Fresh Start Academy v. Toledo Bd. of Educ.

• Decision Date: 04 April 2005
• Docket Number: No. 3:05 CV 7006.,3:05 CV 7006.
• Citation: 363 F.Supp.2d 910
• Parties: FRESH START ACADEMY, Plaintiff, v. TOLEDO BOARD OF EDUCATION, Defendant.
• Court: U.S. District Court — Northern District of Ohio

363 F.Supp.2d 910

FRESH START ACADEMY, Plaintiff, v. TOLEDO BOARD OF EDUCATION, Defendant.

No. 3:05 CV 7006.

United States District Court, N.D. Ohio, Western Division.

April 4, 2005.

Lafe E. Tolliver, Toledo, OH, for Plaintiff.

Anastasia K. Hanson, Lisa E. Pizza, Spengler Nathanson, Toledo, OH, for Defendant.

MEMORANDUM OPINION

KATZ, District Judge.

This matter is before the Court on Defendant's Motion to Dismiss (Doc. No. 12). Plaintiff has filed a response (Doc. No. 16). Defendant has filed a reply (Doc. No. 17). For the reasons stated below, Defendant's Motion to Dismiss is granted.

BACKGROUND

Plaintiff Fresh Start Academy ("Fresh Start") is a private provider of educational and tutoring services. Fresh Start would like to provide tutoring services to Toledo Public Schools students in exchange for funds made available to Defendant Toledo Board of Education ("the Board") under the No Child Left Behind Act ("the NCLBA" or "the Act"), 20 U.S.C. §§ 6301 et seq.

The NCLBA requires a "local educational agency" ("LEA"), the definition of which includes "a public board of education" like the Board, 20 U.S.C. § 1401(15)(A)¹, to take certain actions when an elementary school that it serves fails to make "adequate yearly progress." 20 U.S.C. § 6316(b). Among other things, the Board must:

[A]rrange for the provision of supplemental educational services to eligible children in the school from a provider with a demonstrated record of effectiveness, that is selected by the parents and approved for that purpose by the State educational agency in accordance with reasonable criteria ... that the State educational agency shall adopt.

20 U.S.C. § 6316(e)(1); see also 20 U.S.C. §§ 6316(b)(5)(B), (7)(C)(iii), (8)(A)(ii). The NCLBA defines "supplemental educational services" ("SES") as:

[T]utoring and other supplemental academic enrichment services that are — (I) in addition to instruction provided during the school day; and

(ii) are of high quality, research-based, and specifically designed to increase the academic achievement of eligible children on the academic assessments required under section 1111 [20 U.S.C. § 6311] and attain proficiency in meeting the State's academic achievement standards.

20 U.S.C. § 6316(e)(12)(C). A "provider" can be:

[A] non-profit entity, a for-profit entity, or a local educational agency that —

(I) has a demonstrated record of effectiveness in increasing student academic achievement;

(ii) is capable of providing supplemental educational services that are consistent with the instructional program of the local educational agency and the academic standards described under section 1111 [20 U.S.C. § 6311]; and

(iii) is financially sound....

20 U.S.C. § 6316(e)(12)(B). When the NCLBA requires the Board to arrange SES for its students, the Board must:

(A) provide, at a minimum, annual notice to parents (in an understandable and uniform format and, to the extent practicable, in a language the parents can understand) of —

(I) the availability of services under this subsection;

(ii) the identity of approved providers of those services that are within the local educational agency or whose services are reasonably available in neighboring local educational agencies; and

(iii) a brief description of the services, qualifications, and demonstrated effectiveness of each such provider;

(B) if requested, assist parents in choosing a provider from the list of approved providers maintained by the State;

(C) apply fair and equitable procedures for serving students if the number of spaces at approved providers is not sufficient to serve all students; and

(D) not disclose to the public the identity of any student who is eligible for, or receiving, supplemental educational services under this subsection without the written permission of the parents of the student.

20 U.S.C. § 6316(e)(2). The parents of eligible students, not the Board, select the provider of SES for each individual student. 20 U.S.C. § 6316(e)(3). Once the parent has selected a provider, the Board must enter into a contract with that provider for SES. Id.

As part of the NCLBA, Congress has appropriated and allocated to the states funds to enable LEAs and state educational agencies ("SEAs") to carry out the Act's requirements. 20 U.S.C. §§ 6302, 6332. The Act instructs LEAs like the Board to make a specified amount of the LEA's federal allocation available for SES, 20 U.S.C. §§ 6316(b)(10)(A)(ii), (e)(6), and allows SEAs like the state board of education to use a portion of their federal allocation to help LEAs pay for SES, 20 U.S.C. § 6316(e)(7).

Fresh Start claims it is a state-approved provider of SES and that it has applied to the Board seeking "entry and access to the available federal and state funds that are designed for tutorial services via the No Child Left Behind Act." (Doc. No. 1, Ex. A, ¶¶ 2, 5). Fresh Start claims the Board has "misappropriated" funds that it has received under the NCLBA; blocked Fresh Start from obtaining funds and qualified students for SES; engaged in preferential treatment by allowing certain providers of SES access to school facilities while excluding others, including Fresh Start; and thereby caused Fresh Start financial harm. Fresh Start seeks compensatory and punitive damages, an accounting of funds received by the Board for the provision of SES under the NCLBA, and an order allowing Fresh Start to "bid and contract for said available tutorial services." Id. at ¶ 15.

The Board has moved under Federal Rules of Civil Procedure 12(b)(1) and (6) to dismiss Fresh Start's complaint, arguing that all of Fresh Start's claims depend upon rights allegedly conferred by the NCLBA, but that the Act does not confer any private rights upon Fresh Start.

DISCUSSION

A. Motion to Dismiss Standards

In deciding a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the function of the Court is to test the legal sufficiency of the complaint. In scrutinizing the complaint, the Court is required to accept the allegations stated in the complaint as true, Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232, 81 L.Ed.2d 59 (1984), while viewing the complaint in a light most favorable to the plaintiffs, Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974); Westlake v. Lucas, 537 F.2d 857, 858 (6th Cir.1976). The Court is without authority to dismiss the claims unless it can be demonstrated beyond a doubt that the plaintiff can prove no set of facts that would entitle it to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957); Westlake, supra, at 858. See generally 2 JAMES W. MOORE, MOORE'S FEDERAL PRACTICE, § 12.34[1] (3d ed.2004).

Generally, Fed.R.Civ.P. 12(b)(1) motions to dismiss for lack of subject matter jurisdiction fall into two categories: facial attacks and factual attacks. Fed.R.Civ.P. 12(b)(1); United States v. Ritchie, 15 F.3d 592, 598 (6th Cir.1994) cert. denied. 513 U.S. 868, 115 S.Ct. 188, 130 L.Ed.2d 121 (1994). A facial attack challenges the sufficiency of the pleading itself. Upon receiving such a motion, the Court must take all of the material allegations in the complaint as true and construe them in the light most favorable to the non-moving party. Id. (citing Scheuer v. Rhodes, 416 U.S. 232, 235-37, 94 S.Ct. 1683, 1686-87, 40 L.Ed.2d 90 (1974)). In contrast, a factual attack challenges the factual existence of subject matter jurisdiction. See Ohio Hosp. Ass'n v. Shalala, 978 F.Supp. 735, 739 (N.D.Ohio.1997).

When a Court is inquiring about whether it has subject matter jurisdiction, "no presumptive truthfulness applies to the factual allegations, and the court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case." Ritchie, 15 F.3d at 598 (internal citations omitted). See also RMI Titanium Co. v. Westinghouse Elec. Corp., 78 F.3d 1125, 1135 (6th Cir.1996). "In reviewing such a motion, a district court is to probe the facts and assess the validity of its own jurisdiction. In doing so, the Court has a wide discretion to consider affidavits and the documents outside the complaint, and may even conduct a limited evidentiary hearing if necessary." Ohio Hosp. Ass'n, 978 F.Supp. at 739 (relying on Ohio Nat'l Life Ins. Co. v. United States, 922 F.2d 320, 325 (6th Cir.1990)). The plaintiff bears the burden of demonstrating that the Court has and may appropriately exercise jurisdiction over the subject matter. RMI Titanium, 78 F.3d at 1134. The Court may examine evidence of its power to hear a case, and must make any factual findings to determine whether it has jurisdiction. Kroll v. United States, 58 F.3d 1087, 1090 (6th Cir.1995); Rogers v. Stratton Inds., Inc., 798 F.2d 913, 915 (6th Cir.1986); Ohio Hosp. Ass'n, 978 F.Supp. at 739. A Fed. R. Civ. Pro. 12(b)(1) motion is not converted into a Fed.R.Civ.P. 56 motion for summary judgment when a Court examines evidence for this purpose. Rogers, 798 F.2d at 915.

B. Section 1983 and Implied Private Right of Action

The NCLBA provides no procedure for individual entities like Fresh Start to enforce its requirements: the Act's only "penalties" provision allows the Secretary of Education to withhold funds from states that do not meet the Act's requirements. 20 U.S.C. § 6311(g)(2). As the Board points out, Fresh Start's complaint does not make it clear whether Fresh Start claims the NCLBA creates private rights that it is attempting to enforce under 42 U.S.C. § 1983, or whether it claims the Act creates an implied private right of action. Whichever Fresh Start intended, the initial inquiry is the same and is dispositive.²

The Supreme Court has indicated that its "implied right of action cases should guide the determination of whether a statute confers rights enforceable under § 1983." Gonzaga Univ. v. Doe, 536 U.S. 273, 283, 122 S.Ct. 2268, 2275, 153 L.Ed.2d 309, 321 (2002). Therefore, whether Fresh Start's claims are...