Key Provision of Distressed School Law Struck as Unconstitutional Delegation of Legislative Power

A section of the Public School Code authorizing Philadelphia’s School Reform Commission to suspend provisions of the Charter School Law violates the non-delegation rule, the Pennsylvania Supreme Court ruled in West Phila. Achievement Charter Elem. Sch. v. Sch. Dist. of Phila., __ A.3d __ (No. 31 EM 2014, filed Feb. 16, 2016). In 1959, the legislature added provisions to the Public School Code of 1949 to assist school districts in financial distress. These so-called Distress Law provisions were amended again in the 1990s to respond to adverse financial conditions in the Philadelphia School District. The Secretary of Education was authorized to appoint a chief executive officer to oversee the District, and the CEO was given broad power “

[t]o suspend the requirements of [the School Code] and regulations of the State Board of Education.” Section 696(i)(3) of the School Code, 24 P.S. §6-696(i)(3). In 2001, Section 696 was amended to create the School Reform Commission (SRC), which inherited the former CEO’s suspension powers. The District was declared distressed and the SRC was appointed.

In 2011, the West Philadelphia Achievement Charter Elementary School sought renewal of its charter. Desiring to subject renewal to certain conditions, the SRC passed a resolution invoking Section 696(i)(3) to suspend a provision of the Charter School Law requiring that a charter school be in corrective action status prior to the SRC placing conditions in a renewed charter. The SRC also capped Charter School’s enrollment. Charter School refused to sign the agreement and continued to operate. In 2013, the SRC passed a resolution suspending a number of sections of the Charter School Law and any applicable regulations. In 2014, the SRC issued a “Proposed Charter Schools Policy” to implement the 2013 resolution. Inter alia, the Policy required charter schools to accept enrollment caps and, in the absence of an agreement with the SRC, allowed the SRC to dictate the terms under which a charter school operates. The Policy also allowed the SRC to revoke or non-renew a charter for reasons not appearing in the School Code. Charter School petitioned the Supreme Court in its original jurisdiction for declaratory and injunctive relief, arguing that Section 696(i)(3) violates the non-delegation rule of Article II, Section 1 of the Pennsylvania Constitution.

In a 4-2 decision, the Court struck Section 696(i)(3) as an unconstitutional delegation of legislative power. Writing for the majority, Chief Justice Saylor found that the legislature failed to provide adequate standards to guide and restrain the SRC’s discretion in choosing which portions of the School Code to suspend. The majority noted that remediating the District’s financial distress is a legislative “objective,” not a “standard.” The Court was troubled by the lack of any mechanism to limit the SRC’s actions so as to “protect against administrative arbitrariness and caprice.” In the majority’s view, the SRC’s actions in this case illustrated the point: by suspending a number of significant aspects of the Charter School Law, the SRC effectively rewrote the Law through its Charter Schools Policy. The Court permanently enjoined the SRC and the District from taking any further action under Section 696(i)(3).

Justice Baer, joined by Justice Donohue, filed a dissenting opinion. Justice Baer opined that Section 696(i)(3) does not delegate legislative power. Rather, it delegates the authority to suspend legislation that affects the economic stability of a school district in financial distress, which is constitutionally permissible pursuant to Article I, Section 12 of the Pennsylvania Constitution (“Power of suspending laws”).

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