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Federal court denies California district’s motion to dismiss environmental lawsuit, allows suit seeking cleanup of school facilities to continue

The Santa Monica Daily Press reports that U.S. District Court Judge Percy Anderson denied a request by the Santa Monica-Malibu Unified School District to dismiss a suit, which was filed in March by America Unites for Kids and Public Employees for Environmental Responsibility, that seeks the removal of polychlorinated biphenyls from Malibu High and Juan Cabrillo Elementary Schools.

March by America Unites for Kids (AUK) and Public Employees for Environmental Responsibility (PEER), who brought the suit, have repeatedly criticized the school district for spending millions of dollars on consulting and legal fees over the last two years, now aim to conduct additional testing at the facilities as they urge SMMUSD officials to expedite the remediation process.

AUK president Jennifer deNicola said, “The district has spent far more money avoiding a cleanup than a full cleanup would ever cost.” She added, “All our nation’s children deserve a safe learning environment free from PCBs; an education that will not jeopardize their health.”

SMMUSD expressed disappointment with the ruling, vowing to continue to adhere to federal guidelines for chemical testing and cleanup. It said, “SMMUSD would have preferred that the court dismiss the lawsuit outright,” the district’s statement reads, (but) “the ruling is a sound endorsement of the Environmental Protection Agency policy regarding management of PCBs in building materials in schools, which has been closely followed by SMMUSD.”

SMMUSD contends that several rounds of testing at the Malibu campuses have shown chemical levels to be below EPA thresholds in multiple locations. AUK and PEER, on the other hand, assert that PCBs exist in concentrations higher than allowed in the federal Toxic Substances Control Act. They have accused the district of manipulating results by leaving windows and doors open and pre-cleaning surfaces before testing.

The court’s ruling appears to set the stage for additional testing of pre-1979 buildings at the sites in question. “The parents and teachers believe that further testing will demonstrate that PCB contamination is widespread,” the plaintiffs’ statement reads, “and that the only solution both to protect kids and teachers and to comply with the law is a thorough investigation to identify and remove all PCBs found to be at illegal levels.”

Meanwhile, in the midst of the suit the school board is considering breaking the school district into separate Malibu and Santa Monica factions. Malibu activists, unhappy with MMUSD’s handling of  chemical testing and its recently implemented centralized fundraising system, favor the split.

Source: Santa Monica Daily Press, 6/23/15, By Jeffrey Goodman

[Editor’s Note: In May 2015, Legal Clips summarized a story from ABC News 10 reporting that a class action lawsuit has been filed against Ametek Aerospace & Defense (AAD) on behalf of parents, students and teachers at Magnolia Elementary School (MES). Attorney John Fiske of Gomez Trial Attorneys, who are representing the plaintiffs, said, “They dumped up to 7,000 gallons of chlorinated solvent waste into the ground a month.” He added, “That waste has created the largest TCE plume underground in the state of California.”] 


Sixth Circuit rules that Tennessee district did not violate First Amendment’s Establishment Clause by contracting with private religious school to provide alternative school program

Smith v. Jefferson Cnty. Bd. of Comm’rs, No. 13-5957 (6th Cir. Jun. 11, 2015)

Abstract: A U.S. Court of Appeals for the Sixth Circuit three-judge panel has ruled that a Tennessee school district’s decision to outsource its alternative school program to a private Christian school did not violate the First Amendment’s Establishment Clause. The panel concluded that the school district action of contracting with the Christian school to provide an alternative school program passed constitutional muster because, as the three-prong test established in Lemon v. Kurtzman, 403 U.S. 602 (1971) requires: (1) there was a secular purpose for the district’s action; (2) the relationship between the school district and the Christian school did not amount to government endorsement of religion; and (3) the relationship did not foster excessive entanglement between church and state.

Although all three judges agreed that the school district had not violated the Establishment Clause, one judge wrote a separate opinion concurring in part and in the result, but offering different reasoning for that result than that set out in panel’s opinion.

Facts/Issues: Facing budgetary constraints for the upcoming 2003-04 school year, the Jefferson County Board of School Commissioners (JCBSC) voted to eliminate the alternative school and the positions of the teachers and principal. After deciding to close the alternative school, JCBSC voted to outsource alternative school services for Jefferson County students to Kingswood School (KS). The board’s officially stated reason for the closure and outsourcing was financial considerations due to budget cuts. KS is a religious school that specializes in providing treatment programs for students with behavioral and emotional problems. The principal and two teachers filed suit in federal district court against JCBSC and its members in their official and individual capacities.

The suit alleged that the defendants’ actions had violated the principal and teachers’ rights under the First Amendment’s Establishment Clause, the Fourteenth Amendment’s Due Process Clause, and state establishment clause. The plaintiffs filed a motion for partial summary judgment on the establishment and due process claims. Defendants responded with a motion for summary judgment. The district court denied the plaintiffs’ motion, in part for lack of standing, but granted the defendants’ motion.

The Sixth Circuit, sitting en banc (all active judges participating in considering and deciding the case), ruled that teachers at a Tennessee school district’s alternative school, who lost their positions when the school board decided to close the school in favor of outsourcing services to a private religious school, have municipal taxpayer standing to file suit claiming the board’s decision violated the federal and state constitutions’ Establishment Clauses. It rejected, however, the teachers’ procedural and substantive due process claims, and held that the individual board members enjoyed legislative immunity from the suit.

The Sixth Circuit remanded the case to the district court to consider the claims under the Establishment Clause.

The district court subsequently denied JCBSC’s motion for summary judgment. A bench trial took place in May 2013. In July 2013, the district court issued its findings of fact and conclusions of law, holding that JCBSC had violated the Establishment Clause. The court permanently enjoined JCBSC “from contracting with Kingswood or another religious entity for the operation of its alternative school.” It also awarded plaintiffs damages for lost wages during the 2003–2004 school year.

Ruling/Rationale:  The Sixth Circuit panel reversed the district court’s decision, vacating the judgment, vacating the injunction against JCBSC, vacating the award of damages and vacating the order granting attorney’s fees.

It began by addressing two objections by JCBSC to the district court’s factual findings. In regard to JCBSC’s assertion that the district court erred in finding that KS’s day and residential programs were not meaningfully distinct, the panel concluded that JCBSC had misread the district court’s opinion. While acknowledging the district court’s use of a double negative was somewhat confusing, it stated “there can be no doubt about its meaning: the two programs are meaningfully distinct, or at least the evidence does not suggest otherwise.” As to JCBSC’s second objection that the district court erred in characterizing KS “as a self-proclaimed religious institution,” the panel concluded JCBSC’s argument failed on the merits because ‘[f]rom the evidence in this case, it would certainly be permissible to conclude that Kingswood described itself as a religious institution.”

The panel then took up the issue of whether JCBSC’s outsourcing of its alternative school program to KS, a private religious school, ran afoul of the First Amendment’s Establishment Clause. It began its analysis utilizing the three-prong Lemon test. Under that the test, government action passes constitutional muster only if it satisfies all three prongs.

In addition to the Lemon test, the panel utilized the “endorsement” analysis set out by Justice O’Connor in Lynch v. Donnelly, 465 U.S. 668 (1984). It pointed out that unlike Lemon’s first prong which is subjective, the Lynch “endorsement” analysis, focuses on the objective question of whether a reasonable observer would think that the activity is a governmental endorsement of religion. Finally, the panel historical approach used in Town of Greece v. Galloway, 134 S. Ct. 1811 (2014).

Addressing Lemon’s first prong, the panel found there was no question JCBSC had a secular purpose because its “sole motivation” for contracting out its alternative-school services to KS was “to reconcile the Board’s budget with the Commission’s fund allotment.” However, it dismissed the relevance of Town of Greece because the decision “does not impact our approach to the case before us.” It stated that in the words of Wallace v. Jaffree, 472 U.S. 38, 80 (1985) : “The simple truth is that free public education was virtually nonexistent in the late 18th century . . . [so] it is unlikely that the persons who drafted the First Amendment, or the state legislators who ratified it, anticipated the problems of interaction of church and state in the public schools.”

Finding that Town of Greece  gave no indication that the Supreme Court intended to abandon the endorsement test or that matter Lemon, the panel next examined whether the relationship between JCBSC and KS had the primary effect of advancing religion. It pointed out that Supreme Court Establishment Clause jurisprudence made it clear that state endorsement of religion occurs “when it coerces participation in a religious activity.” It found nothing to suggest that JCBSC’s “association with Kingswood coerced students to partake in religious activity of any kind, either directly or through peer pressure.”

The panel stressed, however, that even in absence of coercion, “government violates the endorsement test if a reasonable observer would think that the activity is a governmental endorsement of religion.” Applying the reasonable observer test to the facts in the present case, it determined that “a reasonable observer would not interpret the School Board’s relationship with Kingswood as a governmental endorsement of religion.” The panel found that “[t]he evidence indicates that students in the day program were not exposed to any religious instruction, prayer, or any mentions of religion at all.”

The panel concluded:

Viewed in this context, it is clear that the taxpayers, School Board, parents, and students all benefited from the relationship between the Board and Kingswood. While this benefit was being conferred, parents and children received only slight exposure to religious content.

The panel rejected the plaintiffs’ reliance on Washegesic v. Bloomingdale Public Schools, 33 F.3d 679 (6th Cir. 1994), in which the Sixth Circuit held that it was unconstitutional for a public school to display a portrait of Jesus in a hallway. It found “the purpose of the arrangement with Kingswood was purely educational, and the religious references merely incidental,” concluding that a “reasonable observer would rightly view the religious references in this case very differently from the portrait in Washegesic.”

The panel also found the plaintiffs’ reliance on Doe ex rel. Doe v. Elmbrook School District, 687 F.3d 840 (7th Cir. 2012) (en banc), unpersuasive because “[t]here are significant differences between Elmbrook and the case before us that lead to the difference in the outcome.” Finally, it found no excessive entanglement between church and state under Lemon’s third prong. It emphasized that JCBSC was not providing KS with government aid, rather it was paying under a contract for services rendered. It noted, “Kingswood’s performance of the contracted service, the education of the alternative-school students, did not require significant monitoring because it took place in the context of an established and structured day program—a program that, as discussed, was consistently run in a secular manner.” Lastly, the panel concluded there was no danger of excessive entanglement from the delegation of essential governmental functions to religious entities because KS “carried out its service in a secular manner.”

The concurring opinion argued that it was a canard to grant the plaintiffs standing as taxpayers, contending the suit was an “employment-contract dispute masquerading as an Establishment Clause case.” It also stressed that courts “do not grant monetary damages for violations of the Establishment Clause.”

Turning to the reasoning in the panel’s opinion, the concurrence conceded that “unless and until the Supreme Court explicitly holds that it has abandoned the Lemon/endorsement test, the lower courts are bound to continue applying that test in contexts where the Court has previously employed it.” Nonetheless, it took issue with the “lead opinion’s dismissing as irrelevant last year’s Supreme Court opinion in Town of Greece.” It noted, “There, in the context of a challenge to legislative prayer, the Supreme Court addressed the issue of what test governs an Establishment Clause challenge to government action.” The concurrence argued: “Town of Greece is apparently a major doctrinal shift regarding the Establishment Clause, declaring a two-pronged test for Establishment Clause cases, a test based upon the historical approach the Court had followed in Marsh, Van Orden, and Hosanna-Tabor, and adding the coercion principle it followed in Lee and Santa Fe.”

Regarding application of Town of Greece’s historical-inquiry test in the present case, the concurrence stated “the question would be whether the Framers would regard the Kingswood contract as an establishment of religion.” It posited that if JCBSC’s “contract would be historically acceptable to the Framers, we would then be required to also ask if it passes muster under the coercion prong of Town of Greece.”

In the concurring judge’s view, the U.S. Supreme in Town of Greece “gave several indications that it intends to displace the endorsement test, foremost of which was that Justice Kennedy’s opinion for the Court went beyond Marsh to adopt his four-Justice dissent from Allegheny.” While it believed that the “Supreme Court has rejected the endorsement test in favor of the historically grounded coercion test,” it concluded “lower courts are bound to follow Supreme Court cases invoking the endorsement test until the Justices explicitly overrule Allegheny and its progeny.” As a result, the concurrence ultimately conceded “school-funding cases must be examined under the endorsement test,” and applying that test in the present case led to the conclusion “that no reasonable observer would regard the School Board’s action as an endorsement of religion.”

Smith v. Jefferson Cnty. Bd. of Comm’rs, No. 13-5957 (6th Cir. Jun. 11, 2015)

[Editor’s Note: In May 2014, Legal Clips summarized an article in The New York Times reporting that a five justice majority, led by Justice Kennedy, in Town of Greece v. Galloway held that a New York State town’s practice of beginning public town board meetings with a prayer from a “chaplain of the month” passes constitutional muster. Kennedy wrote, “[C]eremonial prayer is but a recognition that, since this nation was founded and until the present day, many Americans deem that their own existence must be understood by precepts far beyond that authority of government to alter or define.”

In August 2012, Legal Clips summarized the Seventh Circuit’s en banc decision in Doe v. Elm Brook S.D. holding that a Wisconsin school district violated students’ rights under the Establishment Clause when it held graduation ceremonies for two of its high schools at a local Christian church. After analyzing the facts under the test established in Lemon v. Kurtzman, 403 U.S. 602 (1971), and the endorsement and coercion tests, the majority concluded that the sheer religiosity of the church ran afoul of the “primary effect” prong of Lemon, in that it created a likelihood that high school students would perceive a link between church and state, conveying a message of religious endorsement. The majority stressed that its ruling was of limited scope, and should not be read as constitutionally condemning any government use of church-owned facilities, nor “as critical of the cases permitting governmental use, in the proper context, of certain church-owned facilities.”]


Illinois Attorney General settles suit with state high school athletic association to allow disabled student-athletes in certain sports to participate in association sanctioned competitions

According to an Associated Press (AP) report on Pantagraph.com, Illinois Attorney General Lisa Madigan has settled a suit with the Illinois High School Association (IHSA) that will allow disabled student-athletes to compete and earn points toward a team state championship in swimming, diving and track and field. Madigan’s lawsuit accused the IHSA with violating federal laws affecting the disabled.

Under the settlement, the IHSA must maintain records for disabled student-athletes as it does for all other student-athletes. It also must adopt a revised accommodations policy for student-athletes with disabilities and provide a trained Americans with Disabilities coordinator. Madigan’s office also will monitor the IHSA’s responses to accommodation requests from disabled students. IHSA staff, board members, coaches and officials will be trained in ADA issues. IHSA also must create an annual road race open to all Illinois high school students that recognizes finishers in each gender in both an open and wheelchair division.

Source: Pantagraph.com, 6/24/15, By AP

[Editor’s Note: In May 2012, Legal Clips summarized an article in the Chicago Sun-Times reporting that Illinois Attorney General Lisa Madigan had filed suit in federal court, seeking to make it possible for student-athletes with disabilities to compete in future IHSA state meets. The suit asked for an injunction ordering IHSA “to cease unlawful discrimination against athletes with disabilities,” and to create more opportunities for athletes with disabilities by setting state-qualifying standards for those athletes in individual sports, including swimming and track and field.]

U.S. Supreme Court upholds disparate impact discrimination claims under federal Fair Housing Act

In 5-4 decision, the U.S. Supreme Court held that the federal Fair Housing Act (FHA) supports disparate impact claims of discrimination, says an Associated Press (AP) report in The Washington Post. Justice Kennedy, speaking for a narrow majority, upheld the use of the disparate impact theory of liability, which challenges race-neutral policies that have a negative impact on minority groups.

Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc., No. 13-1371, involved an appeal from decisions by Texas officials accused of violating the FHA by awarding federal tax credits in a way that kept low-income housing out of white neighborhoods. The U.S. Court of Appeals for the Fifth Circuit ruled that a fair housing group, The Inclusive Communities Project, Inc. (ICP), could use statistics to show that the effect of policies used by the Texas Department of Housing and Community Affairs (TDHCA) had a negative impact on black residents.

ICP argued that even if there was no motive to discriminate, the government’s policies harmed black residents. The effect, the group claimed, was perpetuating segregated neighborhoods and denying blacks a chance to move into areas with better schools and lower crime rates. TDHCA countered that it was unfair to have to justify or change policies that didn’t facially discriminate. While disparate impact has been used routinely in employment discrimination cases, TDHCA said such claims were not expressly written into the housing law. It argued that allowing them would essentially force them to make race-conscious decisions to avoid liability.

Justice Kennedy, joined by Justices Ginsburg, Breyer, Sotomayor and Kagan, said language in the FHA discrimination “because of race” allows for disparate impact cases. He said such lawsuits “may prevent segregated housing patterns that might otherwise result from covert and illicit stereotyping.” Business groups complained that using disparate impact to expose every decision to legal challenge is unfair if those practices are based on sound underwriting and compliance with federal regulations.

Justice Alito dissenting from the majority said disparate impact was not specifically allowed in the text of the housing law. He warned that the tactic can also result in perverse outcomes, such as a recent Minnesota case where a landlord claimed a city’s efforts to make him combat rat infestation and unsanitary conditions in low income housing would cause an increase in rent. Chief Justice Roberts and Justices Scalia and Thomas joined Alito’s dissent.

Thomas also filed a separate dissent questioning the very foundation of the disparate impact theory. “Racial imbalances do not always disfavor minorities,” Thomas said, noting that over 70 percent of National Basketball Association players are black. “To presume that these and all other measurable disparities are products of racial discrimination is to ignore the complexities of human existence,” Thomas said.

Attorney General Loretta Lynch said the Justice Department would continue to vigorously enforce the Fair Housing Act “with every tool at its disposal – including challenges based on unfair and unacceptable discriminatory effects.”

Sherrilyn Ifill, president of NAACP Legal Defense Fund said the FHA is critical in bridging the nation’s racial divide, especially in light of the shooting at a black church in Charleston, South Carolina. “Anyone who has been paying attention in the last week knows that we can no longer afford to live the way we have as two separate bifurcated parts of this country,” Ifill said.

Source: The Washington Post, 6/25/19, By Sam Hananel (AP)

[Editor’s Note: In June 2015, Legal Clips summarized a decision by the U.S. Supreme Court in EEOC v. Abercrombie & Fitch reversing the U.S. Court of Appeals for the Tenth Circuit’s decision holding that under Title VII an employer is only required to provide an employee or prospective employee with a religious accommodation when the employer has actual knowledge of the need for accommodation. The eight justice majority held: “To prevail in a disparate-treatment claim, an applicant need only show that his need for an accommodation was a motivating factor in the employer’s decision, not that the employer had knowledge of his need.” Justice Scalia, joined by Chief Justice Roberts and Justices Kennedy, Ginsburg, Breyer, Sotomayor, and Kagan, delivered the Court’s opinion. Justice Alito filed an opinion concurring in judgment. Justice Thomas filed an opinion concurring in part and dissenting in part.]

U.S. Supreme Court rules that the right of same-sex partners to government sanctioned marriage is guaranteed by the Fourteenth Amendment

Obergefell v. Hodges, Nos. 14-556, 14-562, 14, 571, 14-574 (U.S. Jun. 26, 2015)

Facts: Michigan, Kentucky, Ohio, and Tennessee define marriage as a union between one man and one woman. The petitioners, 14 same-sex couples and two men whose same-sex partners are deceased, filed suits in the federal district courts in their home states, claiming that respondent state officials violated the Fourteenth Amendment by denying them the right to marry or to have marriages lawfully performed in another State given full recognition. Each District Court ruled in petitioners’ favor, but the Sixth Circuit consolidated the cases and reversed.

Issues: 1) Does the Fourteenth Amendment require a state to license a marriage between two people of the same sex? 2) Does the Fourteenth Amendment require a state to recognize a marriage between two people of the same sex when their marriage was lawfully licensed and performed out-of-state?

Abstract of Majority Opinion: The U.S. Supreme Court, in a 5-4 decision, has ruled that the Fourteenth Amendment requires a state to license a marriage between two people of the same sex and to recognize a marriage between two people of the same sex when their marriage was lawfully licensed and performed out-of-state. Justice Kennedy, joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan, delivered the Court’s opinion. Chief Justice Roberts, joined by Justices Scalia and Thomas, filed a dissenting opinion. Justice Scalia, joined by Justice Thomas, filed a dissent. Justice Thomas, joined by Justice Scalia, filed a dissent. Justice Alito also filed a dissent.

The Kennedy led majority began its opinion with the discussion of the history of marriage from a time when marriages of members of the opposite sex were arranged to the time when it became a voluntary contract. The majority’s review encompassed a discussion of the emergence of gay and lesbian rights in the United States. It stated:

In the late 20th century, following substantial cultural and political developments, same-sex couples began to lead more open and public lives and to establish families. This development was followed by a quite extensive discussion of the issue in both governmental and private sectors and by a shift in public attitudes toward greater tolerance. As a result, questions about the rights of gays and lesbians soon reached the courts, where the issue could be discussed in the formal discourse of the law.

The majority pointed out that the U.S. Courts of Appeals have held that excluding same-sex couples from marriage violates the Constitution. It also noted that there have been a number of federal district court “decisions addressing same-sex marriage—and most of them, too, have concluded samesex couples must be allowed to marry.”  The majority said, “After years of litigation, legislation, referenda, and the discussions that attended these public acts, the States are now divided on the issue of same-sex marriage.”

Turning to the Fourteenth Amendment claim, the majority, citing Loving v. Virginia, 388 U. S. 1, 12 (1967), pointed out that the Supreme Court “has long held the right to marry is protected by the Constitution.” While conceding that “Court’s cases describing the right to marry presumed a relationship involving opposite-sex partners,” it stressed that “in assessing whether the force and rationale of its cases apply to same-sex couples, the Court must respect the basic reasons why the right to marry has been long protected.”

As a result, the majority concluded that “same-sex couples may exercise the right to marry.” Its conclusion was based on four principles and traditions:

  • A first premise of the Court’s relevant precedents is that the right to personal choice regarding marriage is inherent in the concept of individual autonomy.

  • A second principle in this Court’s jurisprudence is that the right to marry is fundamental because it supports a two-person union unlike any other in its importance to the committed individuals.

  • A third basis for protecting the right to marry is that it safeguards children and families and thus draws meaning from related rights of childrearing, procreation, and education.

  • Fourth and finally, this Court’s cases and the Nation’s traditions make clear that marriage is a keystone of our social order.

It stated: “The States have contributed to the fundamental character of the marriage right by placing that institution at the center of so many facets of the legal and social order. There is no difference between same- and opposite-sex couples with respect to this principle. Yet by virtue of their exclusion from that institution, same-sex couples are denied the constellation of benefits that the States have linked to marriage.”

In addition to the Fourteenth Amendment due process guarantee, the majority emphasized that the “right of same-sex couples to marry that is part of the liberty promised by the Fourteenth Amendment is derived, too, from that Amendment’s guarantee of the equal protection of the laws.” It noted that in Loving the Court invalidated a prohibition on interracial marriage under both the Equal Protection Clause and the Due Process Clause, holding “the prohibition invalid because of its unequal treatment of interracial couples.”

Responding to the suggestion that proponents of same-sex marriage await a legislative remedy, the majority said, “The dynamic of our constitutional system is that individuals need not await legislative action before asserting a fundamental right.” The majority, in conclusion, held:

[S]ame-sex couples may exercise the fundamental right to marry in all States. It follows that the Court also must hold—and it now does hold—that there is no lawful basis for a State to refuse to recognize a lawful same-sex marriage performed in another State on the ground of its same-sex character.

[Editor’s Note: In June 2013, Legal Clips reported that in a 5-4 split,  the U.S. Supreme Court in United States v. Windsor struck down a provision of the 17-year-old Defense of Marriage Act (DOMA) that denies federal benefits, like Social Security benefits or the ability to file joint tax returns, to same-sex couples legally married.  Justice Anthony Kennedy, delivering the majority’s opinion, said, “DOMA is unconstitutional as a deprivation of the equal liberty of persons that is protected by the Fifth Amendment.”  Kennedy was joined by Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan.]

U.S. Supreme Court rules that the ACA tax credits are available to individuals regardless of whether insurance through a state or federal exchange

King v. Burwell, No. 14-114 (U.S. Jun 25, 2015)

Facts: In 2010, Congress passed the Affordable Care Act (ACA) to increase the number of Americans covered by health insurance and decrease the cost of health care. The ACA required each state to establish an “exchange” through which people could purchase health care coverage, and if a state elected not to do so, the federal government would establish one through the Secretary of Health and Human Services. The ACA also required people to obtain the minimum essential coverage or pay a tax penalty unless they fell within an unaffordability exemption for low-income individuals. To limit the number of people that would fall into such an exemption, the ACA provided for tax credits that are calculated based on the health plan in which an individual enrolls through the exchange. Although the legislative language of the ACA pertaining to the tax credits only referred to the exchanges established by the states, the Internal Revenue Service (IRS) created a regulation that made the tax credits available to those enrolled in plans through the federal exchange as well.

Virginia declined to establish a state-run exchange and has one operated by the federal government. The plaintiffs are a group of Virginia residents who, without the tax credits, would fall under the unaffordability exception and be exempt from having to purchase health insurance. They sued the federal government arguing that the IRS regulation exceeded the agency’s statutory authority, is arbitrary and capricious, and is contrary to the law in violation of the Administrative Procedure Act. The district court granted the defendants’ motion to dismiss, and the U.S. Court of Appeals for the Fourth Circuit affirmed.

Issue: Did the Internal Revenue Service permissibly create a regulation that extended the tax credits the Affordable Care Act authorized to federal exchanges as well as those created by the states?

Abstract of Majority Opinion: In a 6-3 split, the U.S. Supreme Court ruled that Section 36B of the Internal Revenue Code, which addresses tax credits in the federal Patient Protection and Affordable Care Act (ACA), does provide tax credits to individuals in states that have a Federal Exchange. Chief Justice Roberts, joined by Justices Kennedy, Ginsburg, Breyer, Sotomayor and Kagan, delivered the Court’s opinion. Justice Scalia, joined by Justices Thomas and Alito, filed a dissenting opinion.

The Roberts’ majority opinion states that the issue in the case was whether the Act’s tax credits are available in States that have a Federal Exchange rather than a State Exchange. The ACA provisions in question, §§ 38B(b)-(c), state that “the amount of the tax credit depends in part on whether the taxpayer has enrolled in an insurance plan through ‘an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act.’”

After a lengthy review of the language, the Roberts majority concluded the phrase “an Exchange established by the State under [42 U. S. C. §18031]” is properly viewed as ambiguous. It stated: “The phrase may be limited in its reach to State Exchanges. But it is also possible that the phrase refers to all Exchanges—both State and Federal—at least for purposes of the tax credits.”

The Majority also indicated that its conclusion of the phrase’s ambiguity was “supported by several provisions that assume tax credits will be available on both State and Federal Exchanges.” As an example, it indicated that the ACA “requires all Exchanges to create outreach programs that must ‘distribute fair and impartial information concerning . . . the availability of premium tax credits under section 36B.’”

The majority emphasized the fact that the ACA contains a number of examples of “inartful drafting.” Having determined that the text is ambiguous, it turned to the broader structure of the ACA to discover Section 38B’s meaning, with regard to the petitioners’ argument that the ACA would operate quite differently in a State with a Federal Exchange. In particular, “one of the Act’s three major reforms—the tax credits—would not apply, and “a second major reform—the coverage requirement—would not apply in a meaningful way,” the majority found that such a scenario, i.e., the combination of no tax credits and an ineffective coverage requirement, “could well push a State’s individual insurance market into a death spiral.”

The majority concluded that it was “implausible that Congress meant the Act to operate in this manner.” It also rejected the petitioners’ contention that “Congress was not worried about the effects of withholding tax credits from States with Federal Exchanges because Congress evidently believed it was offering states a deal they would not refuse.” It stated:

Section 18041 refutes the argument that Congress believed it was offering the States a deal they would not refuse. That section provides that, if a State elects not to establish an Exchange, the Secretary “shall . . . establish and operate such Exchange within the State.” The whole point of that provision is to create a federal fallback in case a State chooses not to establish its own Exchange. Contrary to petitioners’ argument, Congress did not believe it was offering States a deal they would not refuse—it expressly addressed what would happen if a State did refuse the deal.

Finally, the majority concluded that “the structure of Section 36B itself suggests that tax credits are not limited to State Exchanges.” It pointed out that “[h]ad Congress meant to limit tax credits to State Exchanges”, it likely would have done so in the definition of “applicable taxpayer” or in some other prominent manner. The majority, therefore, held:

Section 36B allows tax credits for insurance purchased on any Exchange created under the Act. Those credits are necessary for the Federal Exchanges to function like their State Exchange counterparts, and to avoid the type of calamitous result that Congress plainly meant to avoid.

Abstract of Dissenting Opinion: The dissent found the majority’s conclusion that when the ACA says “Exchange established by the State” it means “Exchange established by the State or the Federal Government,” absurd and its reasoning completely flawed. According to the dissent: “Words no longer have meaning if an Exchange that is not established by a State is ‘established by the State.’”

In the dissent’s view, the majority’s reading of the ACA “does not merely give ‘by the State’ a duplicative effect; it causes the phrase to have no effect whatever.” It stated:

The Court has not come close to presenting the compelling contextual case necessary to justify departing from the ordinary meaning of the terms of the law. Quite the contrary, context only underscores the outlandishness of the Court’s interpretation. Reading the Act as a whole leaves no doubt about the matter: “Exchange established by the State” means what it looks like it means.

New Jersey Supreme Court rules school board clerk can face criminal charges for taking confidential board documents, even though she planned to use the documents in discrimination suit

According to n.j.com, the New Jersey Supreme Court, in a 6-1 split, has ruled that a North Bergen school board employee can be indicted for taking confidential documents from the district even though she allegedly planned to use them in a discrimination lawsuit she filed against the board. The court rejected Ivonne Saavedra’s motion to dismiss the theft and official misconduct charges against her.

Saavedra, a clerk for the Hudson County township’s school board, filed a lawsuit in 2009 alleging that she was the victim of gender, ethnic, and sexual discrimination. Her attorney later produced hundreds of documents that Saavedra took or copied from the school district to use in her case. The school board said that the documents included “highly confidential student educational and medical records that were protected by federal and state privacy laws.”

Saavedra was indicted in 2012 on charges of official misconduct and theft for allegedly stealing the documents. She faced a possible sentence of 5 to 10 years in prison. Saavedra dropped her lawsuit against the board out of fear her testimony might be used against her in the criminal case. But she moved to dismiss the indictment arguing that the state failed to present sufficient evidence to the grand jury and withheld evidence about her motive in taking the documents from the grand jury. Both a state Superior Court judge and a three-judge state appellate panel ruled against her.

The New Jersey Supreme Court agreed with the lower courts. The justices noted that the state properly presented evidence to the grand jury that indicted Saavedra, including how the school board trains employees that such documents are “highly confidential and must not be tampered with.”

The court also dismissed Saavedra’s argument that she was allowed to take documents under the state Supreme Court’s 2010 decision in Quinlan v. Curtiss-Wright Corp. That decision says an employee has a legal right to take confidential documents from their employer to use in employment discrimination cases “and, accordingly, criminal prosecution for that act is barred by due process principles and public policy.”  The court went on to say, “[h]owever, the Court’s decision in Quinlan did not endorse self-help as an alternative to the legal process in employment discrimination litigation. Nor did Quinlan address any issue of criminal law.”

Mario Blanch, Saavedra’s attorney, said the ruling is “very dangerous.” He added, “It leaves whistleblowers in a state of perpetual danger.” But Lynne Anderson, an attorney with Drinker Biddle & Reath in Florham Park, said that many lawyers believe the Quinlan decision from 2010 gives defendants “a free pass” to take documents as long as they explain they did so for an discrimination lawsuit. “The court addressed that head on and said, ‘No, that’s not right,'” Anderson said. “The employers’ right also need to be balanced. Not all claims are legitimate claims.”

Still, Peter Verniero, the former state Supreme Court Justice and state Attorney General, said it’s too soon to tell what the decision means for other whistleblower cases. He said the ruling “carefully notes the manner in which a litigant can properly obtain or preserve information for use in a civil lawsuit.”

Source: nj.com, 6/23/15, By Brent Johnson

[Editor’s Note: The New Jersey Supreme Court’s majority opinion held: 

The trial court properly denied defendant’s motion to dismiss her indictment. The State presented to the grand jury a prima facie showing with respect to the elements of each offense charged in the indictment and the State did not withhold from the grand jury exculpatory information or a charge regarding a defense that it was compelled by law to present. Defendant’s indictment does not violate due process standards or New Jersey public policy by conflicting with this Court’s decision in Quinlan, which does not govern the application of the criminal laws at issue in this appeal.

However, the majority did not altogether reject that Quinlan’s reasoning could play a role in Saavedra’s defense:

Although the Quinlan balancing test for LAD retaliation cases does not govern the availability of a claim of right or other justification in a criminal prosecution, evidence that would be relevant to that test in a civil case may be considered if a jury evaluates defendant’s claim of right defense or other defense of justification. Should this matter proceed to trial, the jury may consider such issues as the contents of the documents, the presence or absence of confidentiality policies, the privacy interests at stake, the circumstances under which defendant gained access to the documents, the extent to which she disclosed them, and her reasons for taking an original or copying a document rather than simply seeking it in discovery. With a complete factual record, the trial court will be in a position to instruct the jury regarding a claim of right or other justification as a defense to the State’s allegations.]


Parents of student expelled for compiling a “hit list” in his personal journal file federal court suit against Oregon district citing First Amendment

The Portland Tribune reports that Michael and Julie McNeil have filed suit in federal district court on behalf of their son, identified as CLM, claiming that Sherwood School District (SSD) officials overstepped their authority when they expelled CLM from Sherwood High School for the “hit list” he compiled in a personal journal that he kept at home. The lawsuit names as defendants SSD, Superintendent Heather Cordie, Sherwood High Principal Ken Bell, Associate Principal Brian Bailey, the district’s chief academic officer Gary Bennett and Peter Miller, a former SHS principal working as a hearing officer.

According to the suit, CLM kept a personal journal in his bedroom. In May 2014, CLM allegedly wrote a list of 23 names under the notations “I am God,” “My Hit List,” and “All these people must die.” The suit asserts that the list was a failed attempt at coping with a bad day at school. According to the family, CLM wrote the entry out of frustration with classmates who were rude and unkind. They contend that CLM never meant to harm anyone. The lawsuit claims that CLM eventually forgot all about it and began school that fall as a junior at Sherwood High.

In September, CLM’s mother, Julie McNeil, found the journal while cleaning near CLM’s nightstand. Reading portions of it, she discovered the list. Julie McNeil spoke to a therapist later that week about the journal entry, the lawsuit claims. The therapist, a mandatory reporter, alerted police. Police began an investigation, but no charges were ever filed against CLM. The police did alert SSD.

SSD alerted the parents of all of the students named on the list and issued a press release indicating that an unnamed student had been removed from classes for writing a hit list. CLM was later expelled. The school district claimed that the threats of violence had caused a “substantial disruption to the school environment.”

Even though a a psychological evaluation found CLM’s list was likely “a fantasy or symbolic method of acting out,” SSD refused to let CLM return to school. Unable to find another school, CLM was forced to take online classes.

The suit claims the journal was a form of self-expression and is protected under the First Amendment to the U.S. Constitution. It did not constitute a threat to anyone, they said in the lawsuit. Plaintiffs assert that the list, which lay forgotten in a desk drawer, could not have been a disruption to the school environment. “The only communication about or disclosure of CLM’s personal journal Hit List to students, patrons and staff at SHS was the (Sherwood School District) personnel …” according to the lawsuit. “Any disruption in the SHS environment in connection with CLM’s personal journal entries was exclusively attributable to (the Sherwood School District’s) conduct.”

The lawsuit also claims that SSD had no authority to take action. The McNeils claim that the student handbook, which governs how students are to conduct themselves, is too vague. The handbook says that a student can be expelled if the student’s actions “has the potential to disrupt or impact the safe and efficient operation of the school.”

The suit is seeking a court order requiring SSD to remove the expulsion from CLM’s school records and asking the court to forbid the school district from taking any other disciplinary action in the matter. It also seeks $300,000 in damages, $200,000 for CLM’s “impeded educational progress and compensable injuries,” and $100,000 for Julie and Michael McNeil’s emotional suffering.

Source: Portland Tribune, 6/19/15, By Geoff Pursinger

[Editor’s Note: In August 2011, Legal Clips summarized a decision by a U.S. Court of Appeals for the Eighth Circuit three-judge panel  in D.J.M. v. Hannibal Pub. Sch. Dist. holding that a school district that suspended a student for off-campus instant message communications with a classmate did not violate the student’s free speech rights because the student’s speech constituted unprotected true threats. The panel also concluded that the school district was justified in disciplining the student under the substantial disruption standard established in Tinker v. Des Moines Indep. Cmty. Sch. Dist., 393 U.S. 503 (1969), based on Tinker’s language that school officials may discipline students for speech that occurs “in class or out of it, ” which “might reasonably [lead] school authorities to forecast substantial disruption to or material interference with school activities.”

In March 2012, Legal Clips summarized a decision by a three-judge panel of the U.S. Court of Appeals for the Second Circuit in Cuff v. Valley Cent. Sch. Dist. holding that a school district did not violate a student’s free speech rights when it imposed a six-day suspension on him for drawing a picture in class expressing the desire to commit violence against the school and teachers. The majority concluded that school officials reasonably forecast that the student’s picture would result in substantial disruption to school operations. The test should be an objective one, it found,  focusing on the reasonableness of school officials’ response, rather than the student’s intentions.]

Teachers union’s suit alleges that Nebraska district official instructed teachers who suspected child abuse to contact parents before reporting it

WOWT News reports that the North Platte Education Association (NPEA) has filed a lawsuit in state court against North Platte School District (NPSD), which alleges that two teachers, who had reported child abuse, were told that in the future they needed to contact the parents first. NPEA asked the school district to rescind what it believes is the district’s policy and that so far the NPSD and the school board have refused to do so.

According to the suit,  teacher Christie Copper and guidance counselor Stephen Spiehs, based on their personal observations of the student, determined that they had an obligation under state law and school policy to report the student’s condition to the Department of Health and Human Services. They contacted the school resource officer and, upon arrival, he assessed the situation. During this time, the school principal, associate principal and secondary special education coordinator were in and out of the room with the child and were aware of the situation.

Spiehs contacted the Department of Health and Human Services. The suit claims that later that day the principal sent an email to Copper and Spiehs saying he had heard from the child’s parent who was “extremely displeased.” In his email, the principal also wrote that it was a mistake to report the suspected abuse or neglect without first contacting the parents. He admonished the employees that in future cases of suspected abuse or neglect a student’s parents should be contacted first if the student is not in immediate danger.

Source: WOWT News, 6/22/15, By Staff

[Editor’s Note: In April 2014, Legal Clips summarized a decision by the Indiana Supreme Court in Smith v. State of Indiana holding that the evidence was sufficient to uphold a high school principal’s conviction for violating the state’s mandatory reporting of suspected child abuse statute. The incident involved a student-on-student rape at school. The court also rejected the principal’s vagueness challenge to the statute.]

Florida district’s board is poised to ban the use of corporal punishment in schools

Lake County School Board is expected to give preliminary approval to a proposal to do away with corporal punishment as an disciplinary option, says the Orlando Sentinel. Lake County Schools is the last school district in Central Florida to allow the form of discipline. The board last year decided to keep corporal punishment as an option, but a consensus has now developed that in a modern world populated by potential litigants it’s time to cast aside the paddle.

Board members agreed that it’s time for  the policy permitted in Florida and throughout the country to go. Corporal punishment in schools is authorized in 19 states, including Florida, which administered it 2,170 times in the 2013-14 school year, according to the state Department of Education.

The practice is frowned upon by a number of education and child-development groups, including the National Education Association and the Society of Adolescent Medicine, which has called it an “ineffective, dangerous, and unacceptable method of discipline.” However, a paddling change wouldn’t prevent charter schools from disciplining kids in this manner. Charters are free to develop their own disciplinary protocols.

LCSB members said it’s no longer wise for school staff to exert force on a student. School Board attorney Steve Johnson said the active use of paddling died following a 1988 lawsuit that alleged, among other things, that a principal spanked a young girl excessively.

The corporal punishment policy is limited: Paddling must be carried out by a principal or administrator in front of a witness and with parental consent and notification. But even carefully drawn restrictions don’t protect the district against legal liability, said Johnson, who advised officials that such lawsuits are “impossible to defend.”

Superintendent Susan Moxley added that she doesn’t encourage administrators or principals to paddle students, even at a parent’s insistence. A committee of principals asked the board last year to delete the corporal punishment provision, but elected leaders resisted the push. This year, the panel overwhelmingly supported trying again to remove the provision from the code of student conduct.

Orlando Sentinel, 6/21/15, By Bethany Rodgers

[Editor’s Note: In April 2011, Legal Clips summarized an article in the Alamogordo Daily News reporting that Gov. Susana Martinez had signed a bill that outlaws paddling students in schools. “The decision on whether or not to use corporal punishment on a child is one that is best left to a parent,” said Martinez. Thirty-six of the state’s 89 school districts still permitted paddling of students, though many used the punishment sparingly. New Mexico became the 31st state to outlaw paddling students in schools. In signing the measure, House Bill 172, Martinez broke with most legislators in her party. Lawmakers approved the ban on paddling students in close votes, 22-17 in the Senate and 36-31 in the House of Representatives.] 

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