Butt v. State of California

• Decision Date: 31 December 1992
• Docket Number: No. S020835,S020835
• Citation: 842 P.2d 1240,4 Cal.4th 668,15 Cal.Rptr.2d 480
• Court: California Supreme Court
• Parties: , 842 P.2d 1240, 79 Ed. Law Rep. 1039 Thomas K. BUTT et al., Plaintiffs and Respondents, v. STATE of California et al., Defendants and Appellants.

Page 480

15 Cal.Rptr.2d 480

4 Cal.4th 668, 842 P.2d 1240, 79 Ed. Law Rep. 1039

Thomas K. BUTT et al., Plaintiffs and Respondents, v. STATE of California et al., Defendants and Appellants.

No. S020835.

Supreme Court of California,

In Bank.

Dec. 31, 1992.

[842 P.2d 1243] Daniel E. Lungren, Atty. Gen., Robert L. Mukai, Chief Asst. Atty. Gen., Charlton G. Holland, Asst. Atty. Gen., D. Robert Shuman, Richard J. Chivaro, Joseph R. Symkowick, Roger D. Wolfertz, Michael E. Hersher, Allan H. Keown, Sacramento, and Stuart Biegel, Los Angeles, for defendants and appellants

Frank R. Calton, Howard P. Abelson, Richmond, Ronald A. Zumbrun and Anthony T. Caso, Sacramento, as amici curiae on behalf of defendants and appellants.

Eva Paterson, Michael Harris, Morrison & Foerster, Darryl Rains, Arturo J. Gonzalez and Katherine E. Schuelke, San Francisco, for plaintiffs and respondents.

Beverly Tucker, A. Eugene Huguenin, Jr., Burlingame, Robert Einar Lindquist, Los Angeles, Constance de la Vega, San Francisco, Ann Fagan Ginger, Berkeley, Linda Fullerton, Point Richmond, Alan L. Schlosser, Edward M. Chen, Matthew A. Coles, Margaret C. Crosby, San Francisco, Richard Briffault, John A. Powell, Helen Hershkoff, Adam S. Cohen, New York City, Winslow & Fassler, Martin Fassler, Oakland, Bunch & Grimes and Michael C. Grimes, San Francisco, as amici curiae on behalf of plaintiffs and respondents.

Robert J. Bezemek, Oakland, as amicus curiae.

BAXTER, Justice.

In late April 1991, after a period of mounting deficits, the Richmond Unified School District (District) announced it lacked funds to complete the final six weeks of its 1990-1991 school term. The District proposed to close its doors on May 1, 1991. The Superior Court of Contra Costa County issued a preliminary injunction directing the State of California (State), its Controller, and its Superintendent of Public Instruction (SPI) to ensure that the District's students would receive a full school term or its equivalent. The court approved the SPI's plan for an emergency State loan, and for appointment by the SPI of an administrator to take temporary charge of the District's operation.

We declined to stay implementation of the plan pending the State's appeal. However, we transferred the appeal here in order to decide an important issue of first impression: Whether the State has a constitutional duty, aside from the equal allocation of educational funds, to prevent the budgetary problems of a particular school district from depriving its students of "basic" educational equality.

We affirm the trial court's determination that such a duty exists under the California Constitution. Further, the court did not err in concluding, on the basis of the plaintiffs' preliminary showing, that the particular circumstances of this case demanded immediate State intervention. However, the court exceeded its judicial powers by approving the diversion of emergency loan funds from appropriations clearly intended by the Legislature for other purposes.

FACTS AND PROCEDURAL HISTORY ¹

On April 17, 1991, Thomas K. Butt and other named District parents filed a class action for temporary and permanent injunctive relief against the State and the District's board of education (Board). ² The complaint alleged as follows: The State is responsible for educating all California children, and the Board is the State's agent for carrying out this responsibility in the District. The scheduled final day of the District's On April 22, 1991, plaintiffs noticed a motion for preliminary injunction. In an attached declaration, Frank R. Calton, a member of the Board, stated that the District projected a revenue shortfall of $23 million for the 1990-1991 academic year and only had sufficient funds to pay its employees through April 1991. Calton declared the District would have to close at the end of April unless new funds were obtained or employees agreed to work for registered warrants in lieu of paychecks. He indicated that the District's efforts to obtain an emergency loan from the State had not yet succeeded, and the District was preparing to file for bankruptcy.

[842 P.2d 1244] 1990-1991 school term was June 14, 1991, but the District had announced that its 44 elementary, secondary, and adult schools would close on May 1, 1991. The resulting loss of six weeks of instruction would cause serious, irreparable harm to the District's 31,500 students and would deny them their "fundamental right to an effective public education" under the California Constitution. Moreover, as an unjustified discrimination against District students compared to those elsewhere in California, the closure would violate equal protection guarantees of the California and United States Constitutions. Therefore, defendants should be enjoined from closing the District's schools before the scheduled end of the scholastic term.

Plaintiffs' motion papers also included declarations by District teachers, academicians in the field of education, and members of the Contra Costa County board of education. These statements detailed the serious disruptive effect the proposed closure would have upon the educational process in the District and upon the quality of education afforded its students.

The motion was heard on April 29, 1991. The Attorney General represented the State in opposition. Counsel for the District represented that the Board's appearance was precluded by an automatic bankruptcy stay. The trial court granted plaintiffs' unopposed motion for amendment of the complaint to include the SPI and the Controller as defendants. Pending applications for intervention and amicus curiae status were not formally granted, ³ but as stipulated by the parties, the court heard argument from the applicants and agreed to consider their briefs.

At the conclusion of the hearing, the trial court ruled orally that under the California Constitution, the State itself is responsible for the "fundamental" educational rights of California students and must remedy a local district's inability to provide its students an education "basically equivalent" to that provided elsewhere in the State. Concluding that the threatened closure would deny the District's students a "constitutionally [equal] education," the court ordered the State and the SPI to act as "they deem appropriate" to ensure that District schools remained open until June 14, 1991, or to provide District students a "substantially equivalent educational opportunity" within the statutory school year ending June 30, 1991.

This oral decision was followed by two written orders filed May 2. One of these, drafted by plaintiffs' counsel, purported to formalize the April 29 ruling. It made findings that closure of District schools by May 1 would cause District students irreparable harm, that the balance of harm favored a preliminary injunction, that education is a "fundamental right" in California, that no "compelling interest" justified denying District students six weeks of instruction available to "every other child in the State," and that plaintiffs' ultimate success on the merits was reasonably probable. The State and its agents again were directed to act "as ... appropriate" to ensure District students, within the school year ending June 30, 1991, an education "equivalent basically" to that provided elsewhere in California for a full school term.

[842 P.2d 1245] The Controller was added as a State official expressly bound by the court's commands.

On the same day, May 2, the SPI and the Controller submitted their plan for compliance with the preliminary injunction. With counsel for all interested parties present, the court took evidence indicating that uncommitted funds exceeding the estimated $19 million necessary to complete the District's school year were available from existing State appropriations to the Greater Avenues for Independence (GAIN) program and for emergency assistance to the OUSD. Counsel for the OUSD stipulated that his client had "no objection" to use of the $10 million OUSD appropriation for purposes of an emergency loan to the District.

Accordingly, the court executed an order, drafted by counsel for the SPI, approving in principle the submitted plan. ⁴ The order authorized the Controller to disburse an emergency loan to the District from unspent portions of the GAIN and OUSD appropriations. (See Stats.1989, ch. 93, § 22.00; Stats.1989, ch. 1438, § 1 et seq.) Meanwhile, the SPI, by virtue of the State's "ultimate responsibility" for equal education and his own statutory obligation to "superintend the schools of this state" (Ed.Code, § 33112, subd. (a)), ⁵ would have authority to "relieve the ... [B]oard of its legal duties and powers, appoint a trustee, develop a recovery plan and, subject to the approval of the Controller, [develop] a repayment plan on the [D]istrict's behalf as necessary" to ensure completion of the school term, the District's financial recovery, and the protection of the loaned funds. ⁶

The Attorney General timely noticed appeals from the April 29 and May 2 orders on behalf of the State. Defendants SPI and Controller did not appeal. The State immediately requested transfer of the appeal from the Court of Appeal, First Appellate District, to this court (see Cal.Rules of Court, rule 20) and also asked that we stay enforcement of the trial court's orders pending appeal. The SPI and the Controller opposed a stay but supported transfer of the appeal to this court. We granted the transfer request but denied a stay. ⁷

DISCUSSION

1. Standard of review.

In deciding whether to issue a preliminary injunction, a court must weigh two "interrelated" factors: (1) the likelihood that the moving party will ultimately prevail on the merits and (2) the relative interim harm to the parties from issuance or nonissuance of the injunction. (Common Cause v. Board of Supervisors (1989) 49 Cal.3d 432, 441-442, 261 Cal.Rptr. 574, 777 P.2d 610.) Appellate review is limited to...