Michael K.

Jeanes, Clerk of Court

*** Electronically Filed ***
02/16/2010 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2007-017981 02/11/2010

CLERK OF THE COURT

HONORABLE DEAN M. FINK S. Brown
Deputy

GILBERT UNIFIED SCHOOL DISTRICT NO 41 PAUL F ECKSTEIN

v.

ARIZONA STATE, et al. KEVIN D RAY

REBECCA K SETLOW
CHAD BRADLEY SAMPSON

MINUTE ENTRY

Each party has submitted a motion for summary judgment; the state has also submitted a
motion for judgment on the pleadings. All three motions cover essentially the same ground, and
will be discussed as one. The Court took these matters under advisement following oral
argument on October 19, 2009. Subsequently, the Court received, and has now considered:
(1) Defendants’ Notice of Supplemental Authority in Support of Defendants’ Motion for
Summary Judgment, filed November 23, 2009, (2) Gilbert Unified School District No. 41’s
Response to Defendants’ Notice of Supplemental Authority, filed December 4, 2009, and (3)
Defendants’ Reply to Gilbert Unified School District No. 41’s Response to Defendants’ Notice
of Supplemental Authority, filed December 14, 2009.

The general question presented is whether a funding program effectively limited to 28 of

the state’s school districts, and under which the 28 participating school districts annually receive
funds based on the formula utilized for all school districts – plus an additional 5.5.% – creates a
departure from the constitutional requirement of a general and uniform public school system.

For the motion for judgment on the pleadings, all well-pled facts in the Complaint are to
be taken as true; in any event, the material facts do not appear to be in dispute. In 1985, the
Docket Code 019 Form V000A Page 1
 SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2007-017981 02/11/2010

Career Ladder Program was created by the legislature as a five-year pilot program to improve the
quality of teaching and thus of education in participating districts. In the early years, the number
of districts allowed to participate grew, in increments of seven, from the original seven to 28;
however, since 1994 no new districts have been allowed to participate. Plaintiff Gilbert Unified
School District (the “District”) argues that the effect of the Career Ladder Program has been to
allow participating districts to outbid non-participating districts for the best teachers, resulting in
an impermissible disparity between the two classes of districts.

Turning first to the State’s procedural objections, counsel for the State did not address the
applicability of laches at oral argument. Laches is the equitable counterpart of a statute of
limitations, and is to be invoked when “under the totality of circumstances, the claim, by reason
of delay in prosecution, would produce an unjust result.” Harris v. Purcell, 193 Ariz. 409, 410 ¶
1 n.2 (1998). Such a finding requires that the adverse party suffer actual prejudice from the
delay. Id. at 412 ¶ 16. The State has suffered no prejudice; even assuming that the interests of
the participating districts, non-parties to this action, are to be considered, they would not be
prejudiced by losing a flow of funds to which they were not entitled in the first place, and the
District does not seek retrospective relief requiring them to disgorge funds already spent.
Furthermore, the assumption that a decision in the District’s favor will result in the “destruction”
of the Career Ladder program and the impoverishment of the teachers in the participating
districts is not necessarily a sound one, and depends on the remedy selected by the legislature,
not the decision of this Court.

The statute of limitations defense also fails. The State is correct that the District is
covered by A.R.S. § 12-821. School districts are included within the scope of A.R.S. § 12-510,
which excludes political subdivisions from certain statutes of limitations. Tucson Unified School
Dist. v. Owens-Corning Fiberglas Corp., 174 Ariz. 336, 337-38 (1993). However, the latter
statute applies only to statutes of limitations codified in Chapter 5 of Title 12, not to A.R.S. § 12-
821, which is found in Chapter 7. The common-law exemption of political entities from statutes
of limitations cannot stand against the express statutory language.

That said, the District’s action is not time-barred. Entry into the Career Ladder program
has never been formally closed. 1992 Ariz. Sess. Laws Ch. 246 § 3 expressly authorized the
Department of Education to approve new districts for the program, provided that the legislature
approved new funding. If the legislature’s implicit promise to fund the program is treated as
genuine, as the Court does not doubt, there is no reason to treat the District’s claim as accruing in
1994 or in any other year prior to the most recent application and rejection. At no time was the
District informed that it had to apply or be forever excluded, and while, with the passage of the
years, the promise of new money has rung more and more hollow, there was no day prior to its
application when it could be said that participation in the Career Ladder program was denied to
it. (This distinguishes the present action from Mayer Unified School Dist. v. Winkleman, 219
Docket Code 019 Form V000A Page 2
 SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2007-017981 02/11/2010

Ariz. 562 (2009), in which there was a single discrete act that could be identified as defining the
plaintiff’s rights for all time.)

Turning next to the uniformity arguments, there is of course no dispute that the Career
Ladder program constitutes an infusion of state money into the coffers of 28 districts to the
exclusion of the remainder. The State argues that the general and uniform clause requires only
that the public schools be funded so as to achieve a statewide level of minimum adequacy and
prevent substantial disparities between districts; because the District cannot show that its failure
to receive the state funding received by the participating districts has resulted in its failure to
reach the level of minimum adequacy or the creation of a substantial disparity between it and the
participating districts, its suit fails.

On an evidentiary level, the Court does not see in the record any evidence controverting
the District’s affidavits that such a disparity exists. At the broader constitutional level, this case
does not raise the same questions addressed in the Roosevelt and Albrecht opinions. Those cases
dealt with the effect of the uniformity clause on the provision of education given the inequality
of property valuation, and thus property tax revenues, from district to district. The Supreme
Court held that “the system the legislature chooses to fund the public schools must not itself be
the cause of substantial disparities.” Roosevelt Elem. Sch. Dist. v. Bishop (Roosevelt I), 179
Ariz. 233, 242 (1994) (plurality opinion); id. at 246 (Feldman, C.J., specially concurring). It is,
of course, not suggested that the state is responsible for the disparity in property tax revenue,
which, as the Supreme Court acknowledged, is the product of housing patterns and the free
market economy. Id. at 242. Thus, the Supreme Court had no occasion to address the non-
uniformity found here, non-uniformity in the familiar dictionary sense of unequal state funding.
It did, however, provide direction for a case like this one. “[N]othing in the constitution
prohibits a school financing system that allows districts to go above and beyond state-mandated
adequate facilities by individually accessing local financing sources…. But the general and
uniform requirement will not tolerate a state funding mechanism that itself causes disparities
between districts.” Hull v. Albrecht (Albrecht II), 192 Ariz. 34, 37-38 (1998). Not only
substantial disparities, but all disparities violate the uniformity clause if they are caused by the
state itself.

That there are disparities is evident. The purpose of the Career Ladder program is to
attract, through the offer of higher salaries, better-trained teachers, whose expertise in teaching
methods will presumably increase students’ learning as compared to students with lower-paid,
less expert teachers. Having continued it for so many years, the legislature has plainly concluded
that the Career Ladder has achieved its goal. This, of course, is precisely the District’s point: the
Program creates, and exists to create, a difference in educational quality between participating
and non-participating districts. That this difference may be difficult to quantify does not place it
beyond judicial review. The difference in funding levels – $68,000,000 in the 2005-06 school
Docket Code 019 Form V000A Page 3
 SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2007-017981 02/11/2010

year and $74,000,000 in the 2006-07 school year – for the participating districts versus zero for
the non-participating districts, is sufficient to constitute a “judicially discoverable and
manageable” standard. Contrast Kromko v. Arizona Bd. of Regents, 216 Ariz. 190, 193 ¶ 15
(2007) (requirement that university education be “free” would be enforceable, but “as nearly free
as possible” is not). And while $68,000,000 or $74,000,000 may constitute only a tiny portion of
the state’s total education expenditures, it is not de minimis.

The State points out that the District, in fact, pays its teachers a salary comparable to, if
not higher than, Career Ladder schools. It does so by taxing its residents at a rate higher than
would be necessary for a merely adequate school system. That is its right under Roosevelt I and
its progeny. But the District’s inability to access Career Ladder funds forces it into a choice not
faced by the participating districts: use the augmented tax revenues to pay for superior teachers
or to provide other benefits for its students. The case law is clear that the residents’ option to tax
themselves to provide better educational amenities is a permissible departure from uniformity;
the State cannot rely on it to create uniformity.

The State argues that a decision in favor of the District would prevent the legislature from
enacting specially targeted programs or pilot programs. The Career Ladder Program is neither.
A pilot program is one that may or may not be successful and is being tested on a small,
economical scale with a view to extending it generally should it prove its worth. After nearly a
quarter-century, the Career Ladder Program can no longer be considered a pilot program. (It is
therefore not necessary for the Court to determine whether the use of pilot programs limited to
certain districts is a violation of uniformity.) And the Career Ladder Program is not a specially
targeted program. It does not identify and is not designed to compensate for any deficiency in
the participating districts vis-à-vis the non-participating districts or to raise their educational
performance to the statewide average; rather, its purpose is to make their educational
performance better than that of districts not receiving funds by attracting better-trained and
presumably more effective teachers. To the extent it achieves that goal, then, it makes the public
school system less uniform. The lesson of Roosevelt I, supra at 242, is that where the lack of
uniformity is the direct result – here, indeed, the intended result – of state action, the uniformity
clause is breached.

Addressing the supplemental authority provided by the State after the oral argument, the
Court finds that Federal Way School Dist. No. 210 v. State of Washington, 219 P.3d. 941 (Wash.
2009), is not helpful. For one thing, the system upheld in Washington, though it perpetuated
(while narrowing over time) teacher salary disparities that existed in the base year 1976-77, id. at
¶ 5-7, did not create those disparities, as the Career Ladder Program does. Our precedents make
it clear that, while the state need not correct all exogenous disparities, state action must not itself
be the cause of disparities. Hull v. Albrecht, 192 Ariz. 34, 37-38 (1998); Roosevelt I, supra, at
242 (plurality opinion).
Docket Code 019 Form V000A Page 4
 SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2007-017981 02/11/2010

More fundamentally, the Washington Supreme Court interprets the uniformity clause of
its constitution more restrictively than does ours. Federal Way follows Seattle School Dist. No. 1
of King County v. State, 585 P.2d 71 (1978), which found a judicially enforceable constitutional
duty to “make ample provision for the education of all children,” but held that “the organization,
administration, and operational details of the ‘general and uniform system’ required by [the state
constitution] are the province of the Legislature,” id. at 95. Seattle School District, and thus
Federal Way, are closer to Kromko v. Arizona Bd. of Regents, supra, which declined as a
nonjusticiable political question a dispute over the permissible level of university tuition. But
Kromko did not go so far as Seattle School District, supra, and Federal Way, supra at ¶ 23-24, to
say that only the duty to provide is judicially enforceable. Rather, Kromko conditioned
justiciability on the existence of a judicially discoverable and manageable standard to evaluate
the alleged breach, supra at 194 ¶ 21. In fact, the Arizona Supreme Court distinguished the
school-funding cases, specifically Roosevelt, on the ground that a judicially discoverable and
manageable standard does exist as to the “general and uniform” requirement for elementary and
secondary education, unlike the “as nearly free as possible” requirement applying to the state
universities, and so is subject to judicial review, id. at 195 ¶ 24. The holding in Federal Way,
supra at ¶ 24, that implementation of the uniformity clause is the province of the legislative
branch is thus contrary to Arizona case law.

There is nothing in Federal Way School Dist. No. 210 v. State of Washington to cause the
Court to revisit its conclusions.

The District also pleads that the Career Ladder program, as applied, is a special law. (It
is not necessary for the Court to decide whether the District’s appeal to subsection 20 of A.R.S.
Const. Art. IV Pt. 2 § 19, which forbids all special laws when a general law can be made
applicable, was adequately pled in its Complaint, as the analysis under subsection 13 is
dispositive.) The District, citing Webster v. Heywood, 21 Ariz. 550, 552 (1920), and other early
cases, asserts that a school district is a corporation and therefore covered by the ban on
legislation granting special or exclusive benefits to any “corporation, association, or individual,”
A.R.S. Const. Art. IV Pt. 2 § 19(13). The State argues that a school district is defined by A.R.S.
§ 15-101(21) as a political subdivision of the state; see also Amphitheater Unified School Dist.
No. 10 v. Harte, 128 Ariz. 233, 234-35 (1981). The categories are not mutually exclusive. Our
constitution itself defines cities as both municipal corporations, A.R.S. Const. Art. XIII § 1, and
political subdivisions, A.R.S. Const. Art. IX § 7; see City of Phoenix v. Collar, Williams & White
Engineering, Inc., 12 Ariz.App. 510, 514 (1970). While the status of school districts is not
expressly defined, it requires no stretch of logic to harmonize the Supreme Court precedents and
treat them, like cities, as both.
Docket Code 019 Form V000A Page 5
 SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2007-017981 02/11/2010

This interpretation is consistent with the public policy expressed in State Compensation
Fund v. Symington, 174 Ariz. 188, 192 (1993). “The purpose of proscribing special or local
legislation is to prevent the legislature from providing benefits or favors to certain groups or
localities. [It] also confines the power of the legislature to the enactment of general statutes
conducive to the welfare of the state as a whole, to prevent diversity of laws on the same subject,
to secure uniformity of law throughout the state as far as possible, and to prevent the granting of
special privileges. In addition, it prevents the enlargement of the rights of persons in
discrimination against others’ rights....” Id. [internal citations and quotation marks omitted,
emphasis added]. Thus, while the state has extensive power to regulate its political subdivisions,
that power does not extend to enacting special laws benefiting some and not others.

Not all laws of limited applicability are proscribed special laws. The challenged
legislation must satisfy a three-part test: the classification must be rationally related to a
legitimate governmental objective, it must encompass all members of the relevant class, and it
must allow members to move in and out of the class. Republic Inv. Fund I v. Town of Surprise,
166 Ariz. 143, 149 (1990). The Court accepts the legislature’s judgment that improving the
quality of teaching is a legitimate governmental objective and that the Career Ladder program is
rationally related to it. It is evident, however, that this objective is legitimate for every district in
the state; there is no basis on which to find it more legitimate for the participating districts. It is
conceded that the primary, if not the sole, criterion for receiving Career Ladder funds is whether
the district applied for them prior to 1994. (At oral argument, counsel for the State could not
recall whether any district applying in the early years was turned down; the Court takes it that,
even if some applications were not approved, rejection was not frequent.) This criterion has
nothing to do with the primary objective. For it to be valid, then, it must be related to some other
legitimate governmental objective. The only objective suggested, and the only one that comes to
the Court’s mind, is the legislature’s choice to prioritize state spending by funding the program at
a level that allows only a handful of districts to participate. While prudent management of the
public purse is beyond question a worthy goal, the State does not argue, and the Court is familiar
with no case law holding, that economy is a legitimate basis on which to define the relevant
class. Yet if there is no legitimate governmental objective served by confining the Career Ladder
program to the initial 28 participants, it fails to encompass all members of the broader class of
districts whose educational performance would be improved by participation in the program, nor
does it provide for entry into the favored class. (That, in at least one instance, a district has left
the program does not satisfy the third prong of the Republic test, which requires free entry as
well as free exit.)

There remains the matter of a remedy. The State urges that the Court wait until the effect
of the Teacher Performance Pay system enacted by the legislature in 2008 can be evaluated on its
Docket Code 019 Form V000A Page 6
 SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2007-017981 02/11/2010

actual results instead of the estimates of the parties. This is not, on its face, an unreasonable
request. See Hull v. Albrecht (Albrecht I), 190 Ariz. 520, 525-26 (1997) (Moeller, J., dissenting).
Two objections occur to the Court. First, by its own terms, the new system will not become
effective statewide until 2018. Even affording the greatest possible deference to the legislature,
it is difficult to justify continuation of a constitutionally defective system for almost a decade.
Second, it is long-established law that a legislature cannot be bound by the decisions of its
predecessors. Higgins’ Estate v. Hubbs, 31 Ariz. 252, 264 (1926); Sedona Private Property
Owners Assn. v. City of Sedona, 192 Ariz. 126, 128 (App. 1998). As has been amply
demonstrated by the fate of the Career Ladder program, circumstances may overtake promises.
The Court must therefore act.

This is not a budgeting case. The District’s prayer can be answered by the legislature
appropriating more money for the Career Ladder Program, or by dividing existing funds among
all the school districts of the state, or by abolishing the program altogether. As the Supreme
Court noted in Roosevelt I, supra at 242, “[t]here are doubtless many ways to create a school
financing system that complies with the constitution.” Thus, the exclusive power of the
legislature to determine appropriate funding levels is not implicated. However, requiring the
legislature to choose among one of the three options (or four – the State, in its motion for
judgment on the pleadings, separates the “more money” option into “increasing taxes” and
“cutting other programs” sub-options) does not violate the separation of powers. Indeed, it is the
duty of the judiciary to determine when the actions of the legislature violate the mandate of the
Constitution. Forty-Seventh Legislature of the State of Arizona v. Napolitano, 213 Ariz. 482,
485 ¶ 8 (2006).

No doubt the District would prefer to see the program expanded to improve the quality of
education it can provide, rather than deprive the participating districts of the benefits they now
enjoy. But the constitution is equally satisfied by extending the program to all or denying it to
all, and the Court may not presume to tell the legislature which choice it should make. It may
decide that the program is successful enough to merit its extension to every district in the state.
It may decide that the benefit is not worth the cost and terminate the program. What it may not
decide is that the program is successful enough to be offered to the participating districts yet not
successful enough to be funded for the rest of the state’s districts. The Career Ladder Program,
as presently structured, is designed to create a two-tier system in which 28 districts are given
preferential access to the best teachers and the remaining districts must make do with what is left
over. This violates the uniformity clause and the ban on special laws.

Based on the foregoing, as well as the analysis set forth in the District’s briefs and at oral
argument, the Court hereby denies the Defendants’ Motion for Summary Judgment and
Defendants’ Motion for Judgment on the Pleadings and grants Plaintiff’s Motion for Summary
Judgment.
Docket Code 019 Form V000A Page 7
 SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2007-017981 02/11/2010

As discussed at oral argument, the Court recognizes the pragmatic difficulty of enjoining
the Career Ladder program immediately. The participating districts have incorporated the Career
Ladder funds into their budgets; their teachers have planned their own lives around their shares.
In addition, the legislature is entitled to the reasonable time it needs to choose the best route
forward. The Court, therefore, intends to stay any order of injunctive relief until the appellate
courts can consider the matter, as it has little doubt they will be asked to do. The parties are
encouraged to address this issue further in connection with any briefing on the District’s
proposed form of order/judgment, the signing of which will trigger the time for appeal.

IT IS HEREBY ORDERED that the District shall lodge such a proposed order within 45
days.

This case is eFiling eligible: http://www.clerkofcourt.maricopa.gov/efiling/default.asp

Docket Code 019 Form V000A Page 8