DRAFT

Charter Schools and Charter Schools Litigation

by Stephen D. Sugarman

AALS Education Law Section Talk January 7, 2000

Full version: 5600 words

I. Charter schools

1. Charter schools are public schools. Their charters are granted by public bodies and they are publicly funded.. Unlike traditional public schools, however, they have no assigned pupils; instead, all their pupils attend by choice. Moreover, charter schools are meant to have considerable autonomy in their educational mission, their teaching philosophy, and their management.

The number of charter schools in the U.S. is rapidly increasing from year to year -- and by this school year, there were around 1000 such schools. Yet, charter schools still account for less than 1% of American school children. Moreover, most of the nation's charter schools are still concentrated in Arizona, California and Michigan.

A few districts have made all of their public schools "schools of choice" -- that is, they operate no schools that assign pupils on the basis of where they live, nor do they give preference to children based upon where they live. Many of these districts have adopted such plans as part of a racial balance effort.

Somewhat fewer than 1% of children attend regular "neighborhood" public schools that are located in other districts -- through organized inter-district transfer schemes (which now exist in about 18 states) or through ad hoc approved inter-district transfers.

Some families exercise "choice' by giving false addresses as to where they live or with whom the child lives.

In addition, about 12% of American school children attend private schools or are home schooled.

So, although charter schools now play but a small role in the "school choice movement," nevertheless, the trajectory of charter school growth suggests that they could become numerically quite significant within the next 10 years.

Moreover, despite the enormous opposition to school voucher plans within the public education establishment and among most Democrats who speak out on the subject, charter schools enjoy quite widespread political support. Indeed, both President Clinton and the teachers' unions say they endorse charter schools. Of course, some say that the real motivation of many charter school supporters is to head off private school vouchers, and that many so-called friends of charter schools really mean to strangle them.

3. Variety

The charter school movement has had varied success across the country. First, not all states allow charter schools, although by now most nominally do so. Second, the state charter school laws are very different from place to place. Some are very liberal and strongly encourage charter schools; others are very conservative and make it difficult, if not impossible, to create charter schools and then heavily regulate those that are created.

Three sources of charter schools are generally envisioned: One, conversions of existing neighborhood schools into charter schools. Two, conversions of existing private schools into charter schools. Three, creation of new charter schools from the ground up. In many places, in practice, only public conversion schools get approved. In many places, private school conversions are expressly disallowed. In any event, the most exciting charter school development is the creation of new schools from the ground up -- often by private entrepreneurs or by ideologically driven founders. These new schools are often the focus of the most heated controversies within the scheme.

4. Charter schools and private schools

It should be emphasized that, at the intellectual or design level, the key difference between charter schools and other public choice schools is that charter schools are to be much freer from regulation. Right now charter school supporters are struggling with how to impose accountability measures on these schools in ways that don't curtail the independence that the charter school philosophy rests upon. States are dealing with this struggle in various ways.

But if charter schools are to be generally free to operate much like private schools can, there are some important differences.

First, in most, but not all states, charter schools, unlike private schools, may not be selective in admissions, but instead must admit all comers or select on a lottery basis. (Note how this policy is more egalitarian than is the admission policy of the elite public schools of choice, like Bronx Science, that many districts run.) Second, unlike private schools, charter schools may not charge tuition. This helps assure that low income families are not financially screened out, but it makes it essential that the public funding for charter schools is adequate. Third, as they are public schools, charter schools are subject to various civil rights laws that may not apply to private schools.

But it should be emphasized that liberals who support school voucher plans tend also to favor a regime that would allow the vouchers to be used only at schools that were not selective in admissions, which did not price the poor out, and which were bound by the voucher law itself not to engage in most sorts of discrimination barred by the civil rights laws.

Hence perhaps the two main differences between charter schools and the sorts of school voucher plans that are supported by liberals are these: First, some schools might not get a charter, or might lose their charter, even if they otherwise could draw and keep enough satisfied parents. Second, religious schools may not be charter schools; whether their pupils could use publicly funded vouchers has not been decided by the Supreme Court and is a matter of great controversy.

5. Outcomes.

The parents of those attending charter schools seem more satisfied with those schools than are public school parents generally.

Some have detected that, in areas where charter schools now exist in substantial numbers, the traditional public schools have responded in educationally positive (and in some cases educationally dubious) ways.

Whether pupils learn more or less in charter schools than they would have learned in public schools, and whether public schools get better as a result of the competition from charter schools is quite uncertain as of now. Indeed, it is probably silly to make much of any findings after just a few years of experience. The real issue is whether charter schools can make a long run change.

II. Charter School Litigation

In as much as charter schools are controversial, it should come as no surprise that they have become embroiled in considerable litigation. I've put the litigation that I have uncovered into six categories.

1. Claims that this sort of autonomy is incompatible with being a "public" school.

Several school districts and other opponents of charter schools have challenged the entire state charter school scheme. They claim that, in one way or another, this experiment violates the state constitution (or perhaps some other state statute). These challenges have basically failed. See e.g., In re Grant of the Charter School Application of Englewood on the Palisades Charter School, 727 A.2d 15 (N.J. Super. 1999) and the cases cited therein.

A common type of objection is that charter schools are too autonomous and hence not properly under the control of public officials as many state constitutions appear to require. But these claims have been brushed aside. After all, the courts seem to say, the charter is a mechanism of control. See, e.g., Council of Organizations and Others for Education About Parochiaid, Inc. v. Governor, 566 N.W.2d 208 (Mich. 1997).

2. Claims that charter schools unfairly hurt traditional public schools

a) Often the local district, in attacking the charter scheme or in refusing to grant a charter in a specific case, argues that the charter school funding mechanism is harmful to the local district. As with school voucher plans, the typical mantra is that these experiments siphon off funds from the regular public schools. But, of course, by drawing off pupils, these plans leave districts with less of an educational burden. Districts often seem to be arguing that most of their costs are fixed so that no matter now much money they give the charter school, the district will face a financial squeeze. But in fact there is good reason to believe that, over reasonably short periods of time, and certainly in the longer run, district costs are mostly or entirely variable. Moreover, if their costs are reflected in conventional supply curves, this means their marginal costs are rising and exceed average costs. In that case, losing, say 10% of their pupils while losing, 10 % of their revenues could well make them rather better able to serve their remaining pupils, instead of worse able -- as they claim. Of course, this may not follow if the district loses pupils who are disproportionately cheaper to educate. There is some indication that this is true to the extent that charter schools seem disproportionately to serve elementary rather than high school pupils since more money is traditionally spent upon the latter (whether or not this is "needed" or "wise" remaining controversial matters). But surely this problem could be addressed by funding rules that gave charter schools money keyed to public school spending at the grade levels served -- as some states have.

It is my view that the biggest funding problem with charter schools is not that they take too much money away, but that they get too little. Although states vary in how much money they give to their charter schools, most in fact give them rather less than they spend on their comparable regular public schools, especially when the charter school has to find and pay for its own building.

Funding-based objections to charter schools have been basically rejected by the courts. For example, in Englewood, supra, and in Jersey City Education Association v. City of Jersey City, 720 A.2d 356 (N.J. Super. 1998) certification denied, Jersey City Educ. Ass'n v. City of Jersey City, 158 N.J. 71, 726 A.2d 935, 1999 N.J. LEXIS 251 (1999)(where using bond money in support of a charter school was ruled legal).

b) By taking enrollment from the regular public schools, charter schools may force the closing and consolidation of some regular public schools. Clearly some of those who liked their public school and don't prefer the new charter school will be unhappy if their local school is closed because of regular district enrollment declines. This scenario led to a challenge in Colorado but the courts found in favor of the district, Villanueva v. Carere, 873 F. Supp. 434 (Colo. 1994) aff'd 85 F.3d 481 (10^th Cir. 1996) - among other things rejecting plaintiff claims that there were improper racial motives behind the district's actions. {It is a very different picture when there is a conversion of an existing school to a charter school, assuming the charter school gets the building and most of the pupils come from the former regular public school. Here the complaint will come from parents who opposed the conversion and lost.}

c) Most of those who enroll in charter schools live in the district where the school is located, although charter schools are generally allowed to admit children from outside the district, and as this practice grows, it is likely to create several controversies.

On the whole, these cases seem to turn on statutory interpretation. In California initially, there was no limit on location, and a few enterprising school superintendents began to charter schools in many distant locations, viewing this as a profit-making opportunity for their home district. A recent California law now only allows districts to charter schools that are located either in their own district or an adjacent district.

Related controversies concern charter schools that seek to enroll those who are otherwise home-schooled, as these sorts of charter schools often provide what is, in effect, distance learning via computers.

3. Now let me turn to the other side, to claims that applicants were unfairly denied a charter

Several would-be charter schools have gone to court after the local district from which they sought a charter refused to grant one. These cases are delicate. On the one hand, the whole point of requiring a charter instead of simply awarding families vouchers is to cast the charter-granter into a gate-keeper role, and in this role the gate-keepers are meant to try to keep out irresponsible providers. On the other hand, when the charter-granting power is given to local boards of education, many view this as putting the power to deny in the hands of those who have a conflict of interest; after all, the charter school is designed to draw students away from the local board's regular schools. The fear is especially strong when the charter is sought, not by insiders who seek to convert an existing school, but by outsiders. When a local district, for example, denies a charter on the ground that it has concerns about the school's financial solvency or the adequacy of its facilities or its educational plans, the founders are quick to charge that the board just wants to sabotage the school; the board, of course, insists that it is protecting parents and children by making sure that any school it charters is adequately planned to get off to a good start.

What courts are meant to do in the face of such challenges depends in the end upon state law. Often those denied a charter have a statutory right to appeal inside the educational system - say to the State Board of Education. The review powers of these bodies also vary. Sometimes, they may only narrowly review, for example, in accordance with the "substantial evidence" test. (In Beaufort County Board of Education v. Lighthouse Charter School Committee, 1999 S.C. LEXIS 99 (S.C. June 1, 1999), for example, the South Carolina Supreme Court affirmed the lower court which itself had reversed the State Board of Education for applying too intrusive review of the local Board of Education that had denied the charter.)

Other times, the State Board is empowered either to issue the charter itself or to order the local district to issue it if, after reviewing the record, it judges that a charter should be awarded. (In in re Grant of the Charter School Application of Englewood on the Palisades Charter School, 727 A.2d 15 (N.J. Super. 1999), a trial court simply affirmed the state board's award of charters to schools in three districts over the objections of the local boards.) (In Booth v. Board of Education, 984 P.2d 639 (1999),a Colorado appeals court had reversed a trial court decision and held that, although the State Board of Education clearly did have the power to order a district to issue a charter if a denial is contrary to the best interests of the pupils, the district or the community, it did not have the power to make its order conditional on the district and the charter seekers continuing to negotiate over certain issues. The Colorado Supreme Court first determined that the charter school scheme (including the provision giving the State Board the power to override the local school district to force the award of a charter) was valid under the state constitution. It then partially reversed the appeals court, concluding that in ordering the school district to grant a charter to the applicant the State Board was not determining the precise terms of the charter and could reasonably leave some of the details to be worked out between the applicant and the district.)

In some places, only state-level bodies (e.g. the state board of education, a special charter-issuing body, or state universities) may issue charters.

Given all this variety, the review powers of state courts also vary. (In Shelby School v. Arizona State Board of Education, 962 P.2d 230 (Ariz. App. 1998), an Arizona appeals court found that the State Board of Education, to which the Shelby School applied directly for a charter, erred in not providing a sufficient written record of the reasons for its denial - although the court also concluded that the Board could deny a charter on the basis of the credit history of the school's director. Although the Board denied it, there is some underlying concern in the record that the applicant might have been looked unfavorably upon because its predecessor school was an arm of something called the Church of Immortal Consciousness. At a minimum, this made it important that a record of the Board's reasons be created.)

I think that in designing charter school schemes, it is important to allow applicants to seek charters from some body or bodies in addition to their local school district. With such options available, the need for judicial involvement should be reduced.

4. Claims concerning the racial composition of charter schools

One persistent issue confronting charter schools concerns their likely or actual racial composition -- especially as compared with that of the district in which they are located. Overall, charter schools seem to serve a slightly higher proportion of minority group pupils than do public schools, and they seem to be slightly less racially segregated than are the public schools - which means that, overall, both are rather segregated.

Recent litigation suggests that local school boards and state boards of education may have quite different feelings about this issue. State charter school laws also differ considerably on this issue. Furthermore, the school districts in question may or may not be under continuing desegregation orders from federal courts or agencies. And the racial imbalance that is anticipated, or has materialized, may cut either way. That is, the charter school may appeal primarily to African-American (or other minority group) families, or it may appeal primarily to white families.

I believe that it turns racial justice upside down to block a charter school because it winds up attracting primarily, or even only, black students. But I concede that my view is not universally shared.

In many districts around the U.S., a large percentage of African-American students now attend traditional public schools that have few or no white students enrolled, because there are few white pupils remaining in the district. In such districts, a charter school with an Afro-centric curriculum, or simply a stronger academic program that appeals to African-American families, should often face no difficulty under a state law of the sort that insists that the charter school's racial balance generally reflect the district's population.

{Nevertheless, a situation rather like this was recently litigated with respect to the proposed Benton Harbor Charter School in Berry v. School District of Benton Harbor, 56 F. Supp. 2d 866 (W. D. Mich. July 15, 1999). Benton Harbor and some surrounding school districts had been involved in school desegregation litigation for more than two decades, and in the mid-1990s they were in the process of seeking to be declared unitary so as to get out from the supervision of the federal district court. As part of a remedial decree first entered in 1981, some Benton Harbor pupils attended public schools in surrounding school districts that were much whiter. Others attended magnet schools in Benton Harbor (created as part of the initial decree) that were designed to have between 10 and 25% of their pupils from outside Benton Harbor. By 1999 about 90% of the public school pupils living in Benton Harbor were African-American. So, although the court is not clear about it, it appears that many Benton Harbor public schools are overwhelmingly, if not entirely filled with African-American school children. Several charter schools, with the support of sponsoring state universities, sought certification in the Benton Harbor area, and this case focused on two such applications.

{The Benton Harbor School District and the teachers' union opposed the approval of these charter schools. The court's opinion provide clues that the motivation behind the opposition to the charter schools was at best only partially on race grounds. The local district didn't want to lose money to, or face competition from, the charter schools, and the union no doubt disliked the fact that both schools were to be run by private enterprises which had already started up other charter schools in Michigan and elsewhere.

{The court insisted that it had the right to approve or disapprove the funding of these charter schools, and expressed great concern that both were likely to become one race - that is, all black - schools. I found not one mention in its opinion that it made any difference to the court that those wanting their children to attend these charter schools were fed up with the unsatisfactory educational opportunities that were otherwise open to their children under the court-supervised remedy for intentional discrimination against black children in the past. Instead, the court just didn't like the idea of allowing the use of public money to fund a school that, in the end, might be 100% black, or nearly so, even if by choice. Since one of the charter schools was unable to provide any helpful information about its prospective enrollment by race, its charter was flatly disapproved. Notice how difficult it can be for a charter school to recruit pupils, and hence be in a position to say anything about its racial composition, not really knowing whether the school will, in fact, be allowed to open. The other would-be charter school did go ahead and recruit widely, and although it made substantial efforts to recruit in surrounding districts, at the time of the court's opinion, it had attracted rather few white applicants. The court, in the end, ordered that the charter school's student body would have to reflect the district's racial balance - that is, 10% white - with a 5% leeway if it had recruited in good faith. In short, the charter school, which sought to serve about 500 pupils altogether, would have to attract at least around 25 token white pupils as a condition of public funding. I find this baffling.}

{A somewhat different pattern is revealed in In re Grant of the Charter School Application of Englewood on the Palisades Charter School, 727 A.2d 15 (N.J. Super1999). The Englewood district, which was fighting the award of a charter school, conceded that its district-wide enrollment was 68% Afro-American and 30% Hispanic. Although its internal inter-minority racial balance data was not revealed, even if there was considerable black-Hispanic integration, I question whether a district ought to insist upon forcing black or Hispanic children to attend with each other when a charter school is more appealing to their family even if it is more racially isolated.}

In other local districts, blacks mainly attend with blacks and whites with whites. Suppose the district is about 50-50 black and white and most of the pupils of both races attend neighborhood schools that largely enroll pupils of their own race, with some attending schools that are reasonably racially balanced. In such districts, it seems hypocritical and unfair to require charter schools attractive to black children to achieve a measure of racial balance that a large share of the regular public schools have failed to achieve; applying the racial balance requirements contained in some state charter school laws to charter schools in those districts seems to me to be ill thought ought or simply misguided.

The more interesting case is one in which the local district has racially balanced its regular public schools. Now suppose a charter school comes along that appeals to primarily to African-Americans. (This may well have been the expectation in the Colorado case, noted above, where the charter school was to be the Thurgood Marshall Charter School. It may wall also be the case in disputes now ongoing in North Carolina over the Durham Healthy Start Academy, which is nearly all African-American, in St. Louis over the African American Rite of Passage Charter School, and in Louisiana over a school said to be aimed at "people of color." )

The core objection to such a charter school must be that it will be harmful to its own pupils -- because they will be attending a racially identified school. I find this objection unpersuasive when the children attend as a result of the family's choice.

To be sure, some might also be concerned that siphoning off of black children will undercut white children's interest in having racially integrated schooling or will reduce black enrollment in regular schools to risky tokenism. I find neither of these concerns sufficient to trump the wishes of the departing black families to provide their children with the choice of education they prefer. Morever, these sorts of risks are usually quite small (at least so far). (In the Benton Harbor litigation, a de minimus impact was how the court saw the siphoning off of a few African-American inter-district transfer pupils from the surrounding whiter suburbs to the newly proposed charter school.)

Of course, the more serious problem is the risk on the other side. What if the charter school mainly attracts whites? In districts which have some or all integrated schools, one needs to be concerned about white flight if the charter is denied, and the charter school option might at least keep the white family living in the community instead of moving out to a typically far more exclusively white suburb. Nonetheless, in a district under a desegregation order, I can understand a judge not allowing a charter school that is all or predominantly white.

Whether or not there is a court order in place, I can also understand a local district denying a charter if it fears the charter school will attract mainly whites and specifically undermine integrated schooling that at least some black children now enjoy. (This seemed to be one of the underlying concerns in the South Carolina Lighthouse Charter School Committee case.)

But I realize that today's U.S. Supreme Court might not be favorable to public school choice rules or practices that are expressly tilted in favor of African-Americans -- apart from rules adopted as remedies to intentional discrimination. This fetish for color-blindness may explain why states have adopted the racial balance provisions they have in their charter school laws. Yet, today's Court may also turn out to be hostile to those rules, and in any event legal challenges by African-American groups to targeted racial proportionality in charter schools are clearly now brewing.

5. Claims concerning religion and charter schools

Just as several former religious schools in central cities have been sold or leased to other non-sectarian private schools, it should not be surprising when charter schools turn up in the facilities of former religious schools. Finding adequate facilities for a new school is an extremely difficult problem for many new school founders, especially in urban areas, not only because of the expense of building something new or remodeling something that wasn't a school in ways that satisfy building codes governing schools, but also because of the sheer problem of identifying a suitable location. Abandoned schools are often the first choice, and the Catholic school systems around the country often have schools available as their inner city parishes have declined in population as a result of their parishioners moving to the suburbs.

Just because the building was once a religious school should, by itself, be no real basis for turning down a charter application. This was the finding, for example, in New Jersey case, Porta v. Klagholz, 19 F. Supp.2d 290 (D. N.J. 1998) where a charter school leased a building from a church and in which the court emphasized that the school in question did not provide religious instruction, there were no religious symbols on display, and enrollment was not based upon church membership.

But because charter schools, by state law (and probably under the Establishment Clause as well) may not be religious schools, a concern is raised if the school is sufficiently identified with a specific religious group that it attracts all or nearly all of its students from members of a specific congregation (and especially if the school's building was leased from that congregation's church). The concern could be further compounded if the school had a "released time" scheme by which pupils were permitted to leave the charter school on a regular and organized basis and go to the nearby church for religious worship - especially if all or nearly all the pupils participated in such a scheme. Nonetheless, one must still be cautious not to apply greater scrutiny of, or impose tighter restrictions on, charter schools than are imposed on regular public schools. Certainly in some neighborhoods, the local community is so religiously cohesive that all or nearly all the pupils in the regular public school are of the same faith and their families may be part of the same congregation, or but a few related congregations. That alone hardly makes the public school a religious school. The same separation ought to be possible for a charter school; and although the autonomy of such schools may be a cause for some worry, surely this matter may be dealt with by individualized audits rather than by the outright denial of a charter in the first place based upon indicia of congregational connections.

6. Finally, we are beginning to see legal disputes among the players once the charter has been granted and the school is in operation

a) First, there are disputes between charter schools and state education bodies over compliance with the terms of school charters and the revoking or non-renewal of charters. What role should courts play? Should charters themselves provide for specific dispute resolution processes? I think that would be wise. In Academy of Charter Schools v. Adams County School District No 12, 1999 Colo App. LEXIS 127 (Colo. App. May 13, 1999) a Colorado appeals court ruled that a charter school had no right to go to court to challenge what it claimed was the failure by the chartering district to live up to the promises it made in granting the charter. The court also said that would-be employees of the charter school could go to court with claims that the district violated their constitutional rights, allegedly by uniquely singling them out as ineligible to be hired as charter school teachers.

b) Next, just as families sue regular public schools, it should not be a surprise for them to sue charter schools. In one unreported California case the parents objection was to mandatory parental involvement. The school won. Interestingly enough, the requirement at issue in this case was a district-wide rule that the charter school was also imposing.

One unreported California case held that because of the state charter school law's "mega" waiver provision, the public school collective bargaining laws were waived and charter school teachers could not even organize under them if they wished. But in practice in California this case is being largely ignored. Instead the recent practice seems to be that charter school teachers may be unionized if they wish, but usually they will form their own bargaining unit. Although many of the earlier charter documents themselves included provisions about keeping the teachers in the district's existing collective bargaining unit, these provisions seem much less common now, as statutory amendments have decreased the power of local districts to deny charters and in turn have reduced their leverage over charter seekers. Elsewhere some other union issues have arisen. For example, may a charter school contract with non-union non-teachers (e.g. maintenance people) if the district uses unionized workers for this task?

Conclusion

Charter schools are an exciting educational policy development, and they have already spawned a wide range of interesting litigation. One concern school choice advocates have is that courts will step in and slow down the charter movement. The best way to reduce that risk, I believe, is through better drafting of state charter school laws. If you are interested in this matter and are not already involved with your own state legislature, perhaps you should be.