain defined circumstances”); post, at 2822 (“respondent’s property interest in the enforcement of her restraining order”); post, at 2823 (the “service” of “protection from her husband”); post, at 2824 (“interest in the enforcement of the restraining order”).

11 The dissent asserts that the police would lack discretion in the execution of this warrant, post, at 2820, n. 12, but cites no statute mandating immediate execution. The general Colorado statute governing arrest provides that police “may arrest” when they possess a warrant “commanding” arrest. Colo.Rev.Stat. § 16–3–102(1) (Lexis 1999).

12 The dissent suggests that the interest in having a restraining order enforced does have an ascertainable monetary value, because one may “contract with a private security firm ... to provide protection” for one’s family. Post, at 2813, 2823, and n. 19. That is, of course, not as precise as the analogy between public and private schooling that the dissent invokes. Post, at 2823–2824, n. 19. Respondent probably could have hired a private firm to guard her house, to prevent her husband from coming onto the property, and perhaps even to search for her husband after she discovered that her children were missing. Her alleged entitlement here, however, does not consist in an abstract right to “protection,” but (according to the dissent) in enforcement of her restraining order through the arrest of her husband, or the seeking of a warrant for his arrest, after she gave the police probable cause to believe the restraining order had been violated. A private person would not have the power to arrest under those circumstances because the crime would not have occurred in his presence. Colo.Rev.Stat. § 16–3–201 (Lexis 1999). And, needless to say, a private person would not have the power to obtain an arrest warrant.

13 In other contexts, we have explained that “a private citizen lacks a judicially cognizable interest in the prosecution or nonprosecution of another.” Linda R.S. v. Richard D., 410 U.S. 614, 619, 93 S.Ct. 1146, 35 L.Ed.2d 536 (1973).

14 Because we simply do not address whether the process would have been adequate if respondent had had a property interest, the dissent is correct to note that we do not “contest” the point, post, at 2813. Of course we do not accept it either.

15 In Colorado, the general statutory immunity for government employees does not apply when “the act or omission causing ... injury was willful and wanton.” Colo.Rev.Stat. § 24–10–118(2)(a) (Lexis 1999). Respondent’s complaint does allege that the police officers’ actions “were taken either willfully, recklessly or with such gross negligence as to indicate wanton disregard and deliberate indifference to” her civil rights. App. to Pet. for Cert. 128a. The state cases cited by the dissent that afford a cause of action for police failure to enforce restraining orders, post, at 2818–2819, 2820–2821, n. 13, vindicate state common-law or statutory tort claims—not procedural due process claims under the Federal Constitution. See Donaldson v. Seattle, 65 Wash.App. 661, 831 P.2d 1098 (1992) (city could be liable under some circumstances for per se negligence in failing to meet statutory duty to arrest); Matthews v. Pickett County, 996 S.W.2d 162 (Tenn.1999) (county could be liable under Tennessee’s Governmental Tort Liability Act where restraining order created a special duty); Campbell v. Campbell, 294 N.J.Super. 18, 682 A.2d 272 (1996) (rejecting four specific defenses under the New Jersey Tort Claims Act in negligence action against individual officers); Sorichetti v. New York, 65 N.Y.2d 461, 492 N.Y.S.2d 591, 482 N.E.2d 70 (1985) (city breached duty of care arising from special relationship between police and victim); Nearing v. Weaver, 295 Or. 702, 670 P.2d 137 (1983) (en banc) (statutory duty to individual plaintiffs arising independently of tort-law duty of care).

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 18 Town of Castle Rock, Colo. v. Gonzales, 545 U.S. 748 (2005) 125 S.Ct. 2796, 162 L.Ed.2d 658, 73 USLW 4611, 05 Cal. Daily Op. Serv. 5642...

* Gonzales does not claim to have a protected liberty interest.

1 The Court of Appeals also looked to other provisions of the statute to inform its analysis. In particular, it reasoned that a provision that gave police officers qualified immunity in connection with their enforcement of restraining orders, see Colo.Rev.Stat. § 18–6–803.5(5) (Lexis 1999), supported the inference that the Colorado Legislature intended mandatory enforcement. See 366 F.3d 1093, 1108 (C.A.10 2004) (en banc).

2 The Court declines to show deference for the odd reason that, in its view, the Court of Appeals did not “draw upon a deep well of state-specific expertise,” ante, at 2804, but rather examined the statute’s text and legislative history and distinguished arguably relevant Colorado case law. See ante, at 2804, and n. 4. This rationale makes a mockery of our traditional practice, for it is precisely when there is no state law on point that the presumption that circuits have local expertise plays any useful role. When a circuit’s resolution of a novel question of state law is grounded on a concededly complete review of all the pertinent state-law materials, that decision is entitled to deference. Additionally, it should be noted that this is not a case in which the Court of Appeals and the District Court disagreed on the relevant issue of state law; rather, those courts disagreed only over the extent to which a probable-cause determination requires the exercise of discretion. Compare 366 F.3d, at 1105–1110, with App. to Pet. for Cert. 122a (District Court opinion).

3 See Colo. Rule App. Proc. 21.1(a) (Colorado Supreme Court may answer questions of law certified to it by the Supreme Court of the United States or another federal court if those questions “may be determinative of the cause” and “as to which it appears to the certifying court there is no controlling precedent in the decisions of the [Colorado] Supreme Court”).

4 See Westminster v. Dogan Constr. Co., 930 P.2d 585, 590 (Colo.1997) (en banc) (in interpreting an ambiguous statute, the Colorado Supreme Court will consider legislative history and the “consequences of a particular construction”); ibid. (“ ‘Because we also presume that legislation is intended to have just and reasonable effects, we must construe statutes accordingly and apply them so as to ensure such results’ ”). Additionally, it is possible that the Colorado Supreme Court would have better access to (and greater facility with) relevant pieces of legislative history beyond those that we have before us. That court may also choose to give certain evidence of legislative intent greater weight than would be customary for this Court. See, e.g., Brief for Peggy Kerns et al. as Amici Curiae (bill sponsor explaining the Colorado General Assembly’s intent in passing the domestic restraining order statute).

5 Citing similar considerations, the Second Circuit certified questions of state law to the Connecticut Supreme Court when it was faced with a procedural due process claim involving a statute that arguably mandated the removal of children upon probable cause of child abuse. See Sealed v. Sealed, 332 F.3d 51 (C.A.2 2003). The Connecticut Supreme Court accepted certification and held that the provision was discretionary, not mandatory. See Teresa T. v. Ragaglia, 272 Conn. 734, 865 A.2d 428 (2005).

6 The Court is correct that I would take an “anyone-but-us approach,” ante, at 2804, n. 5, to the question of who decides the issue of Colorado law in this case. Both options that I favor—deferring to the Circuit’s interpretation or, barring that, certifying to the Colorado Supreme Court—recognize the comparative expertise of another tribunal on questions of state law. And both options offer their own efficiencies. By contrast, the Court’s somewhat overconfident “only us” approach lacks any cogent justification. The fact that neither party requested certification certainly cannot be a sufficient reason for dismissing that option. As with abstention, the considerations that weigh in favor of certification—federal-state comity, constitutional avoidance, judicial efficiency, the desire to settle correctly a recurring issue of state law—transcend the interests of individual litigants, rendering it imprudent to cast them as gatekeepers to the procedure. See, e.g., Elkins v. Moreno, 435 U.S. 647, 662, 98 S.Ct. 1338, 55 L.Ed.2d 614 (1978) (certifying state-law issue absent a request from the parties); Aldrich v. Aldrich, 375 U.S. 249, 84 S.Ct. 305, 11 L.Ed.2d 304 (1963) (per curiam) (same); see also 17A C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure § 4248, p. 176 (2d ed. 1988) (“Ordinarily a court will order certification on its own motion”).

7 See Fuller & Stansberry, 1994 Legislature Strengthens Domestic Violence Protective Orders, 23 Colo. Lawyer 2327 (1994) (“The 1994 Colorado legislative session produced several significant domestic abuse bills that strengthened both civil and criminal restraining order laws and procedures for victims of domestic violence”); id., at 2329 (“Although many law enforcement jurisdictions already take a proactive approach to domestic violence, arrest and procedural policies vary greatly from one jurisdiction to another. H.B. 94–1253 mandates the arrest of domestic violence perpetrators and restraining order violaters. H.B. 94–1090 repeals the requirement that protected parties show a copy of their restraining order to enforcing officers. In the past, failure to provide a copy of the restraining order has led to hesitation from police to enforce the order for fear of an illegal arrest. The new statute also shields arresting officers from liability; this is expected to reduce concerns about enforcing the mandatory arrest requirements” (footnotes

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 19 Town of Castle Rock, Colo. v. Gonzales, 545 U.S. 748 (2005) 125 S.Ct. 2796, 162 L.Ed.2d 658, 73 USLW 4611, 05 Cal. Daily Op. Serv. 5642...

omitted)).

8 See Sack 1669 (“The movement to strengthen arrest policies was bolstered in 1984 by the publication of the results of a study on mandatory arrest in domestic violence cases that had been conducted in Minneapolis. In this study, police handled randomly assigned domestic violence offenders by using one of three different responses: arresting the offender, mediating the dispute or requiring the offender to leave the house for eight hours. The study concluded that in comparison with the other two responses, arrest had a significantly greater impact on reducing domestic violence recidivism. The findings from the Minneapolis study were used by the U.S. Attorney General in a report issued in 1984 that recommended, among other things, arrest in domestic violence cases as the standard law enforcement response” (footnotes omitted)); see also Zorza, The Criminal Law of Misdemeanor Domestic Violence, 1970–1990, 83 J.Crim. L. & C. 46, 63–65 (1992) (tracing history of mandatory arrest laws and noting that the first such law was implemented by Oregon in 1977).

9 See also Brief for International Municipal Lawyers Association et al. as Amici Curiae 6 (“Colorado is not alone in mandating the arrest of persons who violate protective orders. Some 19 states require an arrest when a police officer has probable cause to believe that such orders have been violated” (collecting statutes)).

10 See Note, Mandatory Arrest: A Step Toward Eradicating Domestic Violence, But is It Enough? 1996 U. Ill. L.Rev. 533, 541–542, 544–546 (describing the problems that attend a discretionary arrest regime: “Even when probable cause is present, police officers still frequently try to calm the parties and act as mediators .... Three studies found the arrest rate to range between 3% and 10% when the decision to arrest is left to police discretion. Another study found that the police made arrests in only 13% of the cases where the victim had visible injuries .... Police officers often employ irrelevant criteria such as the ‘reason’ for the abuse or the severity of the victim’s injuries in making their decision to arrest .... Some [officers] may feel strongly that police should not interfere in family arguments or lovers’ quarrels. Such attitudes make police much more likely to investigate intent and provocation, and consider them as mitigating factors, in responding to domestic violence calls than in other types of cases” (footnotes omitted)); see also Walsh, The Mandatory Arrest Law: Police Reaction, 16 Pace L.Rev. 97, 98 (1995). Cf. Sack 1671–1672 (“Mandatory arrest policies have significantly increased the number of arrests of batterers for domestic violence crimes .... In New York City, from 1993, the time the mandatory arrest policy was instituted, to 1999, felony domestic violence arrests increased 33%, misdemeanor domestic violence arrests rose 114%, and arrests for violation of orders of protection were up 76%” ).

11 The Oregon Supreme Court noted that the “widespread refusal or failure of police officers to remove persons involved in episodes of domestic violence was presented to the legislature as the main reason for tightening the law so as to require enforcement of restraining orders by mandatory arrest and custody.” Nearing, 295 Or., at 709, 670 P.2d, at 142.

12 Under the Court’s reading of the statute, a police officer with probable cause is mandated to seek an arrest warrant if arrest is “impractical under the circumstances,” but then enjoys unfettered discretion in deciding whether to execute that warrant. Ante, at 2807–2808. This is an unlikely reading given that the statute was motivated by a profound distrust of police discretion in the domestic violence context and motivated by a desire to improve the protection given to holders of domestic restraining orders. We do not have the benefit of an authoritative construction of Colorado law, but I would think that if an estranged husband harassed his wife in violation of a restraining order, and then absconded after she called the police, the statute would not only obligate the police to seek an arrest warrant, but also obligate them to execute it by making an arrest. In any event, under respondent’s allegations, by the time the police were informed of the husband’s whereabouts, an arrest was practical and, under the statute’s terms, mandatory.

13 The Court wonders “how the mandatory-arrest paradigm applies to cases in which the offender is not present to be arrested.” Ante, at 2807. Again, questions as to the scope of the obligation to provide enforcement are far afield from the key issue—whether there exists an entitlement to enforcement. In any event, the Court’s speculations are off base. First, this is not a case like Donaldson v. Seattle, 65 Wash.App. 661, 831 P.2d 1098 (1992), in which the restrained person violated the order and then left the scene. Here, not only did the husband violate the restraining order by coming within 100 yards of the family home, but he continued to violate the order while his abduction of the daughters persisted. This is because the restraining order prohibited him from “molest[ing] or disturb[ing] the peace” of the daughters. See 366 F.3d, at 1143 (appendix to dissent of O’Brien, J.). Because the “scene” of the violation was wherever the husband was currently holding the daughters, this case does not implicate the question of an officer’s duties to arrest a person who has left the scene and is no longer in violation of the restraining order. Second, to the extent that arresting the husband was initially “impractical under the circumstances” because his whereabouts were unknown, the Colorado statute (unlike some other States’ statutes) expressly addressed that situation—it required the police to seek an arrest warrant. Third, the Court is wrong to suggest that this case falls outside the core situation that these types of statutes were meant to address. One of the well-known cases that contributed to the passage of these statutes involved facts similar to this case. See Sorichetti v. New York City, 65 N.Y.2d 461, 467, 492 N.Y.S.2d 591, 482 © 2015 Thomson Reuters. No claim to original U.S. Government Works. 20 Town of Castle Rock, Colo. v. Gonzales, 545 U.S. 748 (2005) 125 S.Ct. 2796, 162 L.Ed.2d 658, 73 USLW 4611, 05 Cal. Daily Op. Serv. 5642...

N.E.2d 70, 74 (1985) (police officers at police station essentially ignored a mother’s pleas for enforcement of a restraining order against an estranged husband who made threats about their 6–year–old daughter; hours later, as the mother persisted in her pleas, the daughter was found mutilated, her father having attacked her with a fork and a knife and attempted to saw off her leg); Note, 1996 U. Ill. L.Rev., at 539 (noting Sorichetti in the development of mandatory arrest statutes); see also Sack 1663 (citing the police’s failure to respond to domestic violence calls as an impetus behind mandatory arrest statutes). It would be singularly odd to suppose that in passing its sweeping omnibus domestic violence legislation, the Colorado Legislature did not mean to require enforcement in the case of an abduction of children in violation of a restraining order.

14 The order also stated: “If you violate this order thinking that the other party or child named in this order has given you permission, you are wrong, and can be arrested and prosecuted. The terms of this order cannot be changed by agreement of the other party or the child(ren). Only the court can change this order.” 366 F.3d, at 1144 (appendix to dissent of O’Brien, J.).

15 A concern for the “ ‘protected person’ ” pervades the statute. For example, the statute provides that a “peace officer may transport, or obtain transportation for, the alleged victim to shelter. Upon the request of the protected person, the peace officer may also transport the minor child of the protected person, who is not an emancipated minor, to the same shelter ....” § 18–6–803.5(6)(a).

16 I find it neither surprising nor telling, cf. ante, at 2809, that the statute requires the restraining order to contain, “in capital letters and bold print,” a “notice” informing protected persons that they can demand or request, respectively, civil and criminal contempt proceedings. § 18–6–803.5(7). While the legislature may have thought that these legal remedies were not popularly understood, a person’s right to “demand” or “request” police enforcement of a restraining order simply goes without saying given the nature of the order and its language. Indeed, for a holder of a restraining order who has read the order’s emphatic language, it would likely come as quite a shock to learn that she has no right to demand enforcement in the event of a violation. To suggest that a protected person has no such right would posit a lacuna between a protected person’s rights and an officer’s duties—a result that would be hard to reconcile with the Colorado Legislature’s dual goals of putting an end to police indifference and empowering potential victims of domestic abuse.

17 See also Matthews v. Pickett County, 996 S.W.2d 162, 165 (Tenn.1999) (“The order of protection in this case was not issued for the public’s protection in general. The order of protection specifically identified Ms. Matthews and was issued solely for the purpose of protecting her. Cf. Ezell [v. Cockrell, 902 S.W.2d 394, 403 (Tenn.1995)] (statute prohibiting drunk driving does not specify an individual but undertakes to protect the public in general from intoxicated drivers)”); Sorichetti, 65 N.Y.2d, at 469, 492 N.Y.S.2d 591, 482 N.E.2d, at 75 (“The [protective] order evinces a preincident legislative and judicial determination that its holder should be accorded a reasonable degree of protection from a particular individual”).

18 The Court mistakenly relies on O’Bannon v. Town Court Nursing Center, 447 U.S. 773, 100 S.Ct. 2467, 65 L.Ed.2d 506 (1980), in explaining why it is “by no means clear that an individual entitlement to enforcement of a restraining order could constitute a ‘property’ interest for purposes of the Due Process Clause.” Ante, at 2809. In O’Bannon, the question was essentially whether certain regulations provided nursing-home residents with an entitlement to continued residence in the home of their choice. 447 U.S., at 785, 100 S.Ct. 2467. The Court concluded that the regulations created no such entitlement, but there was no suggestion that Congress could not create one if it wanted to. In other words, O’Bannondid not address a situation in which the underlying law created an entitlement, but the Court nevertheless refused to treat that entitlement as a property interest within the meaning of the Due Process Clause.

19 As the analogy to a private security contract demonstrates, a person’s interest in police enforcement has “ ‘some ascertainable monetary value,’ ” ante, at 2809. Cf. Merrill, The Landscape of Constitutional Property, 86 Va. L.Rev. 885, 964, n. 289 (2000) (remarking, with regard to the property interest recognized in Goss v. Lopez, 419 U.S. 565, 95 S.Ct. 729, 42 L.Ed.2d 725 (1975), that “any parent who has contemplated sending their children to private schools knows that public schooling has a monetary value”). And while the analogy to a private security contract need not be precise to be useful, I would point out that the Court is likely incorrect in stating that private security guards could not have arrested the husband under the circumstances, see ante, at 2809, n. 12. Because the husband’s ongoing abduction of the daughters would constitute a knowing violation of the restraining order, see n. 13, supra, and therefore a crime under the statute, see § 18–6–803.5(1), a private person who was at the scene and aware of the circumstances of the abduction would have authority to arrest. See § 16–3–201 (“A person who is not a peace officer may arrest another person when any crime has been or is being committed by the arrested person in the presence of the person making the arrest”). Our cases, of course, have never recognized any requirement that a property interest possess “ ‘some ascertainable monetary value.’ ” Regardless, I would assume that respondent would have paid the police to arrest her husband if that had been possible; at the very least, the entitlement has a monetary value in that © 2015 Thomson Reuters. No claim to original U.S. Government Works. 21 Town of Castle Rock, Colo. v. Gonzales, 545 U.S. 748 (2005) 125 S.Ct. 2796, 162 L.Ed.2d 658, 73 USLW 4611, 05 Cal. Daily Op. Serv. 5642...

sense.

20 According to Justice SOUTER, respondent has asserted a property interest in merely a “state-mandated process,” ante, at 2812 (concurring opinion), rather than in a state-mandated “substantive guarantee,” ibid. This misunderstands respondent’s claim. Putting aside the inartful passage of respondent’s brief that Justice SOUTER relies upon, ante, at 2811, it is clear that respondent is in fact asserting a substantive interest in the “enforcement of the restraining order,” Brief for Respondent 10. Enforcement of a restraining order is a tangible, substantive act. If an estranged husband violates a restraining order by abducting children, and the police succeed in enforcing the order, the person holding the restraining order has undeniably just received a substantive benefit. As in other procedural due process cases, respondent is arguing that the police officers failed to follow fair procedures in ascertaining whether the statutory criteria that trigger their obligation to provide enforcement—i.e., an outstanding order plus probable cause that it is being violated—were satisfied in her case. Cf. Carey v. Piphus, 435 U.S. 247, 266–267, 98 S.Ct. 1042, 55 L.Ed.2d 252 (1978) (discussing analytic difference between the denial of fair process and the denial of the substantive benefit itself). It is Justice SOUTER, not respondent, who makes the mistake of “collapsing the distinction between property protected and the process that protects it,” ante, at 2812. Justice SOUTER also errs in suggesting that respondent cannot have a property interest in enforcement because she would not be authorized to instruct the police to refrain from enforcement in the event of a violation. Ante, at 2811. The right to insist on the provision of a service is separate from the right to refuse the service. For example, compulsory attendance laws deny minors the right to refuse to attend school. Nevertheless, we have recognized that minors have a property interest in public education and that school officials must therefore follow fair procedures when they seek to deprive minors of this valuable benefit through suspension. See Goss, 419 U.S. 565, 95 S.Ct. 729. In the end, Justice SOUTER overlooks the core purpose of procedural due process—ensuring that a citizen’s reasonable reliance is not frustrated by arbitrary government action.

21 See Logan v. Zimmerman Brush Co., 455 U.S. 422, 432, 102 S.Ct. 1148, 71 L.Ed.2d 265 (1982) (“ ‘ “While the legislature may elect not to confer a property interest, ... it may not constitutionally authorize the deprivation of such an interest, once conferred, without appropriate procedural safeguards” ’ ”).

22 See Fuentes v. Shevin, 407 U.S. 67, 81, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972) (“[W]hen a person has an opportunity to speak up in his own defense, and when the State must listen to what he has to say, substantively unfair and simply mistaken deprivations of property interests can be prevented” (emphasis added)); Bell v. Burson, 402 U.S. 535, 542, 91 S.Ct. 1586, 29 L.Ed.2d 90 (1971) (“It is a proposition which hardly seems to need explication that a hearing which excludes consideration of an element essential to the decision whether licenses of the nature here involved shall be suspended does not meet [the] standard [of due process]”); Goldberg v. Kelly, 397 U.S. 254, 271, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970) (“[T]he decisionmaker’s conclusion as to a recipient’s eligibility must rest solely on the legal rules and evidence adduced at the hearing”); cf. ibid. (“[O]f course, an impartial decision maker is essential”).

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

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appeal to Supreme Court from district court. KeyCite Yellow Flag - Negative Treatment Fed.Rules Civ.Proc. rule 52(a), 28 U.S.C.A. Distinguished by St. Bernard General Hospital, Inc. v. Hospital Service Ass’n of New Orleans, Inc., 5th Cir.(La.), April 7, 1975 72 S.Ct. 690 55 Cases that cite this headnote Supreme Court of the United States

UNITED STATES v. OREGON STATE MEDICAL SOC. et al. [2] Antitrust and Trade Regulation Admissibility No. 19. | Argued Jan. 4 and 7, 1952. | Decided April 28, 1952. In action by government to restrain medical societies and physicians’ service corporation and officers thereof from violating Sherman Action by the United States of America against Oregon Anti-Trust Act, wherein government asserted State Medical Society, and others, for injunction to conspiracy to monopolize business of providing prevent and restrain violations of the Sherman Anti-Trust prepaid medical care in Oregon, district judge Act, wherein government asserted conspiracy to restrain properly rejected pre-1941 events as establishing and monopolize business of providing prepaid medical cause of action, notwithstanding that it is proper care in Oregon and conspiracy to restrain competition to trace currently questioned conduct backwards between doctor-sponsored prepaid medical plans. The to illuminate connections and meanings. United States District Court of the State of Oregon, Sherman Anti-Trust Act, §§ 1, 2, as amended, McColloch, J., 95 F.Supp. 103, dismissed the complaint, 15 U.S.C.A. §§ 1, 2. and the United States appealed directly to the Supreme Court. The Supreme Court, Mr. Justice Jackson, held that findings of district judge were not clearly erroneous. 2 Cases that cite this headnote

Judgment affirmed.

Mr. Justice Black dissented. [3] Injunction Prospective, preventive, or future-oriented nature of remedy

West Headnotes (23) Sole function of action for injunction is to forestall future violations. [1] Federal Courts Credibility and impeachment 29 Cases that cite this headnote Federal Courts “Clearly erroneous” standard of review in general [4] Rule that where action is tried by court without Abatement and Revival jury, findings of fact shall not be set aside unless Identity of causes and issues clearly erroneous and due regard shall be given Criminal Law to opportunity of trial court to judge credibility Availability or pendency of, or recovery in, of witnesses, is particularly appropriate to case civil action in which complaining party creates vast record of cumulative evidence as to long-past Action for injunction is so unrelated to transactions, motives and purposes, the effect of punishment or reparations for past violations which depends largely on credibility of that its pendency or decision does not prevent witnesses, notwithstanding that case is on direct concurrent or later remedy for past violations by

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Tab E-18 U.S. v. Oregon State Medical Soc., 343 U.S. 326 (1952) 72 S.Ct. 690, 96 L.Ed. 978

indictment or action for damages by those injured.

13 Cases that cite this headnote [8] Antitrust and Trade Regulation Presumptions and burden of proof

When defendants, in action to restrain violation of anti-trust laws, are shown to have settled into [5] Injunction continuing practice or entered into conspiracy Clear, likely, threatened, anticipated, or violative of anti-trust laws, court will not intended injury assume that it has been abandoned without clear proof. Sherman Anti-Trust Act, §§ 1, 2, as Real threat of future violation or contemporary amended, 15 U.S.C.A. §§ 1, 2. violation of nature likely to continue or recur is sufficient to make cause of action for relief by injunction, and once established, it adds nothing 11 Cases that cite this headnote that calendar of years gone by might have been filled with transgressions.

47 Cases that cite this headnote [9] Injunction Voluntary cessation or undertaking of conduct

It is duty of courts to beware of efforts to defeat [6] Injunction injunctive relief by protestations of repentance Mandatory injunctions; restoration of status and reform, especially when abandonment quo seems timed to anticipate suit and there is probability of resumption. Notwithstanding that injunctive relief is mandatory in form, such relief is to undo existing conditions, because otherwise they are 116 Cases that cite this headnote likely to continue.

10 Cases that cite this headnote [10] Antitrust and Trade Regulation Injunction

Where in 1936 private associations of doctors [7] Antitrust and Trade Regulation sold certificates under prepaid medical plan and Admissibility were opposed by state and county medical societies which attempted to stamp out such In action to restrain violations of Sherman contract practices until 1941 when societies Anti-Trust Act wherein government asserted reversed themselves and state society formed a conspiracy to monopolize business of prepaid physicians’ service corporation to provide medical care in Oregon, examination of past prepaid medical care on contract basis and violations would be justified only if it carried out extensive operations which had illuminates or explains present and predicts every appearance of being permanent, and there shape of things to come. Sherman Anti-Trust was no threat or probability of resumption of Act, §§ 1, 2, as amended, 15 U.S.C.A. §§ 1, 2. abandoned warfare against prepaid medical service and contract practice, such conduct discontinued in 1941 did not warrant issuance of 3 Cases that cite this headnote injunction in 1949, in government’s 1948 suit to

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2 U.S. v. Oregon State Medical Soc., 343 U.S. 326 (1952) 72 S.Ct. 690, 96 L.Ed. 978

restrain conspiracy to monopolize prepaid theretofore applied to private commercial medical care in Oregon. Sherman Anti-Trust hospital association contracts for prepaid Act, §§ 1, 2, as amended, 15 U.S.C.A. §§ 1, 2. medical care be extended to industrial and railroad type of contracts, but their report stated that receipt shall be furnished each patient at 36 Cases that cite this headnote time of each visit as it was understood that the industrial and railroad plan companies concerned would probably establish a program of reimbursement to affected employees, report [11] did not show threat to restrict practice of Federal Courts industrial and railroad companies of reimbursing Review of federal district courts employees for medical expenses, and any ambiguity could properly be resolved in favor of In action by government to restrain medical society. Sherman Anti-Trust Act, §§ 1, 2, as societies and physicians’ service corporation and amended, 15 U.S.C.A. §§ 1, 2. officers thereof from violation of Sherman Anti-Trust Act, wherein government asserted conspiracy to monopolize business of providing 3 Cases that cite this headnote prepaid medical care in Oregon, and wherein district court dismissed complaint on ground of lack of proof on charges therein, it was duty of Supreme Court to inquire whether any restraints had been proved of character likely to continue [14] Antitrust and Trade Regulation if not enjoined. Sherman Anti-Trust Act, §§ 1, 2, Monopolization or attempt to monopolize as amended, 15 U.S.C.A. §§ 1, 2; Expediting Federal Courts Act, § 2, as amended, 15 U.S.C.A. § 29. Review of federal district courts

In action by government to restrain medical Cases that cite this headnote societies and physicians’ service corporation and officers thereof from violation of Sherman Anti-Trust Act, wherein government asserted conspiracy to monopolize business of providing [12] prepaid medical care in Oregon, letters from Antitrust and Trade Regulation doctors to private health associations refusing to Monopolization or attempt to monopolize accept checks directly from them had some evidentiary value but were not compelling, and Action of one county medical society in Oregon weighed against other evidence, did not show in threatening to expel doctors engaged in that findings of trial court that government had prepaid medical care on contract basis activity not proved charges, were clearly erroneous. would not necessarily indicate joint venture or Fed.Rules Civ.Proc., rule 52(a), 28 U.S.C.A.; conspiracy with other county medical societies Sherman Anti-Trust Act, §§ 1, 2, as amended, and state medical society to expel doctors 15 U.S.C.A. §§ 1, 2. engaged in such practice. Sherman Anti-Trust Act, §§ 1, 2, as amended, 15 U.S.C.A. § 1, 2. 9 Cases that cite this headnote Cases that cite this headnote

[15] Federal Courts [13] Review of federal district courts Antitrust and Trade Regulation Monopolization or attempt to monopolize Where, in action by government to restrain medical societies and physicians’ service Where state medical society house of delegates corporation and officers thereof from violation voted that private patient status policy © 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 U.S. v. Oregon State Medical Soc., 343 U.S. 326 (1952) 72 S.Ct. 690, 96 L.Ed. 978

of Sherman Anti-Trust Act, on ground of conspiracy to monopolize business of providing prepaid medical care in Oregon, it was not proved that doctors made concerted refusal to [18] deal with private health associations, on appeal Antitrust and Trade Regulation Supreme Court would not decide whether same Medical services would violate anti-trust laws. Sherman Anti-Trust Act, §§ 1, 2, as amended, 15 Where physicians’ service corporation, U.S.C.A. §§ 1, 2. sponsored and controlled by state medical society to provide prepaid medical care on contract basis, and county medical societies with 3 Cases that cite this headnote similar plans, agreed that state organization would withdraw and keep out of areas where county societies provided local plan, but plan did not supply or withhold medical service or facilities but was merely plan for prepayment of [16] Health fees for services performed by local doctors, and Regulation of Professional Conduct; Boards there was no proof that duplicating sources of and Officers prepaid certificates would make them cheaper, more available or render improved service, Ethical considerations exist in relationship agreement not to compete was not an between patient and physician which are quite unreasonable restraint of trade in violation of the different than usual considerations prevailing in Sherman Anti-Trust Act. Sherman Anti-Trust ordinary commercial matters, and hence forms Act, §§ 1, 2, as amended, 15 U.S.C.A. §§ 1, 2. of competition usual in business world may be demoralizing to ethical standards of medical profession. 3 Cases that cite this headnote

12 Cases that cite this headnote

[19] Federal Courts Definite and firm conviction of mistake [17] Federal Courts A finding is “clearly erroneous” when, although Affirmance there is evidence to support it, reviewing court on entire evidence is left with definite and firm In action by government to restrain medical conviction mistake has been committed. societies and physicians’ service corporation and Fed.Rules Civ.Proc. rule 52(a), 28 U.S.C.A. officers thereof from violation of Sherman Anti-Trust Act, wherein government asserted conspiracy to monopolize business of prepaid 90 Cases that cite this headnote medical care in Oregon, evidence on issue of boycott or discrimination by medical society members against private health associations and doctors dealing therewith was such that [20] Supreme Court could not say that district court’s Antitrust and Trade Regulation refusal to find conspiracy to restrain or Restraints and misconduct in general monopolize business was clearly erroneous. Sherman Anti-Trust Act, §§ 1, 2, as amended, In action by government to restrain medical 15 U.S.C.A. §§ 1, 2; Fed.Rules Civ.Proc. rule societies and physicians’ service corporation and 52(a), 28 U.S.C.A. officers thereof from violation of Sherman Anti-Trust Act, on ground of conspiracy to restrain competition between doctor-sponsored 4 Cases that cite this headnote prepaid medical plans in that physicians’ service

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4 U.S. v. Oregon State Medical Soc., 343 U.S. 326 (1952) 72 S.Ct. 690, 96 L.Ed. 978

corporation would not furnish prepaid medical [23] care in area serviced by local society plan, Federal Courts district court’s findings that sale of medical Affirmance services by doctor-sponsored organizations as conducted within State of Oregon, is not “trade” Where, in action by government to restrain or “commerce” within Sherman Anti-Trust Law medical societies and physicians’ service or commerce within constitutional grant of corporation and officers thereof from violation power to Congress to regulate commerce among of Sherman Anti-Trust Act, on ground of several states, were not clearly erroneous. conspiracy to monopolize business of providing Fed.Rules Civ.Proc. rule 52(a), 28 U.S.C.A.; prepaid medical care in Oregon and conspiracy Sherman Anti-Trust Act, §§ 1, 2, as amended, to restrain competition between 15 U.S.C.A. §§ 1, 2; U.S.C.A.Const. art. 1, § 8, doctor-sponsored prepaid medical plans, district cl. 3. judge dismissed complaint on ground that government had proved none of the charges, affirmance on appeal would be without 18 Cases that cite this headnote prejudice to future suit if practices and conduct of the societies, whether or not involved in present action, should threaten or constitute violation of anti-trust laws. Sherman Anti-Trust [21] Act, §§ 1, 2, as amended, 15 U.S.C.A. §§ 1, 2. Antitrust and Trade Regulation Medical services 5 Cases that cite this headnote Where sale of medical services by doctor-sponsored organizations offering plans of prepaid medical care, as conducted within state of Oregon, was not trade or commerce within meaning of Sherman Anti-Trust Act or commerce within meaning of constitutional Attorneys and Law Firms grant of power to Congress to regulate commerce among several states, alleged **693 *327 Mr. Stanley M. Silverberg, Washington, conspiracy to restrain competition between the D.C., for appellant. several doctor-sponsored organizations would not fall within prohibitions of Sherman Mr. Nicholas Jaurequy, Portland, Or., for appellees. Anti-Trust Act against restraint of interstate Opinion commerce. Sherman Anti-Trust Act, §§ 1, 2, as amended, 15 U.S.C.A. §§ 1, 2; U.S.C.A.Const. *328 Mr. Justice JACKSON delivered the opinion of the art. 1, § 8, cl. 3. Court.

4 Cases that cite this headnote This is a direct appeal by the United States1 from dismissal by the District Court2 of its complaint seeking an injunction to prevent and restrain violations of ss 1 and 2 of the Sherman Act. 26 Stat. 209, as amended, 15 [22] Federal Civil Procedure U.S.C. ss 1, 2, 15 U.S.C.A. ss 1, 2.3 Trial by Court Appellees are the Oregon State Medical Society, eight county medical societies, Oregon Physicians Service (an It is trial judge’s duty function to appraise Oregon corporation engaged in the sale of prepaid testimony of witnesses. medical care), and eight doctors who are or have been at some time responsible officers in those organizations. 9 Cases that cite this headnote This controversy centers about two forms of ‘contract practice’ of medicine. In one, private corporations organized for profit sell what amounts to a policy of

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 5 U.S. v. Oregon State Medical Soc., 343 U.S. 326 (1952) 72 S.Ct. 690, 96 L.Ed. 978

insurance by which small periodic payments purchase the defendants in this action, was formed. It is a nonprofit right to certain hospital facilities and medical attention. In Oregon corporation, furnishing prepaid medical, surgical, the other, railroad and large industrial employers of labor and hospital care on a contract basis. As charged in the contract with one or more doctors to treat their ailing or complaint, ‘It is sponsored and approved by the Oregon injured employees. Both forms of ‘contract practice,’ for State Medical Society and is controlled and operated by rendering the promised medical and surgical service, members of that society. It sponsors, approves, and depend upon doctors or panels of doctors who cooperate cooperates with component county societies and on a fee basis or who associate themselves with the plan organizations controlled by the latter which offer prepaid on a full or part-time employment basis. medical plans.’ 95 F.Supp. at page 121. After seven years of successful operation, the Government brought this suit Objections of the organized medical profession to against the doctors, their professional organizations and contract practice are both monetary and ethical. Such their prepaid medical care company, asserting two basic *329 practice diverts patients from independent charges: first, that they conspired to restrain and practitioners to contract doctors. It tends to standardize monopolize the business of providing prepaid medical fees. The ethical objection has been that intervention by care in the State of Oregon, and, second, that they employer or insurance company makes a tripartite matter conspired to restrain competition between of the doctor-patient relation. Since the contract doctor doctor-sponsored prepaid medical plans within the State owes his employment and looks for his pay to the of Oregon in that Oregon Physicians’ Service would not employer or the insurance company rather than to the furnish prepaid medical care in an area serviced by a local patient, he serves two masters with conflicting interests. society plan. In many cases companies assumed liability for medical or surgical service only if they approved the treatment in The District Judge, after a long trial, dismissed the advance. There was evidence of instances where promptly complaint on the ground that the Government had proved needed treatment was delayed while obtaining company none of its charges by a preponderance of evidence. The approval, and where a lay insurance official disapproved direct appeal procedure does not give us the benefit of treatment advised by a doctor. review by a Court of Appeals of findings of fact.

In 1936, five private associations were selling prepaid The appeal brings to us no important questions of law or medical certificates in Oregon, and doctors of that State, unsettled problems of statutory construction. It is much alarmed at the extent to which private practice was being like United States v. Yellow Cab Co., 338 U.S. 338, 70 invaded and superseded by contract practice, commenced S.Ct. 177, 94 L.Ed. 150. Its issues are solely ones of fact. a crusade to stamp it out. A tooth-and-claw struggle The record is long, replete with conflicts in testimony, ensued between the organized medical profession, on the and includes quantities of documentary material taken one hand, and the organizations employing contract from the appellees’ files and letters written by doctors, doctors on the other. The **694 campaign was bitter on employers, and employees. The Government and the both sides. State and county medical societies adopted appellees each put more than *331 two score of witnesses resolutions and policy statements condemning contract on the stand. At the close of the trial the judge stated that practice and physicians who engaged in it. They brought his work ‘does not permit the preparation of a formal pressure on individual doctors to decline or abandon it. opinion in so complex a case. I will state my conclusions They threatened expulsion from medical societies, and on the main issues and then will append some notes made one society did expel several doctors for refusal to at various stages throughout the trial. These may be of aid terminate contract practices. to counsel in the preparation of Findings of Fact and Conclusions of Law to be submitted as a basis for final However, in 1941, seven years before this action was judgment.’ 95 F.Supp. at page 104. These notes indicated commenced, there was an abrupt about-face on the part of his disposition of the issues, but the Government the organized medical profession in Oregon. It was predicates a suggestion of bias on irrelevant soliloquies on apparently convinced that the public demanded and was socialized medicine, socialized law, and the like, which entitled to purchase protection against unexpected costs of they contained. Admitting that these do not add strength disease and accident, which are catastrophic to persons or persuasiveness to his opinion, they do not becloud his without reserves. The organized doctors completely clear disposition of the main issues of the case, in all of reversed *330 their strategy, and, instead of trying to which he ruled against the Government. Counsel for the discourage prepaid medical service, decided to render it doctors submitted detailed findings in accordance on a nonprofit basis themselves. therewith. The Government did not submit requests to find, but by letter raised objections to various proposals of In that year, Oregon Physicians’ Service, one of the the appellees. © 2015 Thomson Reuters. No claim to original U.S. Government Works. 6 U.S. v. Oregon State Medical Soc., 343 U.S. 326 (1952) 72 S.Ct. 690, 96 L.Ed. 978

The trial judge found that appellees did not conspire to trying to *333 maintain, and adopt his division of the time restrain or attempt to monopolize prepaid medical care in involved into two periods, 1936—1941, and 1941 to trial. Oregon in the period 1936—1941, and that, even if such [3] [4] [5] [6] [7] conspiracy during that time was proved, it was abandoned It will simplify consideration of such cases as in 1941 with the formation of Oregon Physicians’ Service this to keep in sight the target at which relief is aimed. marking **695 the entry of appellees into the prepaid The sole function of an action for injunction is to forestall medical care business. He ruled that what restraints were future violations. It is so unrelated to punishment or proved could be justified as reasonable to maintain proper reparations for those past that its pendency or decision standards of medical ethics. He found that supplying does not prevent concurrent or later remedy for past prepaid medical care within the State of Oregon by violations by indictment or action for damages by those doctor-sponsored organizations does not constitute trade injured. All it takes to make the cause of action for relief or commerce within the meaning of the Sherman Act, but by injunction is a real threat of future violation or a he declined to rule on the question whether supplying contemporary violation of a nature likely to continue or prepaid medical care by the private associations is recur. This established, it adds nothing that the calendar interstate commerce. of years gone by might have been filled with transgressions. Even where relief is mandatory in form, it The Government asks us to overrule each of these is to undo existing conditions, because otherwise they are findings as contrary to the evidence, and to find that the likely to continue. In a forward-looking action such as business *332 of providing prepaid medical care is this, an examination of ‘a great amount of archeology’4 is interstate commerce. We are asked to review the facts and justified only when it illuminates or explains the present reverse and remand the case ‘for entry of a decree and predicts the shape of things to come. granting appropriate relief.’ We are asked in substance to try the case de novo on the record, make findings and [8] [9] When defendants are shown to have settled into a determine the nature and form of relief. We have continuing practice or entered into a conspiracy violative heretofore declined to give such scope to our review. of anti-trust laws, courts will not assume that it **696 has United States v. Yellow Cab Co., supra. been abandoned without clear proof. Local 167 of [1] While Congress has provided direct appeal to this International Brotherhood of Teamsters, etc. v. United Court, it also has provided that where an action is tried by States, 291 U.S. 293, 298, 54 S.Ct. 396, 398, 78 L.Ed. a court without a jury ‘findings of fact shall not be set 804. It is the duty of the courts to beware of efforts to aside unless clearly erroneous, and due regard shall be defeat injunctive relief by protestations of repentance and given to the opportunity of the trial court to judge of the reform, especially when abandonment seems timed to credibility of the witnesses.’ Rule 52(a), Fed.Rules anticipate suit, and there is probability of resumption. Cf. Civ.Proc., 28 U.S.C.A. There is no case more appropriate United States v. United States Steel Corp., 251 U.S. 417, for adherence to this rule than one in which the 445, 40 S.Ct. 293, 297, 64 L.Ed. 343. complaining party creates a vast record of cumulative evidence as to long-past transactions, motives, and *334 [10] But we find not the slightest reason to doubt the purposes, the effect of which depends largely on genuineness, good faith or permanence of the changed credibility of witnesses. attitude and strategy of these defendant-appellees which took place in 1941. It occurred seven years before this suit [2] The trial court rejected a grouping by the Government was commenced and, so far as we are informed, before it of its evidentiary facts into four periods, 1930—1936, the was predictable. It did not consist merely of pretensions year 1936, 1936—1941, and 1941 to trial. That proposal or promises but was an overt and visible reversal of projected the inquiry over an eighteen-year period before policy, carried out by extensive operations which have the action was instituted. The court accepted only the every appearance of being permanent because wise and period since the organization of Oregon Physicians’ advantageous for the doctors. The record discloses no Service as significant and rejected the earlier years as threat or probability of resumption of the abandoned ‘ancient history’ of a time ‘when the Doctors were trying warfare against prepaid medical service and the contract to find themselves. * * * It was a period of groping for the practice it entails. We agree with the trial court that correct position to take to accord with changing times.’ 95 conduct discontinued in 1941 does not warrant the F.Supp. at page 105. Of course, present events have roots issuance of an injunction in 1949. Industrial Ass’n of San in the past, and it is quite proper to trace currently Francisco v. United States, 268 U.S. 64, 84, 45 S.Ct. 403, questioned conduct backwards to illuminate its 408, 69 L.Ed. 849. connections and meanings. But we think the trial judge was quite right in rejecting pre-1941 events as [11] Appellees, in providing prepaid medical care, may establishing the cause of action the Government was © 2015 Thomson Reuters. No claim to original U.S. Government Works. 7 U.S. v. Oregon State Medical Soc., 343 U.S. 326 (1952) 72 S.Ct. 690, 96 L.Ed. 978

engage in activities which violate the antitrust laws. They may have avoided disclosure of personal opposition by are now competitors in the field and restraints, if any are the handy and impersonal excuse of association ‘policy.’ to be expected, will be in their methods of promotion and The letters have some evidentiary value, but it is not operation of their own prepaid plan. Our duty is to inquire compelling and, weighed against the other post-1941 whether any restraints have been proved of a character evidence, *336 does not satisfy us that the trial court’s likely to continue if not enjoined. findings are ‘clearly erroneous.’ [15] [16] Since no concerted refusal to deal with private Striking the events prior to 1941 out of the Government’s health associations has been proved, we need not decide case, except for purposes of illustration or background whether it would violate the antitrust laws. We might information, little of substance is left. The case derived its observe in passing, however, that there are ethical coloration and support almost entirely from the considerations where the historic direct relationship abandoned practices. It would prolong this opinion between patient and physician is involved which are quite beyond useful length, to review evidentiary details different than the usual considerations prevailing in peculiar to this case. We mention what appear to be some ordinary commercial matters. This Court has recognized highlights. that forms of competition usual in the business world may [12] Only the Multnomah County Medical Society resorted be demoralizing to the ethical standards of a profession. to expulsions of doctors because of contract-practice Semler v. Oregon State Board of Dental Examiners, 294 activities, and there have been no expulsions for such U.S. 608, 55 S.Ct. 570, 79 L.Ed. 1086. cause since 1941. There were hints in the testimony that Multnomah was reviving the expulsion threat a short *335 time before this action was commenced, but nothing came Appellees’ evidence to disprove conspiracy is not of it, and what that Society might do within the limits of conclusive, is necessarily largely negative, but is too its own membership does not necessarily indicate a joint persuasive for us to say it was clear error to accept it. In venture or conspiracy with other appellees. 1948, 1,210 of the 1,660 licensed physicians in Oregon were members of the Oregon State Medical Society, and [13] Some emphasis is placed on a report of a meeting of between January 1, 1947, and June 30, 1948, 1,085 the House of Delegates of the State Society at which it Oregon doctors billed and received payment directly from was voted that the ‘private patient status’ policy the Industrial Hospital Association, only one of the theretofore applied to private commercial hospital several private plans operating in the State. Surely there association contracts be extended to the industrial and was no effective boycott, and ineffectiveness, in view of railroad type of contracts. Any significance of this the power over its members which the Government provision seems neutralized by another paragraph in the attributes to the Society, strongly suggests the lack of an same report, which reads: ‘A receipt should be furnished attempt to boycott these private associations. A parade of each patient at the time of each visit, as it is understood local medical society members from all parts of the State, the (industrial and railroad plan) companies concerned apparently reputable, credible, and informed professional will probably establish a program of reimbursement to the men, testified that their societies now have no policy of affected employees.’ That does not strike us as a threat to discrimination against private health associations, and that restrict the practice of industrial and railroad companies no attempts are made to prevent individual doctors from of reimbursing employees for medical expenses and we cooperating with them. Members of the governing can not say that any ambiguity was not properly resolved councils of the State and Multnomah County Societies in appellees’ favor by the trial court. testified that since 1940 there have been no suggestions in their meetings of attempts to prevent individual doctors [14] The record contains a number of letters from doctors from serving private associations. The manager of Oregon to private associations refusing to accept checks directly *337 Physicians’ Service testified that at none of the from them. Some base refusal on a policy of their local many meetings and conferences of local societies medical society, others are silent as to reasons. Some may attended by him did he hear any proposal to prevent be attributed to the writers’ personal resistance to dealing doctors from cooperation with private plans. [17] directly with the private health associations, for it is clear If the testimony of these many responsible witnesses is that many doctors objected to filling out the company given credit, no finding of conspiracy to restrain or forms and supplying details required by the associations, monopolize this business could be sustained. Certainly we and preferred to confine **697 themselves to direct cannot say that the trial court’s refusal to find such a dealing with the patient and leaving the patient to deal conspiracy was clearly erroneous. with the associations. Some writers may have mistaken or misunderstood the policy of local associations. Others © 2015 Thomson Reuters. No claim to original U.S. Government Works. 8 U.S. v. Oregon State Medical Soc., 343 U.S. 326 (1952) 72 S.Ct. 690, 96 L.Ed. 978

The other charge is that appellees conspired to restrain Almost everything pointed to in the record by the competition between the several doctor-sponsored Government as evidence that interstate commerce is organizations within the State of Oregon. The charge involved in this case relates to across-state-line activities here, as we understand it from paragraph 33(i) of the of the private associations. It is not proven, however, to complaint, 95 F.Supp. at page 124, is that Oregon be adversely affected by any allocation of territories by Physicians’ Service, the state-wide organization, and the doctor-sponsored plans. So far as any evidence brought to county-medical-society-sponsored plans agreed not to our attention discloses, the activities of the latter are compete with one another. Apparently if a county was wholly intrastate. The Government did show that Oregon provided with prepaid medical care by a local society, the Physicians Service made a number of payments to state society would stay out, or if the county society out-of-state doctors and hospitals, presumably for wanted to inaugurate a local plan, the state society would treatment of polycyholders who happened to remove or withdraw from the area. temporarily to *339 be away from Oregon when need for [18] This is not a situation where suppliers of commercial service arose. These were, however, few, sporadic and commodities divide territories and make reciprocal incidental. Cf. Industrial Ass’n of San Francisco v. United agreements to exploit only the allotted market, thereby States, supra, 268 U.S. at page 84, 45 S.Ct. at page 408, depriving allocated communities of competition. This 69 L.Ed. 849. prepaid plan does not supply to, and its allocation does not withhold from, any community medical service or American Medical Ass’n v. United States, 317 U.S. 519, facilities of any description. No matter what organization 63 S.Ct. 326, 87 L.Ed. 434, does not stand for the issues the certificate, it will be performed, in the main, by proposition that furnishing of prepaid medical care on a the local doctors. The certificate serves **698 only to local plane is interstate commerce. That was a prosecution prepay their fees. The result, if the state association under s 3 of the Sherman Act of a conspiracy to restrain should enter into local competition with the county trade or commerce in the District of Columbia. Interstate association, would be that the inhabitants could prepay commerce was not necessary to the operation of the medical services through either one of two medical statute there. [19] [20] [21] society channels. There is not the least proof that We conclude that the Government has not duplicating sources of the prepaid certificates would make clearly proved its charges. Certainly the Court’s findings them cheaper, more available or *338 would result in an are not clearly erroneous. ‘A finding is ‘clearly erroneous’ improved service or have any beneficial effect on when although there is evidence to support it, the anybody. Through these nonprofit organizations the reviewing court on the entire evidence is left with a doctors of each locality, in practical effect, offer their definite and firm conviction that a mistake has been services and hospitalization on a prepaid basis instead of committed.’ United States v. United States Gypsum Co., on the usual cash fee or credit basis. To hold it illegal 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746. The because they do not offer their services simultaneously Government’s contentions have been plausibly and and in the same locality through both a state and a county earnestly argued but the record does not leave us with any organization would be to require them to compete with ‘definite and firm conviction that a mistake has been themselves in sale of certificates. Under the circumstances committed.’ proved here, we cannot regard the agreement by these [22] nonprofit organizations not to compete as an unreasonable As was aptly stated by the New York Court of restraint of trade in violation of the Sherman Act. Appeals, although in a case of a rather different substantive nature: ‘Face to face with living witnesses, the original trier of the facts holds a position of advantage With regard to this charge, the court found, ‘The sale of from which appellate judges are excluded. In doubtful medical services, by Doctor Sponsored Organizations, as cases, the exercise of his power of observation often conducted within the State of Oregon, is not trade or proves the most accurate method of ascertaining the truth. commerce within the meaning of Section 1 of the * * * How can we say the judge is wrong? We never saw Sherman Anti-Trust Law, nor is it commerce within the the witnesses. * * * To the sophistication **699 and meaning of the constitutional grant of power to Congress sagacity of the trial judge the law confides the duty of ‘To regulate Commerce * * * among the several States’.’ appraisal.’ Boyd v. Boyd, 252 N.Y. 422, 429, 169 N.E. 95 F.Supp. at page 118. If that finding in both aspects is 632, 634. not to be overturned as clearly erroneous, it, of course, [23] disposes of this charge, for if there was no restraint of Affirmance is, of course, without prejudice to future interstate commerce, the conduct charged does not fall suit if practices in conduct of the Oregon Physicians’ within the prohibitions of the Sherman Act. Service or the county services, whether or not involved *340 in the present action, shall threaten or constitute © 2015 Thomson Reuters. No claim to original U.S. Government Works. 9 U.S. v. Oregon State Medical Soc., 343 U.S. 326 (1952) 72 S.Ct. 690, 96 L.Ed. 978

violation of the antitrust laws. Cf. United States v. Mr. Justice CLARK took no part in the consideration or Reading Co., 226 U.S. 324, 373, 33 S.Ct. 90, 104, 57 decision of this case. L.Ed. 243.

All Citations Judgment affirmed. 343 U.S. 326, 72 S.Ct. 690, 96 L.Ed. 978

Mr. Justice BLACK is of opinion that the judgment below is clearly erroneous and should be reversed.

1 Pursuant to s 2 of the Expediting Act of 1903, 32 Stat. 823, as amended, 15 U.S.C. s 29, 15 U.S.C.A. s 29.

2 95 F.Supp. 103.

3 26 Stat. 209, 15 U.S.C. s 1, 15 U.S.C.A. s 1: ‘Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States * * * is declared to be illegal * * *.’ 15 U.S.C. s 2, 15 U.S.C.A. s 2: ‘Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States * * * shall be deemed guilty of a misdemeanor * * *.’

4 Judge Augustus Hand, ‘Trial Efficiency,’ dealing with antitrust cases, Business Practices Under Federal Antitrust Laws, Symposium, New York State Bar Assn. (C.C.H., 1951) 31—32. See also Sec. VIII, Procedure in Antitrust and Other Protracted Cases, a Report adopted September 26, 1951, by the Judicial Conference of the United States.

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 10 Sec. 12.115. BASIS FOR CHARTER REVOCATION OR MODIFICATION OF GOVERNANCE.

(a) Except as provided by Subsection (c), the commissioner shall revoke the charter of an open-enrollment charter school or reconstitute the governing body of the charter holder if the commissioner determines that the charter holder:

(1) committed a material violation of the charter, including failure to satisfy accountability provisions prescribed by the charter;

(2) failed to satisfy generally accepted accounting standards of fiscal management;

(3) failed to protect the health, safety, or welfare of the students enrolled at the school;

(4) failed to comply with this subchapter or another applicable law or rule;

(5) failed to satisfy the performance framework standards adopted under Section 12.1181; or

(6) is imminently insolvent as determined by the commissioner in accordance with commissioner rule.

(b) The action the commissioner takes under Subsection (a) shall be based on the best interest of the open-enrollment charter school's students, the severity of the violation, any previous violation the school has committed, and the accreditation status of the school.

(c) The commissioner shall revoke the charter of an open-enrollment charter school if:

(1) the charter holder has been assigned an unacceptable performance rating under Subchapter C, Chapter 39, for the three preceding school years;

(2) the charter holder has been assigned a financial accountability performance rating under Subchapter D, Chapter 39, indicating financial performance lower than satisfactory for the three preceding school years; or

(3) the charter holder has been assigned any combination of the ratings described by Subdivision (1) or (2) for the three preceding school years.

(c-1) For purposes of revocation under Subsection (c)(1), performance during the 2011- 2012 school year may not be considered. For purposes of revocation under Subsection (c)(1), the initial three school years for which performance ratings under Subchapter C, Chapter 39, shall be considered are the 2009-2010, 2010-2011, and 2012-2013 school years. For purposes of revocation under Subsection (c)(2), the initial three school years for which financial accountability performance ratings under Subchapter D, Chapter 39, shall be considered are the

Tab F 2010-2011, 2011-2012, and 2012-2013 school years. This subsection expires September 1, 2016.

(d) In reconstituting the governing body of a charter holder under this section, the commissioner shall appoint members to the governing body. In appointing members under this subsection the commissioner:

(1) shall consider:

(A) local input from community members and parents; and

(B) appropriate credentials and expertise for membership, including financial expertise, whether the person lives in the geographic area the charter holder serves, and whether the person is an educator; and

(2) may reappoint current members of the governing body.

(e) If a governing body of a charter holder subject to reconstitution under this section governs enterprises other than the open-enrollment charter school, the commissioner may require the charter holder to create a new, single-purpose organization that is exempt from taxation under Section 501(c)(3), Internal Revenue Code of 1986, to govern the open-enrollment charter school and may require the charter holder to surrender the charter to the commissioner for transfer to the organization created under this subsection. The commissioner shall appoint the members of the governing body of an organization created under this subsection.

(f) This section does not limit the authority of the attorney general to take any action authorized by law.

(g) The commissioner shall adopt rules necessary to administer this section.

(h) The commissioner shall adopt initial rules under Subsection (g) not later than September 1, 2014. This subsection expires October 1, 2014.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30, 1995. Amended by Acts 2001, 77th Leg., ch. 1504, Sec. 12, eff. Sept. 1, 2001.

Amended by: Acts 2013, 83rd Leg., R.S., Ch. 1140 (S.B. 2), Sec. 25, eff. September 1, 2013. Sec. 12.116. PROCEDURE FOR REVOCATION OR MODIFICATION OF GOVERNANCE. (a) The commissioner shall adopt an informal procedure to be used for revoking the charter of an open-enrollment charter school or for reconstituting the governing body of the charter holder as authorized by Section 12.115.

(b) Chapter 2001, Government Code, does not apply to a procedure that is related to a revocation or modification of governance under this subchapter.

(c) A decision by the commissioner to revoke a charter is subject to review by the State Office of Administrative Hearings. Notwithstanding Chapter 2001, Government Code:

(1) the administrative law judge shall uphold a decision by the commissioner to revoke a charter unless the judge finds the decision is arbitrary and capricious or clearly erroneous; and

(2) a decision of the administrative law judge under this subsection is final and may not be appealed.

(d) If the commissioner revokes the charter of an open-enrollment charter school, the commissioner may:

(1) manage the school until alternative arrangements are made for the school's students; and

(2) assign operation of one or more campuses formerly operated by the charter holder who held the revoked charter to a different charter holder who consents to the assignment.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30, 1995. Amended by Acts 2001, 77th Leg., ch. 1504, Sec. 12, eff. Sept. 1, 2001.

Amended by: Acts 2013, 83rd Leg., R.S., Ch. 1140 (S.B. 2), Sec. 26, eff. September 1, 2013. “[p]rocedural due process requires reasonable notice and the opportunity to be heard at a meaningful time and in a meaningful manner.” See Univ. of Tex. Med. Sch. v. Than, 901 S.W.2d 926, 930 (Tex.1995). SUBCHAPTER C. ACCREDITATION

Sec. 39.051. ACCREDITATION STATUS. Accreditation of a school district is determined in accordance with this subchapter. The commissioner by rule shall determine in accordance with this subchapter the criteria for the following accreditation statuses:

(1) accredited;

(2) accredited-warned; and

(3) accredited-probation.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30, 1995. Amended by Acts 1997, 75th Leg., ch. 767, Sec. 6, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 396, Sec. 2.20, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 397, Sec. 7, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1422, Sec. 3, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 8, Sec. 3, eff. April 11, 2001; Acts 2001, 77th Leg., ch. 725, Sec. 4, 5, eff. June 13, 2001; Acts 2001, 77th Leg., ch. 834, Sec. 10, eff. Sept. 1, 2001; Acts 2001, 77th Leg., ch. 1420, Sec. 4.007, 4.008, eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 201, Sec. 26, eff. Sept. 1, 2003; Acts 2003, 78th Leg., ch. 433, Sec. 2, eff. June 20, 2003; Acts 2003, 78th Leg., ch. 805, Sec. 1, eff. Sept. 1, 2003.

Amended by:

Acts 2006, 79th Leg., 3rd C.S., Ch. 5 (H.B. 1), Sec. 3.10, eff. May 31, 2006.

Acts 2006, 79th Leg., 3rd C.S., Ch. 5 (H.B. 1), Sec. 3.11, eff. May 31, 2006.

Acts 2007, 80th Leg., R.S., Ch. 1312 (S.B. 1031), Sec. 15, eff. September 1, 2007.

Acts 2007, 80th Leg., R.S., Ch. 1340 (S.B. 1871), Sec. 5, eff. June 15, 2007.

Acts 2009, 81st Leg., R.S., Ch. 895 (H.B. 3), Sec. 59, eff. June 19, 2009.

Sec. 39.052. DETERMINATION OF ACCREDITATION STATUS OR PERFORMANCE RATING. (a) Each year, the commissioner shall determine the accreditation status of each school district.

(b) In determining the accreditation status of a school district, the commissioner:

Tab G (1) shall evaluate and consider:

(A) performance on student achievement indicators described by Section 39.053(c); and

(B) performance under the financial accountability rating system developed under Subchapter D; and

(2) may evaluate and consider:

(A) the district's compliance with statutory requirements and requirements imposed by rule of the commissioner or State Board of Education under specific statutory authority that relate to:

(i) reporting data through the Public Education Information Management System (PEIMS) or other reports required by state or federal law or court order;

(ii) the high school graduation requirements under Section 28.025; or

(iii) an item listed under Sections 7.056(e)(3)(C)- (I) that applies to the district;

(B) the effectiveness of the district's programs for special populations; and

(C) the effectiveness of the district's career and technology program.

(c) Based on a school district's performance under Subsection (b), the commissioner shall:

(1) assign each district an accreditation status; or

(2) revoke the accreditation of the district and order closure of the district.

(d) A school district's accreditation status may be raised or lowered based on the district's performance or may be lowered based on the performance of one or more campuses in the district that is below a standard required under this subchapter.

(e) The commissioner shall notify a school district that receives an accreditation status of accredited-warned or accredited-probation or a campus that performs below a standard required under this subchapter that the performance of the district or campus is below a standard required under this subchapter. The commissioner shall require the district to notify the parents of students enrolled in the district and property owners in the district of the district's accreditation status and the implications of that accreditation status. (f) A school district that is not accredited may not receive funds from the agency or hold itself out as operating a public school of this state.

(g) This chapter may not be construed to invalidate a diploma awarded, course credit earned, or grade promotion granted by a school district before the commissioner revoked the district's accreditation.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30, 1995. Amended by Acts 1999, 76th Leg., ch. 396, Sec. 2.21, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1514, Sec. 1, eff. June 19, 1999; Acts 2001, 77th Leg., ch. 1420, Sec. 4.009, eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 1269, Sec. 2, eff. Sept. 1, 2003.

Acts 2006, 79th Leg., 3rd C.S., Ch. 5 (H.B. 1), Sec. 3.12, eff. May 31, 2006.

Acts 2009, 81st Leg., R.S., Ch. 895 (H.B. 3), Sec. 59, eff. June 19, 2009.

Sec. 39.053. PERFORMANCE INDICATORS: STUDENT ACHIEVEMENT. (a) The commissioner shall adopt a set of indicators of the quality of learning and student achievement. The commissioner biennially shall review the indicators for the consideration of appropriate revisions.

(b) Performance on the student achievement indicators adopted under this section shall be compared to state-established standards. The indicators must be based on information that is disaggregated by race, ethnicity, and socioeconomic status.

(c) Indicators of student achievement adopted under this section must include:

(1) the results of assessment instruments required under Sections 39.023(a), (c), and (l), including the results of assessment instruments required for graduation retaken by a student, aggregated across grade levels by subject area, including:

(A) for the performance standard determined by the commissioner under Section 39.0241(a):

(i) the percentage of students who performed satisfactorily on the assessment instruments, aggregated across grade levels by subject area; and (ii) for students who did not perform satisfactorily, the percentage of students who met the standard for annual improvement, as determined by the agency under Section 39.034, on the assessment instruments, aggregated across grade levels by subject area; and

(B) for the college readiness performance standard as determined under Section 39.0241:

(i) the percentage of students who performed satisfactorily on the assessment instruments, aggregated across grade levels by subject area; and

(ii) for students who did not perform satisfactorily, the percentage of students who met the standard for annual improvement, as determined by the agency under Section 39.034, on the assessment instruments, aggregated across grade levels by subject area;

(2) dropout rates, including dropout rates and district completion rates for grade levels 9 through 12, computed in accordance with standards and definitions adopted by the National Center for Education Statistics of the United States Department of Education;

(3) high school graduation rates, computed in accordance with standards and definitions adopted in compliance with the No Child Left Behind Act of 2001 (20 U.S.C. Section 6301 et seq.);

(4) the percentage of students who successfully completed the curriculum requirements for the distinguished level of achievement under the foundation high school program;

(5) the percentage of students who successfully completed the curriculum requirements for an endorsement under Section 28.025(c-1); and

(6) at least three additional indicators of student achievement to evaluate district and campus performance, which must include either:

(A) the percentage of students who satisfy the Texas Success Initiative (TSI) college readiness benchmarks prescribed by the Texas Higher Education Coordinating Board under Section 51.3062(f) on an assessment instrument in reading, writing, or mathematics designated by the Texas Higher Education Coordinating Board under Section 51.3062(c); or

(B) the number of students who earn:

(i) at least 12 hours of postsecondary credit required for the foundation high school program under Section 28.025 or to earn an endorsement under Section 28.025(c-1);

(ii) at least 30 hours of postsecondary credit required for the foundation high school program under Section 28.025 or to earn an endorsement under Section 28.025(c-1);

(iii) an associate's degree; or (iv) an industry certification.

(c-1) An indicator adopted under Subsection (c) that would measure improvements in student achievement cannot negatively affect the commissioner's review of a school district or campus if that district or campus is already achieving at the highest level for that indicator.

(c-2) The commissioner by rule shall determine a method by which a student's performance may be included in determining the performance rating of a school district or campus under Section 39.054 if, before the student graduates, the student:

(1) satisfies the Texas Success Initiative (TSI) college readiness benchmarks prescribed by the Texas Higher Education Coordinating Board under Section 51.3062(f) on an assessment instrument designated by the Texas Higher Education Coordinating Board under Section 51.3062(c); or

(2) performs satisfactorily on an assessment instrument under Section 39.023(c), notwithstanding Subsection (d).

(d) For purposes of Subsection (c), the commissioner by rule shall determine the period within which a student must retake an assessment instrument for that assessment instrument to be considered in determining the performance rating of the district under Section 39.054.

(d-1) In aggregating results of assessment instruments across grade levels by subject in accordance with Subsection (c)(1), the performance of a student enrolled below the high school level on an assessment instrument required under Section 39.023(c) is included with results relating to other students enrolled at the same grade level.

(e) Performance on the student achievement indicators under Subsections (c)(1) and (2) shall be compared to state standards and required improvement. The state standard shall be established by the commissioner. Required improvement is the progress necessary for the campus or district to meet state standards and, for the student achievement indicator under Subsection (c)(1), for its students to meet each of the performance standards as determined under Section 39.0241.

(f) Annually, the commissioner shall define the state standard for the current school year for each student achievement indicator described by Subsection (c) and shall project the state standards for each indicator for the following two school years. The commissioner shall periodically raise the state standards for the student achievement indicator described by Subsection (c)(1)(B)(i) for accreditation as necessary to reach the goals of achieving, by not later than the 2019-2020 school year:

(1) student performance in this state, disaggregated by race, ethnicity, and socioeconomic status, that ranks nationally in the top 10 states in terms of college readiness; and

(2) student performance, with no significant achievement gaps by race, ethnicity, and socioeconomic status. (g) In defining the required state standard for the indicator described by Subsection (c)(2), the commissioner may not consider as a dropout a student whose failure to attend school results from:

(1) the student's expulsion under Section 37.007; and

(2) as applicable:

(A) adjudication as having engaged in delinquent conduct or conduct indicating a need for supervision, as defined by Section 51.03, Family Code; or

(B) conviction of and sentencing for an offense under the Penal Code.

(g-1) In computing dropout and completion rates under Subsection (c)(2), the commissioner shall exclude:

(1) students who are ordered by a court to attend a high school equivalency certificate program but who have not yet earned a high school equivalency certificate;

(2) students who were previously reported to the state as dropouts, including a student who is reported as a dropout, reenrolls, and drops out again, regardless of the number of times of reenrollment and dropping out;

(3) students in attendance who are not in membership for purposes of average daily attendance;

(4) students whose initial enrollment in a school in the United States in grades 7 through 12 was as unschooled refugees or asylees as defined by Section 39.027(a-1);

(5) students who are in the district exclusively as a function of having been detained at a county detention facility but are otherwise not students of the district in which the facility is located; and

(6) students who are incarcerated in state jails and federal penitentiaries as adults and as persons certified to stand trial as adults.

(h) Each school district shall cooperate with the agency in determining whether a student is a dropout for purposes of accreditation and evaluating performance by school districts and campuses under this chapter.

(i) The commissioner by rule shall adopt accountability measures to be used in assessing the progress of students who have failed to perform satisfactorily as determined by the commissioner under Section 39.0241(a) or under the college readiness standard as determined under Section 39.0241 in the preceding school year on an assessment instrument required under Section 39.023(a), (c), or (l). Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30, 1995. Amended by Acts 1999, 76th Leg., ch. 510, Sec. 2, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1417, Sec. 2, eff. June 19, 1999; Acts 2001, 77th Leg., ch. 725, Sec. 6, eff. June 13, 2001; Acts 2001, 77th Leg., ch. 834, Sec. 11, eff. Sept. 1, 2001; Acts 2001, 77th Leg., ch. 1420, Sec. 4.010, eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 1055, Sec. 24, eff. June 20, 2003.

Acts 2009, 81st Leg., R.S., Ch. 895 (H.B. 3), Sec. 59, eff. June 19, 2009.

Acts 2011, 82nd Leg., R.S., Ch. 307 (H.B. 2135), Sec. 5, eff. June 17, 2011.

Acts 2013, 83rd Leg., R.S., Ch. 211 (H.B. 5), Sec. 42(a), eff. June 10, 2013.

Acts 2013, 83rd Leg., R.S., Ch. 211 (H.B. 5), Sec. 43(a), eff. June 10, 2013.

Sec. 39.054. METHODS AND STANDARDS FOR EVALUATING PERFORMANCE. (a) The commissioner shall adopt rules to evaluate school district and campus performance and assign each district a performance rating of A, B, C, D, or F. In adopting rules under this subsection, the commissioner shall determine the criteria for each designated letter performance rating. A district performance rating of A, B, or C reflects acceptable performance and a district performance rating of D or F reflects unacceptable performance. The commissioner shall also assign each campus a performance rating of exemplary, recognized, acceptable, or unacceptable. A campus performance rating of exemplary, recognized, or acceptable reflects acceptable performance, and a campus performance rating of unacceptable reflects unacceptable performance. A district may not receive a performance rating of A if the district includes any campus with a performance rating of unacceptable. Not later than August 8 of each year, the performance rating of each district and campus shall be made publicly available as provided by rules adopted under this subsection. If a district or campus received a performance rating that reflected unacceptable performance for the preceding school year, the commissioner shall notify the district of a subsequent such designation on or before June 15.

(b) In evaluating performance, the commissioner shall evaluate against state standards and consider the performance of each campus in a school district and each open-enrollment charter school on the basis of the campus's or school's performance on the student achievement indicators adopted under Section 39.053, other than, to the greatest extent possible, the student achievement indicator adopted under Section 39.053(c)(1).

(b-1) Consideration of the effectiveness of district programs under Section 39.052(b)(2)(B) or (C): (1) must:

(A) be based on data collected through the Public Education Information Management System (PEIMS) for purposes of accountability under this chapter; and

(B) include the results of assessments required under Section 39.023; and

(2) may be based on the results of a special accreditation investigation conducted under Section 39.057.

(c) In evaluating school district and campus performance on the student achievement indicators adopted under Sections 39.053(c)(1) and (2), the commissioner shall define acceptable performance as meeting the state standard determined by the commissioner under Section 39.053(e) for the current school year based on:

(1) student performance in the current school year; or

(2) student performance as averaged over the current school year and the preceding two school years.

(d) In evaluating performance under Subsection (c), the commissioner:

(1) may assign an acceptable performance rating if the campus or district:

(A) performs satisfactorily on 85 percent of the measures the commissioner determines appropriate with respect to the student achievement indicators adopted under Sections 39.053(c)(1) and (2); and

(B) does not fail to perform satisfactorily on the same measure described by Paragraph (A) for two consecutive school years;

(2) may grant an exception under this subsection to a district or campus only if the performance of the district or campus is within a certain percentage, as determined by the commissioner, of the minimum performance standard established by the commissioner for the measure of evaluation; or

(3) may establish other performance criteria for a district or campus to obtain an exception under this subsection.

(d-1) The commissioner may consider alternative performance criteria to Subsection (d)(1)(A) only in special circumstances, including campus or district performance on the same measure for student groups that are substantially similar in composition to all students on the same campus or district.

(e) Each annual performance review under this section shall include an analysis of the student achievement indicators adopted under Section 39.053(c) to determine school district and campus performance in relation to: (1) standards established for each indicator; and

(2) required improvement as defined under Section 39.053(e).

(f) In the computation of dropout rates under Section 39.053(c)(2), a student who is released from a juvenile pre-adjudication secure detention facility or juvenile post-adjudication secure correctional facility and fails to enroll in school or a student who leaves a residential treatment center after receiving treatment for fewer than 85 days and fails to enroll in school may not be considered to have dropped out from the school district or campus serving the facility or center unless that district or campus is the one to which the student is regularly assigned. The agency may not limit an appeal relating to dropout computations under this subsection.

Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30, 1995.

Acts 2009, 81st Leg., R.S., Ch. 895 (H.B. 3), Sec. 59, eff. June 19, 2009.

Acts 2013, 83rd Leg., R.S., Ch. 211 (H.B. 5), Sec. 44(a), eff. June 10, 2013.

Acts 2013, 83rd Leg., R.S., Ch. 211 (H.B. 5), Sec. 45(a), eff. June 10, 2013.

Text of section as added by Acts 2013, 83rd Leg., R.S., Ch. 167 (S.B. 1538), Sec. 1

For text of section as added by Acts 2013, 83rd Leg., R.S., Ch. 211 (H.B. 5), Sec. 46(a), see other Sec. 39.0545.

Sec. 39.0545. EVALUATING DROPOUT RECOVERY SCHOOLS. (a) For purposes of evaluating performance under Section 39.053(c), the commissioner shall designate as a dropout recovery school a school district or an open- enrollment charter school or a campus of a district or of an open-enrollment charter school:

(1) that serves students in grades 9 through 12 and has an enrollment of which at least 50 percent of the students are 17 years of age or older as of September 1 of the school year as reported for the fall semester Public Education Information Management System (PEIMS) submission; and (2) that meets the eligibility requirements for and is registered under alternative education accountability procedures adopted by the commissioner.

(b) Notwithstanding Section 39.053(c)(2), the commissioner shall use the alternative completion rate under this subsection to determine the student achievement indicator under Section 39.053(c)(2) for a dropout recovery school. The alternative completion rate shall be the ratio of the total number of students who graduate, continue attending school into the next academic year, or receive a high school equivalency certificate to the total number of students in the longitudinal cohort of students.

(c) Notwithstanding Section 39.053(c)(2), in determining the performance rating under Section 39.054 of a dropout recovery school, the commissioner shall include any student described by Section 39.053(g-1) who graduates or receives a high school equivalency certificate.

(d) For a dropout recovery school, only the best result from the primary administration and any retake of an assessment instrument administered to a student in the school year evaluated under the accountability procedures adopted by the commissioner may be considered in determining the performance rating of the school under Section 39.054.

Added by Acts 2013, 83rd Leg., R.S., Ch. 167 (S.B. 1538), Sec. 1, eff. May 24, 2013.

Text of section as added by Acts 2013, 83rd Leg., R.S., Ch. 211 (H.B. 5), Sec. 46

For text of section as added by Acts 2013, 83rd Leg., R.S., Ch. 167 (S.B. 1538), Sec. 1, see other Sec. 39.0545.

Sec. 39.0545. SCHOOL DISTRICT EVALUATION OF PERFORMANCE IN COMMUNITY AND STUDENT ENGAGEMENT; COMPLIANCE. (a) Each school district shall evaluate the district's performance and the performance of each campus in the district in community and student engagement and in compliance as provided by this section and assign the district and each campus a performance rating of exemplary, recognized, acceptable, or unacceptable for both overall performance and each individual evaluation factor listed under Subsection (b). Not later than August 8 of each year, the district shall report each performance rating to the agency and make the performance ratings publicly available as provided by commissioner rule.

(b) For purposes of assigning the performance ratings under Subsection (a), a school district must evaluate: (1) the following programs or specific categories of performance at each campus:

(A) fine arts;

(B) wellness and physical education;

(C) community and parental involvement, such as:

(i) opportunities for parents to assist students in preparing for assessments under Section 39.023;

(ii) tutoring programs that support students taking assessments under Section 39.023; and

(iii) opportunities for students to participate in community service projects;

(D) the 21st Century Workforce Development program;

(E) the second language acquisition program;

(F) the digital learning environment;

(G) dropout prevention strategies; and

(H) educational programs for gifted and talented students; and

(2) the record of the district and each campus regarding compliance with statutory reporting and policy requirements.

(c) A school district shall use criteria developed by a local committee to evaluate:

(1) the performance of the district's campus programs and categories of performance under Subsection (b)(1); and

(2) the record of the district and each campus regarding compliance under Subsection (b)(2).

Added by Acts 2013, 83rd Leg., R.S., Ch. 211 (H.B. 5), Sec. 46(a), eff. June 10, 2013.

Sec. 39.055. STUDENT ORDERED BY A JUVENILE COURT OR STUDENT IN RESIDENTIAL FACILITY NOT CONSIDERED FOR ACCOUNTABILITY PURPOSES. Notwithstanding any other provision of this code except to the extent otherwise provided under Section 39.054(f), for purposes of determining the performance of a school district, campus, or open-enrollment charter school under this chapter, a student ordered by a juvenile court into a residential program or facility operated by or under contract with the Texas Juvenile Justice Department, a juvenile board, or any other governmental entity or any student who is receiving treatment in a residential facility is not considered to be a student of the school district in which the program or facility is physically located or of an open-enrollment charter school, as applicable. The performance of such a student on an assessment instrument or other student achievement indicator adopted under Section 39.053 or reporting indicator adopted under Section 39.301 shall be determined, reported, and considered separately from the performance of students attending a school of the district in which the program or facility is physically located or an open-enrollment charter school, as applicable.

Added by Acts 2001, 77th Leg., ch. 834, Sec. 12, eff. Sept. 1, 2001. Amended by Acts 2003, 78th Leg., ch. 201, Sec. 27, 61(1), eff. Sept. 1, 2003; Acts 2003, 78th Leg., ch. 903, Sec. 1, 4, eff. Sept. 1, 2003.

Acts 2009, 81st Leg., R.S., Ch. 895 (H.B. 3), Sec. 59, eff. June 19, 2009.

Acts 2013, 83rd Leg., R.S., Ch. 517 (S.B. 306), Sec. 1, eff. June 14, 2013.

Sec. 39.056. ON-SITE INVESTIGATIONS. (a) The commissioner may:

(1) direct the agency to conduct on-site investigations of a school district at any time to answer any questions concerning a program, including special education, required by federal law or for which the district receives federal funds; and

(2) as a result of the investigation, change the accreditation status of a district, change the accountability rating of a district or campus, or withdraw a distinction designation under Subchapter G.

(b) The commissioner shall determine the frequency of on-site investigations by the agency according to annual comprehensive analyses of student performance and equity in relation to the student achievement indicators adopted under Section 39.053.

(c) In making an on-site accreditation investigation, the investigators shall obtain information from administrators, teachers, and parents of students enrolled in the school district. The investigation may not be closed until information is obtained from each of those sources. The State Board of Education shall adopt rules for: (1) obtaining information from parents and using that information in the investigator's report; and

(2) obtaining information from teachers in a manner that prevents a district or campus from screening the information.

(d) The agency shall give written notice to the superintendent and the board of trustees of a school district of any impending investigation of the district's accreditation.

(e) The investigators shall report orally and in writing to the board of trustees of the school district and, as appropriate, to campus administrators and shall make recommendations concerning any necessary improvements or sources of aid such as regional education service centers.

(f) A district which takes action with regard to the recommendations provided by the investigators as prescribed by Subsection (e) shall make a reasonable effort to seek assistance from a third party in developing an action plan to improve district performance using improvement techniques that are goal oriented and research based.

Acts 2009, 81st Leg., R.S., Ch. 895 (H.B. 3), Sec. 59, eff. June 19, 2009.

Acts 2013, 83rd Leg., R.S., Ch. 211 (H.B. 5), Sec. 47, eff. June 10, 2013.

Sec. 39.057. SPECIAL ACCREDITATION INVESTIGATIONS.

Text of subsection as amended by Acts 2013, 83rd Leg., R.S., Ch. 211 (H.B. 5), Sec. 48

(a) The commissioner shall authorize special accreditation investigations to be conducted:

(1) when excessive numbers of absences of students eligible to be tested on state assessment instruments are determined;

(2) when excessive numbers of allowable exemptions from the required state assessment instruments are determined; (3) in response to complaints submitted to the agency with respect to alleged violations of civil rights or other requirements imposed on the state by federal law or court order;

(4) in response to established compliance reviews of the district's financial accounting practices and state and federal program requirements;

(5) when extraordinary numbers of student placements in disciplinary alternative education programs, other than placements under Sections 37.006 and 37.007, are determined;

(6) in response to an allegation involving a conflict between members of the board of trustees or between the board and the district administration if it appears that the conflict involves a violation of a role or duty of the board members or the administration clearly defined by this code;

(7) when excessive numbers of students in special education programs under Subchapter A, Chapter 29, are assessed through assessment instruments developed or adopted under Section 39.023(b);

(8) in response to an allegation regarding or an analysis using a statistical method result indicating a possible violation of an assessment instrument security procedure established under Section 39.0301, including for the purpose of investigating or auditing a school district under that section;

(9) when a significant pattern of decreased academic performance has developed as a result of the promotion in the preceding two school years of students who did not perform satisfactorily as determined by the commissioner under Section 39.0241(a) on assessment instruments administered under Section 39.023(a), (c), or (l);

(10) when excessive numbers of students eligible to enroll fail to complete an Algebra II course or any other advanced course as determined by the commissioner;

(11) when resource allocation practices as evaluated under Section 39.0821 indicate a potential for significant improvement in resource allocation;

(12) when a disproportionate number of students of a particular demographic group is graduating with a particular endorsement under Section 28.025(c-1);

(13) when an excessive number of students is graduating with a particular endorsement under Section 28.025(c-1); or

(14) as the commissioner otherwise determines necessary. Text of subsection as amended by Acts 2013, 83rd Leg., R.S., Ch. 509 (S.B. 123), Sec. 2

(a) The commissioner may authorize special accreditation investigations to be conducted:

(1) when excessive numbers of absences of students eligible to be tested on state assessment instruments are determined;

(2) when excessive numbers of allowable exemptions from the required state assessment instruments are determined;

(3) in response to complaints submitted to the agency with respect to alleged violations of civil rights or other requirements imposed on the state by federal law or court order;

(4) in response to established compliance reviews of the district's financial accounting practices and state and federal program requirements;

(5) when extraordinary numbers of student placements in disciplinary alternative education programs, other than placements under Sections 37.006 and 37.007, are determined;

(6) in response to an allegation involving a conflict between members of the board of trustees or between the board and the district administration if it appears that the conflict involves a violation of a role or duty of the board members or the administration clearly defined by this code;

(7) when excessive numbers of students in special education programs under Subchapter A, Chapter 29, are assessed through assessment instruments developed or adopted under Section 39.023(b);

(8) in response to an allegation regarding or an analysis using a statistical method result indicating a possible violation of an assessment instrument security procedure established under Section 39.0301, including for the purpose of investigating or auditing a school district under that section;

(9) when a significant pattern of decreased academic performance has developed as a result of the promotion in the preceding two school years of students who did not perform satisfactorily as determined by the commissioner under Section 39.0241(a) on assessment instruments administered under Section 39.023(a), (c), or (l);

(10) when excessive numbers of students graduate under the minimum high school program; (11) when excessive numbers of students eligible to enroll fail to complete an Algebra II course or any other course determined by the commissioner as distinguishing between students participating in the recommended high school program from students participating in the minimum high school program;

(12) when resource allocation practices as evaluated under Section 39.0821 indicate a potential for significant improvement in resource allocation;

(13) in response to a complaint submitted to the agency with respect to alleged inaccurate data that is reported through the Public Education Information Management System (PEIMS) or through other reports required by state or federal law or rule or court order and that is used by the agency to make a determination relating to public school accountability, including accreditation, under this chapter; or

(14) as the commissioner otherwise determines necessary.

(b) If the agency's findings in an investigation under Subsection (a)(6) indicate that the board of trustees has observed a lawfully adopted policy, the agency may not substitute its judgment for that of the board.

(c) The commissioner may authorize special accreditation investigations to be conducted in response to repeated complaints submitted to the agency concerning imposition of excessive paperwork requirements on classroom teachers.

(d) Based on the results of a special accreditation investigation, the commissioner may:

(1) take appropriate action under Subchapter E;

(2) lower the school district's accreditation status or a district's or campus's accountability rating; or

(3) take action under both Subdivisions (1) and (2).

(e) Regardless of whether the commissioner lowers the school district's accreditation status or a district's or campus's performance rating under Subsection (d), the commissioner may take action under Sections 39.102(a)(1) through (8) or Section 39.103 if the commissioner determines that the action is necessary to improve any area of a district's or campus's performance, including the district's financial accounting practices.

Acts 2009, 81st Leg., R.S., Ch. 895 (H.B. 3), Sec. 59, eff. June 19, 2009. Acts 2013, 83rd Leg., R.S., Ch. 211 (H.B. 5), Sec. 48(a), eff. June 10, 2013.

Acts 2013, 83rd Leg., R.S., Ch. 509 (S.B. 123), Sec. 2, eff. June 14, 2013.

Sec. 39.058. CONDUCT OF INVESTIGATIONS. (a) The agency shall adopt written procedures for conducting on-site investigations under this subchapter. The agency shall make the procedures available to the complainant, the alleged violator, and the public. Agency staff must be trained in the procedures and must follow the procedures in conducting the investigation.

(b) After completing an investigation, the agency shall present preliminary findings to any person the agency finds has violated a law, rule, or policy. Before issuing a report with its final findings, the agency must provide a person the agency finds has violated a law, rule, or policy an opportunity for an informal review by the commissioner or a designated hearing examiner.

Acts 2009, 81st Leg., R.S., Ch. 895 (H.B. 3), Sec. 59, eff. June 19, 2009. SUBCHAPTER D. FINANCIAL ACCOUNTABILITY

Sec. 39.081. DEFINITIONS. In this subchapter:

(1) "Parent" includes a guardian or other person having lawful control of a student.

(2) "System" means a financial accountability rating system developed under this subchapter.

Acts 2009, 81st Leg., R.S., Ch. 895 (H.B. 3), Sec. 59, eff. June 19, 2009.

Sec. 39.082. DEVELOPMENT AND IMPLEMENTATION. (a) The commissioner shall, in consultation with the comptroller, develop and implement separate financial accountability rating systems for school districts and open- enrollment charter schools in this state that:

(1) distinguish among school districts and distinguish among open-enrollment charter schools, as applicable, based on levels of financial performance;

(2) include procedures to:

(A) provide additional transparency to public education finance; and

(B) enable the commissioner and school district and open- enrollment charter school administrators to provide meaningful financial oversight and improvement; and

(3) include processes for anticipating the future financial solvency of each school district and open-enrollment charter school, including analysis of district and school revenues and expenditures for preceding school years.

(b) The system must include uniform indicators adopted by commissioner rule by which to measure the financial management performance and future financial solvency of a district or open-enrollment charter school. In adopting indicators under this subsection, the commissioner shall assign a point value to each indicator to be used in a scoring matrix developed by the commissioner. Any reference to a teacher in an indicator adopted by the commissioner under this subsection means a classroom teacher.

Tab H (c) The system may not include an indicator under Subsection (b) or any other performance measure that:

(1) requires a school district to spend at least 65 percent or any other specified percentage of district operating funds for instructional purposes; or

(2) lowers the financial management performance rating of a school district for failure to spend at least 65 percent or any other specified percentage of district operating funds for instructional purposes.

(d) The commissioner shall evaluate indicators adopted under Subsection (b) at least once every three years.

(e) Under the financial accountability rating system developed under this section, each school district or open-enrollment charter school, as applicable, shall be assigned a financial accountability rating. In adopting rules under this section, the commissioner, in consultation with the comptroller, shall determine the criteria for each designated performance rating.

(f) A district or open-enrollment charter school shall receive the lowest rating under the system if the district or school fails to achieve a satisfactory rating on:

(1) an indicator adopted under Subsection (b) relating to financial management or solvency that the commissioner determines to be critical; or

(2) a category of indicators that suggest trends leading to financial distress as determined by the commissioner.

(g) Before assigning a final rating under the system, the commissioner shall assign each district or open-enrollment charter school a preliminary rating. A district or school may submit additional information to the commissioner relating to any indicator on which performance was considered unsatisfactory. The commissioner shall consider any additional information submitted by a district or school before assigning a final rating. If the commissioner determines that the additional information negates the concern raised by the indicator on which performance was considered unsatisfactory, the commissioner may not penalize the district or school on the basis of the indicator.

(h) The commissioner shall adopt rules for the implementation of this section.

(h-1) The commissioner shall adopt initial rules necessary to implement the changes to this section made by the 83rd Legislature, Regular Session, 2013, not later than March 1, 2015. This subsection expires April 1, 2015.

(i) Not later than August 8 of each year, the financial accountability rating of each school district and open-enrollment charter school under the financial accountability rating system developed under this section shall be made publicly available as provided by rules adopted under this section.

Acts 2009, 81st Leg., R.S., Ch. 895 (H.B. 3), Sec. 59, eff. June 19, 2009.

Acts 2013, 83rd Leg., R.S., Ch. 211 (H.B. 5), Sec. 49(a), eff. June 10, 2013.

Sec. 39.0821. COMPTROLLER REVIEW OF RESOURCE ALLOCATION PRACTICES. (a) The comptroller shall identify school districts and campuses that use resource allocation practices that contribute to high academic achievement and cost-effective operations. In identifying districts and campuses under this section, the comptroller shall:

(1) evaluate existing academic accountability and financial data by integrating the data;

(2) rank the results of the evaluation under Subdivision (1) to identify the relative performance of districts and campuses; and

(3) identify potential areas for district and campus improvement.

(b) In reviewing resources allocation practices of districts and campuses under this section, the comptroller shall ensure resources are being used for the instruction of students by evaluating:

(1) the operating cost for each student;

(2) the operating cost for each program; and

(3) the staffing cost for each student.

Acts 2009, 81st Leg., R.S., Ch. 895 (H.B. 3), Sec. 59, eff. June 19, 2009. Sec. 39.0823. PROJECTED DEFICIT. (a) If the commissioner, based on the indicators adopted under Section 39.082 or other relevant information, projects a deficit for a school district or open-enrollment charter school general fund within the following three school years, the agency shall provide the district or school interim financial reports, including projected revenues and expenditures, to evaluate the current budget status of the district or school.

(b) Repealed by Acts 2013, 83rd Leg., R.S., Ch. 211, Sec. 78(b)(5), eff. September 1, 2014.

(c) Repealed by Acts 2013, 83rd Leg., R.S., Ch. 211, Sec. 78(b)(5), eff. September 1, 2014.

(d) The agency may require a district or open-enrollment charter school to submit additional information needed to produce a financial report under Subsection (a). If a district or school fails to provide information requested under this subsection or if the commissioner determines that the information submitted by a district or school is unreliable, the commissioner may order the district or school to acquire professional services as provided by Section 39.109.

Acts 2009, 81st Leg., R.S., Ch. 895 (H.B. 3), Sec. 59, eff. June 19, 2009.

Acts 2013, 83rd Leg., R.S., Ch. 211 (H.B. 5), Sec. 50(a), eff. June 10, 2013.

Acts 2013, 83rd Leg., R.S., Ch. 211 (H.B. 5), Sec. 78(b)(5), eff. September 1, 2014.

Sec. 39.0824. CORRECTIVE ACTION PLAN. (a) A school district or open-enrollment charter school assigned the lowest rating under Section 39.082 shall submit to the commissioner a corrective action plan to address the financial weaknesses of the district or school. A corrective action plan must identify the specific areas of financial weaknesses, such as financial weaknesses in transportation, curriculum, or teacher development, and include strategies for improvement.

(b) The commissioner may impose appropriate sanctions under Subchapter E against a district or school failing to submit or implement a corrective action plan required under Subsection (a).

Added by Acts 2013, 83rd Leg., R.S., Ch. 211 (H.B. 5), Sec. 51(a), eff. June 10, 2013. Sec. 39.083. REPORTING. (a) The commissioner shall develop, as part of the system, a reporting procedure under which:

(1) each school district is required to prepare and distribute an annual financial management report; and

(2) the public is provided an opportunity to comment on the report at a hearing.

(b) The annual financial management report must include:

(1) a description of the district's financial management performance based on a comparison, provided by the agency, of the district's performance on the indicators adopted under Section 39.082(b) to:

(A) state-established standards; and

(B) the district's previous performance on the indicators; and

(2) any descriptive information required by the commissioner.

(c) The report may include:

(1) information concerning the district's:

(A) financial allocations;

(B) tax collections;

(C) financial strength;

(D) operating cost management;

(E) personnel management;

(F) debt management;

(G) facility acquisition and construction management;

(H) cash management;

(I) budgetary planning;

(J) overall business management;

(K) compliance with rules; and

(L) data quality; and (2) any other information the board of trustees determines to be necessary or useful.

(d) The board of trustees of each school district shall hold a public hearing on the report. The board shall give notice of the hearing to owners of real property in the district and to parents of district students. In addition to other notice required by law, notice of the hearing must be provided:

(1) to a newspaper of general circulation in the district; and

(2) through electronic mail to media serving the district.

(e) After the hearing, the report shall be disseminated in the district in the manner prescribed by the commissioner.

Acts 2009, 81st Leg., R.S., Ch. 895 (H.B. 3), Sec. 59, eff. June 19, 2009.

Acts 2013, 83rd Leg., R.S., Ch. 211 (H.B. 5), Sec. 52(a), eff. June 10, 2013.

Sec. 39.084. POSTING OF ADOPTED BUDGET. (a) On final approval of the budget by the board of trustees, the school district shall post on the district's Internet website a copy of the budget adopted by the board of trustees. The district's Internet website must prominently display the electronic link to the adopted budget.

(b) The district shall maintain the adopted budget on the district's Internet website until the third anniversary of the date the budget was adopted.

Acts 2009, 81st Leg., R.S., Ch. 895 (H.B. 3), Sec. 59, eff. June 19, 2009.

Sec. 39.085. RULES. The commissioner shall adopt rules as necessary for the implementation and administration of this subchapter. Amended by:

Acts 2009, 81st Leg., R.S., Ch. 895 (H.B. 3), Sec. 59, eff. June 19, 2009.

Sec. 39.086. SOFTWARE STANDARDS. (a) The Department of Information Resources, in cooperation with the commissioner, shall adopt performance and interoperability standards for software used by school districts for financial accounting or attendance reporting.

(b) Standards adopted under this section must ensure that the software will enable a school district to share and report information in a timely manner for purposes of financial management, operational decision- making, and transparency of district operations to the public.

(c) The Department of Information Resources:

(1) shall include compliance with standards adopted under this section as a requirement in any solicitation for software anticipated to be used for a purpose described by Subsection (a);

(2) shall require a vendor awarded a contract in response to a solicitation described by Subdivision (1) to certify that the software complies with the standards adopted under this section; and

(3) may negotiate state contract pricing for software that complies with the standards adopted under this section.

Added by Acts 2009, 81st Leg., R.S., Ch. 393 (H.B. 1705), Sec. 2.06, eff. September 1, 2009.

Transferred and redesignated from Education Code, Section 39.205 by Acts 2011, 82nd Leg., R.S., Ch. 91 (S.B. 1303), Sec. 27.001(6), eff. September 1, 2011. Tab I Tab J Tab K