Charter School Contractual Issues
Orange County School of the Arts v. Santa Ana USD – California Court of Appeal, Second District (Case No. B332826)
MEMBER(S) INVOLVED: Santa Ana Unified School District

IMPORTANCE OF STATEWIDE ISSUE:

Generally, under the Charter Schools Act of 1992, as amended, a charter school may be established upon the granting of a petition by a local school governing board or county board of education (the charter authorizer), based on criteria specified in law. When granted, a charter school must be operated in accordance with law and the provisions of its charter. Within this procedural scheme, questions have arisen as to whether a charter (1) creates contractual obligations that are enforceable against the charter authorizer (school district or county governing board) or (2) is akin to local legislation in the same vein as a city ordinance that may be binding on the authorizer. In addition, may the terms of a charter petition override a requirement of law?
SUMMARY OF THE CASE:

For close to 20 years, the Orange County School of the Arts (OCSA), a charter school authorized by Santa Ana USD (district), operated as a district school for special education purposes. As a result, the district was responsible for providing students with disabilities who were enrolled by OCSA special education services, including a free appropriate public education (FAPE) as required by law.

Over that period, the district failed to require OCSA to financially support the districtwide special education instruction and services by paying an equitable share of OCSA’s charter school block grant, as required by law. When the district eventually sought to recover those payments, OCSA filed a writ of mandate and complaint against the district, arguing that the district’s general-fund support claims were unenforceable and that the district’s demand was barred by certain equitable doctrines. The district also filed a cross-complaint seeking prejudgment interest on the amount owed by OCSA. The trial court ruled in favor of the district and OCSA appealed.

  • The district’s approval of the charter via formal resolution was a quasi-legislative act that created a duty on the part of the district that is enforceable via writ of mandamus,
  • Equitable estoppel prevents enforcement of the district’s invoices because the district did not follow the procedures it had agreed to follow in order to induce OCSA to continue using the district’s special education services, and
  • The district has a contractual duty to follow the procedures that were negotiated and mutually agreed upon by the parties.
CURRENT STATUS AND/OR OUTCOME:
In the amicus brief filed on appeal in support of the district and the trial court’s decision, the ELA argued that the Charter Schools Act does not require a charter authorizer to comply with the terms of a charter school’s own charter and that a resolution is a legally permissible method by which an authorizer may approve or renew a charter, and does not in any way create a local legislation binding on the authorizer.

After the case was fully briefed, the parties entered into a legal settlement, and the appeal was voluntarily dismissed.

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