Sioux City School Dist. v. Dept. of Educ., 01-1996.

• Decision Date: 02 April 2003
• Docket Number: No. 01-1996.,01-1996.
• Parties: SIOUX CITY COMMUNITY SCHOOL DISTRICT, Appellant, v. IOWA DEPARTMENT OF EDUCATION, Appellee.
• Court: Iowa Supreme Court

659 N.W.2d 563

SIOUX CITY COMMUNITY SCHOOL DISTRICT, Appellant, v. IOWA DEPARTMENT OF EDUCATION, Appellee.

No. 01-1996.

Supreme Court of Iowa.

April 2, 2003.

Dawn E. Mastalir of Berenstein, Moore, Berenstein, Heffernan & Moeller, L.L.P., Sioux City, for appellant.

Thomas J. Miller, Attorney General, and Christie J. Scase, Assistant Attorney General, for appellee.

STREIT, Justice.

This dispute began when the Sioux City Community School District decided not to provide bussing for students who live less than two miles from the school. Parents appealed this decision to the Western Hills Area Education Agency (AEA). The AEA found the route students would have to travel was unsafe and therefore reversed the school district's decision. Both the Department of Education and district court affirmed the AEA's decision. Because we find the school district did not abuse its discretion in deciding not to provide transportation, we reverse.

I. Background and Facts

This case involves a dispute over the provision of transportation for ninety-four students to and from McKinley Elementary School in Sioux City, Iowa. Children who reside at the Regency Mobile Home Park in Sioux City live approximately one mile from their school. Prior to 1995, the Sioux City Community School District did not provide transportation for the children. Construction of a shopping center in 1995 disrupted the children's route to school. The city required the developer of the project to pay for the childrens' transportation and to design a "safe route" the children could use to walk to school when the construction was completed. Though the project was completed in 1998, additional road construction continued and the school district exercised its discretion to temporarily provide transportation for the students until the construction was complete and sidewalks were installed.

In the fall of 2000, the construction was finished and the school district informed parents that it would no longer provide transportation for the students. The only available route for the children to use was a sidewalk built on the right of way located between Gordon Drive, a four-lane highway and major business thoroughfare, and a frontage road serving local businesses.¹ Parents appealed the decision to the Western Hills Area Education Agency (AEA). The AEA found the route between the mobile home park and the school was not reasonably safe for elementary students to travel. It concluded the school district's decision to not provide transportation was not a proper discretionary act and ordered the school district to immediately resume transportation services for the students. The school district appealed and both the Iowa Department of Education (Department) and the district court affirmed the AEA's decision. The school district appeals the decision of the Department claiming it exceeded its authority in ordering the school district to provide transportation.

II. Scope of Review

Our review of an administrative agency proceeding is governed by Iowa Code section 17A.19(8) (2001). S.E. Iowa Co-op. Elec. Ass'n v. Iowa Utils. Bd., 633 N.W.2d 814, 818 (Iowa 2001). We are limited to correcting any errors of law made by the Department. Iannone v. Iowa Dep't of Revenue & Fin., 641 N.W.2d 735, 738 (Iowa 2002) (citing Iowa Code § 17A.19(8)). We will grant the requested relief if the petitioning party's substantial rights have been prejudiced and the agency exceeded its statutory authority or abused its discretion. Iowa Utils. Bd., 633 N.W.2d at 818.

To constitute an abuse of discretion, the action must be unreasonable or lack rationality under the attendant circumstances. Iannone, 641 N.W.2d at 738; In re J.L.L., 414 N.W.2d 133, 135 (Iowa 1987). An abuse of discretion is synonymous with unreasonableness. Dawson v. Iowa Bd. of Med. Exam'rs, 654 N.W.2d 514, 518 (Iowa 2002) (citing Stephenson v. Furnas Elec. Co., 522 N.W.2d 828, 831 (Iowa 1994)). "A decision is unreasonable where it is not based on substantial evidence... or is based on an erroneous application of the law." City of Windsor Heights v. Spanos, 572 N.W.2d 591, 592 (Iowa 1997) (citing Frank v. Iowa Dep't of Transp., 386 N.W.2d 86, 87 (Iowa 1986); 5 Am.Jur.2d Appellate Review § 695, at 365 (1995)). Evidence is substantial when "a neutral, detached, and reasonable person" would find it sufficient "to establish the fact at issue when the consequences from the establishment of that fact are understood to be serious and of great importance." Iowa Code § 17A.19(10)(f)(1).

III. The Merits

The school district begins by challenging the applicable standard under which the Department has authority to review its decision. The school district's argument shows a dichotomy of thought. On the one hand, the school district argues there can be no review of its discretionary decisions. On the other hand, the school district states if we review its discretionary decision, we can review only for an abuse of discretion. The Department did not precisely articulate the applicable scope of review for its review of the school district's decision. In the Department's decision, and implicitly on appeal, the Department urges the director may determine whether the school district's decision was reasonable and "exercise[][its] own independent judgment and discretion." The parties disagree over whether substantial credible evidence supports the school district's decision not to provide transportation.

A. What is the proper scope of review?

Both parties concede the Department has authority to review the school district's decision. However, they disagree over the appropriate standard of review the Department must apply in its review. We begin by briefly explaining the powers of the school district in transportation matters. Iowa Code chapter 285 gives the board of directors of a school district certain duties and powers over the provision of transportation. The school district argues its decision to not provide transportation in this case was a discretionary decision subject to review only for an abuse of discretion. The school district relies upon Iowa Code section 285.1 which provides the board of directors of every school district,

shall provide transportation ... for all resident pupils attending public school, kindergarten through twelfth grade, except that:

(a) Elementary pupils shall be entitled to transportation only if they live more than two miles from the school designated for attendance....

(d) Boards in their discretion may provide transportation for some or all resident pupils attending public school ... who are not entitled to transportation....

Iowa Code § 285.1(1) (1999).

The code creates only one mandate for the school district. The school district must provide transportation to students who live more than two miles from school. Id. § 285.1(1)(a). Apart from this requirement, the school district is vested with discretionary authority to decide whether to provide transportation under other circumstances. Iowa Code section 274.1 supports this conclusion stating, "[e]ach school district ... shall have exclusive jurisdiction in all school matters...." Id. § 274.1. The school district's decision to not provide transportation was discretionary in nature because the statute states the provision of transportation is discretionary for students living less than two miles from school.

The parents properly challenged the school district's discretionary decision pursuant to section 285.12 which directs the agency boards to hear and decide appeals in a transportation disagreement between a school patron and the board of a local district. Id. § 285.12. Section 285.12 provides, in part,

In the event of a disagreement between a school patron and the board of the school district, the patron if dissatisfied with the decision of the district board, may appeal the same to the area education agency board.... Either party may appeal the decision of the agency board to the director of the department of education.... The decision of the director shall be subject to judicial review in accordance with the terms of the Iowa administrative procedure Act.

Id. We begin our discussion by determining the extent to which the Department may review the school district's action.

At first glance, our decision in Howell School Board District No. 9 v. Hubbartt appears to have addressed the issue of the proper scope of review of a school district's discretionary decision. See 246 Iowa 1265, 70 N.W.2d 531 (1955). In Howell, although the case may have been litigated under Iowa Code chapter 285, the central dispute was not the provision of transportation to students within two miles of a school. Rather, it focused on the school district's exclusive authority to assign a student to one school when the parent sought enrollment in another school in a different district. We emphasized there was no statute either giving or denying the state superintendent the authority to determine which school a pupil should attend. Id. at 1274, 70 N.W.2d at 535-36. Because the legislature had not directed otherwise, we held the school board's decision in this regard concerned a matter within the "exclusive jurisdiction" and discretion of the local school board. Consequently, we found the state superintendent did not have authority to "determine matters within the exclusive jurisdiction of the local board." Id. at 1274, 70 N.W.2d at 536.

Our decision in Howell must not be construed to mean discretionary decisions of the school district are immune from any type of review. Rather, in Howell, we addressed whether, when reviewing the school district's action, it was proper for the state superintendent to examine the record, make his own independent determination, and substitute his judgment for the school district's. Id. at 1267, 70 N.W.2d at 532. Because no statute conferred upon the state superintendent this broad scope of review, we found he exceeded his authority. That is, in Howell...