legal update: a focus on issues affecting school business officials

Legal Update: A Focus on Issues Affecting School Business Officials

Chris Thomas, General Counsel, Arizona School Boards Association

What We Will Cover

• Arizona in State and Federal Courts– School Funding: Prop. 301, Charters, Overrides,

Career Ladder, State Trust Lands – School Operations: Use of School as Church, Pledge of

Allegiance, free speech, Police/CPS Interview of Students

– Arizona in the USSC: Tuition Tax Credits, Clean Elections and Employer Sanctions

• Legal Issues: 2011 legislation, ECA tax credits, medical marijuana

Arizona in State and Federal Courts -School Funding (Prop. 301)

• Cave Creek Unified School District, et. al v. Ducey– Prop. 301 inflation mandate – FY2011 didn’t

provide mandated increase• “Or” vs. “and”

– Superior Court: voters merely suggested the Legislature make appropriations – cannot require appropriations be made (calls into question all propositions that use general fund as revenue source and require annual appropriations from Legislature)


• Cave Creek USD (cont.)– Case is now before Arizona Court of Appeals, Div. I• Another attempt to go to the AZ Supreme Court was

rejected– Legislature also did not fund FY2012– Remedy may prove difficult even if victory in court

– still need to get the Legislature to affirmatively do something they don’t want to do; also may be two years away from final verdict (and then what happens to lost revenue?)


• Reeves v. Barlow– Arizona Court of Appeals: School districts do not

have authority to pay CSF funds to individuals that are not certified as teachers

– School districts do have discretion to include individuals that do possess teaching certificate

– Overrules/contradicts AGO I01-014– Applies to both base pay and performance pay– Charters do not fall under ruling since they do not

have to use certified teachers

General and Uniform Clause• AZ Constitution (Art. 11, Sec. 1): “The legislature shall

enact such laws as shall provide for the establishment and maintenance of a general and uniform public school system…”

• Roosevelt v. Bishop (1994): …Units in "general and uniform" state systems need not be exactly the same, identical, or equal. Funding mechanisms that provide sufficient funds to educate children on substantially equal terms tend to satisfy the general and uniform requirement. School financing systems which themselves create gross disparities are not general and uniform.”

Arizona in State and Federal Courts -School Funding (Charter Schools)

• Craven v. Huppenthal; Hobday v. Huppenthal– Is it a violation of General & Uniform clause for

charters to receive different funding than traditional school districts; is it a violation of G & U for some districts to have overrides and some not• Transportation, overrides, bonds v. additional

assistance• What about other non-financial regulation?

Arizona in State and Federal Courts -School Funding (Career Ladder)

• Gilbert v. Arizona– Is it a violation of G & U for some districts to receive Career Ladder monies

and some not?• 1985: 5-year pilot program began; started with 7 and added 7 at a time to

28 districts; funding mix between local and state; since 1994 no other districts have been able to join program and state funding has been cut

• allows districts in program to spend 5.5% above their revenue control limit (and tax local taxpayers for it) to fund the program – FY2012

– Superior Court: If state causes ANY disparity in funding, it’s a violation of G &U– After initially planning to appeal, state has now moved to dismiss suit

following legislative phase-out to comply– Phase-out of Career Ladder and OPIP

• Base Level Adjustment– 4% FY2012– 3% FY2013– 2% FY2014– 1% FY2015

Arizona in State and Federal Courts -School Funding (Trust Lands)

• Rumery v. Baier– Does the state have the authority under the State

Constitution and Enabling Act to fund state land department operations from sale/lease proceeds of state trust lands?• Maricopa Superior Court says NO• Arizona Court of Appeals will hear case in September

– Earnings from interest of state trust go to support K-12 education through Classroom Site Fund

– Voter protected in 2002 election

Federal Courts -School Operations (Religion)

• Bronx Household of Faith v. New York City Board of Education– 2d Cir.: School district could ban use of school for

church services; “had valid, non-viewpoint discriminatory reasons for barring worship services even when it allowed certain other religious activities in its facilities.”

– Important to note that deference was given to school district to make determination based on non-viewpoint factors

– USSC appeal likely

Federal Courts -School Operations (Religion)

• Freedom From Religion Foundation v. U.S.– USSC has denied review for 1st Cir. Decision

upholding New Hampshire law that requires students to recite the Pledge of Allegiance with “under God” reference• Other cases coming out of CA have died due to

procedural issues– Educators should never forget the Supreme

Court's 1943 decision in West Virginia State Board of Education v. Barnette that no individual child is required to recite the Pledge

Federal Courts -School Operations (Free Speech)

• Doe v. Silsbee Independent School District– Texas cheerleader dismissed from squad after refusing to cheer for male

student accused of sexually assaulting her– 5th Cir ruled that cheerleader did not have First Amendment right to not cheer

as a silent protest and school officials had discretion to dismiss her

• "In her capacity as a cheerleader, H.S. served as a mouthpiece through which [the school district] could disseminate speech—namely, support for its athletic teams," the 5th Circuit panel said. "Insofar as the First Amendment does not require schools to promote particular student speech, [the district] had no duty to promote H.S.'s message by allowing her to cheer or not cheer, as she saw fit. Moreover, this act constituted substantial interference with the work of the school because, as a cheerleader, H.S. was at the basketball game for the purpose of cheering, a position she undertook voluntarily.”

– USSC has denied review


• How far can school districts go in regulating online, off-campus speech of students?

• Rule: School must show nexus between students’ off campus activity and substantial disruption to learning environment to regulate


• Layschock v. Hermitage SD, J.S. v. Blue Mountain SD– MySpace parodies of principals– Layschock: SD agreed there was no disruption;

unanimous decision from 3d Cir.– J.S.: Student said principal was sex addict and

pedophile, but not all MySpace users could see it; 3d Cir panel split 8-6 in favor of student• In students’ favor: no evidence anyone believed or took

seriously the information on the page


• Nevada Commission on Ethics v. Carrigan– Is the act of voting by a public official free speech protected by the First

Amendment?• USSC: No – unanimous (in central holding of case)

– Court upheld a Nevada ethics law for local officials that requires them to abstain from voting on matters implicating their own financial interests or those of a household member, relative, employer, or anyone else with whom they have a substantial and continuing business relationship. The ethics law applies to school boards in the state.

– Scalia: the nation has "a history of limiting legislators' ability to participate in matters in which they have a conflict" and that history "suggests that the First Amendment has no application to voting by legislators.”

• The law was challenged by Michael A. Carrigan, a member of the Sparks, Nev., city council who was censured by the state's Commission on Ethics for voting to approve a casino that had been lobbied for by an influential political confidant of Carrigan’s.

Federal Courts – School Operations (CPS/Police Interview of Students)

• Camreta v. Greene• Do in-school interviews of students by the police and other authorities

require a warrant?

• The case was prompted by the ordeal of a girl identified in court papers as S.G. In 2003, 9-year-old S.G. was pulled from her Bend, Ore., classroom, taken to a school office, and interviewed by a state child-protective-services caseworker and a deputy sheriff.

• The authorities suspected the girl was being sexually abused at home. After lengthy questioning, the girl told the investigators that she had been touched inappropriately by her father. The girl and her sister were briefly removed from their home, but criminal charges against the father were later dismissed. The father accepted a plea agreement over abuse charges involving another child.

• S.G.'s mother sued not only the investigators who questioned her daughter, but also the Bend-La Pine school district and the school counselor who had removed the girl from class. The school defendants were dismissed early in the case. The mother said in court papers that only after two hours of denying any abuse did S.G. tell the investigators what the girl believed they wanted to hear—that her father had touched her improperly.

• The suit led to a 2009 decision by the U.S. Court of Appeals for the 9th Circuit, in San Francisco, that S.G.'s Fourth Amendment rights were violated because she had been seized in the absence of a warrant, parental consent, or other special circumstances.


• Greene v. Camreta (continued):• USSC sidestepped issue (7-2): Said case was moot since the young

woman at the center of the case no longer lived in Oregon and would soon graduate from high school, she no longer faced the prospect of a warrantless police interview in school

• Kagan: “When subsequent events make it absolutely clear that the allegedly wrongful behavior could not reasonably be expected to recur, we have no live controversy to review"

• Kagan said the mootness of S.G.'s underlying case in turn has frustrated the appeal rights of the investigators to challenge the 9th Circuit's constitutional ruling.

• The majority vacated that part of the 9th Circuit ruling, which is significant in that it removes, for now, the requirement that warrants or parental consent are required for in-school interviews.


• J.D.B. v. North Carolina– 13 year-old a special-education student attending school in

North Carolina, pulled out of his classroom by a uniformed officer and escorted to a conference room where he faced a police investigator, the assistant principal and two other school officials.

– For more than half an hour, the investigator interrogated J.D.B. about a string of local burglaries. The boy’s legal guardian, his grandmother, was never contacted, and he was not given a Miranda warning, which is routinely given by police to criminal suspects once they are taken into custody.

– USSC (5-4): Broadened use of the Miranda warning for suspects, extending it to children questioned by police in school.

– Age must be considered in determining whether a suspect is in custody for purposes of administering Miranda warnings.

Arizona in the USSC – Tax Credits

• Arizona Christian School Tuition Organization v. Winn– At issue was 9th Cir. Decision that allowed “as

applied” Establishment Clause challenge to go forward• USSC had already dealt with case before on issue

whether a state taxing scheme could be challenged under the U.S. Constitution• Arizona Supreme Court (1998): already ruled that tax

credit program was OK under Arizona and U.S. Constitution

Arizona in the USSC – Tax Credits• Winn (continued):– At issue this time: Whether the plaintiffs had standing

to sue as taxpayers under Flast v. Cohen in challenging a tax credit scheme (as opposed to a direct government expenditure)• The general rule for testing the constitutionality of a

government program is that the plaintiff must show direct particularized injury from the program in order to have standing to sue; however, there has always been an exception for governmental programs challenged under the Establishment Clause (taxpayers need not show actual injury)

– USSC (5-4): No, the taxpayers lacked standing

Arizona in the USSC – Tax Credits• Winn (continued):

– Kennedy writing for majority:• “Like contributions that lead to charitable tax deductions, contributions yielding STO tax

credits are not owed to the State and, in fact, pass directly from tax payers to private organizations. Respondents’ contrary position assumes that income should be treated as if it were government property even if it has not come into the tax collector’s hands. That premise finds no basis in standing jurisprudence.”

– Kagan writing for dissent:• “Today’s opinion…enables the government to end-run Flast’s guarantee of access to the

Judiciary. From now on, the government need follow just one simple rule— subsidize through the tax system—to preclude challenges to state funding of religion. And that result—the effective demise of taxpayer standing—will diminish the Establishment Clause’s force and meaning.”

• “In the decades since Flast, no court—not one—has differentiated between appropriations and tax expenditures in deciding whether litigants have standing.”

• “The Court’s opinion thus offers a road- map—more truly, just a one-step instruction—to any government that wishes to insulate its financing of religious activity from legal challenge. Structure the funding as a tax expenditure, and Flast will not stand in the way. No taxpayer will have standing to object. However blatantly the government may violate the Establishment Clause, taxpayers cannot gain access to the federal courts.”

Arizona in the USSC – Tax Credits

• Winn (continued):– Court’s opinion did not on it’s face rule that the

tuition tax credit program is constitutional but it undercut severely any hope of a challenge – moreover, with the present USSC, it is highly doubtful the 5-4 majority would rule against the program on the merits.

Arizona in the USSC – Clean Elections

• Arizona Free Enterprise Club’s Freedom Club PAC v. Bennett– Clean Elections: allowed qualified candidates to choose to

forego private fundraising and instead receive an initial grant and supplemental "fair fight" matching funds from the state to have an opportunity to campaign and get the message out depending on what the opposition was spending.

– The challenge was raised by past and future Arizona candidates complaining that the matching funds provision severely burdened their exercise of protected political speech by punishing them for making, receiving, or spending campaign contributions.

Arizona in the USSC – Clean Elections

• USSC, Roberts (5-4): “Any increase in speech resulting from the Arizona law is of one kind and one kind only—that of publicly financed candidates. The burden imposed on privately financed candidates and independent expenditure groups reduces their speech…”

• Dissent, Kagan: “Petitioners are able to convey their ideas without public financing—and they would prefer the field to themselves, so that they can speak free from response. To attain that goal, they ask this Court to prevent Arizona from funding electoral speech—even though that assistance is offered to every state candidate, on the same (entirely unobjectionable) basis. And this Court gladly obliges…If an ordinary citizen, without the hindrance of a law degree, thought this result an upending of First Amendment values, he would be correct.”

Arizona in the USSC – Employer Sanctions

• Chamber of Commerce v. Whiting– 2006 law that penalizes businesses for hiring workers

who are in the United States illegally– Question: whether states are preempted from being

involved in immigration matters– USSC (5-3): Federal immigration law gives states the

authority to impose sanctions on employers who hire unauthorized workers• Case centered on business licenses and state’s ability to

regulate them – very difficult to take this opinion as a cue on how court would rule on SB1070

Legal Issues – 2011 Legislation

• SB1553: Arizona Empowerment Accounts– Allows parents of disabled students to draw from

state account set up for students going to private school and using private services

– 90% of base support level– Parent must sign form promising not to enroll

student in state school– Another voucher challenge: Cain v. Horne ruled

vouchers unconstitutional under AZ’s Aid Clause– Lawsuit on the way; program being implemented


• HB2002: The “ASBA” Bill– Prohibits school districts from expending funds for

membership in an organization that attempts to influence the outcome of an election• Amendment to A.R.S. §15-511

– Also applies to other organizations including Chambers of Commerce

– ASBA has created 501c4 organization that is not funded by school district dollars, where there is no school district membership


• SB1263: – Performance Pay – District

Superintendents: – Requires up to 20% of a school district

superintendent’s salary (eliminating language that required calculation to be compensation and benefits) to be classified as performance pay

Legal Issues – 2011 LegislationHB2415 (schools; bullying policies)Expands those eligible to report from students to also

parents and school district employeesRequires the district to supply a form and to establish

appropriate disciplinary procedures for employees who fail to report suspected incidents known to them

Includes electronic technology and communication on school equipment and during school hours

All students must receive a written copy of the rights, protections, and support services available to bullying victims at the beginning of each school year and provide that information to the alleged victims when an incident is reported.


• HB2219 (study committee; unification; consolidation)

• Creates the 16-member Joint Legislative Study Committee on School District Unification and Consolidation


• SB1141 (schools; residency requirements)

• Requires parents, or persons who have custody, of a child who will attend a public, private or charter school to provide verifiable documentation of Arizona residency

• Requires school districts and charter schools to maintain the documentation


• SB1365 (paycheck deductions; political purposes)

• For payroll deductions made after October 1, 2011, prohibits a public or private employer from deducting a payment from an employee's paycheck for political purposes unless the employee gives written or electronic authorization on a yearly basis

Legal Issues – ECA Tax Credits• Arizona Department of Revenue: New “rubric” to determine whether activity is

eligible for tax credit funds– 1. Is the activity sponsored by the district/school?– 2. Is the activity for enrolled students?– 3. Is the activity optional?– 4. Is the activity non-credit?– 5. Does the activity supplement the district/school’s educational program?– 6. Does the district/school charge a fee for participation in the activity? 2

– 7. Is the activity fee paid directly to the district/school?– 8. Was the fee for this activity adopted by the Governing Board at a public meeting after

notice to all parents of enrolled students?– 9. Has the Governing Board authorized the principal to waive all or part of the activity fee if it

creates an economic hardship for a student?

• If you answered NO to any of these questions, then the activity is not tax credit eligible. If you are not certain how to answer any of the above questions, you should consult the school’s attorney before offering tax credits for the activity.

Legal Issues – Medical Marijuana• Medical Marijuana Law

– Permits employers to regulate an employee if the employee used, possessed or was impaired by marijuana at work or during work hours. • “Impaired” is not defined and consequently, employers have been concerned

about their rights to monitor and control employees who are under the influence of medical marijuana, especially those who perform work in safety- sensitive positions.

• HB2541 defines impairment as “symptoms that a prospective employee or employee while working may be under the influence of drugs or alcohol that may decrease or lessen the employee’s performance of the duties or tasks of the employee’s job position” and identifies nearly 20 signs and behaviors that indicate impairment, but also gives employers discretion to identify any sign that causes the employer to have a reasonable

Legal Issues – Medical Marijuana• “Safety-Sensitive Position” is defined as “any job designated by an

employer as a safety- sensitive position or any job that includes tasks or duties that the employer in good faith believes could affect the safety or health of the employee performing the task or others.”

• HB 2541 generally identifies safety-sensitive positions to include jobs where the employee operates a motor vehicle, equipment, or machinery, works in the residential or commercial premises of a customer, or prepares or handles food or medicine. It also states that all occupations regulated under Title 32 of the Arizona Revised Statutes are safety-sensitive positions; those include over 40 occupations ranging from architects to massage therapists.

• School districts may be able to identify nearly all of their employees as being in safety sensitive positions.

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