                                                                                       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,

                                        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
                       ______________________________

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.

TEX. EDUC. CODE §12.115(c).

      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.”);

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

      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,

                                    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
                   ______________________________

                     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


                                                1

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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


                                                 2

                                                                                                       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).


                                                 3

                                                                                                        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


                                                 4

                                                                                                        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

§39.152(c)(3).

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,


                                                  5

                                                                                                          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.




                                                  6

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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.").


                                                   7

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       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



                                                 8

                                                                                                        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.

       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

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

TEX. EDUC. CODE §12.115(c).

       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



                                                   9

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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,);



                                                   10

                                                                                                            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.

                                                       11

                                                                                                                  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


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        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


                                                   13

                                                                                                          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.



                                                 14

                                                                                                      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.-



                                                 15

                                                                                                        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



                                                  16

                                                                                                          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,



                                                 17

                                                                                                         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



                                                   18

                                                                                                             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


                                                   19

                                                                                                         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.



                                                 20

                                                                                                         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,


                                              KEN PAXTON
                                              Attorney General of Texas

                                              CHARLES E. ROY
                                              First Assistant Attorney General

                                              JAMES E. DAVIS
                                              Deputy Attorney General for Civil Litigation

                                              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




                                                 21

                                                                                                     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




                                              22

                                                                                           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;




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                                                                                                       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

     50

gJ 40
01
.l9
 5j 30
~
&.   20

     10




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


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                                                                                                                   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
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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
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     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



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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

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                                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.


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                               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.

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                                •   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.




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      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.

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     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


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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


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     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.




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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
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     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,

                                                                                           185


                                                                                                     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

                                                                                 186

                                                                                            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

                                                                                  188



                                                                                         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.


                                                                                                     189



                                                                                                           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




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11/17/2014                                                                      Charter School Status Detail




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       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


             Size-Dependent Indicators


             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




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                               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


             Size-Dependent Indicators


             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




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                               1701 North Congress Avenue· Austin 1 Texas, 78701 · (512) 463M9095
                                      Copyright© Texas Education Agency (TEA) 2007-2012



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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




     100



      75




      50




      25




                                                             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



STATE OF TEXAS                      §
                                    §
COUNTY OF TRAVIS                    §


                                 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



                                                        19


                                                                                                      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


             Size-Dependent Indicators


             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

             Charter School Score:                    47

                                                                                                                    Last   Updated:   6/19/2012
                                                                                                                    4:03:28 PM




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                               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


             Size-Dependent Indicators


             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
                                                                                                                   6:37:32 PM

             Charter School Score:                  45


        l    Passing Score:           _s_o__
                                                                                                                   Last Updated:
                                                                                                                   6:37:32 PM
                                                                                                                                          9/12/2013




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                               1701 North Congress Avenue· Austin, Texas, 78701 · (512) 463-9095
                                      Copyright© Texas Education Agency (TEA} 2007-2012



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      CSSF 1.1.0.15

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


             Size-Dependent Indicators


             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


       ~sing Sco'e'                    50
                                                                                                               Last Updated:
                                                                                                               PM
                                                                                                                                  9/5!2014 3:ss:47                                 1


                                                                                                                                                                              .J
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                               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




     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 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.

Dear Dr. Nelson and Ms. Applin:

        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

MW/cc

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


STATE OF TEXAS                      §
                                    §
COUNTY OF TRAVIS                    §


                                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




                                                          21


                                                                                                   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

                     - Closing Performance Gaps




    100




     15




                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 '

10

        *
   Government Code ch, 200 I docs not apply to a procedure that is reln!ed to a revocation under Texas Education
C<ldc 12.115. Tex. Educ. Code§ 12.Jl6(b); 19 Tex. Admin. Code§ 157.1182(a).
11
     Set: also 19 Tex. Admin. Code § 157.1184.
12
    City q( El Paso v. Public Uti/. Comm 'n, 883 S.W.2d 179, J 84 (Tex. 1994); see also T'ttxas Dep 't. of Ins. v.
State Ftlrm Lloyds, 260 S.W.3d 233, 245-46 (Tex App.-Austin 2008, no pet.}; Public UN/. Comm 'n v.                    '
So11th Plains Ele~·. Co-op., Inc., 635 S.W.2d 954, 957 (Tex. App.--Austin 1982, writ ref'd n.r.c.).
Ll City of £1 Paso v. P11blic Uri!. Comm"n, 883 S.W.2d 179, 184 (rex. 1994); see al.w Texas Dep'f qj' Ins. v.
Stt1te Farm Lloyd.~, 260 S.WJd 233, 245-46 (Tex. App.-Aostin 2008, no pet.); Public Uti!. Comm'n v. South
Plains E!l.!c. Co,op.. Inc., 635 S.W.2d 954,957 (Tex. App ... ~Austin 1982, writ refd n.r.c.).
14
 ' Ojfict: vf' Pub/i,· l.hf( Counse( 11. PuNic Utfl Comm 'n, I !IS S. W.3d 555, 564 (Tex. App.-Austin 2006, pet.
denied); .l'l'l.' ufso flower l?es. Urmtp. Inc v, J'uhlh- Urd. Comm'n, 73 S.WJd 354, 35!1 (Tex. App.--Austin 2002,
pet denied).
15
     Tt!xas fh:alth Facilities Comm 'n   l'.   Chartcl' Med-Dallas, !nt•., 665 S.W.2d 446, 454 (Tex. !984).
14
   City Qf' El Paso v. Public Uti/. Comm 'n, 1l83 S.. W.2d 179, 184 (Tex. 1994) (citing Ourst v. Nixon, 411 S,W.2d
350, 360 n.& (Tex. 1966)).




                                                                                                                          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<hibit I.




                                                                                                     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 <t(Tobt!<:CO, Inc. v. Calvert, 394 S. W.2d 654,
657-58 (Tex. 1965}.
~' TEA Exhibit I.
~ 4 TEA Exhibit I.

-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                      §


                     CERTIFIED RECORDS OF THE TEXAS EDUCATION AGENCY


             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


                                  INDEPENDENT AUDITOR'S REPORT

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.




Armstrong, Vaughan & Associates, P.C.

December 31, 2014




                                                        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




                               STATE OF TEXAS                        §
                                                                     §
                               COUNTY OF TRAVIS                      §


                                               CERTIFIED RECORDS OF THE TEXAS EDUCATION AGENCY


                                       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.

Sincerely,


;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



Respectfully submitted,



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

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 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

                                                 1

                                             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



                                                  2

                                                                                                       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.



                                                  3

                                                                                                         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.

                                            PRAYER

       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.




                                                 4

                                                                                                       411
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 V. COLMENERO
Division Chief- General Litigation


/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




   5

                                               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




                                               6

                                                                                            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


               Size-Dependent Indicators



           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



                                    WS!~ tb!.l~ ~o Ycm!2!Jm!i1Q ggJnign lc tb!fl 6EB 20 tb!ll fio;o~:;ial
                                    statemen!;:i. E!S i! ~hQI~? Thg ill!!~rl~o IDiit!B!t~ Qf ~rt!fl~g
               p      tl 2          Publl~:; 6~!..10tsl!lt:i (AI!:E~l dii:tl!l~ !Jnmodlfler.l S2!2!nlgo, ~nd                                              YES
                                    tbg !i~WS!llmis:~m!!i:Dt i:!!.WitQc !;!!.lt!i:!!IllD~ If ill!ir!i.l ~il:i lil!l
                                    unmodified _oolnion.
                                    ~ii!:i tb!.l cb;ct~c :id:l2211o Q.lmglliiD!K~ wJtb tb!i 12il~[!!i:Ct
                                    t~!l!l~ !2f ~II d!i:bt ii!91E!!J!i:n~ S!~ ~~~ Y:~iiC !l:!Jg? If tb!il
                                    !;!J51rnl:C :i~bggJ :t:!i~Ji !o Q!if51Yit ID il QCIQC fi~!Kal Y:~C, iilC
                                    !i~!imr!tig!] -iil!2gi[!.§ !o fQIIQ~J!Jg ::£~!] if tbs: !;bii!d!!C :i'bQQII:i
                                    !:;!.IW:Dt !l!J !~ fgdl!!5H:sl!lt:~ QC llilllEI!!iDt QliiD ~ltb. tb~ l~OQ!!r
               p      tl 3          "od    tb!!   lla:t:rn~o~ llll: mag~:: go 2;b~:dul!i fQc til~:: fJ~I YS:i:lc                                          YES
                                    !;!~I!Jg   rs!mQ, Elli£! eX!illJ!l.t!i&! 5!cg ~hO[!:;S!i g~fiilyl!;§ th!lt !l~
                                    oQt rniilt!i!:l tQ mgng:U~Ci ds:m!.!r~, e:. t~::~!:!!li!;!ill s!!iul!.!lt ~ 2
                                    fi!li!.!C!il t2 YQbgld tb!i t!i:!IEJ:i gf a c~bt ~:;gv~nilot, ~ctrng, Qr
                              ~     !!lS!ste[ QJ:2!D[:i:iQ~ !lQt.e !iV~n t!J.2U9b tlifi!!l!iCt:i !Jl: th!i
                                    lender, ~- or slnkinctJund are current.
                                    Willi tl:!!i !;Qt§!l n~t a~~~t bli!IS!nC§ In the ~~t!imeot gf f!DS!ll!;;ijl)
                                    1Kl:iltl2!l fg[ U!!i: 'hild!ilc ~~bQQI 91Jl:ilt:ilr tbac I!:!!:2Z !If tta::
                                    Cbill::t!iC 5!;hQQI'i fiYJ~.:Y:!ilil[ Q!.l[S;!iiJt !:;bii!IJ9!i IO :itl.rd!i.l!lt:i. ~ii!!i iii
                                    lQ !;l!ll:!;!iHlt lO!K~ii!i!: Q[ !DQ~, lblil!l ~t chii!!ililC !il~bQ21 LN!~~
               p      tl 4          tb[~ i!]gJ~tQCl· (~§W t:ba!Er &bQill!i tb!i!t bil~~ ll Qjlgii!~Y!i                                                    YES
                                    n~ 5!~8~ Qli!iii!ll!;!il Will Q~:i.i. UJI~ im;![~tgr If t!J!!lY h!!Y!i: iii !Q                                  ~




                                    !2!i!:£!i:Dt 9!!!Wtb I!J lit!.!!;!!ilDt:i. Y:~ii!r oy~::r Y!i:5![ !.!Dt!l It 92£DQi~t~                      '
                                    [g; Cf!;!J Y!ilS!r Qf Q!l.!il!:5!ti21J~· B~r tb~ Af!;b Y!i:ii!C Qf Q~@J;!QQ:i,
                                    tb!il ~IQ.!i5!tl20 !;h5!ng~ t2 ttl!: lQ r;!!i:Cl:!::Ot [!l!;I:Sli.lii!ill!l S
                                    -~                                                                                                                          --
                                    Was ~h!i ch~rter li~bgoi':i §!dmin~t@tlv!i cg~t [!:!tiQ ~!JS!i tQ QC




                                                                                                                                                                     1!/y
        https ://pryor.tea.state.tx. ustTea.CSSF. Web/Fonns/DistrictS tatusDetail.a5px                                                                   8/13/2015 .,
                                                                                                                                                                        418
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https://pryor.tea.state.tx.usffea.CSSF.Web/F orms!DistrictStatusDetail.a.Spx                                                           8/13/2015

                                                                                                                                                          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:..
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          Filename:                 M201S015816                                                                                       unallocated
          oi strict:                015816 - ACADEMY OF CAREERS AND TECHNOLOGIES CHARTER SCHOOL

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                                                                                                                                                                0 :
                                                                                                                                                                      .                    0 :
                                                                                                                                                                                             ' .                     '
           :
          •:
           •
                    31           Guidance, counseling, and
                                 evaluation services
                                                                                                           :
                                                                                                           •,'
                                                                                                           I
                                                                                                                           80,832 :
                                                                                                                                  :   .
                                                                                                                                                                0
                                                                                                                                                                                    .      0 :
                                                                                                                                                                                             :
                                                                                                                                     -£·------------------- · ·----------····----- ·h··-----------------
                                                                                                                                       •                                                       I
                                                                                                                                                                                                                  27 : Instructional
                                                                                                                                                                                                                     ':4
                                                                                                                                                                                                                         Costs (B)


                                                                                                                                                                                                                       -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




                                                   2




                                                                      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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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

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.
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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
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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.
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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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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

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,

Footnotes

*      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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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

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.
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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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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


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.


Footnotes

*      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

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                                                            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

Footnotes

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


                 © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                     1


                                                             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
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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
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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.
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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,
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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

Footnotes

*       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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Olim v. Wakinekona, 461 U.S. 238 (1983)
103 S.Ct. 1741, 75 L.Ed.2d 813



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.




               © 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



                                                                      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

                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                  1


                                                         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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Paul v. Davis, 424 U.S. 693 (1976)
96 S.Ct. 1155, 47 L.Ed.2d 405, 1 IER Cases 1827

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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Paul v. Davis, 424 U.S. 693 (1976)
96 S.Ct. 1155, 47 L.Ed.2d 405, 1 IER Cases 1827

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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Paul v. Davis, 424 U.S. 693 (1976)
96 S.Ct. 1155, 47 L.Ed.2d 405, 1 IER Cases 1827

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
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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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Paul v. Davis, 424 U.S. 693 (1976)
96 S.Ct. 1155, 47 L.Ed.2d 405, 1 IER Cases 1827

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
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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
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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
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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
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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
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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
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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


Footnotes

*      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
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Phillips v. Washington Legal Foundation, 524 U.S. 156 (1998)
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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

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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
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Phillips v. Washington Legal Foundation, 524 U.S. 156 (1998)
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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
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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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Phillips v. Washington Legal Foundation, 524 U.S. 156 (1998)
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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
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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

Footnotes

*      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

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       (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.




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.                                        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

               © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                       1


                                                         Tab 8
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

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

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.                                        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,
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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
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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
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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
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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.

                         ORDER

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.


Footnotes

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.




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.                                            13
Project School v. City of Indianapolis, Not Reported in F.Supp.2d (2012)
2012 WL 3114573



                                                               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
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                                                      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

                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                         2
Project School v. City of Indianapolis, Not Reported in F.Supp.2d (2012)
2012 WL 3114573

            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

Footnotes

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.




               © 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




   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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                                                         Tab E-11
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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
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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).

       Cases that cite this headnote
                                                                      Cases that cite this headnote



[12]
       Constitutional Law
                                                               [15]
         Accreditation and licensure                                  Education
       Education                                                        Termination of charter
         Termination of charter
                                                                      Delaware Department of Education’s (DOE)
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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
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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).

       Cases that cite this headnote
                                                                      Cases that cite this headnote



[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
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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
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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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Reach Academy for Boys and Girls, Inc. v. Delaware..., 46 F.Supp.3d 455 (2014)
314 Ed. Law Rep. 693

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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Reach Academy for Boys and Girls, Inc. v. Delaware..., 46 F.Supp.3d 455 (2014)
314 Ed. Law Rep. 693

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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Reach Academy for Boys and Girls, Inc. v. Delaware..., 46 F.Supp.3d 455 (2014)
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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
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Reach Academy for Boys and Girls, Inc. v. Delaware..., 46 F.Supp.3d 455 (2014)
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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
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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
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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
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Reach Academy for Boys and Girls, Inc. v. Delaware..., 46 F.Supp.3d 455 (2014)
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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
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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
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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
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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

Footnotes

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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Reach Academy for Boys and Girls, Inc. v. Delaware..., 46 F.Supp.3d 455 (2014)
314 Ed. Law Rep. 693



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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Reach Academy for Boys and Girls, Inc. v. Delaware..., 46 F.Supp.3d 455 (2014)
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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

Footnotes

*      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

                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                        7
Simi Inv. Co., Inc. v. Harris County, Tex., 236 F.3d 240 (2000)



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

                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                          8
Simi Inv. Co., Inc. v. Harris County, Tex., 236 F.3d 240 (2000)



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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Simi Inv. Co., Inc. v. Harris County, Tex., 236 F.3d 240 (2000)



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
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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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Simi Inv. Co., Inc. v. Harris County, Tex., 236 F.3d 240 (2000)



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
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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))).


Footnotes

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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Simi Inv. Co., Inc. v. Harris County, Tex., 236 F.3d 240 (2000)



       “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.


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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.
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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

               © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                         1


                                                       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
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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

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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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Society of Separationists, Inc. v. Herman, 959 F.2d 1283 (1992)
60 USLW 2710

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
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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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Society of Separationists, Inc. v. Herman, 959 F.2d 1283 (1992)
60 USLW 2710

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 ).

                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                        8
Society of Separationists, Inc. v. Herman, 959 F.2d 1283 (1992)
60 USLW 2710



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

                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                      10
Society of Separationists, Inc. v. Herman, 959 F.2d 1283 (1992)
60 USLW 2710

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

Footnotes

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,

                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                          12
Society of Separationists, Inc. v. Herman, 959 F.2d 1283 (1992)
60 USLW 2710

       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.




               © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                             13
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...


                                                                     [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

                 © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                         1


                                                               Tab E-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...

        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

                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                         5
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...

                    **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,

                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                      6
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...

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)
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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
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  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)
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  (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
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“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,
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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
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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
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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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Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998)
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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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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...

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

Footnotes

*      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
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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.



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Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998)
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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

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         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
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         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.




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               © 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

Footnotes

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
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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.
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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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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...

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
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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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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...

                                                                                               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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Town of Castle Rock, Colo. v. Gonzales, 545 U.S. 748 (2005)
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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
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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
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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
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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,
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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...

                          *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

Footnotes

*      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
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         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).

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*      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

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       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
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       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
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       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.




                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                             22
U.S. v. Oregon State Medical Soc., 343 U.S. 326 (1952)
72 S.Ct. 690, 96 L.Ed. 978



                                                                         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

                 © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                       1


                                                            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.

Footnotes

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.

Amended by:

       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.

Amended by:

        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.

Amended by:

        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.

Amended by:

        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.




Amended by:

        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.




Amended by:

        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.




Amended by:

        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.




Amended by:

        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.




Amended by:

        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.




Amended by:

        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.




Amended by:

        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.




Amended by:

        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.




Amended by:

        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.
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