This article originally ran in The Legal Intelligencer on February 19, 2016.
In striking down as unconstitutional a section of the Public School Code that granted broad powers to the School Reform Commission, which oversees the Philadelphia School District, the Pennsylvania Supreme Court this week ignited a series of questions about how the district will adapt and what might happen at other distressed schools.
The ruling, which held that legislation giving the SRC authority under the Distress Law to suspend portions of the code violated the nondelegation rule of the state constitution, could further destabilize the district and necessitate dialogue in Philadelphia and beyond about how to resolve the issues it presents, attorneys said.
Deborah Gordon Klehr, executive director of the Education Law Center, said the decision will substantially harm the district's long-term financial outlook.
"We do not currently have a funding system that can sustain our public schools," Klehr said. "We need a long-term funding formula that's sustainable, predictable and adequate, and until we have that, decisions like this one will continue to destabilize the district's finances."
The ruling immediately throws into question a number of actions taken by the SRC, created in 2001, which the court said are now "null and void," according to attorney Kevin McKenna of Latsha Davis & McKenna. It also raises the issue of the SRC's prospective governing power. The decision could affect cases ongoing both inside and outside of Philadelphia, including litigation regarding charter-school funding in the Chester Upland School District and another Philadelphia case involving enrollment caps at Richard Allen Preparatory Charter School.
The Supreme Court said the Distress Law lacks any mechanism to limit the SRC's actions to protect against arbitrary and capricious actions.
"The Distress Law gives the SRC these broad powers pursuant to a generalized legislative objective of mitigating the school district's adverse financial circumstances," Chief Justice Thomas G. Saylor wrote Tuesday in the 4-2 majority in West Philadelphia Achievement Charter Elementary School v. School District of Philadelphia. "We do not view such objective as supplying either a constitutionally adequate guiding standard or an effective channeling mechanism relative to the SRC's discretionary suspension powers."
Section 696(i)(3) of the School Code allowed a CEO appointed by the secretary of Education in distressed school districts to suspend regulations of the code. A 2001 amendment to Section 696 created the SRC and gave it "sweeping powers, including 'all powers granted to the superintendent by law,'" Saylor said.
The SRC, which had used its power to place limits on charter-school enrollment and bypass seniority when making teacher assignments, among other actions, called the decision a "sobering moment" in a statement. It further noted that the actions were taken in good faith with the intention of getting the school district out of financial and economic distress.
"The district has lost a key tool that it was using to control costs during funding crises," Klehr said.
Robert O'Donnell of O'Donnell Associates, who represented West Philadelphia Achievement Charter Elementary School, said the opinion makes "absolutely clear" that enrollment caps are negotiable and will be met with opposition by applicants and schools seeking renewal.
The charter school had argued that the provision the court struck down granted "unfettered power" to the SRC to suspend provisions of the code, Saylor said, effectively allowing the SRC to create its own law, contrary to Article II, Section 1 of the Pennsylvania Constitution, which prevents the legislature from delegating the authority to execute or administer laws.
"The legislature gave the SRC what amounts to carte blanche powers to suspend virtually any combination of provisions of the School Code—a statute covering a broad range of topics," Saylor said.
The effect, he said, was to permit the SRC to govern the delivery of public education in Philadelphia.
In a dissent, Justice Max Baer said the provision doesn't delegate legislative power, but rather delegates "the authority to suspend legislation that affects the economic stability of a school district in financial distress, which is constitutionally permissible." Justice Christine L. Donohue joined the dissent.
"The breadth of the standard is driven by the breadth of the problem, and the problem here is unquestionably great," Baer said.
Philadelphia, though, isn't the only Pennsylvania district with financial problems. The Duquesne City, Chester Upland, York City and Harrisburg school districts have all been placed into various stages of recovery in recent years.
While the direct impact of the Supreme Court's ruling will be felt only in Philadelphia, it could have a ripple effect on other financially troubled school districts if issues arise, O'Donnell said.
"This raises the level of potential conflict all over the place, including Philadelphia," he said.
Patricia Hennessy of Conrad O'Brien represents the Richard Allen school, which won at the Commonwealth Court level last August in a suit over the school district's enrollment caps for charter schools. With the West Philadelphia ruling pending, the Supreme Court had stayed a decision on whether to take up the school district's appeal. Hennessy said she now anticipates the justices will decline to grant allocatur because the issues significantly overlap.
Hennessy said renaissance charter schools—failing district schools awarded to operators to help turn them around—could be affected by the Supreme Court's ruling. Continued dialogue among all the stakeholders, including the school district, charter operators and the teachers' union, will be needed to help resolve the complications created by the decision, she said.
Hennessy said she expects the ruling will have a ripple effect on distressed districts throughout the state attempting to get their affairs in order.
"A school district that's in distress is obviously trying to balance what it's doing in response to that distress," she said. "It just can't have unfettered ability to do it."
Carl Solano of Schnader Harrison Segal & Lewis, who represented the school district, did not return a call for comment.
Reprinted with permission from the February 19, 2016 issue of The Legal Intelligencer. © 2016 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.