Evans v. Buchanan

• Decision Date: 05 May 1978
• Docket Number: Civ. A. No. 1816-1822.
• Citation: 455 F. Supp. 692
• Parties: Brenda EVANS et al., Plaintiffs, v. Madeline BUCHANAN et al., Defendants.
• Court: U.S. District Court — District of Delaware

455 F. Supp. 692

Brenda EVANS et al., Plaintiffs, v. Madeline BUCHANAN et al., Defendants.

Civ. A. Nos. 1816-1822.

United States District Court, D. Delaware.

May 5, 1978.

Joseph A. Rosenthal and Irving Morris, of Morris & Rosenthal, and Louis L. Redding, Wilmington, Del., for individual plaintiffs.

Richard Allen Paul, of Paul, Lukoff & Hurley, Wilmington, Del., for intervening plaintiffs; Louis R. Lucas, Ratner, Sugarmon, Lucas, Salky & Henderson, Memphis, Tenn., Paul R. Dimond, of O'Brien, Moran & Dimond, Ann Arbor, Mich., William L. Taylor, Center for National Policy Review, Washington, D. C., of counsel.

Aida Waserstein, Wilmington, Del., for intervening Hispanic plaintiffs.

Richard R. Wier, Jr., Atty. Gen., State of Delaware, and Regina M. Small, Asst. Atty. Gen., State of Delaware, William Prickett, and Mason E. Turner, of Prickett, Ward, Burt & Sanders, Wilmington, Del., Philip B. Kurland, Chicago, Ill., for defendant State Board of Education.

Edward W. Cooch, Jr., of Cooch & Taylor, Wilmington, Del., for Marshallton-McKean School District.

Samuel R. Russell, of Biggs & Battaglia, Wilmington, Del., for Alexis I. duPont School Dist Willaim Poole, of Potter, Anderson & Corroon, Wilmington, Del., for Alfred I. duPont School Dist.

James T. McKinstry, of Richards, Layton & Finger, Wilmington, Del., for Claymont and Stanton School Districts.

John P. Sinclair, of Potter, Anderson & Corroon, Wilmington, Del., for Newark School Dist.

Jerome O. Herlihy, of Herlihy & Herlihy, Wilmington, Del., for Conrad Area School Dist.

Howard M. Handelman, and Jeffrey M. Weiner, of Bayard, Brill & Handelman, Wilmington, Del., for New Castle County Vocational-Technical School Dist.

James M. Tunnell, Jr., and Richard Allen, of Morris, Nichols, Arsht & Tunnell, Wilmington, Del., for Mount Pleasant School Dist.

David Anderson, of Potter, Anderson & Corroom, Wilmington, Del., for New Castle-Gunning Bedford School Dist.

Thomas S. Lodge, of Connolly, Bove & Lodge, Wilmington, Del., for DeLaWarr School Dist.

Henry N. Herndon, and Edward M. McNally, of Morris, James, Hitchens & Williams, Wilmington, Del., for New Castle County Planning Bd. of Ed., a non-aligned party.

Leonard L. Williams, and George E. Evans, Wilmington, Del., for Wendell Howell, member of New Castle County Planning Bd. of Ed.

Sheldon N. Sandler, of Bader, Dorsey & Kreshtool, Wilmington, Del., amicus curiae, Delaware State Ed. Association.

Clifford B. Hearn, of Balick & Hearn, P.A., Wilmington, Del., amicus curiae, Wilmington Federation of Teachers AFT AFL-CIO.

OPINION

MURRAY M. SCHWARTZ, District Judge.

The latest development in this actively litigated school desegregation case¹ is the State Board's² motion for a permanent injunction seeking to enjoin the NCCPBE³ from "fixing, levying or collecting a local tax for current operating expense in excess of the limit established by applicable State law."⁴ By applicable State law, the State Board refers to Senate Bill 457 ("S.B. 457"), enacted by the Delaware Legislature on February 9, 1978, which directs the State Board to set a maximum tax rate for "each new school district."⁵ The question before the Court is whether S.B. 457 as implemented by the State Board provides a taxation scheme likely to frustrate or imperil the desegregation process in the single school district. It is concluded that question must be answered affirmatively and consequently no injunction will issue.

I. Jurisdiction

On January 9 and 20, 1978, this Court issued comprehensive orders and opinions in this case. The orders conferred upon the NCCPBE the authority to establish, levy and collect taxes for current operating expenditures up to a maximum authorized rate of $1.91 per $100 of assessed valuation. The January 9 Opinion indicated that the Delaware Legislature could raise or lower the tax authorization, so long as the rate was not lowered "below a generally acceptable rate to a point at which the desegregation process would be imperiled . . .."⁶ The accompanying Order did not address this point. Defendants appealed from both the January orders and opinions. Subsequently, the Legislature responded to the invitation in the January 9 Opinion and passed legislation leading to a lower tax ceiling than that imposed by the Court.

Before evaluating the merits of that legislation under the standard imposed in the January 9 Opinion, the Court must first be assured that it possesses jurisdiction to conduct such an inquiry. The appeals taken divested the Court of jurisdiction to resolve issues finally decided by the Opinion and Order. Plant Economy Inc. v. Mirror Insulation Co., 308 F.2d 275, 276-77 n. 7(3d Cir. 1962); Evans v. Buchanan, Nos. 1816-1822 (D.Del. March 15, 1978), at 1051. Nonetheless, jurisdiction remains in the Court to enforce its previously issued orders and opinions and to rule on matters left open in those rulings. See United States v. Board of School Commissioners, 503 F.2d 68, 81-82 (7th Cir. 1974), cert. denied, 421 U.S. 929, 95 S.Ct. 1654, 44 L.Ed.2d 86 (1975); Plaquemines Parish Commission Council v. United States, 416 F.2d 952 (5th Cir. 1969). It follows the Court necessarily retains jurisdiction to protect its decree, especially where, as in this case, jurisdiction has expressly been retained until the transition mandated by the orders occurs and the system upon which relief is entered is operational. Evans v. Buchanan, Nos. 1816-1822 (D.Del. Jan. 9, 1978), at 1039; order at 16. It is concluded the Court possesses jurisdiction.

II. Background

To understand the conclusion that the State Board's tax rate likely will frustrate the desegregation process, it is necessary to review the context from which the State legislation emanated. S.B. 457 was passed in conjunction with Senate Bill 456 ("S.B. 456") which attempted to eliminate the NCCPBE as the governing body of the reorganized school district and replace the single district with four autonomous districts. Pursuant to S.B. 457, the State Board immediately fixed the tax rates for current operating expenses applicable in each of the four prospective districts, ranging from 1.343 to 1.685, and sanctioned an amount for minor capital expenditures, tuition and debt service.

On February 24, on application of the NCCPBE, a temporary restraining order issued to enjoin implementation of the four district plan. After hearing and argument, and a full review of S.B. 456, it was preliminarily concluded the four district plan conflicted with the January 9, 1978 order of the Court presently on appeal to the Third Circuit. To protect its outstanding order and to prevent irreparable harm to the movant, plaintiffs and the public, a preliminary injunction and accompanying opinion issued on March 15, 1978 enjoining the State Board from further implementation of the four district plan pursuant to S.B. 456.

Although S.B. 457 also provided a mechanism for establishing a maximum tax rate for the single district, the State Board did not move to set a rate for the single district. Instead, its Director of Finance, James L. Spartz ("Spartz"), submitted by affidavit that the maximum rate for current operating expenses would be $1.527. Thereafter, the State Board sought to permanently enjoin the NCCPBE from fixing a rate for current operating expenses in excess of the amount to be fixed by defendant State Board, presumably $1.527. In the interim, pursuant to the January 9, 1978 opinion of the Court, the NCCPBE on February 23, 1978 established a tax rate for current operating expenses of $1.68. This rate was within the guidelines sanctioned by the Court's order and coincidentally within the upper range of tax rates which had been established by the State Board for the aborted four district plan.⁷

In the face of the two disparate tax rates, the issue now posed for decision is whether the formula for local school funding⁸ set out by the Legislature as interpreted by the State Board is an acceptable "practical alternative" or threatens to imperil the desegregation process in the coming or future years and must be rejected.

III. S.B. 457 and the Role of the Court

S.B. 457 provides a procedure by which the State Board is authorized to calculate a maximum current operating expenses tax rate.⁹ The legislation directs the State Board to: (1) estimate fiscal 1978 current expenditures; (2) divide this figure by the number of students enrolled for fiscal year 1978 to calculate a current average per pupil expenditure; (3) multiply the average expenditure total by the number of students expected to attend in fiscal year 1979 to establish an estimated expenditure required for fiscal year 1979; (4) using the current total assessed value of taxable real estate establish a tax rate that would yield 110% of the 1979 estimated expenditure. Although providing that the 110% amount so obtained included delinquencies and the costs of collection, the statute is silent on whether the 10% is also intended to cover the costs of reorganization and desegregation or is simply an inflation factor reflecting the historic percentage of increase in total expenditure. Finally, the statute provides that the Board of Education (NCCPBE) rather than the State Board may set the tax rate for debt service, minor capital expenditures and tuition.

The State Board urges that the rate obtained by it following the statutory procedure cannot be upset because "in the field of taxation . . . special deference is normally paid to legislative judgments."¹⁰ Citing Madden v. Kentucky, 309 U.S. 83, 87-88, 60 S.Ct. 406, 84 L.Ed. 590 (1940), for the postulate that legislatures possess great freedom in taxation classifications, the Supreme Court stated in San Antonio Independent School District v. Rodriguez, 411 U.S. 1, 42, 93 S.Ct. 1278, 1301, 36 L.Ed.2d 16 (1973):

The very complexity of the problems of financing and managing a statewide public school system suggests that "there will be more than one constitutionally permissible

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