EFiled: Oct 04 2016 05:38PM EDT

Transaction ID 59649335
Case No. 12800-

IN THE COURT OF CHANCERY FOR THE STATE OF DELAWARE

LAS AMERICAS ASPIRA
ACADEMY, et al.,
Plaintiffs,
V.
CHRISTINA SCHOOL DISTRICT,
MR. ROBERT SILBER, personally
and in his official capacity as Chief
Financial Officer of Christina School
District, DELAWARE DEPARTMENT
OF EDUCATION, DR. STEVEN
GODOWSKY, in his official capacity
as Secretary of Education for the
Delaware Department of Education,
Defendants.

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C.A. No.___________

MOTION TO EXPEDITE PROCEEDINGS

AND TO MAINTAIN STATUS QUO
Plaintiffs Las Americas ASPIRA Academy, Academia Antonia Alonso,
Delaware Academy of Public Safety and Security, EastSide Charter School of
Wilmington, Inc., Family Foundations Academy, Inc., First State Montessori
Academy, Inc., Freire Charter School of Wilmington, Gateway Charter School,
Inc., Great Oaks Wilmington Charter School, Kuumba Academy Charter School,
Inc., MOT Charter School, Inc., Newark Charter School, Inc., Odyssey Charter
School, Inc., Providence Creek Academy, Inc., Thomas Edison Charter School of
Wilmington (collectively, Charter School Plaintiffs) and Riccardo Carrasquillo,

for his minor child S.C., Clissita Patrick, for her minor children K.B.P., N.P.,
J.P.H., K.P.H., and D.S., Alexis Simms for her minor children M.H, L.S. and K.S.,
and DaLynne Vick for her minor children E.V. and I.V. (collectively, Individual
Plaintiffs) (together, Plaintiffs), by and through their undersigned counsel,
hereby move this Honorable Court for the entry of an order, in the form attached
hereto, directing that the proceedings be expedited and that the status quo be
preserved pendente lite. In support of their Motion, the Plaintiffs state as follows:
BACKGROUND 1
1.

The Charter School Plaintiffs are public charter schools attended by

students who reside in the Christina School District. The Individual Plaintiffs are
parents of such Christina students attending the Plaintiff Charter Schools. Plaintiffs
initiated this action to enforce their rights to receive that share of Christinas local
tax revenues to which they are entitled under Section 509. Section 509 requires
that the DOE certify that appropriate share based on local cost per student, on or
before September 1. Among the Plaintiffs several causes of action is a claim that
DOEs attempt, sometime during the second week in September, to revise DOEs
August 12 certificate was untimely and, therefore, ineffective.
2.

As alleged in more detail in the Verified Complaint, Christinas

Exclusions (and, therefore, the amount of local revenues it keeps to itself) have
1

Capitalized terms used in this Motion are defined in the Verified Complaint.

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grown over the past several years, despite a declining student population. Plaintiffs
allege that Christinas Exclusions include items not permitted under Section 509.
In the Spring of 2016, DOE decided it would more closely scrutinize all
Exclusions.
3.

On August 12, 2016, DOE certified the Local Cost Per Student for

each local district and drew each charter schools attention to this information by email. Charter schools were invited to go onto the DOEs online financial system,
confirm each districts LCPS so that they could revise their budgets for the school
year about to begin.
4.

Secretary of Education, Dr. Godowsky received push-back from

several Delaware legislators, primarily those representing portions of the Christina

district. Christinas CFO also complained about the reduction of funds available to
Christina. On September 7, one week after the statutory deadline, Secretary
Godowsky wrote to Senators and Representatives, purporting to place a hold
status on all school district approved exclusions for the 2015 16. Consequently,
he concluded not to make any changes to district requested exclusions this year.
At some point after Secretary Godowskys September 7th letter, DOE updated its
online financial system with a revised set of amounts, applying the same
parameters permitted for Exclusions in FY 16.
5.

As a result of DOEs untimely revisions to its Local Cost Per Student

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certificate, a question arises over the proper disposition of $7,051,542.00 of local

tax revenues collected from taxes levied by Christina (the Delta Fund).2
However, without interim relief from this Court, the Plaintiffs have no assurances:
a) that Christina will not have exhausted the Delta Fund before the Court has the
opportunity to decide this case; or b) that Christina will have the ability or legal
authority to restore those funds to Plaintiffs in the event the Court rules in
Plaintiffs favor.
6.

For the reasons discussed below, the Court should grant Plaintiffs

motion to expedite proceedings and enter a status quo order prohibiting Christina
School District from spending any monies from its local fund.
ARGUMENT
A.

Request for Expedition.

7.

Standard for Expedited Proceedings. The Court of Chancery has

broad power to order expedited proceedings, and the threshold showing required is
minimal. See Corporate Prop. Assocs. 8, L.P. v. AmerSig Graphics, Inc. 1993 WL
499005, at *1 (Del. Ch.); Harmony Mill Ltd. Pship v. Magness, 1984 WL 21898,
at *1 (Del. Ch.). A plaintiff seeking expedited proceedings need only show some
reason justifying departure from the sequence envisioned by the rules . . . .
2

This amount represents the increase in Exclusions from Total Local

Expenditures permitted to Christina as a result of DOEs untimely purported
revision to its August 12 Certificate.

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American Stores Co. v. Lucky Stores, Inc., 1988 WL 909330, *2 (Del. Ch., Apr.
13, 1988). Delaware Courts are always receptive to expediting any type of
litigation in the interests of affording justice to the parties. Box v. Box, 697 A. 2d
395, 399 (Del. 1997). Thus, at this stage, the Court ordinarily limits its inquiry to
assessing whether a plaintiff (1) has articulated a sufficiently colorable claim and
(2) shown a sufficient possibility of a threatened irreparable injury to warrant
expedition. Morton v. American Mktg. Indus. Holdings, Inc., 1995 WL 1791090,
*2 (Del. Ch., Oct. 5, 1995) (citing Giammargo v. Snapple Beverage Corp., 1994
WL 672698, *2 (Del. Ch., Nov. 15, 1994)). In undertaking this inquiry, the Court
takes the allegations in the complaint as true, see, e.g., TCW Tech. Ltd. Pship v.
Intermedia Commun. Inc., 2000 WL 1478537, *2 (Del. Ch., Oct. 2, 2000), and
does not judge the merits or even the legal sufficiency of the complaint. See
Giammargo, 1994 WL 672698, at *3. For the reasons set forth below, expedition is
appropriate here.
8.

Plaintiffs Claims are Colorable. Plaintiffs assert that Section 509

was violated in two ways.

a. First, that Christinas Exclusions are improperly inflated by the
inclusion of expenditures not permitted under Section 509. For
example, the Complaint alleges that expenditures linked to
taxes approved in a 2003 referendum have been improperly

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excluded from Total Local Expenditures and so too have

expenditures met with a so-called Match Tax. See, Verified
Complaint, 54. While discovery will likely cause the list of
improper Exclusions to grow, the allegations of the Verified
Complaint, taken as true, easily make out a case for violation of
State law.
b. Next, Plaintiffs have alleged that DOEs attempt to revise its
August 12 Certificate, on which several Plaintiff Charter
Schools relied, was made after the September 1 deadline set by
Section 509. See, Verified Complaint, 51-53. That allegation,
if true, makes out another instance of the violation of State law.
9.

The object of Section 509 is to permit each students fair share of

those local revenues collected to fund operating expenditures. As alleged in the

Verified Complaint, the result of the unlawful expansion of Christinas Exclusions
is to improperly reduce the share of those revenues which follow each Christina
child who chooses a charter school. See, Verified Complaint, 35-41. There
being no lawful basis for distinguishing between those Christina students who stay
and those who leave, Plaintiffs have adequately stated an Equal Protection Claim.
10.

Plaintiffs have alleged that for several years they have questioned

Christinas Exclusions and sought more detail about each of them. See, Verified

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Complaint, 35-41. No such information has ever been provided and Plaintiffs
scrutiny has been purposefully avoided and, in its absence, Defendants have been
free to inflate unlawfully Christinas Exclusions. Moreover, Plaintiffs allege that,
in reaction to DOEs first real attempt to scrutinize Christinas Exclusions,
legislators and others who have no role in the application of Section 509 intervened
and, apparently, persuaded Secretary Godowsky to attempt an untimely revision to
the Departments August 12 Certification for reasons not found in Section 509
chiefly that Christina did not want to lose the money. See, Verified Complaint,
51-53. These allegations are sufficient to make out a claim that DOEs postSeptember 1 attempt to revise the August 12 Certification and deprive the
Plaintiffs of their vested protected property interest was shockingly arbitrary and
capricious in violation of Plaintiffs right under State law and the Due Process
Clause within the Fifth Amendment.
11.

Plaintiffs have alleged that they have had, since September 1, a vested

protected property interest in Local Cost Per Student funds identified in the August
12 Certification and that any change in the Local Cost Per Student calculation after
the September 1 deadline without notice or opportunity to be heard, violates
Plaintiffs procedural due process rights. See, Verified Complaint 77-83. Several
Plaintiffs received no notice and had no opportunity to be heard before the DOE
retracted the August 12 Certification and stripped Plaintiff of their right to the

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Local Cost Per Student outlined in the August 12 Certification. These allegations
sufficiently state a claim for violation of Plaintiffs right to Procedural Due Process
under the Fifth Amendment.
12.

Plaintiffs have alleged that several Charter School Plaintiffs justifiably

relied on the August 12 Certification to their detriment, thus making out a claim of
detrimental reliance. See, Verified Complaint, 49-51.
13.

Finally, it stands to reason that, if each of these other claims is

accepted as true, Plaintiffs have established the elements of their claim that
Christina has been unjustly enriched.
14.

Accepting the allegations described above and detailed in the Verified

Complaint as true, as is required at this stage, Plaintiffs have asserted claims that
are sufficiently colorable. TCW Tech. Ltd. Pship, 2000 WL 1478537, at *2.
15.

Plaintiffs Demonstrate a Strong Likelihood of Irreparable Harm.

Without expedited proceedings, Plaintiffs will suffer irreparable harm. Each year,
the Charter School Plaintiffs rely on the certificate from DOE to finalize their
budgets. With Secretary Godowskys revocation of this certification, the Charter
School Plaintiffs are faced with restructuring their budgets after the school year has
already started. Absent clear guidance in this case, the Charter School Plaintiffs
will be left to wonder what funds they may receive and whether they will need to
make staff layoffs or terminate service contracts. Any delay in these funds will

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further jeopardize the Charter School Plaintiffs ability to run and manage their
schools.
16.

Accordingly, a threat of irreparable harm exists and warrants

expedited proceedings in this matter.

17.

In addition, expedited proceedings will impose little or no burden on

the Defendants. Expedited proceedings here will promote judicial economy and the
interests of justice by providing both Plaintiffs and Defendants access to relevant
facts in a timely manner. Moreover, expedition will lighten any burden otherwise
created by the interim relief sought in the requested status quo order. Setting aside
the funds in question so that Plaintiffs can be assured that they will remain unspent
should cause the Defendants no difficulty assuming these proceedings are
expedited.
B.

Request for a status quo order

18.

For the same reasons discussed above, Plaintiffs are also entitled to a

status quo order restricting Christina from spending any monies from its local
fund.
19.

Standard for entry of a status quo order. The decision to enter a

status quo order is within the discretion of the trial judge. R & R Capital LLC v.
Merritt, 2013 WL 1008593 (Del. Ch. Mar. 15, 2013). While the appropriateness of
entering a status quo order is based on considerations similar to those consulted in

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determining whether other forms of interlocutory injunctive relief are appropriate

(see Pharmalytica Servs., LLC v. Agno Pharm., LLC, 2008 WL 2721742 (Del. Ch.
July 9, 2008), there are instances when a party may be entitled to maintain the
status quo even if the facts do not warrant injunctive relief. See Topspin Partners,
L.P. v. RockSolid Sys., Inc., 2009 WL 154387 (Del. Ch. Jan. 21, 2009) (dismissing
plaintiffs motion for a TRO but finding that the plaintiffs . . . are entitled to
protection in the form of a status quo order . . . designed to preserve intact as much
as possible of the [companys] business).
20.

Plaintiffs are entitled to a status quo order. Plaintiffs are in such a

position where the monies in Christinas local fund may be dramatically and
irreversibly changed before the Court can decide on whether the August 12
Certification is enforceable and binding. See also Arbitrium (Cayman Islands)
Handels AG v. Johnson, 1994 WL 586828 (Del. Ch.) (noting purpose of status quo
order was to prevent material, potentially irreversible changes in the firm or in its
assets or business.). As set forth herein and as detailed in the Verified Complaint,
Defendants DOE and Secretary Godowkskys wrongful reversal of its August 12
Certification strip local funds from charter schools and provides Christina with a
$7,051,542.00 windfall. Without any conditions on these funds, Christina is free to
spend these funds as it so pleases. Plaintiffs are in need of a status quo order to
secure their rights to the Delta Fund.

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CONCLUSION
21.

WHEREFORE, Plaintiffs respectfully requests that this Court enter an

Order, in the form attached hereto, providing for expedited proceeding and
maintaining status quo.
Respectfully submitted,
SAUL EWING LLP
/s/William E. Manning
William E. Manning, Esq. (#697)
James D. Taylor, Jr., Esq. (#4009)
Allison J. McCowan, Esq. (#5931)
1201 N. Market Street, Suite 2300
Wilmington, DE 19899
wmanning@saul.com
jtaylor@saul.com
amccowan@saul.com
Telephone: (302) 421-6800
Facsimile: (302) 421-5861
Attorneys for Plaintiffs

Dated: October 4, 2016

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