Alexander v. Califano, C-76-1982-WWS.

• Decision Date: 17 May 1977
• Docket Number: No. C-76-1982-WWS.,C-76-1982-WWS.
• Citation: 432 F. Supp. 1182
• Court: U.S. District Court — Northern District of California
• Parties: Billie ALEXANDER and Barbara Alexander, on their behalf and on behalf of all others similarly situated, as parents and next friends of, Dyan Alexander and Timothy Alexander, minor children, Plaintiffs, v. Joseph A. CALIFANO, Jr., Individually and as Secretary of the Department of Health, Education and Welfare, et al., Defendants.

432 F. Supp. 1182

Billie ALEXANDER and Barbara Alexander, on their behalf and on behalf of all others similarly situated, as parents and next friends of, Dyan Alexander and Timothy Alexander, minor children, Plaintiffs, v. Joseph A. CALIFANO, Jr., Individually and as Secretary of the Department of Health, Education and Welfare, et al., Defendants.

No. C-76-1982-WWS.

United States District Court, N. D. California.

May 17, 1977.

David M. Krashna, Contra Costa Legal Services Foundation, Richmond, Cal., Norman J. Chachkin, Federal Ed. Project, etc., Washington, D. C., Jan T. Chilton, Severson, Werson, Berke & Melchior, San Francisco, Cal., for plaintiffs.

John J. Klee, Jr., Joanne Condas, Deputy Atty. Gen., San Francisco, Cal., Russell W. Taylor, Haims MacGowan & McInerney, Oakland, Cal., William B. Spohn, Senior Asst. U. S. Atty., San Francisco, Cal., for defendants.

ORDER GRANTING PARTIAL SUMMARY JUDGMENT

WILLIAM W SCHWARZER, District Judge.

This is an action to enforce rights asserted by plaintiffs under Title I of the Elementary and Secondary Education Act of 1965, as amended, (20 U.S.C. Secs. 241a et seq.) ("Title I") and regulations issued thereunder. This Court has jurisdiction under Sections 1331 and 1343, Title 28, United States Code.

Plaintiffs allege that they are low-income residents of Richmond, California, and that the minor plaintiffs are educationally deprived children requiring special educational assistance. They sue in their own behalf and on behalf of a class of other educationally deprived children and their parents residing in areas within the Richmond Unified School District ("RUSD") eligible to receive so-called Title I assistance. Although no motion has been made under Rule 23(c)(1), Federal Rules of Civil Procedure, for a determination that the action may be maintained as a class action, no question has been raised by defendants in this regard and the record on this motion amply supports a finding that this action meets the requirements of paragraphs (a) and (b)(2) of Rule 23. Accordingly, the Court finds that, at least with respect to the issues determined on this motion, the action may be maintained as a class action.

The complaint raises, among other issues, an issue concerning the lawfulness of the method used by RUSD in allocating and distributing to various schools funds received from federal and State sources for compensatory educational programs.¹ Cross-motions for partial summary judgment on that issue have been filed and the parties agree that there is no genuine issue of material fact precluding disposition by summary judgment.

For the reasons hereafter discussed, the Court finds and concludes that plaintiffs are entitled to partial summary judgment awarding them declaratory relief against the method used by RUSD to allocate and distribute State compensatory education funds to schools eligible to receive federal Title I aid.

I.

A. Title I makes available federal "financial assistance . . . to local educational agencies serving areas with concentrations of children from low-income families to expand and improve their educational programs by various means . . . which contribute particularly to meeting the special educational needs of educationally deprived children." (20 U.S.C. Sec. 241a.)

An application for Title I funds by a local educational agency ("LEA") such as RUSD must be approved by the appropriate State educational agency which must determine that the LEA has met certain requirements. Among other things, the State agency must determine that

"Federal funds made available under this subchapter will be so used (i) as to supplement and, to the extent practical, increase the level of funds that would, in the absence of such Federal funds, be made available from non-Federal sources for the education of pupils participating in programs and projects assisted under this subchapter, and (ii) in no case, as to supplant such funds from non-Federal sources . . ." (20 U.S.C. Sec. 241e(a)(3)(B); emphasis added.)

The question presented is whether the method used by RUSD, acting under regulations and directives of the State Department of Education, to distribute and allocate federal Title I funds among certain of its schools violates the statutory requirements quoted above. Specifically, the question is whether RUSD, by pooling State and federal funds and allocating a flat sum per eligible pupil, has used federal funds to supplant rather than to supplement available State funds.

B. State funds are made available to RUSD under a compensatory education program known as the Educationally Disadvantaged Youth Act. Inasmuch as it was initially enacted in 1972 as part of Senate Bill 90, it is generally referred to as SB 90/EDY. (Cal.Ed.Code Secs. 6499.230-6499.238.) California also has a program of categorical aid funds known as the Early Childhood Education program ("ECE".) (Cal.Ed.Code Secs. 6445-6446.6.) While there are differences in these programs, for purposes of the discussion here, ECE funds may be treated as being included within the SB 90/EDY allocations to the extent they also went to educationally disadvantaged children.

Under the SB 90/EDY program, RUSD must rank its school attendance areas (i. e., schools) according to educational need, determined on the basis of the number of students scoring in the lowest quartile on statewide standardized tests. 5 Cal.Ad. Code Sec. 3934(c). The available SB 90/EDY funds are then distributed among the district's schools in order of rank.

The amount of SB 90/EDY funds, as well as Title I funds, received by each eligible school, is determined by the district. In making that determination, the district is bound by guidelines issued annually by the State Superintendent of Public Instruction.² Those guidelines establish the maximum and minimum amount of compensatory education funds from all sources which may be spent by the district per eligible pupil. For the 1976-1977 school year, the maximum was set at $550 per pupil, the minimum at $350 per pupil. The district was left free to select any figure within that range as its per pupil expenditure of compensatory education funds. RUSD set the figure at $400 per pupil.

Had RUSD distributed the SB 90/EDY funds available to it to the schools eligible to receive such funds in the order of their SB 90/EDY ranking, and without regard to available Title I funds, at the rate of $400 per pupil, it would have run out of those funds (even after adding to them ECE funds available to the same schools) before reaching the thirteenth ranked school. Even had it distributed only the minimum of $350 per pupil, these funds would not have extended beyond the fourteenth ranked of the eligible schools.³

Instead of following the above procedure, RUSD pooled its SB 90/EDY funds with its Title I funds. It then allocated Title I funds among Title I eligible schools, using SB 90/EDY funds in relatively small amounts as needed to bring the aggregate allocation to the level of approximately $400 per pupil. For Title I purposes, schools must be ranked on the basis of the ratio or number of their students coming from low-income families. See, 45 C.F.R. Sec. 116a.20(b), (d), (g), (h). Inasmuch as the Title I eligible schools were apparently also eligible under SB 90/EDY, the result of this process was to stretch the SB 90/EDY funds among a larger number of schools than would otherwise have received them. Instead of exhausting those funds at the thirteenth-ranked school, RUSD was thus able to provide compensatory education funding at the $400 per pupil level from either State or federal sources to all twenty-five schools shown in footnote 3.⁴

Plaintiffs argue that by this method of allocation, RUSD used federal funds to supplant, rather than to supplement State funds, in violation of the act. They contend, and the Department of Health, Education and Welfare ("HEW") concurs, that State funds should have been allocated first and federal Title I funds layered on top, thereby concentrating the available educational assistance on those pupils needing it the most, i. e., pupils in schools which rank high under both the State scholastic standard and the federal low-income standard.

II.

Title I was initially adopted in 1965. Its basic purpose was to provide federal funds to help meet the needs of educationally deprived children in school attendance areas of districts having high concentrations of children from low-income families. (See, 1965 U.S.Code Cong. and Admin.News, pp. 1446, 1454.) Grants were to be determined with reference to and were to supplement the average expenditures per pupil in the state. (Id., at p. 1451.)

Experience under the act led to various complaints concerning its administration and enforcement, including complaints that federal Title I funds were being used to supplant State and local funds. (1970 U.S. Code Cong. and Admin.News, pp. 2768, 2776.) As a result, Congress in 1970 adopted, among various other amendments to the act, the present language of Section 241e(a)(3) which requires the appropriate State educational agency to make a determination that

"(B) Federal funds made available under this subchapter will be so used (i) as to supplement and, to the extent practical, increase the level of funds that would, in the absence of such Federal funds, be made available from non-Federal sources for the education of pupils participating in programs and projects assisted under this subchapter, and (ii) in no case, as to supplant such funds from non-Federal sources, and (C) State and local funds will be used in the district of such agency to provide services in project areas which, taken as a whole, are at least comparable to services being provided in areas in such district which are not receiving funds under this subchapter . . ."

Senate Report No. 91-634 comments on the purpose of those provisions as follows:

"SUPPLANTING STATE AND LOCAL FUNDS WITH FEDERAL FUNDS

"Under present law there is

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