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In re New Maurice J. Moyer Acadamy, Inc.

Court of Chancery of Delaware, New Castle

January 9, 2015

IN RE THE NEW MAURICE J. MOYER ACADEMY, INC

Submitted: January 2, 2015.

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[Copyrighted Material Omitted]

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Kurt M. Heyman, Melissa N. Donimirski and Dawn Kurtz Crompton of PROCTOR HEYMAN LLP, Wilmington, Delaware; Michael P. Migliore and Christofer C. Johnson of CITY OF WILMINGTON LAW DEPARTMENT, Wilmington, Delaware; Attorneys for Plaintiffs Shauniece Anderson, for her minor child S.A.; Shatana Turner, for her minor child D.T.; Alvin Alexander, for his minor children Z.A. and O.A.; and The City of Wilmington.

William E. Manning, James D. Taylor, Jr. and Allison J. McCowan of SAUL EWING LLP, Wilmington, Delaware; Attorneys for Plaintiffs The New Maurice J. Moyer Academy, Inc.; Judi Kennedy, for her minor child K.D., Jemuel Anderson, for his minor child J.K.A.J.; Jacqueline Bailey, for her minor child J.L.; Shalonda Davis, for her minor child O.D.; and Darcel Earl, for her minor child C.G.

Joseph C. Handlon, Scott W. Perkins, Catherine T. Hickey, Ilona Kirshon and Roopa Sabesan of DEPARTMENT OF JUSTICE STATE OF DELAWARE, Wilmington, Delaware; Max B. Walton and N. Christopher Griffiths of CONNOLLY GALLAGHER LLP, Newark, Delaware; Ryan P. Newell of CONNOLLY GALLAGHER LLP, Wilmington, Delaware; Attorneys for Defendants.

OPINION

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BOUCHARD, C.

I. INTRODUCTION

In 1995, the General Assembly adopted the Delaware Charter School Act.[1] The purpose of the Act was " to create an alternative to traditional public schools operated by school districts and improve public education overall by establishing a system of independent 'charter' schools throughout the State." [2] To that end, the Act " offers members of the community a charter to organize and run independent public schools, free of most state and school district rules and regulations governing public education," and with the use of public funds, " as long as they meet the requirements of [the Act], and particularly the obligation to meet measurable standards of student performance." [3]

Today, over 30 charter schools operate in the State of Delaware. This action concerns one of them. Maurice J. Moyer Academic Institute (" New Moyer" ) is a charter school located in Wilmington, Delaware serving grades 6-12. In 2011, it was granted a four-year charter that started with the 2012-2013 school year, and

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expires at the end of the 2015-2016 school year.

In this action, the operator of New Moyer, parents representing several of its students, and the City of Wilmington seek a preliminary injunction to enjoin the Delaware Department of Education, the Secretary of Education for the State of Delaware, and the Delaware State Board of Education from implementing their October 2014 decision to revoke New Moyer's charter and to close the school at the end of the current school year, in June 2015, one year before the charter expires. As discussed below, following an extensive process set forth in the Charter School Act, this decision was made because, among other reasons, New Moyer is the lowest performing charter school in the State based on the State's testing standards.

New Moyer serves some of the most economically disadvantaged students in the State of Delaware. They face significant academic challenges. It is natural to be sympathetic to Plaintiffs' desire to keep New Moyer's doors open for an additional school year so that the families who chose New Moyer can continue to send their children to what they view as their only practical option to attend a school in their neighborhood. It is the responsibility of State officials, however, to make the tough decisions concerning whether a charter school is meeting its obligations under the Charter School Act.

The primary issue before the Court is whether Plaintiffs have demonstrated a reasonable probability that they have been denied due process under the Fourteenth Amendment of the United States Constitution with respect to the decision to revoke New Moyer's charter. For the reasons discussed below, I conclude they have not. More specifically, I conclude that New Moyer does not have a constitutionally protected property interest in its charter and that its students do not have a constitutionally protected interest in graduating from New Moyer and that, even if they did, Plaintiffs have failed to demonstrate that it is reasonably probable they were not afforded due process.

I also conclude that, although the Charter School Act expressly prohibits judicial review of the merits of a decision to revoke a school's charter, it impliedly affords the school the right to challenge whether one of the statutorily required grounds upon which a charter may be revoked was made after the exercise of due diligence and good faith. The evidence Plaintiffs have presented, however, is insufficient to demonstrate that it is reasonably probable this standard was not met here.

For these and the other reasons explained below, Plaintiffs' motion for a preliminary injunction is denied.

II. BACKGROUND[4]

A. The Parties

Plaintiff The New Maurice J. Moyer Academy, Inc., a non-stock, non-profit Delaware

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corporation, operates Maurice J. Moyer Academic Institute, a charter school serving grades 6-12 in the City of Wilmington, Delaware. Although these two entities are technically distinct, I refer to them interchangeably as " New Moyer."

Plaintiffs Shauniece Anderson, Shatana Turner, Alvin Alexander, Judi Kennedy, Jemuel Anderson, Jacqueline Bailey, Shalonda Davis, and Darcel Earl are Delaware citizens who filed suit on behalf of their minor children who currently attend New Moyer. I refer to these citizens and their minor children together as the " Individual Plaintiffs."

Plaintiff The City of Wilmington, a Delaware municipal corporation, filed suit as parens patriae for the benefit of minor citizens who attend or wish to attend New Moyer.

Defendant Delaware Department of Education (the " Department" ) is the State agency that oversees public education in Delaware.

Defendant Mark T. Murphy is, and was as of the date of the revocation decision, the Secretary of Education for the State of Delaware (the " Secretary" ). Murphy is sued solely in his official capacity as the Secretary.

Defendant Delaware State Board of Education (the " State Board" ), an entity within the Department, is the governing body of the Delaware school system. The State Board administers and supervises the charter schools of Delaware.

Defendants Teri Quinn Gray, Jorge L. Melendez, Gregory G. Coverdale, Jr., G. Patrick Heffernan, Randall L. Hughes, II, Barbara B. Rutt, and Jerry M. Whittaker are, and were as of the date of the revocation decision, the seven members of the State Board. They are sued solely in their official capacities as members of the State Board.

B. The Predecessors to New Moyer

In 2006, the Department granted a charter for a school named The Maurice J. Moyer Academy, Inc. (" Old Moyer" ), which would be located in the City of Wilmington. In February 2010, the Secretary of the Department recommended, and the State Board agreed, not to renew Old Moyer's charter.[5]

In 2010, the General Assembly directed the Department to manage a school at the location of Old Moyer from July 1, 2010, until June 30, 2012.[6] Pursuant to the General Assembly's directive, in July 2010, the Department contracted with K-12 Classroom DE, LLC (" K12" ) to provide educational services for the 2010-2011 academic year.[7] In July 2011, after issuing a request for proposals for a third party to provide educational services for the 2011-2012 academic year,[8] the Department awarded that contract to K12.[9]

C. New Moyer is Formed and Receives a Charter from the Department

On January 3, 2011, a group of individuals (the " Moyer Board" ) submitted an application to the Department to operate a

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charter school at the former location of Old Moyer.[10] The application, which reflected the " consensus" of the Moyer Board members on the new school's " mission, goals and organization," was signed by all members of the Moyer Board, including the current Chairman, Christopher Curry (" Curry" ), and the current Vice Chairman.[11] The application set forth forty-seven separate " assurances" of the Moyer Board should it receive a charter. Those assurances included, for example, that the school would " [b]e in full compliance with 14 Delaware Code, Chapter 5" (the Charter School Act); that the Moyer Board would " not implement any modifications to the charter school program or operation without the express written consent of the Department" ; and that the Moyer Board and the school would " [c]omply with the provisions for a Performance Agreement, as required by the Secretary." [12]

The Moyer Board contemplated that the new school, New Moyer, would serve 365 students in grades 6-12 in its first year and would expand to serve 600 students in grades 6-12 in its fourth year.[13] Anticipating that New Moyer's demographics would be similar to those of its predecessors, the Moyer Board projected that the student body would be predominantly economically disadvantaged (with over 90% qualifying for free or reduced lunch) and minority (with over 99% being African American), and that approximately 25% of its students would need special education services.[14]

According to its application, the Moyer Board " intend[ed] to contract with [K12] for educational and management services in the operation of the school if the Moyer Board [were] granted a charter." [15] The Moyer Board further stated that it found K12, which offered an online instruction method, to be " the premier provider of curriculum, systems, and services" in digital education.[16] The application also included a draft services agreement between New Moyer and K12 pursuant to which K12 would provide educational services to New Moyer's students through the 2020-2021 academic year, unless terminated earlier.[17]

On April 1, 2011, the Charter School Accountability Committee (the " Committee" ) issued a final report on New Moyer's charter application.[18] The Committee found that New Moyer satisfied thirteen of the fourteen criteria required for approval under the Charter School Act.[19] The only criterion not satisfied was New Moyer's educational programming.[20] Regarding New Moyer's proposed curriculum, the Committee approved Science and Health Education; conditionally approved Math and Social Studies; but did not approve

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Physical Education, World Languages, Visual Arts, or Performing Arts based on the information submitted.[21]

In its report, the Committee recommended that the State Board approve New Moyer's charter application, subject to twenty-three conditions. Those conditions included requiring the Moyer Board to submit to the Department a proposed Performance Agreement " specifying measurable objectives with annual targets that is acceptable to the Secretary" by February 15, 2012.[22] The Committee also required New Moyer to submit its curricula for Math, Social Studies, Physical Education, World Languages, Visual Arts, and Performing Arts for review and approval by the Department by August 1, 2012.[23]

On April 21, 2011, the Secretary recommended, and the State Board approved, by a 6-0 vote, the issuance of a charter to New Moyer, subject to the conditions in the Committee's final report.[24] The charter would permit New Moyer to begin operations starting with the 2012-2013 academic year[25] and to remain open through the 2015-2016 academic year.[26]

On February 7, 2012, nearly ten months after New Moyer received a charter, a Department employee inquired about the status of New Moyer's services agreement with K12. The employee forwarded to Curry a copy of the draft services agreement that the Moyer Board had submitted in its charter application and encouraged Curry to consult an attorney regarding a final agreement.[27]

On July 1, 2012, New Moyer officially took over operations at the former location of Old Moyer. As of August 23, 2012, New Moyer still had not submitted an executed services agreement to the Department. When a Department employee inquired about the status of that agreement on August 23, Curry stated that New Moyer's counsel was in " the process of drafting the K12 Agreement." [28]

By December 3, 2012, New Moyer and K12 executed an Education Products and Services Agreement (the " Services Agreement" ), which was dated to be effective retroactively as of July 1, 2012.[29] Under the Services Agreement, K12 would provide educational services to New Moyer's students, and New Moyer became " responsible for monitoring K12's performance under, and compliance with, the terms of this Agreement in accordance with Applicable Law." [30] The Services Agreement continues through the 2015-2016 academic year, unless terminated earlier.[31]

D. New Moyer's Performance in its First Year (2012-2013)

New Moyer failed to meet the August 1, 2012, deadline the Committee had set in its April 2011 report to submit and receive approval of its curriculum. Thus, when New Moyer opened in fall 2012, it lacked a

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curriculum approved by the Department.[32] On November 19, 2012, the Department instructed New Moyer to submit the outstanding curricula for approval no later than December 31, 2012.[33] This deadline was extended further to May 31, 2013, by which time New Moyer submitted a proposed curriculum for approval.[34] On June 11, 2013, content specialists at the Department prepared an internal report noting certain deficiencies in New Moyer's proposed curriculum.[35]

The Department rated the overall academic performance of New Moyer for the 2012-2013 academic school year to be " below standard." [36] Of the fifteen categories in which academic performance was rated, New Moyer received two ratings of " exceeds standard," two ratings of " meets standard," six ratings of " below standard," and five ratings of " far below standard." [37] For the 2012-2013 academic year, the percentage of students scoring " proficient" according to Delaware state standards was 49.6% in English Language Arts and 40.3% in Math, both of which were slightly below the 20th percentile for all schools in the State.[38]

E. New Moyer Requests to Modify its Curriculum

During its first year of operation, New Moyer deviated from the online instruction method set forth in its charter application without obtaining the Department's written approval.[39] On November 19, 2012, the Department instructed New Moyer to submit a proposed charter modification regarding this change in instruction method no later than December 31, 2012.[40]

On December 17, 2012, New Moyer applied to the Department to modify its charter by changing its curriculum and by decreasing its authorized enrollment.[41] Regarding the curriculum, New Moyer sought to change its instructional method for core academic courses from online instruction to traditional, classroom instruction.[42]

On May 30, 2013, the Committee met with New Moyer representatives to discuss the charter modification proposal.[43] On June 27, 2013, the Committee recommended that the Department deny New Moyer's request because of deficiencies in its proposal, including the curricula for English Language Arts, Math, and Social Studies.[44]

On July 18, 2013, the State Board was informed that the Secretary had denied New Moyer's charter modification request. Because this charter modification required approval by both the Secretary and the

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State Board, the State Board took no further action on New Moyer's request.[45]

On July 25, 2013, the Department met with representatives of New Moyer to discuss its curriculum. Moyer Board's Chairman understood the importance of this meeting. Beforehand, in a July 18 email, Curry stated that the meeting " should not be taken lightly. We will be given hard deadlines and if we do not produce, Moyer's future is no more!" [46]

After the July 25 meeting, the Department sent New Moyer a " Curriculum Refinement Review," which provided detailed feedback on New Moyer's curriculum.[47] Similarly, on July 26, 2013, the Department provided New Moyer with a " Corrective Action Plan," which set forth " the expectations of the Department, the deadlines that must be met, and the areas in which the Department will engage in ongoing monitoring of [New] Moyer's progress." [48] The Department further informed New Moyer that, as part of the Corrective Action Plan, it would conduct site visits during September and October 2013.[49]

During the Corrective Action Plan period, the Department provided feedback on New Moyer's curriculum in reports dated October 3, 2013, October 27, 2013, and January 9, 2014.[50] On November 8, 2013, the Department also provided New Moyer with a report explaining certain observations in its monitoring of the Corrective Action Plan, noting that New Moyer's curriculum " continue[d] to lack coherence, appropriate progressions and alignment with assessments, and [did] not align to Common Core State Standards." [51] The report further noted that the Department had " found little improvement over the submissions that resulted in the denial of [New Moyer's] modification application in July, 2013." [52]

F. New Moyer's Performance in its Second Year (2013-2014)

On September 24, 2013, after New Moyer had operated for one academic year, New Moyer and the Department entered into the Performance Agreement,[53] which had been a condition of New Moyer's charter.[54] The Performance Agreement set forth certain performance expectations for New Moyer, including:

By 2015, [New Moyer's] expectation is to achieve the overall rating of " Meets" or " Exceeds" standard as measured by the Academic Performance Framework. Each year, [New Moyer] will show growth within [its] overall rating putting [it] on track to achieve [its] academic performance expectations. This progress ...

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