Richard Allen Preparatory Charter Sch. v. Sch. Dist. of Phila. & Sch. Reform Comm'n

123 A.3d 1101

RICHARD ALLEN PREPARATORY CHARTER SCHOOL

v.SCHOOL DISTRICT OF PHILADELPHIA and School Reform Commission, Appellants.

Richard Allen Preparatory Charter School, Appellant

v.School District of Philadelphia and School Reform Commission.

Walter D. Palmer Leadership Learning Partners Charter School

v.School District of Philadelphia and School Reform Commission, Appellants.

Delaware Valley Charter High School

v.School District of Philadelphia and School Reform Commission, Appellants.

Delaware Valley Charter High School

v.School District of Philadelphia and School Reform Commission.

Appeal of: Delaware Valley Charter High School, Folk Arts–Cultural Treasures Charter School and Wakisha Charter School.

Folk Arts–Cultural Treasures Charter School

v.School District of Philadelphia and School Reform Commission, Appellants.

Wakisha Charter School

v.School District of Philadelphia and School Reform Commission, Appellants.

Wakisha Charter School

v.School District of Philadelphia and School Reform Commission.

Appeal of: Wakisha Charter School, Delaware Valley Charter High Schooland Folk Arts–Cultural Treasures Charter School.

Nos. 1474 C.D. 2014

Commonwealth Court of Pennsylvania.

Argued May 6, 2015.

Decided Aug. 27, 2015.

Deena Jo Schneiderand Carl A. Solano, Philadelphia, for appellants.

Melissa M. Green and Matthew H. Haverstick, Philadelphia, for appellees Walter D. Palmer Leadership Learning Partners Charter School and Richard Allen Preparatory Charter School.

Kevin M. McKenna and Jennifer K. McLoughlin, Philadelphia, for appellees Delaware Valley Charter High School, Folk Arts–Cultural Treasures Charter School, Wakisha Charter School and Richard Allen Preparatory Charter School.

OPINION BY Judge LEAVITT.

The School District of Philadelphia (School District) and its governing authority, the School Reform Commission,¹(collectively, School District) appeal several judgments of the Court of Common Pleas of Philadelphia County (trial court) enjoining the School District from capping the enrollment of certain charter schools that were plaintiffs in this case.²The Richard Allen Preparatory Charter School, the Delaware Valley Charter High School, the Walter D. Palmer Leadership Learning Partners Charter School, the Wakisha Charter School and the Folk Arts–Cultural Treasures Charter School (collectively, Charter Schools) have cross-appealed the trial court's refusal to set aside certain reporting requirements imposed upon them by School District as a condition of their charter renewal.³

The central question in this appeal is whether School District has the statutory authority to suspend Section 1723–A(d) of the Charter School Law,⁴which specifically forbids it from imposing enrollment caps on any charter school. School District claims this authority because it believes that the School Reform Commission can suspend any provision of the Public School Code of 1949 (School Code),⁵including Section 1723–A(d). We affirm the trial court's judgment on this legal issue. We reverse the trial court's judgment, in part, on the other requirements imposed by School District upon the Charter Schools as a condition of charter renewal.

Background

Section 1720–A(a) of the Charter School Law provides that a charter issued by a school district to a school may last for no “more than five (5) years.” 24 P.S. § 17–1720–A(a). Thereafter, the charter must be renewed every five years. Id.

The Richard Allen Preparatory Charter School was granted a charter in 2001. In 2005, when it sought a renewal, School District proposed a charter that limited its total enrollment to 400 students, and Richard Allen agreed. In 2010, when Richard Allen again sought renewal, School District proposed a charter that limited enrollment to 425 students and provided that the school would receive no funding for students enrolled in excess of that cap.⁶School District's proposed charter also imposed several new requirements. These included: setting the school's minimum insurance levels; using School District's academic system to assess student performance; making teachers direct employees of the charter school, as opposed to the charter school's management company; adding to the Secretary of Education's format for the charter school's annual reports; advising School District of student information by using School District's computer system; giving School District advance notice of student admission lotteries; and setting up plans to identify special education needs in the School District population. The proposed charter agreement also made all School District debts to Richard Allen unsecured obligations. Richard Allen refused to sign School District's 2010 proposed charter agreement.

The Walter D. Palmer Leadership Learning Partners Charter School received its original charter in 2000. When it was renewed in 2005, School District proposed an enrollment cap of 675 students, and Palmer agreed. When Palmer requested renewal in 2010, School District proposed a charter that limited enrollment to 675 students and denied funding for students enrolled in excess of that enrollment cap. The proposed charter also included the new requirements described above. Palmer refused to sign the 2010 proposed charter agreement.

The Delaware Valley Charter High School began operation in 2000 with an approved enrollment of 1,500 students. When the charter was renewed in 2005, School District proposed a charter that limited enrollment to 600, and Delaware Valley agreed.⁷When Delaware Valley sought renewal in 2010, School District again limited enrollment to 600 students and denied funding for students enrolled in excess of that cap. The 2010 proposed charter also included the new requirements described above. Delaware Valley refused to sign the 2010 proposed charter agreement.

The Folk Arts–Cultural Treasures Charter School received its charter in 2005 with an enrollment limit of 400 students. It requested renewal in 2010. School District proposed a charter that limited enrollment to 438 students and denied funding for students enrolled in excess of that cap. The 2010 proposed charter included the new requirements described above. Folk Arts–Cultural refused to sign the 2010 proposed charter agreement.

The Wakisha Charter School began operation in 2000. When it requested renewal in 2005, School District proposed an enrollment cap of 400 students, and Wakisha agreed. When Wakisha sought renewal in 2010, School District proposed a charter that limited enrollment to 400 students and denied funding for students enrolled in excess of that cap. The 2010 proposed charter agreement included the new requirements described above. Wakisha refused to sign the 2010 proposed charter agreement.

In short, when School District proposed enrollment caps in 2005, the Charter Schools agreed to them.⁸However, in 2010, the Charter Schools objected to the 2010 enrollment caps proposed by School District as well as the other provisions in the proposed charter agreements listed above. In response, School District held a public meeting. Each of the Charter Schools was given three minutes to speak but none was permitted to present evidence.

The Charter Schools refused to sign School District's proposed charter agreements. Instead, they proposed charter agreements that omitted the enrollment caps and the other new requirements, which they believed not to be authorized by the Charter School Law. Each of the Charter Schools then filed a complaint with the trial court seeking declaratory and injunctive relief. After five complaints were filed, School District adopted resolutions to authorize its governing authority, the School Reform Commission,⁹to limit enrollment in charter schools and in other ways suspend provisions of the Charter School Law.

On May 20, 2013, the Charter Schools filed motions for summary judgment. The trial court granted their motions in part and denied them in part. First, the trial court invalidated the School District resolutions that authorized the School Reform Commission to impose enrollment caps upon the Charter Schools and limit their funding. Second, the trial court invalidated those provisions in the proposed charter agreements that imposed minimum insurance requirements and made the debts of School District to the Charter Schools unsecured obligations.¹⁰However, the trial court denied the Charter Schools' motion for summary judgment with respect to the other requirements set forth in School District's 2010 proposed charter agreements.

On June 3, 2014, the trial court entered final judgment in favor of Charter Schools on Count I (declaratory judgment on enrollment caps); Count II (declaratory judgment on withholding of funds for enrollment in excess of cap); Count IV (partial declaratory judgment on provisions mandating certain insurance amounts and coverages and making School District debts to Charter Schools unsecured obligations); Count V (declaratory judgment that the adjudication is valid and ripe for review); and Count VII (permanent injunction against School District from imposing enrollment caps, making School District debts unsecured and imposing minimum insurance coverage requirements). The trial court entered final judgment in favor of School District on Count III (declaratory judgment on provisions requiring use of School District's performance assessments) and on Count IV (partial declaratory judgment on all new provisions in charter agreement, except as otherwise held on Count IV).¹¹

Appeal

School District and the Charter Schools appealed to this Court. School District argues, first, that the trial court erred in holding that it lacked the power to cap enrollment in the Charter Schools and to enforce those enrollment caps by denying funding where the caps are exceeded. Second, School District argues that requiring the Charter Schools to meet certain insurance requirements is expressly authorized by the Charter School Law.

On cross-appeal, the Charter Schools challenge the trial court's determination that School...