Minn. Transitions Charter Sch. v. Comm'r of the Minn. Dep't of Educ.

• Decision Date: 17 March 2014
• Docket Number: No. A13–1232.,A13–1232.
• Citation: 844 N.W.2d 223
• Court: Minnesota Court of Appeals
• Parties: MINNESOTA TRANSITIONS CHARTER SCHOOL, Relator, v. COMMISSIONER OF THE MINNESOTA DEPARTMENT OF EDUCATION, Respondent.

844 N.W.2d 223

MINNESOTA TRANSITIONS CHARTER SCHOOL, Relator,

v.COMMISSIONER OF THE MINNESOTA DEPARTMENT OF EDUCATION, Respondent.

No. A13–1232.

Court of Appeals of Minnesota.

March 17, 2014.

Syllabus by the Court

Charter schools are not eligible to operate alternative-learning programs under Minn.Stat. § 123A.05, subd. 1(a) (2012).

Minnesota Department of Education Cindy Lavorato, Booth & Lavorato LLC, Minnetonka, MN, for relator.

Lori Swanson, Attorney General, Kathryn M. Woodruff, Assistant Attorney General, St. Paul, MN, for respondent.

Considered and decided by CLEARY, Chief Judge; JOHNSON, Judge; and RODENBERG, Judge.

OPINION

CLEARY, Chief Judge.

Relator Minnesota Transitions Charter School challenges a decision of the Minnesota Department of Education (MDE) that relator is not eligible to operate its alternative-learning program (ALP) under Minn.Stat. § 123A.05 (2012). On appeal, relator argues that MDE erroneously interpreted section 123A.05, subdivision 1(a), and the related statutory scheme. Additionally, relator argues that MDE's decision constitutes an unpromulgated agency rule, that the decision was not supported by substantial evidence, and that the decision was arbitrary and capricious. We affirm MDE's decision because charter schools are not eligible to operate ALPs under the plain meaning of the statute.

FACTS

In 2002, MDE sent relator a letter approving relator for an ALP on a probationary basis for one calendar year. The letter indicated that relator “satisfie[d] a sufficient number of the provisions of M.S. 123A.05 (Area Learning Center Organization) and 123A.06 (Center Programs and Services) to approve initial site determination.” MDE continued to fund relator's ALP over the next eleven years. E-mails among MDE staff members reflect that MDE began reviewing relator's ALP in the first half of 2011. Discussions regarding the statutory basis for relator's ALP continued at various times over the next two years. In May 2013, MDE notified relator that it appeared relator was not eligible to operate its ALP, and the parties subsequently met to discuss MDE's preliminary findings on June 5, 2013. MDE issued its final decision on June 19, 2013 by letter, stating that relator was not eligible to operate an ALP under section 123A.05. Relator now appeals this determination.

ISSUES

I. Is MDE's conclusion that charter schools are not eligible to operate alternative-learning programs under section 123A.05, subdivision 1(a), erroneous?

II. Is MDE's decision invalid as an unpromulgated agency rule under the Minnesota Administrative Procedure Act?

III. Did MDE fail to follow statutory requirements for withholding funding from relator?

IV. Is there substantial evidence to support MDE's decision?

V. Is MDE's decision arbitrary and capricious?

ANALYSIS

On writ of certiorari, we review quasi-judicial agency decisions not subject to the Minnesota Administrative Procedure Act (MAPA) by examining the record “to review questions affecting the jurisdiction of the [agency], the regularity of its proceedings, and, as to the merits of the controversy, whether the order or determination in a particular case was arbitrary, oppressive, unreasonable, fraudulent, under an erroneous theory of law, or without any evidence to support it.” Anderson v. Comm'r of Health, 811 N.W.2d 162, 165 (Minn.App.2012), review denied (Minn. Apr. 17, 2012) (quotation omitted).

I.

A. MDE's interpretation of section 123A.05, subdivision 1(a), corresponds with the plain meaning of the statute.

Minn.Stat. § 123A.05, subd. 1(a), states that “[a] district may establish an area learning center, alternative-learning program, or contract alternative in accordance with sections 124D.68, subdivision 3, paragraph (d), and 124D.69.” MDE argues that the plain language of section 123A.05, subdivision 1(a), limits the eligibility for ALP operation to school districts and excludes charter schools. Relator asserts that MDE's reading of the statute conflicts with a plain reading of the overall statutory scheme.

“When a decision turns on the meaning of words in a statute or regulation, a legal question is presented. In considering such questions of law, reviewing courts are not bound by the decision of the agency and need not defer to agency expertise.” St. Otto's Home v. Minn. Dep't of Human Servs., 437 N.W.2d 35, 39–40 (Minn.1989) (citation omitted). Questions of statutory construction are reviewed de novo. Lee v. Fresenius Med. Care, Inc., 741 N.W.2d 117, 122 (Minn.2007). This court “retain[s] the authority to review de novo errors of law which arise when an agency decision is based upon the meaning of words in a statute.” In re Denial of Eller Media Co.'s Applications for Outdoor Adver. Device Permits, 664 N.W.2d 1, 7 (Minn.2003).

The goal of this court when interpreting statutes “is to ascertain and effectuate the intention of the legislature.” Brua v. Minn. Joint Underwriting Ass'n, 778 N.W.2d 294, 300 (Minn.2010) (quotation omitted). If a statute is unambiguous, we interpret the text of a statute according to its plain language. Id. If a statute is ambiguous, we employ canons of construction to determine the legislature's intent. Id. A statute is ambiguous when it is subject to more than one reasonable interpretation. Am. Family Ins. Grp. v. Schroedl, 616 N.W.2d 273, 277 (Minn.2000). “Basic canons of statutory construction instruct that we are to construe words and phrases according to their plain and ordinary meaning.” Id. “A statute should be interpreted, whenever possible, to give effect to all of its provisions; ‘no word, phrase, or sentence should be deemed superfluous, void, or insignificant.’ ” Id. (quoting Amaral v. Saint Cloud Hosp., 598 N.W.2d 379, 384 (Minn.1999)). “We are to read and construe a statute as a whole and must interpret each section in light of the surrounding sections to avoid conflicting interpretations.” Id.

We first must inquire into whether section 123A.05, subdivision 1(a), has a plain and ordinary meaning or is susceptible to more than one reasonable interpretation. Section 123A.05, subdivision 1(a), enables a “district” to establish an ALP. “When interpreting a statute, we generally are guided by the definitions provided by the Legislature.” State v. Rick, 835 N.W.2d 478, 482 (Minn.2013). For purposes of section 123A.05, subdivision 1(a), “district” is defined in Minn. Stat § 120A.05 (2012). Minn.Stat. § 123A.01, subd. 1 (2012). Section 120A.05 defines “district” as a “school district.” Minn.Stat. § 120A.05, subd. 8.

Under a plain reading of section 120A.05, subdivision 8, a charter school is not a “school district” and is therefore not a “district” as defined in that section. The legislature has distinguished school districts from charter schools elsewhere in the education code. See, e.g.,Minn.Stat. § 124D.10, subd. 27 (2012) (stating that a charter school may enter into a collaborative agreement with the school district in which it is located to enhance student achievement). Additionally, the legislature has expressly deemed that charter schools be considered districts for purposes of other statutory provisions. See e.g.,Minn.Stat. § 124D.10, subd. 8(k) (deeming charter schools to be districts for purposes of tort liability under chapter 466).

Relator argues that, even if charter schools are not districts as defined in section 120A.05, the scope of section 123A.05, subdivision 1(a), does not limit eligibility to operate ALPs to school districts. Instead, relator asserts that the subdivision provides districts the discretion to establish ALPs, but does not prohibit charter schools from also doing so. Relator's reading of the statute is unpersuasive. By authorizing school districts to operate the listed alternative-education programs through subdivision 1(a), the legislature implied that school districts would not otherwise be able to operate alternative-education programs, in the absence of subdivision 1(a). Reading section 123A.05, subdivision 1(a), so that entities not listed are able to operate ALPs makes the subdivision superfluous and of no effect. See Am. Family Ins. Grp., 616 N.W.2d at 277 (stating that “[a] statute should be interpreted, whenever possible, to give effect to all of its provisions”). Entities not listed under subdivision 1(a), including charter schools, are without authorization to operate alternative-education programs under the plain meaning of the subdivision. See Wallace v. Comm'r of Taxation, 289 Minn. 220, 230, 184 N.W.2d 588, 594 (1971) (reiterating the established principle that “courts cannot supply that which the legislature purposefully omits or inadvertently overlooks”).

Under a plain reading of section 123A.05, subdivision 1(a), charter schools are not eligible to operate ALPs. However, we must also review related statutes to determine the meaning of the provision within the entire statutory scheme. See A.A.A. v. Minn. Dept. of Human Servs., 818 N.W.2d 552, 556 (Minn.App.2012) (stating that this court “review[s] a statute's content to discern meaning in the full context of the act or provision and consider[s] sections of a statute that relate to the same subject matter”), review granted (Minn. Sept. 25, 2012).

MDE argues that relator's reading of the statutory scheme runs contrary to the clear intent of the legislature. Specifically, MDE cites flexible-learning-year programs, online-learning programs, and the freedom that charter schools are given from the standard school-year calendar, all as evidence that the legislature has been clear as to what alternative-education programming charter schools may offer. MDE also points to the statutory section authorizing charter-school formation, the lack of a cross-reference to section 123A.05, subdivision 1(a) in that section, and a provision in that section limiting the automatic application to charter schools of the statutes and rules applicable to school districts. SeeMinn.Stat. § 124D.10 (2012). Lastly, MDE argues that the...