Court of Appeals Rejects Challenges to Agency Decision Revoking School Charter

On November 15, 2012, the District of Columbia Court of Appeals decided Kamit Institute for Magnificent Achievers v. D.C. Public Charter School Board, Nos. 11-CV-710 & 11-CV-742, slip op. (D.C. Nov. 15, 2012), in which it considered two judgments arising from a decision by the D.C. Public Charter School Board (“PCSB”) to revoke a school’s charter. Id. at 1-2.

By way of background, pursuant to the School Reform Act of 1995, the District of Columbia has a system of “public charter schools” which are individually authorized by charter (1) to operate without being subject to education laws and regulations of the District of Columbia, and (2) to receive public funding comparable to that received by traditional public schools. Id. at 3. The PCSB is responsible for overseeing the system, including by issuing charters to qualifying schools and, where appropriate, revoking charters. Id. at 4. It may revoke a school’s charter if, inter alia, it determines that the school “has failed to meet the goals and student academic achievement expectations set forth in the [school’s] charter.” Id. at 5 (brackets and internal quotation marks omitted).

This case arose from the PCSB’s decision in 2010 to revoke the charter of an allegedly underperforming school (the “School”). Id. at 1-2. In response to the decision, the School filed in the Superior Court (1) a petition for review of the PCSB’s decision, and (2) a civil complaint against the PCSB, et al., which in substance was essentially premised on the same grounds as the petition for review. Id. at 1-2, 20. The two proceedings resulted in (1) a judgment denying the petition for review, and (2) a judgment dismissing the civil complaint for failure to state a claim. Id. at 2. The School appealed, mainly arguing that the judgments should be vacated because, contrary to the determinations made by the trial court, the PCSB’s decision was both substantively and procedurally flawed. Id. at 9.

The Court of Appeals rejected all of the School’s arguments on appeal and affirmed both judgments. Id. at 3, 22. In affirming the trial court’s judgment rejecting the School’s petition for review, the Court of Appeals applied a “highly deferential” standard of review which provides that a decision to revoke a charter “shall be upheld unless the decision is arbitrary and capricious or clearly erroneous.” Id. at 10 (internal quotation marks omitted). Applying this standard, the Court of Appeals concluded that the PCSB’s decision was not substantively flawed because there was ample evidence of deficiencies that justified revoking the School’s charter, including deficiencies with respect to student test scores, truancy, curriculum, administration, and governance. Id. at 12-16. It also concluded that the PCSB did not use improper procedures in coming to its decision. Id. at 17-19. Specifically, it concluded that the PCSB adequately explained why it was unable to apply either of two “supplemental frameworks” that it had developed in the past to evaluate public charter schools. Id. It also noted that the PCSB had followed applicable procedures specified by the School Reform Act, including with respect to notice. Id. at 9.

The Court of Appeals also affirmed the judgment dismissing the School’s civil complaint for failure to state a claim. Id. at 20-21. It found that three of the six claims in the complaint were properly subject to dismissal because, as discussed above, the School failed to show that the PCSB’s decision was substantively or procedurally flawed. Id. It also rejected a claim that the PCSB tortiously interfered with a contract between the School and the D.C. Board of Education (“BOE”), which originally granted the School’s charter. Id. at 4, 21. It reasoned that the School no longer had a contractual relationship with the BOE, and instead had a contractual relationship with the PCSB, because all of the BOE’s authority to oversee public charter schools was transferred to the PCSB in 2007. Id. at 21. Accordingly, “there was not an underlying contractual relationship between [the School] and the BOE with which the PCSB could have tortiously interfered.” Id. Finally, the Court of Appeals concluded that the remaining two claims were properly dismissed because they were entirely dependent on the first four claims. Id.