Monday, December 31, 2018
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Court of Appeal:
Schools’ Funding Lawsuit Barred by 90-Day Statute
By a MetNews Staff Writer
The Fourth District Court of Appeal has held that a 90-day statute of limitations bars a suit brought by several school districts across the state challenging Controller Betty Yee’s reduction of monies paid to them, because the suit was essentially a constitutional challenge to state funding statutes.
The opinion by Justice Terry B. O’Rourke of Div. One was initially filed “not for publication” on Nov. 30, but was certified for publication on Thursday.
The school districts, including the unified districts for San Diego, Clovis, Poway, San Jose and Newport-Mesa, as well as the Grossmont Union High School District, filed a complaint and petition for writ of mandate after the state controller’s reports from 2014-2017 showed a reduction in the amount of reimbursement for certain state-mandated programs to which the districts were entitled.
San Diego Superior Court Judge Lisa C. Schall sustained Yee’s demurrer without leave to amend to the operative complaint and ordered entry of a judgment of dismissal.
Yee argued that the districts’ request for various injunctions and declaratory relief requiring her to, among other things, “correct any unlawful reductions to the amount of subvention owing to the Districts” and refrain from artificially reducing that amount in the future was really a constitutional challenge to the Government Code sections appropriating the monies available for the controller’s distribution to various school districts.
Applicable Law
Code of Civil Procedure §341.5 sets forth in relevant part:
“Notwithstanding any other provision of law, any action or proceeding in which a…school district…is a plaintiff or petitioner, that is brought against the State of California challenging the constitutionality of any statute relating to state funding for…school districts…shall be commenced within 90 days of the effective date of the statute at issue in the action.”
The section also defines “the State of California” as including “any of its agencies, commissions, boards, or public officials.”
The districts argued that theirs was not solely a constitutional challenge. Rather, they contended, they were challenging as unlawful Yee’s actions relating to the determination of how much subvention they received.
Scope of Statute
O’Rourke wrote:
“Looking first to its words, section 341.5 governs ‘any action or proceeding’ that ‘challeng[es] the constitutionality of any statute relating to state funding’ for local agencies, including school districts. This language is broad and is applicable to any lawsuit whose gravamen is a constitutional challenge to any statute having some connection or association with state funding, no matter the form of the action.”
He added:
“Additionally, section 341.5 expressly triggers the short limitations period for a constitutional challenge to a funding statute on the statute’s effective date.”
The most recent funding statute in the case, Government Code §17581.95, set aside nearly $1 billion to the state school fund for the 2016-2017 school year. That statute was enacted 158 days before the districts filed their first petition for writ of mandate in the case.
Gravamen of Challenge
The jurist noted that the districts’ entitlement to reimbursement “is enshrined in article XIII B, section 6” of the California Constitution. He continued:
“Their pleading makes clear that the mechanism used by the Controller to make the reduction is the offset described in the funding statutes, that is, the application of the general one-time funding allocations to first satisfy the Districts’ outstanding claims for subvention. The funding statutes give the Controller no discretion but to apply the funding in such manner.…
“We are unable to divorce the Controller’s action from her statutory obligation to take that action under the funding statutes as the Districts would have us do. As stated, we look to the gravamen of the Districts’ petition and complaint, the ‘substance of the action, rather than the form of the pleading or the labels employed’…to determine whether section 341.5 applies. Doing so, we conclude the gravamen of the challenge in the Districts’ first amended petition and complaint is no different than their straightforward constitutional challenges to the funding statutes asserted in the original pleading.”
O’Rourke added:
“By challenging the Controller’s actions—compelled by and taken under the funding statutes—as contrary to her constitutional duty to pay subvention, the Districts in substance and effect are advancing a challenge to the constitutionality of the funding statutes themselves.”
The case is San Diego Unified School Dist. V. Yee, D072894.
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