Out of Options: No Judicial Review for Charter School Non-renewals

By Corey Callahan, General Counsel and VP of Legal Policy

In a recent op-ed, James Merriman, the Charter Center’s CEO, reminds us of one of the bedrock principles of chartering: that the autonomy to operate free of many of the hurdles faced by district schools comes with the price of accountability. He goes on to assert that the price of this autonomy can be particularly high when the price is school closure. Merriman’s piece references a recent charter school closure where an authorizer’s non-renewal decision was based on the schools’ failure to meet set academic benchmarks.  This non-renewal decision was challenged by the school in court, but the court held that charters do not have the right to judicial review of non-renewal decisions. As the Director of Legal Affairs at the Charter Center, I regularly monitor the legal landscape, and closely track cases that affect the charter sector. This case, and several earlier cases now make clear that charter schools are subject to their authorizer’s non-renewal decisions without the right to judicial review. Below I discuss the law and cases that govern this issue.

The law regarding judicial review of non-renewal decisions is important because renewal is the main vehicle that authorizers have at their disposal to hold charter schools accountable. Every charter school is required to apply for renewal at least once every five years (sometimes less). At renewal, the charter school must demonstrate that the school has achieved the educational objectives set forth in its charter. If it has not, the authorizer has two options: (1) issue a short term renewal that allows the school a chance to improve or (2) deny the charter’s application for renewal.

The decision to not renew a charter is a difficult one because it is a decision to close the school (charter schools cannot operate without a charter). Nonetheless, it is critical, and in fact imperative that authorizers maintain bright lines of accountability. To that end, authorizers were given the right, under state law, to deny a charter school’s application to renew its charter. The Charter Schools Act provides that authorizers “may” renew a charter and this renewal is subject to the same provisions governing the initial issuance of a charter. See Education Law Section 2851(4). To be clear this means, like the initial granting of a charter – an authorizer’s decision to renew a charter is optional and not required. The statute regarding issuance of a new charter further states that a denial for an application for a charter is “final and shall not be reviewable in any court or by any administrative body.” Education Law Section 2852(6). Since these terms also apply to renewals – this means that an authorizer’s decision regarding renewal is also final and not appealable to any court or administrative body.

While the statute makes clear that renewals are to be treated the same as initial applications, there have been several charter schools that have sought judicial and/or administrative review of their authorizer’s decision to not renew their charter. While the courts have responded correctly –by consistently denying review of these decisions – these appeals have resulted in schools being kept open while the courts review the initial record. This practice needs to stop. Following the recent Appellate decision on this issue, two New York Appellate Divisions in the state have rejected charter schools’ arguments that they have a right to judicial review of their non-renewal decisions.

One of the first cases on non-renewal was Matter of New Covenant Charter School Educ. v. Board of Trustees of the State Univ. of N.Y., the SUNY Board of Trustees denied the charter school’s renewal application. 30 Misc.3d 1205[A] (Sup Ct. Albany County 2010). Former students, parents, teachers, trustees and the school filed suit arguing that the non-renewal decision was arbitrary and capricious in addition to violating the constitution. The court found that non-renewal was not subject to judicial review as the Charter Act “expressly acknowledges that charter may be renewed and notes that the denial of an application for a charter school “is final and shall not be reviewable in any court.” Id. *2 (2851(4), 2852(6). The court outright rejected the charter school’s argument that the statute does not specifically mention “renewal” as the court found the “plain wording of the statutes in question” does not support the charter school’s request for review of a renewal decision. The Court rejected the school’s other due process claims because there is no property interest in a charter as they are issued for five year periods.

The New Covenant Charter School decision was not appealed to the Appellate Division, but in 2013 another charter school sought judicial review of its non-renewal decision in the Appellate Division of the Fourth Department. In April 2012, the Board of Regents (Regents) had denied Pinnacle Charter School’s application to renew its charter. The school and parents at Pinnacle brought suit arguing that the decision by the Regents should be reversed for several reasons. See Pinnacle Charter Sch. v. Board of Regents of the Univ. of the State of N.Y.,  969 N.Y.S.2d 318 (4th Dept 2013). The charter school made allegations that the denial of the renewal violated (a) state and federal due process rights; (b) State Administrative Procedure Act; and (c) the rights of the parents’ children to a sound basic education under the State Constitution. In addition, the charter school further alleged that Education Law Section 2852 (6) is unconstitutional to the extent that it limits judicial and administrative review of the Regents’ non-renewal decision. Lastly, the school alleged that the New York State Education Department negligently misrepresented that Pinnacle’s charter would be renewed, when in fact the Department recommended to the Regents that the charter not be renewed.

The Appellate Division found that the charter school had no cause of action and dismissed all claims. On the due process claim, the court found, like the court in New Covenant Charter School, that the Charter Schools Act creates no constitutionally protected property interest in a renewal of a charter. The court also found that there was no violation of the State Administrative Procedure Act, because the Regents were not required to promulgate rules to exercise its authority to deny the renewal and the charter renewal process is not an “adjudicatory proceeding,” requiring rule making. The court also found that Education Law Section 2852(6) is not unconstitutional because even though Pinnacle does not have a right to an appeal, the provision states “Notwithstanding any provision of law to the contrary,” meaning if there was an indication that the Regents had acted illegal, unconstitutionally or in excess of its jurisdiction, Pinnacle would have been entitled to judicial review. The Court affirmed the dismissal of the negligent misrepresentation claim, holding that the charter school did not have “special or privity-like relationship” with the Department so as to require correct information to be imparted. The school appealed the Appellate Division’s decision to the Court of Appeals (the highest court in New York), which denied the school’s motion for leave to appeal.

The most recent decision by the Appellate Division in the Second Department, Matter of Fahari Academy Charter School v. Bd. of Educ. of City School Dist. of City of New York, mirrors the decisions articulated in New Covenant Charter School and Pinnacle. 27 N.Y.S.3d 688 (2d Dept 2016). In the case of Fahari, the Chancellor of the NYC Department of Education, the school’s authorizer, denied the charter renewal application after determining that the school had failed to meet the academic benchmarks set forth in its charter. This decision for non-renewal came after the school was given a short-term renewal the previous year with specific academic benchmarks it was required to meet. When the school failed to meet these expectations, the Chancellor allowed the school an opportunity to present oral and written submissions to address these deficiencies, and then ultimately decided the school must be closed. The Appellate Division affirmed state law, citing both New Covenant and Pinnacle, by holding Fahari Academy Charter School did not have a right to judicial or administrative review of its non-renewal decision. Fahari also appealed the Appellate Divisions’ decision to the Court of Appeals and was just denied leave to appeal.

With the Fahari decision, it should be unequivocal: charter schools seeking judicial review of non-renewal decisions will be denied. The statute is clear and the courts have been unanimous in upholding that non-renewal decisions – notwithstanding some illegal or conscience-shocking conduct by the authorizer – are not subject to judicial or administrative review. Charter schools that receive non-renewal decisions must do what is right by the students and families to create a transition plan and work collaboratively with their authorizers and school districts to wind-down their operations and, most importantly, identify quality school options for their students.