The ELA described in the writ its statewide interest to enforce the SBE’s compliance with AB 1505 as follows:

The writ of mandate sought to set aside SBE’s reversal of the decisions by the NVUSD and NCBOE governing boards to deny the MCMS petition. The Complaint for Declaratory Relief sought a judicial determination of the rights and legal duties of the parties involved with reviewing charter petitions so that the changes instituted by AB 1505 can be implemented consistently in the future by all parties.

In challenging SBE’s decision to overturn the decisions by NVUSD and NCBOE, the writ supported CSBA’s position that the SBE applied the incorrect legal standard to review the decisions by the two governing boards in the following ways:

1. The SBE failed to give deference to the decisions of the NVUSD and NCBOE to deny the MCMS petition by inappropriately substituting its judgment for the discretionary judgment of the two governing boards.
2. The SBE failed to afford the respective governing boards with the required presumption of correctness, ignoring findings by the NVUSD governing board that were independently sufficient to uphold their denial of the petition and ignoring the fiscal impact data and findings by the NCBOE supporting their conclusion that the MCMS was demonstrably unlikely to serve the interests of the entire community in which the school is proposing to locate.
3. The SBE failed to require the charter petitioner to bear the burden of demonstrating by citation to the evidence in the documentary record that the NVUSD and NCBOE abused their discretion.
4. The SBE purported to apply the “substantial evidence” standard of review to the factual findings of the local boards instead of using the applicable “entirely lacking in evidence” standard of review.
5. The SBE improperly considered evidence outside the record on an administrative appeal.
6. The SBE failed to afford both governing boards due process.

In addition to the issues described above, other legal issues that CSBA put before the court to address include:

1. Whether the SBE will use the most deferential standard of review to determine if there has been a prejudicial abuse of discretion.
2. Whether the action taken by the SBE is quasi-legislative or quasi-judicial.
3. Whether an administrative writ of mandate or a traditional writ of mandate is the proper means to challenge the SBE’s decision.
4. Whether the SBE can reverse the decision by both boards because of a prejudicial abuse of discretion by just one of the governing boards.
5. Whether the SBE is compelled to consider factual findings made by the local boards as true that are not refuted by the petitioner.
6. Whether the SBE is required to make factual findings with a citation to substantial evidence to support its decision to reverse the decision of the two governing boards.

This case was the first time SBE has overturned the decisions by local boards since AB 1505 was signed into law by Gov. Gavin Newsom in 2019. In the four years preceding the passage of AB 1505, the SBE had overturned local boards 84 percent of the time on non-renewal (establishment) petitions. Since 1992, when the Charter Schools Act went into effect, the SBE has overturned local boards 78 percent of the time on petitions establishing new charter schools. Arguably, the rate that SBE historically has overturned local boards on appeal was a factor in AB 1505 limiting the authority of the SBE to a review of the documentary record to determine whether there was an “abuse of discretion” by the local boards. (Education Code 47605 (k)(2)(E).) A memorandum from State Superintendent of Public Instruction Tony Thurmond to the SBE dated June 30, 2023, states that “abuse of discretion is the most deferential standard of review, meaning that the SBE is required to give deference to the decision of the school district governing board and county board of education to deny the petition.”

AB 1505 further limited the scope of SBE’s review to the “specific citations to the documentary record” included by the charter school in its appeal “detailing” how the local boards “abused their discretion.” (Education Code 47605 (k)(2)(A).) Another key reform included in AB 1505 was the addition of a finding of fact supporting the denial of a charter petition for being “demonstrably unlikely to serve the interests of the entire community in which the school is proposing to locate [and] analysis of this finding shall include consideration of the fiscal impact of the proposed charter school.” (Education Code 47605 (c)(7).) Such analysis incudes:

1. The extent to which the proposed charter school would substantially undermine existing services, academic offerings or programmatic offerings.
2. Whether the proposed charter school would duplicate a program currently offered within the school district and the existing program has sufficient capacity for the pupils proposed to be served within reasonable proximity to where the charter school intends to locate.

The findings adopted by NVUSD and NCBOE included several references to the fiscal harm projected as a result of the loss of average daily attendance (ADA) that would be caused by the establishment of MCMS as a charter school. The adverse fiscal impact on student programs and staff was detailed by the district in its factual findings. The SBE’s disregard of the new community interest finding in AB 1505, and specifically how declining enrollment would impact a district that had already closed three schools in the preceding four years, is alone cause for a court to overturn the decision by the SBE.

This was a case of first impression for the courts. On June 29, 2023, Judge Shellyanne W.L. Chang granted the ELA’s and NVUSD’s Writs of Mandate, finding the SBE abused its discretion in granting the appeal, and ordered the SBE to set aside its decision to grant the charter appeal. The ELA filed its Writ alongside a similar Writ of Mandate by NVUSD to represent the statewide interests of governing boards who serve as local charter authorizers and to ensure that the legislative intent of AB 1505, which limited the SBE’s role in charter appeals, was carried out. Both the ELA and NVUSD prevailed in this first lawsuit to test the new standard for State Board review under AB 1505.

According to the court, here, instead of giving deference to the local decision-makers and determining whether the findings by the local boards supporting denial were reasonable and supported by the evidence in the record, the SBE majority substituted its own judgment about the sufficiency (quality and completeness) of the petition. The SBE based its decision to grant the charter school’s appeal on its findings that: 1) NVUSD did not follow a fair process because its process was biased; and 2) NBCOE did not properly determine that the charter petition should be denied because it would undermine existing services, offerings or programs (the community interest criteria). The court noted that the question before it was “whether the NVUSD Board and County Board’s decisions were ‘entirely lacking in evidentiary support’ such that the SBE properly exercised its discretion under section 47605, subdivision (k)(2)(E) in reversing the prior determinations and approving the Charter School petition.” [Emphasis in original.]

In answering that question, the court overturned both findings of the SBE, concluding that it did not exercise the appropriate abuse of discretion standard of review provided for in AB 1505. Specifically, as to the allegations of unfair process against NVUSD, the State Board stated in its pleadings that the NVUSD’s board “made pretextual findings and conducted the public hearing in a biased manner,” made “prepared remarks” during the public hearing and made biased comments about the petition. The court found that NVUSD’s board members’ comments were not evidence of bias or an unfair process. Rather, absent financial bias, the board members were presumed to be unbiased as a matter of law, and the SBE was unable to demonstrate any bias that would render the board unable to consider fairly the evidence before it.

The SBE also argued that the board members were biased because they had a financial interest — ensuring the fiscal health of the district. However, the court did not find that constituted a financial interest. In fact, the Education Code requires boards to form opinions based on their constituents’ interests and directs boards to consider whether granting a charter petition is consistent with the interest of the entire community, including a consideration of the fiscal impact. Thus, NVUSD’s board members were required to form opinions about the petition and the charter’s potential impacts. The court further noted that the legislative intent of AB 1505 was for district boards to have greater authority to determine which charter schools to approve, which demonstrates that the Legislature “believed school boards capable of unbiased adjudication of charter school petitions.” As such, the court found that NVUSD did not act with bias. The court also pointed out the irony that the SBE argued that “its own members are entitled to ‘voice their opinions without raising an inference that the proceedings before [them] are somehow tainted by any opinions’” and noted that the same standard should apply to the NVUSD board.

As to the county board’s decision, the court found that there was evidentiary support for the county board’s determination that the charter school would undermine existing services, offerings or programs (Education Code 47605 (c)(7)) because of the potential for NVUSD to fail to meet the statutory reserve and the need to layoff teachers and reduce or eliminate programmatic offerings. The court set out the detailed evidence the county board presented about the potential negative financial impacts of the charter school, including information in the NVUSD’s Second Interim Financial Report and pointed out the fact that the NVUSD was already in a difficult financial position. As a result, the court found that, contrary to the State Board’s findings, there was evidence of a substantial undermining of existing services, offerings or programs so that the county board’s findings were not “entirely lacking in evidentiary support,” which is the required finding for the abuse of discretion standard. The fact that the SBE would reach a different conclusion on the evidence is irrelevant because the abuse of discretion standard required the State Board to give deference to the county’s determination. In other words, the fact that reasonable people might disagree is not a basis for overturning a decision. In finding otherwise, the SBE utilized an independent judgment standard — substituting its independent judgment for that of the county board — which is the wrong standard.

The court concluded that “there was no proper legal basis for the State Board’s decision in this matter” so “the State Board decision must be set aside.” The court directed the SBE to file with the court, within 30 days, a document setting forth how it complied with the ruling. This case is a victory for Napa Valley USD and for school districts and county offices of education statewide as it reinforces the discretion due to their decisions on denial of charter petitions under AB 1505.