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In re Cortes

Supreme Court, Albany County

December 28, 2016

In the Matter of Nidia Cortes, Virgil Dantes, AnneMarie Heslop, Curtis Witters, on Behalf of Themselves and Their Children, Petitioners,
v.
Robert Mujica, Director, New York State Division of Budget; New York State Division of Budget, Maryellen Elia, New York State Commissioner of Education, New York State Education Department, Respondents.

          EDUCATION LAW CENTER Attorneys for Petitioners (David G. Sciarra, Esq. and Wendy Lecker, Esq., of Counsel)

          HARRIS BEACH PLLC Attorneys for Respondents Robert Mujica and New York State Division of Budget (Karl J. Sleight, Esq. and Aubrey A. Roman, Esq., of Counsel)

          ALISON B. BIANCHI Acting Counsel and Commissioner for Legal Affairs Attorney for Respondents MaryEllen Elia and New York State Education Department (Aaron M. Baldwin, Esq., of Counsel)

          HON. KIMBERLY A. O'CONNOR, Acting Supreme Court Justice.

         Petitioners Nidia Cortes, Virgil Dantes, AnneMarie Heslop, and Curtis Witters, on behalf of themselves and their children (collectively "petitioners"), commenced this CPLR Article 78 proceeding seeking an order of mandamus directing respondents Robert Mujica ("Mujica"), Director, New York State Division of Budget, and New York State Division of Budget ("DOB") (collectively "DOB respondents") to comply with the law and immediately release the 2016-2017 transformation grant funds to respondent New York State Education Department ("NYSED"), and directing respondents MaryEllen Elia ("Elia"), New York State Commissioner of Education, and NYSED (collectively "NYSED respondents") to distribute those funds to the nine schools removed from the "persistently failing" schools list, including Roosevelt High School, JHS 80 Mosholu Parkway, and William S. Hackett Middle School - the schools attended by petitioners' children. [1]

         The DOB respondents have answered, and move for an order dismissing the petition, in its entirety and with prejudice, on the grounds that: (1) petitioners lack standing to bring their claims; (2) the proceeding is time-barred; (3) the DOB's responsibilities in this matter are not merely ministerial; and (4) the determination that the school districts containing the nine schools removed from the "persistently failing" schools list are ineligible to receive transformation grant funding for the 2016-2017 school year and that making the transformation grant funds available to those removed schools for the 2016-2017 school year would be contrary to law was not arbitrary and capricious, and was made in accordance with the plain language of the transformation grant appropriations and related spending plan. The DOB respondents further argue that the DOB cannot be compelled to allocate funds in violation of duly-enacted appropriation statutes, and that directing the DOB to make the transformation grant funds available to the nine removed schools would intrude upon policy-making and discretionary decisions that are reserved to the legislative and executive branches. Petitioners oppose the motion.

         The NYSED respondents answered the petition, opposing only that portion of the requested relief seeking to compel NYSED to immediately release the transformation grant funds for the 2016-2017 school year to the removed schools, if such funds are unfrozen by the Court or released by the DOB, but did not respond to the motion. Oral argument on the petition and motion was held on September 30, 2016, and, on consent of the parties, all issues raised in the petition, motion, and answering papers were addressed. At argument, petitioners withdrew their request to have NYSED immediately release the 2016-2017 transformation grant funds to the subject schools, accepting NYSED's position that the funding, if released by the DOB, would continue to be provided on a reimbursement basis. Petitioners also requested an opportunity to submit written opposition to the procedural arguments in the motion, and the Court set a briefing schedule, making this matter returnable on October 6, 2016. [2] The papers are now fully submitted, and all issues have been addressed and briefed.

         BACKGROUND

         In an effort to aid in the improvement of the lowest performing public schools in New York State, the Legislature, in April 2015, enacted new section 211-f of the Education Law relating to the "takeover and restructuring [of] failing schools" ("school receivership law") (see L 2015, ch 56, part EE, subpart H, § 1). The school receivership law, which took effect April 13, 2015, mandates, among other things, that the NYSED Commissioner designate, as "persistently failing, " any school that has been identified under the State's accountability system to be among the lowest achieving public schools in the State for ten consecutive school years, measured by student achievement and outcomes and a methodology prescribed in the Commissioner's regulations, [3] and denominated a "priority school" for each applicable year from the 2012-2013 school year to the 2014-2015 school year or a "priority school" in each applicable year of such period, except one year in which the school was not identified because of an approved closure plan that was not implemented [4]; a "School Requiring Academic Progress Year 5"; a "School Requiring Academic Progress Year 6"; a "School Requiring Academic Progress Year 7"; and/or a "School in Restructuring" (see Education Law § 211-f [1] [b]).

         Under the school receivership law, the superintendent of a school district containing a "persistently failing" school is vested with the powers of a receiver, and a school district that has a NYSED-approved intervention model or comprehensive education plan in place is given an additional school year to make demonstrable improvement in the school's performance, based upon the performance metrics and goals in the school's model or plan (see Education Law § 211-f [1] [c] [i], [6]). At the end of that year, NYSED is required to conduct a performance review, in consultation and cooperation with the school district and school staff, to determine if a school's designation as "persistently failing" should be removed, if the school should remain under continued school district operation with the superintendent vested with the powers of a receiver, or if the school should be placed into independent receivership (see Education Law § 211-f [1] [c]). [5]

         The school receivership law was supported by a $75 million appropriation in the 2015- 2016 State Budget (see L 2015, ch 53, as amended by L 2015, ch 61), which was reappropriated in the 2016-2017 State Budget (see L 2016, ch 53). The legislation authorizing the appropriation provides that "school districts containing a school or schools designated as persistently failing pursuant to [Education Law § 211(1) (b)]" are eligible to apply for "transformation grants... pursuant to a spending plan developed by the [C]ommissioner of [E]ducation and approved by the [D]irector of the [B]udget" (L 2015, ch 53, as amended by L 2015, ch 61, and reappropriated by L 2016, ch 53). According to the appropriation legislation, transformation grants are intended to support academic, health, mental health, nutrition, counseling, legal and/or other services to students and their families; extended learning time for students; the expansion, alteration or replacement of the school's curriculum and program offerings; professional development of teaching and administrative staff; and mentoring of at-risk students, among other things (see id.).

         The appropriation legislation vests the NYSED Commissioner with the authority to confirm that grant supported activities are aligned with a school's approved intervention model, comprehensive education plan, or school intervention plan, and the authority to determine the amount of such grants (see id.). The legislation further provides that "for each of the persistently failing schools, the maximum annual grant in the 2015-2016 and 2016-2017 school years [will] be established by [NYSED]... in the spending plan for such grants, " and that "[a] portion of such grants [will] be available by July 1 of each such school year" (id.). The appropriation is set to lapse on March 31, 2018 (see L 2016, ch 53).

         In July 2015, the NYSED respondents issued a press release announcing that Commissioner Elia had identified 124 "struggling" and 20 "persistently struggling" schools [6] in the State (referred to hereafter as "failing" or "persistently failing" schools), and indicating that the "persistently [failing]" schools would be eligible for a portion of the $75 million in State aid to support and implement improvement efforts over a two-year period. In October 2015, NYSED submitted, for the DOB Director's approval, a "Persistently [Failing] Schools/Transformation Grant Expenditure Plan" ("spending plan") for the period of July 1, 2015 through March 31, 2017. The final spending plan was approved by the DOB Director on October 15, 2015, and the DOB initially made $37.5 million of the transformation grant appropriation available to NYSED for its "Persistently [Failing] Schools Transformation Grant" program. [7]

         NYSED's spending plan, approved by the DOB, identified 20 schools, including the three schools attended by petitioners' children, as "persistently failing" under Education Law § 211-f, rendering those schools eligible to apply for transformation grants. Pursuant to the spending plan, transformation grants would be made available to those 20 schools "to support and implement turnaround efforts over a two-year period." The plan set forth a "[t]wo-[y]ear [t]otal [t]ransformation [a]llocation" for each school, which schools could "use... over one year or two years, " and provided that "schools should anticipate receiving no more than 50 percent of the [t]ransformation [a]llocation for the 2015-[20]16 school year, " unless a request for accelerated funding was made, and approved, to allow funds "otherwise dedicated to the second year [to] be advanced to the first year."

         NYSED subsequently made the "Persistently [Failing] Schools Grant Application" ("transformation grant application") available to the 20 "persistently failing" schools. The application indicated that transformation grant moneys would be available "to support and implement turnaround efforts over a 21[-]month period." Each of the school districts containing the schools attended by petitioners' children - Yonkers City School District, New York City Department of Education, and Albany City School District - submitted a transformation grant application to NYSED on behalf of those schools for the full two-year transformation allocation to support proposed activities during both the 2015-2016 school year ("year one") and the 2016-2017 school year ("year two"), as well as a proposed budget for the school's year one activities, totaling half or less than half of the two-year transformation allocation. NYSED approved each of the applications and proposed year one budgets.

         In early 2016, NYSED issued continuation guidance to schools awarded transformation grants in year one regarding year two funding. In its continuation guidance, NYSED noted that "all grants... are subject to further review, monitoring and audit to ensure compliance, " and that NYSED "has the right to recoup funds if the approved activities are not performed and/or the funds are expended inappropriately." Schools receiving transformation grants were instructed to submit a budget narrative, a 2016-2017 FS-10, a budget summary chart, and a Sustained Activities Certification by April 29, 2016, and advised that they "must set aside a portion of the grant (no less than 5%) to pay for an external evaluator to assess program implementation in [y]ear 2."

         On February 26, 2016, NYSED issued a press release indicating that nine schools from the list of "persistently failing" schools, including Roosevelt High School, JHS 80 Mosholu Parkway, and William S. Hackett Middle School - the schools attended by petitioners' children - would be removed from "priority school" status and, consequently, removed from the list of "persistently failing" schools, effective June 30, 2016. NYSED indicated, however, that the "[s]chools... removed from the [p]ersistently [failing] [s]chools list in June 2016 will continue to be eligible to receive funding in 2016-[20]17 from a [S]tate grant to support and strengthen their school improvement efforts."

         On or about March 30, 2016, the DOB placed the entire unexpended balance of the transformation grant appropriation in "reserve" in the State Financial System, preventing NYSED from accessing the remaining year one funds and the entire $37.5 million year two appropriation. [8] On April 1, 2016, the transformation grant appropriation, was amended and reappropriated as part of the State's 2016-2017 Budget [9] (see L 2016, ch 53). On April 21, 2016, a DOB's spokesperson issued a statement quoted in a news article regarding the eligibility for transformation grant funding of those schools removed by NYSED from the "persistently failing" schools list for the 2016-2017 school year. The DOB spokesperson was quoted as saying, "To suggest that these schools should remain eligible for the funding even though they were removed from the program is contrary to law."On or about June 9, 2016, NYSED sent a memo to those schools removed from the "persistently failing" schools list, indicating that a decision as to whether the schools would have access to unexpended year one transformation grant funds during year two "is still pending approval by the [DOB], " and that NYSED would inform those schools of the DOB's decision as soon as it is notified. By letter dated July 28, 2016, petitioners' counsel, on behalf of the parents in the schools removed from the "persistently failing" schools list for 2016-2017, wrote to Director Mujica, inquiring as to whether the DOB "will release funding under the [transformation grant] to those schools for the 2016-2017 school year." Counsel indicated in its letter that if Director Mujica did not respond to petitioners' inquiry within ten days, it would deem the lack of a response "as a statement by the Division of Budget that it is withholding [transformation grant] funding... from these schools for the 2016-2017 school year." When Director Mujica did not respond to counsel's letter, this proceeding followed.

         ARGUMENTS

         Petitioners contend that the DOB's refusal to release the second year of transformation grant funding to Roosevelt High School, JHS 80 Mosholu Parkway, and William S. Hackett Middle School, as well as to the six other schools removed from the "persistently failing" schools list, is arbitrary and capricious, and violates the DOB's ministerial and mandatory duty to release those funds under the appropriation legislation. Specifically, petitioners argue that the clear language of the appropriation statutes when read together with their companion legislation - Education Law § 211-f, the statutorily-mandated spending plan approved by the DOB, the transformation grant application created by NYSED, and NYSED's continuation guidance demonstrate that transformation grant funding was intended to cover a two-year period, and that there is nothing in the law or spending plan that gives the DOB respondents authority to withhold the second year of transformation grant funding if "persistently failing" schools improve to a point where their "persistently failing" designation is removed. By this proceeding, petitioners seek an order of mandamus directing the DOB respondents to immediately release to NYSED the transformation grant funds for the 2016-2017 school year, making those funds available to the nine schools whose "persistently failing" designation has been removed, including those schools attended by their children.

         The DOB respondents argue, in opposition to the petition and in support of their motion, that the petition should be dismissed on both procedural and substantive grounds. Particularly, the DOB respondents maintain that the petitioners lack standing to bring their claims, that the proceeding is time-barred, and that the petitioners are attempting to compel the DOB to perform an act that is not purely ministerial and to which petitioners have no clear legal right. The DOB respondents also submit that the determination that the nine schools removed from the "persistently failing" schools list are ineligible to receive transformation grant funding for the 2016-2017 school year and that making the transformation grant funds available to those removed school for the 2016-2017 school year would be contrary to law was not arbitrary and capricious, and was based on the plain language of the transformation grant appropriations and related spending plan. The DOB respondents further argue that the DOB cannot be compelled to allocate funds in violation of duly-enacted appropriation statutes, and that directing the DOB to make the transformation grant funds available to the removed schools would intrude upon policy-making and discretionary decisions that are reserved to the legislative and executive branches.

         Petitioners assert, in opposition to the motion, that they have standing to bring their claims because the DOB respondents' refusal to release the second year of transformation grant funds to their children's schools is causing and will continue to cause harm to their children. According to petitioners, the transformation grant funding enabled these schools to provide services and programs to their children, and fellow students, during the 2015-2016 school year that would otherwise not be available but for those funds, and denying the second year of this funding will directly harm petitioners' children and their classmates for the duration of the 2016-2017 school year. Petitioners also maintain that the interests they are asserting clearly fall within the zone of interests sought to be promoted by the appropriation legislation since the legislation is intended to improve education programs and outcomes in the schools attended by petitioners' children. In addition, petitioners argue that the DOB respondents should not be permitted to use standing in order to shield their actions from judicial review, and further that this proceeding raises matters of vital public concern, which should compel a finding that they have standing to bring their claims. ...


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