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Today's Fresh Start, Inc. v. Los Angeles County

Supreme Court of California

July 11, 2013

TODAY’S FRESH START, INC., Plaintiff and Respondent,
LOS ANGELES COUNTY OFFICE OF EDUCATION et al., Defendants and Appellants. TODAY’S FRESH START, INC., Plaintiff and Appellant,
LOS ANGELES COUNTY OFFICE OF EDUCATION et al., Defendants and Respondents.

Original Proceeding Superior Court, Los Angeles County Super. Ct. Nos. BS112656, BS112656, Ct.App. 2/1 B212966, Ct.App. 2/1 B214470, James C. Chalfant, Judge

Vibiana M. Andrade, Sung Yon Lee; Greines, Martin, Stein & Richland, Timothy T. Coates and Alison M. Turner for Defendants and Appellants and for Defendants and Respondents.

Best Best & Krieger, Dina Harris and Megan M. Moore for Riverside County Office of Education and San Diego County Office of Education as Amici Curiae on behalf of Defendants and Appellants and Defendants and Respondents.

David Holmquist and Devora Navera Reed for Los Angeles Unified School District as Amicus Curiae on behalf of Defendants and Appellants and Defendants and Respondents.

Dannis Woliver Kelly, Sue Ann Salmon Evans and William B. Tunick for Education Legal Alliance of the California School Boards Association as Amicus Curiae on behalf of Defendants and Appellants and Defendants and Respondents.

Doll Amir & Eley, Michael M. Amir, Mary Tesh Glarum, Lloyd Vu and Hemmy So for Plaintiff and Respondent and for Plaintiff and Appellant.

Debra J. La Fetra, Damien M. Schiff and Joshua P. Thompson for Pacific Legal Foundation and Options for Youth as Amici Curiae on behalf of Plaintiff and Respondent and Plaintiff and Appellant.

Ricardo J. Soto, Phillipa L. Altmann, Julie Ashby Umansky; McKenna Long & Aldridge and Charles A. Bird for California Charter Schools Association as Amicus Curiae on behalf of Plaintiff and Respondent and Plaintiff and Appellant.

Amy Bisson Holloway, Edmundo R. Aquilar and Todd M. Smith for State Board of Education, California Department of Education and State Superintendent of Public Instruction Tom Torlakson as Amici Curiae.

Counsel who argued in Supreme Court (not intended for publication with opinion): Michael M. Amir, Doll Amir & Eley, Alison M. Turner, Greines, Martin, Stein & Richland

Werdegar, J.

Two decades ago, California became one of the first states in the country to authorize charter schools—public schools funded with public money but run by private individuals or entities rather than traditional public school districts. The Charter Schools Act of 1992 (Ed. Code, § 47600 et seq., added by Stats. 1992, ch. 781, § 1, pp. 3756-3761) authorized various public bodies to approve charters, supervise charter school operations, and revoke charters in the event particular standards and conditions were not met. But the original law did not specify the procedures that would accompany a contemplated charter revocation. In 2006, the Legislature remedied that omission, adopting provisions governing the hearing on, decision on, and appeal of a charter revocation. (Ed. Code, § 47607, subds. (c)-(k), as amended by Stats. 2006, ch. 757, § 1, pp. 6012-6014.)[1]

In response to a writ petition by Today’s Fresh Start, Inc., an entity challenging its school’s charter revocation, we consider whether the procedures adopted by the Legislature are sufficient under the federal and state due process clauses. (See U.S. Const., 14th Amend.; Cal. Const., art. I, § 7, subd. (a).) The school contends, inter alia, that it has not been afforded a hearing before an impartial adjudicator because the body deciding whether to revoke its charter has an interest in ensuring that funds flowing to charter schools are reallocated to other public schools. No such interest has been shown here; the school has not established that the Legislature’s chosen procedures denied it the opportunity to be heard “at a meaningful time and in a meaningful manner” (Armstrong v. Manzo (1965) 380 U.S. 545, 552) by a decision maker without financial or other bias. Accordingly, we affirm the Court of Appeal’s judgment denying writ relief and upholding as constitutional section 47607.

Factual and Procedural Background

A. Charter Schools

The Legislature is charged with providing a public education system for the citizens of the State of California. (Cal. Const., art. IX, § 5; California Redevelopment Assn. v. Matosantos (2011) 53 Cal.4th 231, 243.) It has long done that through the establishment of public school districts (Matosantos, at p. 243) and, more recently, through charter schools as well (see § 47600 et seq.).[2] The Legislature intended its authorization of charter schools to improve public education by promoting innovation, choice, accountability, and competition. (See § 47601; United Teachers of Los Angeles v. Los Angeles Unified School Dist. (2012) 54 Cal.4th 504, 521; Wells v. One2One Learning Foundation (2006) 39 Cal.4th 1164, 1186.)

Charter schools are initiated by submitting a petition to the chartering authority, generally the governing board of a public school district but occasionally a county board or the State Board of Education. (§ 47605, subds. (a), (b), 47605.5, 47605.6, 47605.8; United Teachers of Los Angeles v. Los Angeles Unified School Dist., supra, 54 Cal.4th at pp. 521-522.) Petitions should be granted whenever they are “consistent with sound educational practice” (§§ 47605, subd. (b), 47605.6, subd. (b)); a petition can be denied only if a chartering authority makes written findings that one or more statutory criteria have not been met (§ 47605, subd. (b); see Wells v. One2One Learning Foundation, supra, 39 Cal.4th at p. 1186).

Once approved, charter schools are operated independently, but are subject to public oversight. (California School Bds. Assn. v. State Bd. of Education (2010) 186 Cal.App.4th 1298, 1305; Wilson v. State Bd. of Education (1999) 75 Cal.App.4th 1125, 1137-1142; see §§ 47601, 47615, subd. (a)(2).) Such public “control and oversight... legitimize[s] charter schools” (California School Bds. Assn., at p. 1326) and arguably is constitutionally necessary (Mendoza v. State of California (2007) 149 Cal.App.4th 1034, 1060-1061). Chartering authorities must monitor schools’ fiscal condition and academic performance and are authorized to investigate whenever grounds for concern arise. (§§ 47604.32, 47604.33, 47604.4, 47604.5, 47605, subd. (k), 47607, subd. (a).) In turn, schools must respond promptly to any reasonable inquiries from public officials charged with oversight. (§ 47604.3.)

Though independently operated, charter schools fiscally are part of the public school system; they are eligible equally with other public schools for a share of state and local education funding. (Wells v. One2One Learning Foundation, supra, 39 Cal.4th at p. 1186; see §§ 47612, subd. (a), 47615, subd. (a), 47630 et seq.) This hybrid nature results in a complicated relationship with other public schools. “Obviously charter schools are not in opposition to the public school system. On the contrary, they are a part of that system.” (Wilson v. State Bd. of Education, supra, 75 Cal.App.4th at p. 1139.) Nevertheless, “charter schools compete with traditional public schools for students, and they receive funding based on the number of students they recruit and retain at the expense of the traditional system.” (Wells, at pp. 1203-1204; see Knapp v. Palisades Charter High School (2007) 146 Cal.App.4th 708, 717.)

Section 47607 specifies the grounds upon and manner in which a school’s charter may be revoked. (§ 47607, subds. (c)-(k).) In broad terms, section 47607 requires the chartering authority to provide notice of violations that could lead to revocation, an opportunity to cure, notice of the intent to revoke if the school fails to cure, a public hearing, and a written decision with factual findings supporting any revocation decision. (Id., subds. (d)-(e).) As well, the statute affords schools an administrative appeals process to contest charter revocation. (Id., subds. (f)-(i).) We discuss these procedures in more detail below; they lie at the heart of this case.

With this background, we turn to the instant charter revocation dispute.

B. Administrative Proceedings

In 2003, Today’s Fresh Start, Inc. (Today’s Fresh Start), a nonprofit public benefit corporation, petitioned for and was granted a countywide charter to serve Los Angeles County.[3] The Los Angeles County Office of Education (County Office), a regional educational agency, issued the charter through its governing board, the Los Angeles County Board of Education (County Board).[4] In 2005, the County Board renewed the charter for a five-year term.

The charter renewal petition stipulated that the County Office would oversee Today’s Fresh Start, investigating complaints and monitoring the school’s operations. (See § 47607, subd. (a)(1) [chartering authority “may inspect or observe any part of the charter school at any time”].) Today’s Fresh Start agreed to respond promptly to County Office inquiries concerning operational and fiscal matters. (See § 47604.3; Knapp v. Palisades Charter High School, supra, 146 Cal.App.4th at pp. 714-715 [charter schools are contractually bound by their charters].) The renewal petition authorized as grounds for revocation “a material violation of any of the conditions, standards, or procedures set forth in this Petition, ” failure to “pursue any of the student outcomes identified in this Petition, ” failure to “meet generally-accepted accounting principles, ” “fiscal mismanagement, ” or “[k]nowingly and willfully violat[ing] any provision of law.”[5] The petition also provided that prior to revocation, Today’s Fresh Start would receive notice of any violation and an opportunity to cure.

In June 2007, the County Office advised Today’s Fresh Start that it planned to investigate concerns raised about the school, including but not limited to four areas: (1) observance of the legal rights of students, parents, and employees; (2) student attendance procedures; (3) professional development; and (4) compliance with California Department of Education testing procedures. Today’s Fresh Start responded that the planned investigation violated section 47604.4 and the school’s charter.[6] The next month, the County Office sent Today’s Fresh Start a “Report of Findings and Recommendations, ” which identified deficiencies and called for improvements in each of the four identified areas. A “Corrective Action Plan” spelled out specific actions required of the school and listed due dates for completion of each.

Contemporaneously, County Superintendent Dr. Darline P. Robles, the head of the County Office, submitted a request for documents regarding the governance of Today’s Fresh Start to determine whether the school was complying with Corporations Code provisions regulating the operation of nonprofit public benefit corporations. In August 2007, Superintendent Robles provided the school with a staff memorandum analyzing the governance materials sent to the County Office. She wrote: “Staff express serious concerns regarding the governance of the Today’s Fresh Start Charter School and I share their concerns.” Robles requested additional materials to allow the County Office to determine whether the school’s board was holding sufficient meetings and complying with open meeting laws, and whether board members were “protecting public funds and not using their positions improperly to the end of personal enrichment.” Superintendent Robles warned that the sufficiency of the school’s response would dictate whether she recommended to the County Board that it initiate charter revocation proceedings.

At an October 9, 2007, County Board meeting, County Office staff member Dr. Lupe Delgado led a discussion of the staff’s analysis of the school’s governance structure and processes and its response to the Corrective Action Plan. County Board members were provided three binders of materials reflecting the staff’s investigation; these same binders had previously been provided to Today’s Fresh Start.

At the County Board’s October 16 meeting, six individuals addressed the board on behalf of Today’s Fresh Start. Thereafter, Superintendent Robles recommended that the County Board give notice of its intent to revoke the school’s charter. The County Board voted five to zero, with two members abstaining, to approve Superintendent Robles’s recommendation to begin the revocation process. A public hearing on Today’s Fresh Start was scheduled for the November 6 County Board meeting. The County Office informed Today’s Fresh Start of the board’s decision and advised the school that it could submit written materials at any time before the hearing to support its oral presentation.

At the November 6, 2007, public hearing, Today’s Fresh Start provided the County Board with handouts detailing the school’s grounds for opposing revocation and three binders containing nearly 900 pages of supporting documentation. Six Today’s Fresh Start students addressed the County Board in support of the school. Five individuals, including the school’s executive director, Dr. Jeanette Parker, its board chair, Dr. Clark Parker, its legal counsel, Mary Tesh Glarum, and Assemblyman Mervyn Dymally, offered arguments on behalf of Today’s Fresh Start. County Office staff made no presentation.

In writing on November 19, and again at a County Board meeting on November 20, Today’s Fresh Start’s counsel raised concerns that the County Office’s revocation procedures violated due process. The school contended the County Office’s staff was both advocating that Today’s Fresh Start’s charter be revoked and advising the County Board regarding the revocation, in addition to having a preexisting relationship with the County Board. At the meeting, the school objected to not having an opportunity to respond to a County Office staff presentation listed on the agenda. Drs. Clark and Jeanette Parker again made appeals on behalf of their school. The staff presentation the school objected to followed: County Office staff member Dr. Lupe Delgado gave a brief ...

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