Young v. Red Clay Consol. Sch. Dist.

• Decision Date: 24 May 2017
• Docket Number: C.A. No. 10847–VCL
• Citation: 159 A.3d 713
• Parties: Rebecca YOUNG, Elizabeth H. Young and James L. Young, Plaintiffs, v. RED CLAY CONSOLIDATED SCHOOL DISTRICT, Defendant.
• Court: Court of Chancery of Delaware

159 A.3d 713

Rebecca YOUNG, Elizabeth H. Young and James L. Young, Plaintiffs,

v.RED CLAY CONSOLIDATED SCHOOL DISTRICT, Defendant.

C.A. No. 10847–VCL

Court of Chancery of Delaware.

Submitted: February 23, 2017

Decided: May 24, 2017

Richard H. Morse, AMERICAN CIVIL LIBERTIES UNION OF DELAWARE, Wilmington, Delaware; John W. Shaw, Karen E. Keller, Jeffrey T. Castellano, David M. Fry, Nathan R. Hoeschen, SHAW KELLER LLP. Counsel for Plaintiffs.

Barry M. Willoughby, William W. Bowser, Michael P. Stafford, Margaret M. DiBianca, YOUNG CONAWAY STARGATT & TAYLOR, LLP, Wilmington, Delaware. Counsel for Defendant.

OPINION

LASTER, Vice Chancellor.

In February 2015, Red Clay Consolidated School District ("Red Clay") held a special election in which residents were asked to approve an increase in the school-related property taxes paid by owners of non-exempt real estate located within the district (the "Special Election"). Red Clay prevailed in the Special Election, with 6,395 residents voting in favor and 5,515 against.

The plaintiffs are residents of Red Clay who did not vote in the Special Election because they were unable to access the polls. They filed suit, asserting that Red Clay violated the provision of the Delaware Constitution which guarantees that "[a]ll elections shall be free and equal."¹ They also contend that Red Clay's actions violated the Due Process and Equal Protection Clauses of the Fourteenth Amendment of the United States Constitution.² This court previously held that the plaintiffs' theories stated claims on which relief could be granted.³ This decision only addresses their state law claim. It does not reach their federal claims.

The plaintiffs proved at trial that to secure a favorable result in the Special Election, Red Clay violated the Elections Clause. Red Clay held seventy-five events on election day, in the school buildings that served as polling places, that drew families with children to the polls. The purpose and effect of these events was to reward families of Red Clay students for voting. By Red Clay's own calculation, at least 6,383 people attended these gatherings. Several of the evening events drew hundreds of people.

The Elections Clause, a related constitutional provision, and two related statutory provisions evidence an unwavering Delaware public policy against both overt and covert rewards for voting. When a government provides a targeted reward for voting to a group it believes will favor its position, the election is not "free and equal."

The election day events also had the unfortunate consequence of interfering with access to the polls. The many families who attended the events jammed the parking lots at the schools that served as polling places. The evidence at trial showed that at least some elderly and disabled residents did not vote because they could not find accessible parking. Having heard the Red Clay representatives testify, I am convinced that they did not intend to discriminate against elderly and disabled residents. They recognized that the events would generate crowded parking lots, and they took some steps to mitigate this effect, but they failed to anticipate the serious problems that elderly and disabled residents would face. They also did not monitor the parking places designated for voters, as required by Red Clay's contracts with the Department of Elections, to ensure that they remained available.

Delaware case law, a statutory provision governing electioneering, and evidence of custom and practice in Delaware elections demonstrate that for an election to be "free and equal," voters must be able to access the polls. An election in which the government obstructs the ability of elderly and disabled residents to vote is not "free and equal."

Red Clay also rendered the Special Election unequal by engaging in four months of one-sided get-out-the-vote efforts. Starting in November 2014, Red Clay aggressively targeted the voters it believed would support the tax increase. Red Clay consciously avoided using communication channels that would inform the public as a whole and make the Special Election a debate. In particular, Red Clay used its access to confidential information about Red Clay families to promote voting by parents of Red Clay students. Red Clay's assigned each school a goal number of "YES" voters, had each school canvass its parents to find those "YES" voters, and used targeted followed-up communications to get these voters to the polls. Red Clay also employed a variety of other tactics to mobilize student families. Although Red Clay directed some communications to the community at large, they were comparably minimal and generally required by law.

The Delaware Supreme Court has held that when a school district conducts a referendum, the "expenditure of public funds in support of one side" must remain "within reasonable limits," and the school district's speech should not venture "beyond [a] factual presentation" to the point of "overstatement and emotional appeals."⁴ In the Dismissal Ruling, I suggested that societal developments since that decision warranted loosening those restrictions. On the facts of this case, however, the extent and intensity of Red Clay's targeted campaign speech, particularly when considered in conjunction with the election day events, resulted in the Special Election not being "free and equal."

Although this case focuses on Red Clay's election-related conduct, it stems from dysfunction in Delaware's system for funding public schools. The proper operation of that system depends on the regime for determining property values for tax purposes. By statute, the assessed value is supposed to reflect a property's current market value. In practice, assessments in New Castle County remain pegged to values from 1983. This means that Red Clay's tax base has remained flat for nearly thirty-five years.

Red Clay's operating expenses have not remained flat for nearly thirty-five years. They increase every year, both because of inflation and because society regularly asks the public schools to take on greater burdens. When the value of the tax base is fixed, the only way to raise revenue is to increase the tax rate. By statute, school districts cannot raise the tax rate unilaterally; they must ask district residents to approve the increase.

In this case, without a favorable vote, Red Clay faced a looming deficit. Prevailing in the Special Election was therefore crucial, and the Red Clay administrators were under a great deal of pressure to achieve that result. Unfortunately, their understandable desire to obtain adequate funding to fulfill their mission led them to undermine the electoral process. But their actions must be evaluated in light of the difficult situation they faced.

The question for decision in this case is not only whether Red Clay violated the Elections Clause, but also whether those violations warrant invalidating the Special Election. Extensive precedent makes clear that proving electoral misconduct does not lead ineluctably to invalidation. In this case, a balancing of multiple factors convinces me that the Special Election should stand. This decision therefore results in a declaration that Red Clay violated the Elections Clause, but it does not award any greater relief.

I. FACTUAL BACKGROUND

A three-day trial took place from October 31 to November 2, 2016. The parties introduced 327 exhibits. Eighteen fact witnesses and five expert witnesses testified live. The following facts were proven by a preponderance of the evidence.

A. Property Taxes And Public Schools

Understanding why Red Clay intervened in the Special Election requires some background knowledge about how Delaware funds its public schools. School districts in Delaware receive the majority of their operating revenue from a combination of state and local funds. State funds come from the General Assembly.⁵ Local funds come from property tax revenue generated within each school district. "Local funds touch every aspect of the school district budget from employee salaries and benefits, to supplies and materials[,] to maintenance and security and transportation."⁶

To generate local revenue, owners of non-exempt real property in a school district pay property taxes on the assessed value of their real estate at a rate set by the school board and approved by residents.⁷ The amount of available local revenue thus depends on two variables: the assessed value of the property and the tax rate per dollar of assessed value. The Delaware Code provides that "[a]ll property subject to assessment shall be assessed at its true value in money."⁸ The Delaware Supreme Court has held that the concept of a property's "true value in money" is "the same as its fair market value."⁹ "Fair market value" is "the price which would be agreed upon by a willing seller and a willing buyer, under ordinary circumstances, neither party being under any compulsion to buy or sell."¹⁰

The Delaware Code requires the annual preparation of an assessment roll showing the values ascribed to properties for purposes of taxation.¹¹ In New Castle County, where Red Clay is located, the Department of Land Use is obligated to "assess all property subject to taxation by the County and maintain appropriate records."¹² The Department also must "prepare tax rolls, including those required by any ... school district."¹³

To oversee the process of preparing the assessment roll, the Delaware Code establishes a Board of Assessment Review.¹⁴ To emphasize the point that its members are supposed to ensure that property is valued at its "true value in money," the Delaware Code contemplates a per-property fine for departures from that standard.¹⁵

The statutory framework calls for the Department of Land Use each year to "prepare and present to the Board of Assessment Review a copy of the assessment roll for [that] year."¹⁶ The Board of Assessment is charged with hearing appeals by individual property owners who have challenged the assessment of the...