DISTRICT’S DENIAL OF CHARTER SCHOOL RENEWAL PETITION IS QUASI-JUDICIAL, “EXTREMELY DEFERENTIAL” COURT REVIEW DOES NOT APPLY

On July 11, 2019, the California Court of Appeal decidedOxford Preparatory Academy v. Chino Valley Unified School District.  The case involved a renewal petition for an existing charter school that was denied by the District.  The San Bernardino County Board of Education declined to consider the Academy’s appeal, and the California State Board of Education denied the appeal.  The Academy then sought judicial review.

The trial court concluded that the District’s decision was quasi-legislative and therefore an “extremely deferential” standard of review – the arbitrary and capricious standard – applied.  Finding that the District’s decision was not arbitrary and capricious, the trial court ruled in favor of the District.  The Academy appealed to the California Court of Appeal, which reversed the trial court.

The Court held that the District’s decision to deny the renewal petition was not quasi-legislative.  The Court also held that the District’s decision was quasi-judicial because it required the application of standards set forth in existing statutes and regulations and because the District did not craft new policy for future application as a result of its decision.  In addition, the Court relied upon the fact that the District made its decision after conducting a public hearing, gathering evidence, and exercising its discretion to make specific factual findings.  Because the District’s decision was deemed by the Court to be quasi-judicial, and not quasi-legislative, the standard of review applied by the trial court, which deferred to the District, was not applicable.  Instead, a less deferential, heightened standard of review applied:  Were the District’s findings supported by substantial evidence?  Taking it a step further, the Court concluded that, after a charter school’s initial petition is approved by a school district, the charter school has a fundamental vested right to continue operating, such that a school district’s decision depriving the charter school of that right is subject to independent judicial review.

While Oxford Preparatory Academy clearly applies to charter school renewal petitions, it is foreseeable that this case will be relied upon in a future challenge to the denial of a charter school initial petition to argue that such a decision is also quasi-judicial.  Although the Court distinguishes the case before it from a 2015 case in which a decision regarding an initial petition was found to be quasi-legislative, the Court does spend a considerable amount of time discussing the process for establishing a new charter school and states that the renewal petition is governed by the same standards as an initial petition, but the District must consider pupil academic achievement as the most important factor in determining whether to grant a charter renewal.  As with a renewal petition, a school district considering an initial petition must hold a public hearing, gather evidence, and exercise its discretion to make specific factual findings.  These were the very factors relied upon by the Court in Oxford Preparatory Academy to conclude that the denial there was quasi-judicial and not quasi-legislative.

Oxford Preparatory Academy is of significance to school districts because it means that Courts, when reviewing a decision regarding a charter school renewal petition – and potentially a charter school initial petition – will not defer to the expertise of the school district.  Courts will not refrain from reweighing the evidence and will exercise independent judgment to determine whether a school district’s findings are supported by substantial evidence.  Therefore, it becomes all the more important for school districts to create a robust evidentiary record to support its findings of fact, carefully tying the evidence gathered to its decision regarding a charter school petition.

Parker & Covert has experience handling charter school petitions.  Should you have any follow-up questions or comments regarding the information in this legal update, please contact us by e-mail or by telephone at (714) 573-0900 (Southern California office) or (916) 245-8677 (Northern California office).

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