no. 03-13-00733-cv in the court of appeals … · dallas, texas 75218 telephone: (214) ... isd...
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NO. 03-13-00733-CV
IN THE COURT OF APPEALS
FOR THE THIRD DISTRICT OF TEXAS
AT AUSTIN
IN RE TEXANS FOR REAL EFFICIENCYAND EQUITY IN EDUCATION, ET AL.
Original Proceeding from Cause Number D-1-GN-11-003130200th Judicial District Court of Travis County, Texas
Judge John K. Dietz, Presiding
REAL PARTIES IN INTEREST TEXAS TAXPAYER AND STUDENTFAIRNESS COALITION, ET AL., CALHOUN COUNTY ISD, ET AL.,
EDGEWOOD ISD, ET AL., AND FORT BEND ISD, ET AL.’S RESPONSETO RELATORS’ EMERGENCY MOTION FOR TEMPORARY RELIEF
THOMPSON & HORTON LLP
J. David Thompson, IIIState Bar No. 19950600Philip FraissinetState Bar No. 00793749Phoenix Tower, Suite 20003200 Southwest FreewayHouston, Texas 77027Telephone: (713) 554-6767Telecopier: (713) 583-9668
Holly G. McIntushState Bar No. 24065721400 West 15th Street, Suite 1430Austin, Texas 78704Telephone: (512) 615-2351Telecopier: (512) 682-8860
ATTORNEYS FOR REAL PARTIES IN
INTEREST FORT BEND ISD, ET AL.
HAYNES AND BOONE LLP
Mark R. TrachtenbergState Bar No. 240081691221 McKinney St., Suite 2100Houston, Texas 77010Telephone: (713) 547-2000Telecopier: (713) 547-2600
John W. TurnerState Bar No. 240280852323 Victory Avenue, Suite 700Dallas, Texas 75218Telephone: (214) 651-5000Telecopier: (214) 651-5940
ATTORNEYS FOR REAL PARTIES
IN INTEREST CALHOUN COUNTY
ISD, ET AL.
MEXICAN AMERICANLEGAL DEFENSE ANDEDUCATIONAL FUND, INC.
David G. HinojosaState Bar No. 24010689Marisa BonoState Bar No. 24052874110 Broadway, Suite 300San Antonio, Texas 78205Telephone: (210) 224-5476Telecopier: (210) 224-5382
ATTORNEYS FOR REAL PARTIES IN
INTEREST EDGEWOOD ISD, ET AL.
GRAY & BECKER, P.C.
Richard E. Gray, IIIState Bar No. 08328300Toni HunterState Bar No. 10295900900 West Ave.Austin, Texas 78701Telephone: (512) 482-0061Telecopier: (512) 482-0924
ATTORNEYS FOR REAL PARTIES
IN INTEREST TEXAS TAXPAYER
AND STUDENT FAIRNESS
COALITION, ET AL.
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TABLE OF CONTENTS
TABLE OF CONTENTS........................................................................................ i
TABLE OF AUTHORITIES ................................................................................. ii
BACKGROUND ....................................................................................................1
SUMMARY OF ARGUMENT ..............................................................................7
ARGUMENT..........................................................................................................9
I. The Intervenors are not entitled to temporary relief ......................................9
A. The standard for granting temporary relief..........................................9
B. The Intervenors have not shown compelling circumstanceswarranting a stay...............................................................................10
1. The Intervenors’ own actions demonstrate that thereis no emergency ......................................................................10
2. The Intervenors overstate the extent of the discoveryand the scope of the supplemental hearing regardingthe new legislation ..................................................................12
3. The Intervenors need not participate in the hearingregarding the 2013 legislation if, as they contend, ithas no impact on their claims ..................................................15
4. A stay would cause unnecessary delay and createunnecessary cost for all the parties and the trial court .............15
II. The stay should be denied because the Intervenors are notentitled to the underlying relief they seek....................................................16
A. There is no order subject to mandamus because the trialcourt has not yet ruled on the merits of the Intervenors’jurisdictional challenge .....................................................................17
B. Even if the trial court had denied Intervenors’ plea, suchdenial is not challengeable by mandamus..........................................18
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C. The trial court did not abuse its discretion by choosing todecide a fact-dependent jurisdictional challenge after fullerdevelopment of the record.................................................................19
1. The trial court did not grant a new trial, but granteda motion to re-open the evidence for the limitedpurpose of considering the impact of newly passedlegislation ...............................................................................19
2. The mere passage of legislation does notautomatically moot a case .......................................................21
3. There is a factual dispute over the extent of theimpact of the 2013 legislation .................................................22
a. The legislation tweaked the existing schoolfinance system; it did not create a new system..............23
b. The impact of the 2013 legislation is the veryissue to be determined at the January hearingon new evidence ...........................................................26
4. The ISD Plaintiffs’ challenge to the system forfinancing the public school system is ripe ...............................27
D. The Intervenors’ standing argument is directly contrary toTexas Supreme Court precedent........................................................29
PRAYER ..............................................................................................................30
CERTIFICATE OF SERVICE..............................................................................34
APPENDIX .............................................................................................. Tabs A-C
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TABLE OF AUTHORITIES
CASES
Abor v. Black,695 S.W.2d 564 (Tex.1985) .............................................................................19
In re Angelini,186 S.W.3d 558 (Tex. 2006) (orig. proceeding) ...............................................22
Barry v. Barry,193 S.W.3d 72 (Tex. App.—Houston [1st Dist.] 2006, no pet.) .......................20
Bell Helicopter Textron, Inc. v. Walker,787 S.W.2d 954 (Tex. 1990) (per curiam)........................................................18
Brown v. Herman,852 S.W.2d 91 (Tex. App.—Austin 1993, orig. proceeding)(per curiam) .....................................................................................................18
Cantu v. Longoria,878 S.W.2d 131 (Tex. 1994) (per curiam)........................................................16
Carrollton-Farmers Branch Indep. Sch. Dist. v. Edgewood Indep. Sch. Dist.,826 S.W.2d 489 (Tex. 1992) [“Edgewood III”]................................................28
City of Galveston v. Gray,93 S.W.3d 587 (Tex. App.—Houston [14th Dist.] 2002, pet. denied) ..............18
In re CSX Corp.,124 S.W.3d 149 (Tex. 2003) (per curiam)........................................................16
In re Dillard Dep’t Stores, Inc.,198 S.W.3d 778 (Tex. 2006) (per curiam)........................................................22
Diocese of Galveston-Houston v. Stone,892 S.W.2d 169 (Tex. App.—Houston [14th Dist.] 1994, orig. proceeding) ....17
Edgewood Indep. Sch. Dist. v. Kirby,777 S.W.2d 391 (Tex. 1989) [“Edgewood I”] ..................................................28
Edgewood Indep. Sch. Dist. v. Kirby,804 S.W.2d 491 (Tex. 1991) [“Edgewood II”] ..................................... 21, 28, 29
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Edgewood Indep. Sch. Dist. v. Meno,917 S.W.2d 717 (Tex. 1995) [“Edgewood IV”] ................................................28
Falcon v. Bonanza Capital, Ltd.,No. 03-12-00132-CV, 2012 WL 1655809 (Tex. App.—AustinMay 1, 2012, order, no pet.) (per curiam)...........................................................9
In re Hays County Sheriff’s Dep’t,No. 03-12-00343-CV, 2012 WL 6554815 (Tex. App.—AustinDec. 12, 2012, orig. proceeding) (mem. op.)....................................................18
Iley v. Hughes,311 S.W.2d 648 (Tex. 1958) ............................................................................19
Lamar Builders, Inc. v. Guardian Savings & Loan Ass’n,786 S.W.2d 789 (Tex. App.—Houston [1st Dist.] 1990, no writ)...........9, 10, 11
N.H. Helicopters, Inc. v. Brown,841 S.W.2d 424 (Tex. App.—Dallas 1992, orig. proceeding) ..........................19
Neeley v. West Orange-Cove Consolidated ISD,176 S.W.3d 746 (Tex. 2005) [“West Orange-Cove II”]..........................1, 29, 30
Patterson v. Planned Parenthood of Houston & Se. Tex., Inc.,971 S.W.2d 439 (Tex. 1998) ............................................................................27
Sharm, Inc. v. Euresti,883 S.W.2d 701 (Tex. App.—Corpus Christi 1994, orig. proceeding) .............17
State Bd. of Ins. v. Williams,736 S.W.2d 259 (Tex. App.—Austin 1987, orig. proceeding)..........................19
Texas Dep’t of Banking v. Mount Olivet Cemetery Ass’n,27 S.W.3d 276 (Tex. App.—Austin 2000, pet. denied) ....................................27
Texas Dep’t of Parks & Wildlife v. Miranda,133 S.W.3d 217 (Tex. 2004) ............................................................................26
Texas Dep’t of Pub. Safety v. Salazar,No. 03-11-00206-CV, 2011 WL 1469429 (Tex. App.—AustinApr. 19, 2011, no pet.) (mem. op.) ...................................................................17
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Waco Indep. Sch. Dist. v. Gibson,22 S.W.3d 849 (Tex. 2000)..............................................................................27
Walker v. Packer,827 S.W.2d 833 (Tex. 1992) ................................................................ 16, 19, 22
Wilkins v. Methodist Health Care Sys.,160 S.W.3d 559 (Tex. 2005) ............................................................................20
STATUTES AND RULES
TEX. CIV. PRAC. & REM. CODE § 51.014 ...............................................................19
TEX. R. CIV. P. 270......................................................................................5, 19, 20
TEX. R. CIV. P. 306c ..............................................................................................20
TEX. R. CIV. P. 329(b) ...........................................................................................20
SECONDARY SOURCES
Acts 1990, 71st Leg., 6th C.S., ch. 1. ....................................................................21
TO THE HONORABLE COURT OF APPEALS:
Real Parties in Interest Texas Taxpayer and Student Fairness Coalition, et
al., Calhoun County ISD et al., Edgewood ISD et al., and Fort Bend ISD et al.
(collectively, the “ISD Plaintiffs”) file this response to the Emergency Motion for
Temporary Relief filed by Relators Texans for Real Efficiency and Equity in
Education et al. (the “Intervenors”), and would show this Court that the Motion
should be denied.1
BACKGROUND
On four separate occasions over the last twenty-three years, the Texas
Supreme Court has declared various public school funding systems adopted by the
Texas Legislature unconstitutional, most recently in Neeley v. West Orange-Cove
Consolidated ISD, 176 S.W.3d 746 (Tex. 2005) [“West Orange-Cove II”].
A perfect storm of (1) substantial legislative budget cuts, (2) a “quantum
leap” in academic standards for public education, (3) vast and growing populations
of economically-disadvantaged and English Language learner students, and
1 Although this response is limited to the emergency motion for temporary relief, the ISDPlaintiffs necessarily must address some aspects of the Intervenors’ mandamus petition as well.The ISD Plaintiffs believe that both the motion and the request for mandamus relief should bedenied on the basis of this response. However, if the mandamus petition is not denied at thistime, the ISD Plaintiffs respectfully request that the Court set a briefing schedule allowing timefor preparation of a full response and a supplemental mandamus record to include relevantcitations that were omitted from the record filed by the Intervenors, including the transcript ofthe hearing on the Motion to Reopen the Evidence that resulted in the order of which theIntervenors complain.
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(4) long outdated and inadequate school finance formulas, prompted more than
half the State’s school districts to challenge the constitutionality of the school
finance system again.
In the fall and winter of 2011, four coalitions of school districts (known as
the Texas Taxpayer and Student Fairness Coalition, the Fort Bend ISD Plaintiffs,
the Edgewood ISD Plaintiffs2, and the Calhoun County ISD Plaintiffs) filed
declaratory judgment actions challenging the constitutionality of the school finance
system on multiple grounds. On February 24, 2012, the Intervenors filed their plea
in intervention in the lawsuit filed by the Fort Bend ISD Plaintiffs. Each of the
ISD Plaintiffs’ lawsuits was consolidated into a single case, and later consolidated
with the lawsuit filed by Mario Flores, et. al (the “Charter School Plaintiffs”).
After eight months of discovery, the cases went to trial on October 22, 2012.
The parties and the court invested substantial time and effort into preparing for and
conducting a thirteen-week, forty-five day trial. The trial concluded on February 4,
2013, a month into the 83rd Legislative Session. On the final day of trial, the trial
court announced from the bench an oral ruling that the school finance system
violated Article VII, Section 1 of the Texas Constitution because it was inadequate,
2 The Edgewood ISD Plaintiffs also include four parents of English language learners andeconomically disadvantaged students.
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unsuitable, and inefficient, and also violated Article VIII, section 1-e’s prohibition
against a state property tax.
During that 83rd Legislative Session, and before the trial court had issued its
findings of fact or a final judgment, the Legislature restored $3.5 of the $5.4 billion
it had previously cut from the schools’ budgets. It also enacted House Bill 5
(“HB5”), which alters graduation requirements by (1) creating a foundation plan of
twenty-two credits, and (2) requiring students to take at least four credits in one of
five “endorsement” areas, for a total of twenty-six credits to graduate under the
default plan. HB5 also requires school districts to develop rigorous courses that
address workforce needs. It also reduces the number of state-mandated end-of-
course exams (EOCs) required for graduation. Contrary to the Intervenors’
contentions, however, HB5 does not reduce standards or change the State’s
expectation that all students will graduate from high school college- or career-
ready. Rather, HB5 revises how school districts prepare students to be
postsecondary-ready.
The prospect of reopening the evidence to consider these legislative changes
and whether they impact the court’s ruling was first raised at a June 5, 2013
hearing before the trial court.3 At that hearing, the trial court informed the parties
3 A rough version of the transcript from the June 5, 2013 hearing is attached as Exhibit A. If aresponse is requested, the ISD Plaintiffs will request a final, certified version of the transcript
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that it would make a determination after the veto period expired (on June 16) and
requested that the parties work together in advance of a June 19 hearing to provide
the court with documents stating their positions on whether the evidence should be
reopened and what legislative changes, if any, should be considered. See Exhibit
A at 10-11. The Intervenors expressed their desire to be included in the
discussions so they could include any legislation that impacted their claims.4 Id. at
14.
Before the June 19 hearing, the Calhoun County ISD Plaintiffs filed a
motion to reopen the evidence and the Fort Bend ISD Plaintiffs filed a brief in
support of the motion. MR9.5 In addition, the parties together provided the Court
with a spreadsheet that listed each party’s positions on whether the evidence
should be reopened and, if it were, what legislation should be considered. Exhibit
B at 6.6 Notably, the Intervenors did not state any opposition to reopening; rather,
their official position was, “If the Court is inclined to re-open the case as to the
from this hearing and the June 19, 2013 hearing on the Motion to Reopen the Evidence, andinclude them in the supplemental record.4 Counsel for the Intervenors stated, “I would just like to add that we are obviously going to bepiping in on how it changed the efficiency case and all of that and would like to be included inon the spreadsheet of issues . . . ..” Exhibit A at 14.5 The Intervenors’ mandamus record is cited as “MR(exhibit) at (pages).” The Fort Bend ISDPlaintiffs’ Brief in Support was not included in the Intervenors’ mandamus record.6 The legislative spreadsheet included in the Intervenors’ Mandamus Record at Tab 14(Exhibit B to the Fort Bend ISD Plaintiffs’ Advisory to the Court dated July 18, 2013) wasoriginally filed with the trial court by the State Defendants on June 19, 2013. That filing isattached to this response as Exhibit B.
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ISD’s claims, then it will be necessary to also re-open and examine the efficiency
and charter cap issues in recent legislation, including, but not limited to SB1, SB2
and HB5.” Exhibit B at 6.
At the June 19 hearing, the trial court asked each party to state its position
on reopening the evidence, and the Intervenors repeated this position, stating, “As
far as the motions that are before the Court, we’re not opposing Mr. Trachtenberg’s
motion [Calhoun County ISD Plaintiffs’ Motion to Reopen] or the motion that Mr.
Thompson joined. Our position on that is if it’s going to be opened, then the
efficiency issues will need to be addressed. . . .” See Rough Transcript of June 19,
2013 hearing, attached hereto as Exhibit C at 16-17. After considering the motion
and the arguments of the parties, the trial court found, pursuant to Texas Rule of
Civil Procedure 270, that consideration of the effect of the 2013 legislative changes
was necessary to the due administration of justice and granted the motion to reopen
the evidence for the limited purpose of considering evidence regarding that effect.
See MR14; Exhibit C at 19-20.
The trial court ordered the parties to prepare and submit a proposed
scheduling order and a list of the legislation that impacted the claims at issue in the
case. See MR14; Exhibit C at 20. The parties submitted one scheduling order on
behalf of all parties and two spreadsheets—one prepared by the State Defendants
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and one prepared with input from the ISD Plaintiffs, the Charter School Plaintiffs,
and the Intervenors. See MR11; MR12.
At an informal conference with the parties on August 20, 2013, the trial
court discussed with the parties the scope of discovery regarding the 2013
legislation, and the Intervenors’ position was that the scope would need to be more
broad than narrow.7 MR13 at 34-35. At that same conference, the trial court
invited the parties to file briefing on whether the trial court should reconsider its
decision to reopen the evidence. The Calhoun County ISD Plaintiffs, the Fort
Bend ISD Plaintiffs, and the Texas Taxpayer and Student Fairness Coalition
Plaintiffs jointly filed a brief in support of reopening the evidence. MR14. The
Intervenors did not file any briefing opposing reopening the evidence or expressing
any concern regarding the propriety of the trial court’s initial order (nor did the
State). On September 12, 2013, the trial court announced that its initial ruling
would stand. MR 16 at 5.
On September 27, 2013, the Intervenors filed their Plea to the Jurisdiction
and Motion for Entry of Final Judgment, arguing for the very first time that the
7 Specifically, Counsel for the Intervenors stated, “As far as the efficiency intervenors areconcerned, much like Mr. Hinojosa, if nobody asked to reopen this record, we were not going tobe jumping up and down to reopen it, but if it’s going to be reopened, it’s kind of like my dadused to say, if you’re going to be a bear, you might as well be a grizzly. I mean, there’s going tobe stuff just like Mr. Hinojosa said that’s going to have to—I mean, that we’re going to have togo into it. So I don’t know how much the talk of limiting and focused and all that—when you puteverybody’s limiting and focus together, it’ll be more like a shotgun than a rifle.” MR13 at 35.
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2013 legislation moots the ISD Plaintiffs’ claims. MR21. On October 3, the day
before the hearing on the plea, the State Defendants filed a joinder to the
Intervenors’ plea. MR22. On October 4, the trial court heard arguments on the
plea, but decided to defer ruling on the merits until it had the opportunity to
consider evidence about the impact and extent of the 2013 legislative changes.
Intervenors waited more than another month before seeking mandamus relief and
filing the emergency motion that is at issue here.
SUMMARY OF ARGUMENT
Intervenors’ emergency motion fails for two overarching reasons. First,
Intervenors have failed to show that there is any emergency requiring this Court’s
immediate intervention, as evidenced by their own conduct. Second, the
underlying mandamus petition on which their motion is based is fatally defective.
There is no emergency. It has been almost five months since the trial court
decided to reopen the record below to consider the impact of the 2013 legislative
changes. For most of this period, the Intervenors did not express any opposition to
reopening the evidence, and in fact argued that if the trial court was going to
reopen the evidence, the scope needed to be more broad than narrow. Only on
September 27 did the Intervenors first argue that the legislation mooted the ISD
Plaintiffs’ claims. And after the trial court deferred ruling on their plea at an
October 4 hearing (so that it could consider evidence about the impact of the 2013
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legislation), the Intervenors waited another month to file a mandamus petition and
their “emergency” motion. Their request for emergency relief is in bad faith.
Moreover, the factual premise behind the alleged “emergency”—that they
will be burdened by having to participate in substantial discovery and a lengthy
hearing—is flawed. The parties have substantially reduced the number of
witnesses that are expected to be deposed and to testify in the January 2014
hearing. Further, Intervenors do not have to participate in the evidentiary hearing
or related discovery. They are not defendants in the ISD Plaintiffs’ lawsuits and
they intervened as plaintiff-intervenors. If they now believe they have proven their
qualitative efficiency claims based on the existing record (despite the trial court’s
contrary ruling) and that the 2013 legislation has no impact on their claims (as they
assert in the mandamus petition), they can sit out the new evidentiary hearing and
make their arguments on appeal. In contrast, a stay would result in a substantial
waste of time, money and effort of the other parties in the case.
Intervenors are not entitled to the underlying mandamus relief.
Intervenors also are not entitled to emergency relief because their underlying
mandamus petition is fatally defective. There is no order that is subject to
mandamus because the trial court never denied Intervenors’ plea to the jurisdiction.
Even if the plea had been denied, such denial would not be subject to mandamus
review because Intervenors have an adequate remedy by appeal, as any challenge
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to the trial court’s subject-matter jurisdiction (mootness, ripeness, standing) can be
raised then. Finally, their requested mandamus relief improperly requires this
Court to resolve disputed fact issues, namely the impact of the 2013 legislation on
the ISD Plaintiffs’ claims. The trial court acted well within its discretion in
deciding that it would defer ruling on the Intervenors’ plea until after it had an
opportunity to hear and consider evidence on the effect of the 2013 legislation.
That evidence will show that the impact of this legislation is minor, and does not
moot the extensive constitutional infirmities in the school finance system that the
ISD Plaintiffs proved in the previous 13-week trial.
ARGUMENT
I. The Intervenors are not entitled to temporary relief.
A. The standard for granting temporary relief.
When seeking a temporary stay from a court of appeals, it is the movant’s
burden to make a “clear showing” that it is entitled to relief. Falcon v. Bonanza
Capital, Ltd., No. 03-12-00132-CV, 2012 WL 1655809, at *1 (Tex. App.—Austin
May 1, 2012, order, no pet.) (per curiam) (citing Lamar Builders, Inc. v. Guardian
Savings & Loan Ass’n, 786 S.W.2d 789, 791 (Tex. App.—Houston [1st Dist.]
1990, no writ). To meet this burden, the movant must state compelling
circumstances that establish that the relief is necessary to preserve its rights until
disposition of their appellate challenge. See Falcon, 2012 WL 1655809, at *1;
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Lamar Builders, 786 S.W.2d at 791. Intervenors have failed to make this showing
here.
B. The Intervenors have not shown compelling circumstanceswarranting a stay.
1. The Intervenors’ own actions demonstrate that there is noemergency.
The Intervenors claim that their motion is an “emergency,” yet their own
actions disprove their claim. The prospect of reopening the evidence to consider
the impact of the 2013 legislative changes on the trial court’s oral ruling was first
raised at a hearing on June 5, 2013. Exhibit A. The parties submitted written
positions on reopening on June 18, 2013. Exhibit B. The order granting the
motion to reopen, from which the Intervenors now claim they need emergency
relief, was entered on June 19, 2013. Exhibit C. The parties submitted advisories
to the trial court regarding what legislation needed to be considered on July 17,
2013. See MR11; MR12. At an informal conference with the parties on August
20, 2013, the trial court began a dialogue with the parties about how to allow the
parties to develop fully the evidence regarding the impact of the legislation while
simultaneously limiting the scope of discovery and the length of the new hearing
and offered any parties an opportunity to convince the trial court that the evidence
did not need to be re-opened. MR13. After some of the ISD Plaintiffs filed a brief
in support of reopening the evidence, the Intervenors remained silent. MR14. On
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September 12, 2013, the trial court announced that its initial ruling would stand.
MR16 at 5.
The Intervenors did not express any opposition to reopening the evidence, in
writing or orally, at any point in this process. Indeed, their consistent position for
more than three months was that if the trial court was going to reopen the evidence,
the scope needed to be more broad than narrow. See supra, Background.
The Intervenors waited more than three months after the trial court entered
its order to reopen the evidence before filing their plea to the jurisdiction, the very
first time they expressed opposition to reopening the evidence. MR21. In their
plea, the Intervenors reversed their position that the hearing needed to be
broadened to include evidence regarding the legislation impacting their claims and
instead argued that the 2013 legislation has no impact whatsoever on their claims.
Id. at 2, n.4. After considering arguments on the Intervenors’ Plea on October 4,
2013, the trial court announced that it would not rule on the Plea until after the new
evidentiary hearing, at which the court would have an opportunity to review
evidence on the impact on the 2013 legislation. MR26 at 47.
The Intervenors then waited another month—during which expert reports
regarding the legislative changes were completed and served by the plaintiffs,
responsive documents were gathered and served by the defendants, and the parties
coordinated and scheduled depositions for plaintiffs’ witnesses—before filing their
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petition for mandamus and their “emergency” motion, seeking to halt the
proceedings on the eve of the first scheduled deposition.
The Intervenors’ initial delay in expressing any opposition to reopening the
evidence, along with their significant delay in filing the mandamus, bely that there
is in fact an “emergency” that compels the need for mandamus relief, much less
temporary relief before this Court even considers and rules on the merits of the
underlying mandamus petition. They lack the “clean hands” required for the
equitable relief they seek.
2. The Intervenors overstate the extent of the discovery andthe scope of the supplemental hearing regarding the newlegislation.
Contrary to the Intervenors’ contention, the trial court did not grant a motion
for new trial. When the issue of reopening the evidence was first raised, the trial
court made it clear that, if the record were to be reopened, the evidence would be
limited to that necessary for the trial court to determine the impact, if any, of the
2013 legislation on the plaintiffs’ claims and the court’s preliminary oral ruling.
See Exhibit A at 9 (“I could not see the reopening being a chance to clean up or
make stronger what occurred between October the 22nd and February the 4th . . .
the consideration is, was there a material change in the circumstances, a substantial
change in the circumstances by reason of this most recent Legislature.”). When
announcing its decision to reopen, the trial court stated that the purpose for doing
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so was to determine “whether that legislation changed the circumstances during the
45-day trial that we had.” Exhibit C at 19-20. Since that time, the trial court has
reiterated that the scope of discovery and the January hearing is to be limited to the
impact of the 2013 legislation, not to replacing the evidence developed during the
initial trial.8
The Intervenors’ main concern appears to be that they do not believe that the
parties will abide by this limitation. In their mandamus petition, the Intervenors
assert that the hearing will involve “sixty-five to seventy witnesses,” and cite to the
parties’ witness lists and expert designations. Petition for Mandamus at 9-10. Yet
the Intervenors’ estimation does not take into account that the initial fact witness
list for the State Defendants and expert designations for the Intervenors included
several witnesses on their initial lists as contingent witnesses, should the other
parties not abide by the limited scope. MR18; MR20. Their estimation of the
scope of the hearing also ignores the fact that, since the initial lists were served, the
8 See MR13 at 11 (“I would exclude any attempt to use updated information to rebut whatoccurred during the 45-day trial. . . . I opened the evidence back up to contemplate what changesoccurred in the Legislature that would affect the rulings and my decision. . . .”); MR26 at 49(“What I thought I had said at some time this year is that if we did reopen, it wasn’t to relitigate.It wasn’t a chance to clean things up. It was to consider whether or not the actions of theLegislature which had been meeting for about a month at the time that the Court issued an oraldecision, whether or not the actions thereafter changed the Court’s consideration and the Court'sdecision, that the Court announced on or about February the 4th, 2013. I thought that that wasabout the extent. And when I reopened evidence, I thought I had made that pretty clear, but I’munaware of any expansion other than what I’ve just said.”).
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parties have, through both formal filings and informal communications,
substantially reduced the number of witnesses expected to testify.9
The Intervenors also assert that “at least 30 depositions are scheduled to
begin this Wednesday, November 6, 2013, and will continue through early
January.” Motion at 2. They later admit that there are only 15 depositions
scheduled for November and early December, and the remainder is based on their
guess that “there will be approximately the same number of witnesses for the State
in December and early January.” Id. at 4, n.1. Intervenors ignore that the State
Defendants have narrowed their fact witness list to three or four individuals, that
the State is likely to designate only one expert witness, and that the discovery
deadline is December 9. Furthermore, outside of routine requests for disclosure
propounded on Intervenors, the ISD Plaintiffs are unaware of any outstanding
written discovery requests of the Intervenors.
If there are specific witnesses, discovery requests, or testimony that the
Intervenors believe go beyond the trial court’s stated scope of the reopening, the
proper remedy is to object in the trial court, rather than to file a mandamus and
request a stay of all discovery and proceedings.
9 For example, the Edgewood Plaintiffs have agreed to only present one of the sevensuperintendents listed and the Texas Taxpayer and Student Fairness Coalition plaintiffs are onlypresenting one of the four superintendents listed (and doing so via deposition in lieu of trialtestimony).
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3. The Intervenors need not participate in the hearingregarding the 2013 legislation if, as they contend, it has noimpact on their claims.
While Intervenors complain that the new evidentiary hearing will be a
significant waste of time and resources, they do not have to participate. They were
not named as defendants by the ISD Plaintiffs and have intervened as plaintiff-
intervenors. If they believe, as they assert in the mandamus petition, that they have
proven their qualitative efficiency claims based on the existing record and that the
2013 legislation has no impact on their claims, they can sit out the new evidentiary
hearing and the related discovery and make that argument on appeal.
4. A stay would cause unnecessary delay and createunnecessary cost for all the parties and the trial court.
The parties have gone to great lengths to negotiate a scheduling order,
coordinate deposition schedules, produce discovery and expert reports, and set
aside time for the evidentiary hearing in January. The trial court has set out a
block of time to conduct the evidentiary hearing in late January that is acceptable
to all parties. A stay of any length will delay the evidentiary hearing until the stay
is lifted and the parties can block off another period of time that is acceptable to
the trial court and counsel for the seven parties involved in this proceeding. It will
require the parties to renegotiate and re-coordinate all of the scheduled depositions.
A lengthy delay could result in the parties having to update and re-issue expert
- 16 -
reports. In short, a stay will result in result in a substantial waste of time, money,
and effort by all the parties.
It is important to note here that the Intervenors chose to intervene in a group
of lawsuits filed by nearly 600 school districts who, collectively, educate more
than 3.7 million students. It is unreasonable for the Intervenors to insert
themselves into such a large, complex lawsuit, then complain about the expense
and seek to stay the proceedings, causing unnecessary delay and creating
unnecessary costs for the other parties.
II. The stay should be denied because the Intervenors are not entitled tothe underlying relief they seek.
Mandamus is an extraordinary remedy, reserved for cases of (1) a clear
abuse of discretion or a failure to perform a ministerial act, that (2) results in a
harm that has no adequate remedy on appeal. Walker v. Packer, 827 S.W.2d 833,
839 (Tex. 1992) (orig. proceeding); Cantu v. Longoria, 878 S.W.2d 131, 132 (Tex.
1994) (orig. proceeding) (per curiam). The burden of establishing a right to
mandamus relief under this two-pronged test is a “heavy one,” In re CSX Corp.,
124 S.W.3d 149, 151 (Tex. 2003) (orig. proceeding) (per curiam), —one that the
Intervenors have not come close to meeting.
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A. There is no order subject to mandamus because the trial court hasnot yet ruled on the merits of the Intervenors’ jurisdictionalchallenge.
The trial court has not yet ruled on the Intervenors’ plea to the jurisdiction.
MR26 at 47. Without a ruling on the plea, this Court does not have jurisdiction
over the mandamus petition. “Where the jurisdictional issue has not been ruled on,
it is premature to seek mandamus relief from such an order.” Diocese of
Galveston-Houston v. Stone, 892 S.W.2d 169, 173 (Tex. App.—Houston [14th
Dist.] 1994, orig. proceeding); see also Texas Dep’t of Pub. Safety v. Salazar, No.
03-11-00206-CV, 2011 WL 1469429 (Tex. App.—Austin Apr. 19, 2011, no pet.)
(mem. op.) (appellate court concluded that it lacked jurisdiction because “[w]hile
the Department contends that the trial court ‘implicitly’ denied its plea to the
jurisdiction, the order appealed from does not deny the plea to the jurisdiction,
implicitly or otherwise, but grants the appellees’ motion for continuance of the
Department’s plea to the jurisdiction and allows additional discovery.”); Sharm,
Inc. v. Euresti, 883 S.W.2d 701, 703 (Tex. App.—Corpus Christi 1994, orig.
proceeding) (“[U]ntil the trial court rules on that plea to the jurisdiction, we would
be premature in addressing this issue by mandamus.”).
In limited circumstances, a governmental entity may file a mandamus asking
that the trial court be directed to rule on a plea to the jurisdiction, but only when
there is an unreasonable delay in ruling on a governmental defendant’s plea based
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on sovereign immunity and only when the mandamus is not dependent on the
resolution of factual disputes. City of Galveston v. Gray, 93 S.W.3d 587, 592
(Tex. App.—Houston [14th Dist.] 2002, pet. denied); cf. In re Hays County
Sheriff’s Dep’t, No. 03-12-00343-CV, 2012 WL 6554815 (Tex. App.—Austin
Dec. 12, 2012, orig. proceeding) (mem. op.) (trial court’s thirteen month delay in
ruling on government’s sovereign-immunity based plea for which there was no
factual issue in dispute was an abuse of discretion). Here, those circumstances are
absent: Intervenors are not a governmental entity and factual issues relevant to the
plea are disputed and remain unresolved.10
B. Even if the trial court had denied Intervenors’ plea, such denial isnot challengeable by mandamus.
“Even where there has been a determination as to subject matter
jurisdiction, it is not properly attacked by mandamus since an adequate remedy
exists on appeal.” Bell Helicopter Textron, Inc. v. Walker, 787 S.W.2d 954, 955
(Tex. 1990) (orig. proceeding) (per curiam); see also Brown v. Herman, 852
S.W.2d 91, 92 (Tex. App.—Austin 1993, orig. proceeding) (per curiam).
The issue of trial-court jurisdiction is a matter properly addressed on appeal.
See Bell Helicopter, 787 S.W.2d at 955 (plea to jurisdiction asserting lack of
10Even if they were, the Intervenors have not sought the only relief available under such
circumstances: for the appellate court to direct the trial court to rule on the merits of the plea.City of Galveston v. Gray, 93 S.W.3d 587, 592 (Tex. App.—Houston [14th Dist.] 2002, pet.denied).
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subject-matter jurisdiction); Abor v. Black, 695 S.W.2d 564, 566-67 (Tex.1985)
(orig. proceeding) (plea in abatement); N.H. Helicopters, Inc. v. Brown, 841
S.W.2d 424, 426 (Tex. App.—Dallas 1992, orig. proceeding); State Bd. of Ins. v.
Williams, 736 S.W.2d 259, 261 (Tex. App.—Austin 1987, orig. proceeding) (plea
in abatement, motions to show authority and to dismiss).
Importantly, an appellate remedy is not inadequate because it may involve
more expense or delay than obtaining relief by mandamus. Walker, 827 S.W.2d at
840; Iley v. Hughes, 311 S.W.2d 648, 652 (Tex. 1958) (orig. proceeding);
Williams, 736 S.W.2d at 261; Brown, 852 S.W.2d at 92-93. Indeed, other than
pleas to the jurisdiction by governmental entities, jurisdictional challenges are not
subject to any form of interlocutory appeal. TEX. CIV. PRAC. & REM. CODE
§ 51.014.
C. The trial court did not abuse its discretion by choosing to decide afact-dependent jurisdictional challenge after fuller development ofthe record.
1. The trial court did not grant a new trial, but granted amotion to re-open the evidence for the limited purpose ofconsidering the impact of newly passed legislation.
As detailed above, contrary to the Intervenors’ contention, the trial court did
not grant a motion for new trial; rather, pursuant to Texas Rule of Civil Procedure
270, it opened the record to permit new evidence for the limited purpose of
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determining the impact of the 2013 legislative changes to the school finance
system and graduation requirements.
In arguing that the trial court functionally granted a new trial, the Intervenors
ignore that a motion for new trial must be filed after a judgment is issued, and if
granted, “wipes the slate clean” from the first trial. Wilkins v. Methodist Health
Care Sys., 160 S.W.3d 559, 563 (Tex. 2005) (“When a motion for new trial is
granted, the case shall be reinstated upon the docket of the trial court and stand for
trial the same as though no trial had been had.”) (internal quotation omitted); Barry
v. Barry, 193 S.W.3d 72, 74 (Tex. App.—Houston [1st Dist.] 2006, no pet.) (“A
motion for new trial must, by its very nature, seek to set aside an existing judgment
and request relitigation of the issues. . . . If an instrument does not meet these
minimum requirements, it is not a motion for new trial.”); TEX. R. CIV. P. 329(b)
(must be filed within 30 days after entry of judgment); TEX. R. CIV. P. 306c
(premature motion for new trial deemed filed after entry of judgment).
In contrast, the Court can reopen the evidence under Rule 270 “at any time,”
and, in so doing, does not erase the existing record. The trial court has repeatedly
stated that the record from the thirteen-week trial stands and that the new discovery
and hearing cannot be used to re-litigate those issues. See, e.g., MR13 at 11;
MR26 at 49. Thus, Intervenors’ repeated references to this Court’s “new trial
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order,” and its legal arguments predicated on this description, are wholly
inaccurate and irrelevant.
2. The mere passage of legislation does not automatically moota case.
Intervenors are incorrect that the mere passage of legislation relating to
school finance moots the ISD Plaintiffs’ claims. A similar scenario occurred in the
Edgewood II case. There, after the courts had found the school finance system
unconstitutional, the Legislature passed Senate Bill 1, which was signed into law
on June 7, 1990. Acts 1990, 71st Leg., 6th C.S., ch. 1. That legislation changed
the school finance system beginning in the 1990-91 school year. Id. Both a trial
court hearing and Supreme Court appeal took place during that school year,
culminating in a decision from the high court on January 22, 1991—halfway
through the academic year. Edgewood Indep. Sch. Dist. v. Kirby, 804 S.W.2d 491
(Tex. 1991). The Court did not find that the new statutory scheme rendered the
equity claims moot or that any challenge to the scheme was not ripe until final data
from 1990-91 was available. Rather, the Court examined how the change in
statutory formulas impacted the parties’ claims, in a similar manner as the ISD
Plaintiffs have proposed to do below. Id. at 496-97.
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3. There is a factual dispute over the extent of the impact ofthe 2013 legislation.
A party seeking mandamus relief must show that there are no disputed issues
of facts related to the requested relief. If there are factual disputes, mandamus
relief is not appropriate. See, e.g., In re Angelini, 186 S.W.3d 558, 560 (Tex.
2006) (orig. proceeding) (“It is well established Texas law that an appellate court
may not deal with disputed areas of fact in an original mandamus proceeding.”)
(quoting Brady v. Fourteenth Court of Appeals, 795 S.W.2d 712, 714 (Tex. 1990)).
This is because, the resolution of factual issues is a matter committed to the trial
court’s sound discretion. Walker, 827 S.W.2d at 839-40. To show that the trial
abused this discretion when resolving a factual matter, the relator must show that
the trial court “‘could reasonably have reached only one decision’” and failed to do
so. In re Dillard Dep’t Stores, Inc., 198 S.W.3d 778, 780 (Tex. 2006) (orig.
proceeding) (per curiam) (quoting Walker, 827 S.W.2d at 840).
The extent of the legislative changes and the impact of those changes on the
ISD Plaintiffs’ claims are factual issues that are hotly disputed among the parties.11
Intervenors repeatedly assert that the 2013 Legislature “enacted a completely new
11 MR17 (Fort Bend ISD Plaintiffs’ Seventh Amended Petition at paragraphs 91, 95, 98, 99,135, and 148; Texas Taxpayer & Student Fairness Coalition Plaintiffs’ Eighth Amended Petitionat paragraphs 14, 15, 16, 17, 35, 54, 55; Calhoun County ISD Plaintiffs’ Third Amended Petitionat paragraphs 16, 43, 44, 47, 53, 54, 55, 56, 57, 58, 59, 60, and 61; Edgewood ISD Plaintiffs’Third Amended Petition at paragraphs 41, 52, 56, 67, 68, 69, 70, 71, 72, 73, 74, 78, 88).
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statutory scheme” and that this new scheme “resolves each aspect of the ISD’s
case.” Yet the Intervenors did not cite to any specific legislation or attach any
evidence to their plea or their petition for mandamus to back up this assertion.
Nor did they discuss any of the ISD Plaintiffs’ claims in any meaningful way.
a. The legislation tweaked the existing school financesystem; it did not create a new system.
Contrary to the Intervenors’ assertion, the 2013 Legislature did not enact a
“completely new statutory scheme.” The statutory formulas and structure of the
system remain the system—the legislature simply used the appropriations process
to flow more money through the same system. The structural defects of the school
finance system that were highlighted at the earlier trial (e.g., arbitrary and
inadequate “weights” for low-income and English language learner students, a
“cost of education index” that has not been updated since the mid-1980s, the need
to pass a tax ratification election simply to access funding needed for adequacy,
among other things) remain in place.12 The State has still made no attempt to study
12 The ISD Plaintiffs’ petitions from before the legislative changes and the amended petitionsfiled after the 2013 session make clear that these structural issues have always been at the heartof the ISD Plaintiffs’ claims and were unaffected by the 2013 legislative session. See MR2 (FortBend ISD Plaintiff’s 5th Amended Petition (filed Nov. 2012) at Paragraphs 93, 95, 97, 120, 122,123, 124, 128, 129, 130, 135, 136, 137, 138, 139, 140, 141, 142, 143, 144, 148 and 149); MR17(Fort Bend ISD Plaintiffs’ 7th Amended Petition (filed Oct. 2013) at Paragraphs 92, 93, 95, 96,100, 118, 121, 123, 124, 125, 129, 130, 131, 136, 137, 138, 139, 140, 141, 142, 143, 144, 145,150 and 151); MR1 (Calhoun County ISD’s 1st Amended Petition (filed Aug. 2012) atparagraphs 16, 36, 49, 50, 51, 53); MR17 (Calhoun County ISD’s 3rd Amended Petition (filedOct. 2013) at paragraphs 17, 37, 60, 61, 62, 64, 65); MR3 (Texas Taxpayer and Student Fairness
- 24 -
the costs of its own standards or link funding levels to that cost.13 Furthermore, the
$3.5 billion in new money flowing through those old formulas was not even
enough to fully restore the $5.4 billion in cuts made by the 2011 Legislature.14 The
ISD Plaintiffs’ evidence at trial showed that the level of inadequacy far exceeds the
$3.5 billion that was restored to the Foundation School Program.
Also contrary to the Intervenors’ contention, the Legislature did not lower
academic standards or reduce graduation requirements. The State’s goal remains
Coalition’s Corrected 7th Amended Original Petition (filed Jan. 2013) at paragraphs 41, 42, 46,58); MR17 (Texas Taxpayer and Student Fairness Coalition’s 8th Amended Original Petition(filed July 2013) at paragraphs 18, 38, 39, 44, and 62); MR4 (Edgewood ISD Plaintiffs’ SecondAmended Petition (filed Dec. 2012) at paragraphs 64, 65, 66, 67, 68, 69, 70, 71, 72 and 73);MR17 (Edgewood ISD Plaintiffs’ Third Amended Petition (filed Aug. 2013) at paragraphs 53,81, 82, 83, 84, 85, 86, 87, 88, 90, and 91).
13 See MR2 (Fort Bend ISD Plaintiff’s 5th Amended Petition at paragraphs 93, 95, 125, 148,and 152); MR17 (Fort Bend ISD Plaintiffs’ 7th Amended Petition at paragraphs 93, 95, 125,148, and 152); MR1 (Calhoun County ISD Plaintiffs’ 1st Amended Petition at paragraphs 48 and52); MR17 (Calhoun County ISD Plaintiffs’ 3rd Amended Petition at paragraphs 59, 60, and 64);MR3 (Texas Taxpayer and Student Fairness Coalition’s Corrected 7th Amended Petition atparagraphs 46 and 65); MR17 (MR17 (Texas Taxpayer and Student Fairness Coalition’s 8thAmended Original Petition at paragraphs 62 and 64); MR4 (Edgewood ISD Plaintiffs’ SecondAmended Petition at paragraph 70); MR17 (Edgewood ISD Plaintiffs’ Third Amended Petitionat paragraphs 87 and 88).
14 As noted in Calhoun County ISD’s Motion to Reopen the Evidence, analyses run to dateindicate that approximately half of the school districts in Texas are expected to receive less perstudent in 2014-15 than they would have received if the Legislature had not rewritten the fundingformulas in 2011. MR9 at Ex. D. For example, many districts in the Austin area—includingAustin ISD, Round Rock ISD, Eanes ISD, Lake Travis ISD, Leander ISD, and Manor ISD—willnot be restored to their pre-cut funding levels under the new budget. Id. Similarly, according toanalyses performed for news reports compiling data from the Legislative Budget Board, manydistricts in the Dallas area will have less in per-pupil funding in 2013-14 than they did in 2010-11. Id. at Ex. E. This is the true for each of the three named plaintiffs for the Calhoun CountyISD coalition that are located in the Dallas area. (Frisco ISD, Lewisville ISD, and RichardsonISD).
- 25 -
to graduate students who are college- or career-ready. The rigorous STAAR
exams remain in place for grades 3-8, and high school students must still pass five
STAAR End-of-Course exams in order to graduate from high school. While this is
less than the fifteen tests that were previously required, the rigor of the remaining
exams was undisputed at trial.15 Further, House Bill 5 requires school districts to
develop graduation plans for each student and provides for high school students to
seek and obtain “endorsements” in areas such as “STEM” (Science Technology,
Engineering and Math) or Business and Industry. Implemented properly, HB5
represents an increase in standards and a serious step towards truly ensuring that all
Texas students graduate from high school ready to succeed in college or the
workforce.
Also importantly, the demographic challenges facing Texas public schools—
the growing populations of low-income students and of English language
learners—and the State’s mandate to close the gaps in performance between these
students and their middle class peers, was not changed by the 2013 legislation.
15 At the time of trial, only four of end-of-course exams had been administered for graduationpurposes and the trial court received evidence of the challenges students and districts face withthose more rigorous exams.
- 26 -
b. The impact of the 2013 legislation is the very issue tobe determined at the January hearing on newevidence.
When a plea to the jurisdiction is fact-dependent, the movant must meet a
summary-judgment like standard and establish that there is no disputed issue of
material fact. Texas Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 228
(Tex. 2004). If the factual determination requires the examination of evidence, it is
within the trial court’s discretion to determine “whether the jurisdictional
determination should be made at a preliminary hearing or await a fuller
development of the case. . . .” Miranda, 133 S.W.3d at 227.
In this case, the trial court had already ordered that discovery be taken and a
hearing be held on the issue of the 2013 legislative changes and whether they
impacted the plaintiffs’ claims and the trial court’s oral ruling. In other words,
previously-ordered discovery and hearing are aimed at answering the very factual
dispute raised by the Intervenors’ plea and mandamus—whether the 2013
legislative changes are so extensive as to warrant a change in the trial court’s
ruling and/or moot the plaintiffs’ claims. Therefore, the trial did not abuse its
discretion in choosing to wait until after that hearing to rule on the Intervenors’
plea.
- 27 -
4. The ISD Plaintiffs’ challenge to the system for financing thepublic school system is ripe.
Ripeness refers to the requirement of a concrete injury in order to present a
justiciable claim. Waco Indep. Sch. Dist. v. Gibson, 22 S.W.3d 849, 851 (Tex.
2000); Patterson v. Planned Parenthood of Houston & Se. Tex., Inc., 971 S.W.2d
439, 442 (Tex. 1998). In determining whether a cause is ripe for judicial
consideration, courts look to see whether the facts have sufficiently developed to
show that an injury has or is likely to occur. Patterson, 971 S.W.2d at 442; Perry,
53 S.W.3d at 824. A party seeking a declaratory judgment need not have incurred
actual injury; a declaratory judgment action will lie if the facts show the presence
of “ripening seeds of a controversy.” Texas Dep’t of Banking v. Mount Olivet
Cemetery Ass’n, 27 S.W.3d 276, 282 (Tex. App.—Austin 2000, pet. denied)
(quoting Texas Dep’t of Pub. Safety v. Moore, 985 S.W.2d 149, 153-54 (Tex.
App.—Austin 1998, no pet.)).
Like their argument that the ISD Plaintiffs’ claims are moot, the Intervenors’
argument that the same claims are not ripe is based on the false assumption that the
2013 legislation created an entirely new statutory scheme. Based on that false
assumption, Intervenors erroneously assert that no the currently available data is
relevant to the operation of the post-2013 school finance system or to the question
of whether it is constitutionally unsound. This is simply not the case.
- 28 -
The Intervenors’ reference to the lack of “final” or “near final” data refers to
the Texas Education Agency’s (“TEA”) data regarding specific school district
property values, tax collections, and student counts, which are used by TEA to
determine exactly how much state aid an individual district receives. TEA uses
estimates to fund districts throughout the year and performs a “settle-up” process
to account for any inaccuracies in the estimates. However, the fact that an
individual district’s specific funding level might change based on district-level
circumstances will not prevent the court from analyzing the impact of the 2013
legislation by running 2012-13 “near final” data through the 2013-14 and 2014-15
formulas, a technique that has been used in past school finance cases.16 See, e.g.,
16 A review of the Texas Supreme Court’s prior rulings on school finance make it clear that theassessment of the constitutionality of the system as a whole depends, not on an individualdistrict’s circumstances, but on whether the Foundation School Program (“FSP”) formulas createa system that, as a whole, is adequate, suitable, and equitable. See Edgewood Indep. Sch. Dist. v.Kirby, 777 S.W.2d 391, 392 (Tex. 1989) (Edgewood I) (discussing the funding elements of theFSP); Edgewood II, 804 S.W.2d at 496 (Tex. 1992) (“The only material changes in the systemsince Edgewood I are those made by Senate Bill 1. The question we address is whether there isany evidence that those changes remove the constitutional violation.”); Carrollton-FarmersBranch Indep. Sch. Dist. v. Edgewood Indep. Sch. Dist., 826 S.W.2d 489 (Tex. 1992) (EdgewoodIII) (evaluating whether the minimum and maximum tax rates and distribution system set bySenate Bill 351 established a statewide property tax); Edgewood Indep. Sch. Dist. v. Meno, 917S.W.2d 717, 730-32 and n.10 (Tex. 1995) (Edgewood IV) (evaluating constitutionality of schoolfinance system based on FSP funding formulas established in Senate Bill 7); West Orange-CoveII, 176 S.W.3d at 761-62 (describing finance system based on FSP formula guarantees). Inanswering that question, the Supreme Court has regularly relied on evidence of the system/FSPformulas in place at the time of the trial. See e.g., Edgewood II, 804 S.W.2d at 494-97. If it didnot, it would never be able to answer the question of whether the current school finance systemis unconstitutional, as the final data is not available until well after the first year of the bienniumends, and the next legislative session is around the corner. (The Edgewood ISD Plaintiffs,however, maintain that the potential error rate is heightened when predicting revenue andaccompanying tax rates for the 2014-15 school year.)
- 29 -
Edgewood Indep. Sch. Dist. v. Kirby, 804 S.W.2d 491, 494-97 (Tex. 1992)
(Edgewood II) (applying new statute to existing tax rates to determine effect of
legislation); see also MR14 at 11-12 & Exhibits A (Wisnoski Affidavit) and B
(Moak Affidavit).
Similarly, the trial court need not wait on “outputs” from the 2013-14
administration of the STAAR exam, as the trial court can rely on the 2012-13
results on the same tests,17 as well as currently available data regarding graduation
and completion rates, ACT and SAT scores, and other output measures.
Furthermore, while all the parties agree that an adequacy challenge under Article
VII, Section 1 of the Texas Constitution is outputs-focused, the Intervenors have
failed to demonstrate how a lack of outputs would impact the equity and suitability
challenges or the challenge that the state has imposed a statewide property tax in
violation of Article VIII, Section 1-e.
D. The Intervenors’ standing argument is directly contrary toTexas Supreme Court precedent.
The Intervenors’ argument that the ISD Plaintiffs lack standing is directly at
odds with the Texas Supreme Court’s 7-1 decision in West Orange-Cove II, 176
17 The Intervenors make much of the fact that HB5 reduced the number of tests required forgraduation, but fail to explain why the results from the still-required EOC exams for the last twoyears are not relevant to the question of whether the school finance system enables all schooldistricts to provide the constitutionally-required “general diffusion of knowledge,” i.e., anadequate education.
- 30 -
S.W.3d at 772-76. In that decision, the Supreme Court considered and rejected
each of the arguments raised by the Intervenors. Specifically, the Supreme Court
noted that there is no “broad rule that a governmental entity cannot sue to declare a
statute unconstitutional,” and that whether such an entity has standing to sue
depends not on whether the governmental entity is granted rights under the
constitutional provision at issue, but whether the governmental entity has a
particularized, concrete injury. Id. at 772-74. The Supreme Court also rejected the
Intervenors’ argument that the constitutionality of the system can be adequately
challenged by students, parents, and members of the community-at-large, as
“[s]chool districts’ interest in discharging th[e] duty [to implement the general
diffusion of knowledge] is not merely representative of constituent students and
taxpayers.” Id. at 773. This Court is bound by that Texas Supreme Court
precedent.
PRAYER
For the foregoing reasons, the ISD Plaintiffs request that the Court deny the
Intervenors’ Emergency Motion for Temporary Relief. The ISD Plaintiffs also
request that the Court deny the Intervenors’ Petition for Writ of Mandamus without
requiring any further response, but reserve the right to file such a response if one is
requested by the Court.
- 31 -
Respectfully submitted,
THOMPSON & HORTON LLP
/s/ J. David Thompson, III *J. David Thompson, IIIState Bar No. 19950600Philip FraissinetState Bar No. 00793749Phoenix Tower, Suite 20003200 Southwest FreewayHouston, Texas 77027Telephone: (713) 554-6767Telecopier: (713) 583- 9668
Holly G. McIntushState Bar No. 24065721400 West 15th Street, Suite 1430Austin, Texas 78704Telephone: (512) 615-2351Telecopier: (512) 682-8860
ATTORNEYS FOR REAL PARTIES IN
INTEREST FORT BEND ISD, ET AL.
- 32 -
HAYNES AND BOONE LLP
/s/ Mark R. TrachtenbergMark R. TrachtenbergState Bar No. 24008169John W. TurnerState Bar No. 240280851221 McKinney St., Suite 2100Houston, Texas 77010Telephone: (713) 547-2000Telecopier: (713) [email protected]@haynesboone.com
ATTORNEYS FOR REAL PARTIES IN INTEREST
CALHOUN COUNTY ISD, ET AL.
MEXICAN AMERICAN LEGAL DEFENSEAND EDUCATIONAL FUND, INC.
/s/ David G. Hinojosa *David G. HinojosaState Bar No. 24010689Marisa BonoState Bar No. 24052874110 Broadway, Suite 300San Antonio, Texas 78205Telephone: (210) 224-5476Telecopier: (210) 224-5382
ATTORNEYS FOR REAL PARTIES IN
INTEREST EDGEWOOD ISD, ET AL.
- 33 -
GRAY & BECKER, P.C.
/s/ Richard E. Gray, III *Richard E. Gray, IIIState Bar No. 08328300Toni HunterState Bar No. 10295900Richard E. Gray, IVState Bar No. 24074308900 West AveAustin, Texas 78701Telephone: (512) 482-0061Telecopier: (512) 482-0924
ATTORNEYS FOR REAL PARTIES IN
INTEREST TEXAS TAXPAYER AND STUDENT
FAIRNESS COALITION, ET AL.
* signed by permission
- 34 -
CERTIFICATE OF SERVICE
In accordance with the Texas Rules of Appellate Procedure, the undersignedhereby certifies that a true and correct copy of the foregoing document was servedon the 11th day of November, 2013 to the following counsel of record via theCourt’s electronic filing system, and, in accordance with the parties’ Rule 11agreement, by electronic mail:
Respondent:
Hon. Judge John Dietz Via Federal Express250th District Court1000 Guadalupe, 5th floorAustin, Texas 78701
Counsel for the Relators/Efficiency Intervenors:
Craig T. Enoch Via e-serviceMelissa A. LorberAmy Leila SaberianShelby O’BrienENOCH KEVER PLLC600 Congress Avenue, Suite 2800Austin, Texas 78701
J. Christopher Diamond Via e-serviceTHE DIAMOND LAW FIRM, P.C.17484 Northwest Freeway, Suite 150Houston, Texas 77040
Counsel for Real Parties in Interest/PlaintiffsEdgewood Independent School District, et al.:
David G. Hinojosa Via e-serviceMarisa BonoMEXICAN AMERICAN LEGAL DEFENSE
AND EDUCATION FUND, INC.110 Broadway, Suite 300San Antonio, Texas 78205
- 35 -
Counsel for Real Parties in Interest/PlaintiffsFort Bend Independent School District, et al.:
J. David Thompson, III Via e-servicePhillip FraissinetTHOMPSON & HORTON LLP3200 Phoenix Tower, Suite 2000Houston, Texas 77027
Counsel for Real Parties in Interest/PlaintiffsThe Texas Taxpayer and Student Fairness Coalition, et al.:
Richard E. Gray, III Via Federal ExpressToni HunterRichard E. Gray, IVGRAY & BECKER, P.C.900 West Ave., Suite 2000Austin, Texas 78701
Counsel for Real Parties in Interest/PlaintiffsTexas Charter School Association, et al.:
Robert Schulman Via e-serviceSCHULMAN, LOPEZ & HOFFER
517 Soledad StreetSan Antonio, Texas 78205
Counsel for Real Parties in Interest/Defendants Michael Williams,Commissioner of Education in His Official Capacity, et al.:
Shelly N. Dahlberg Via e-serviceJames “Beau” EcclesTEXAS ATTORNEY GENERAL’S OFFICE
P.O. Box 12548, Capitol StationAustin, Texas 78711
/s/ Mark TrachtenbergMark Trachtenberg
APPENDIX
Exhibit A — Rough Transcript of June 5, 2013 hearing
Exhibit B — Advisory to the Court of Parties’ Positions RegardingRe-Opening of the Evidence and Entry of Judgment
Exhibit C — Rough Transcript of June 19, 2013 hearing
EXHIBIT A
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
1
PROCEEDINGS
June 5th, 2013
THE COURT: Thank y'all. Be seated. So,
Mr. Trachtenberg, there's not a written motion. What is
it that you want to do?
MR. TRACHTENBERG: We could file a motion
for -- we can file a written motion for Rule 270 to
reopen the evidence to reflect -- I'm sorry, Your Honor,
to reflect the impact of the legislation on the public
education system. What we think -- we think the
legislation -- I'm sorry.
THE COURT: And the question is -- why do
you think that's something that, in the interest of
justice, should -- that we should reopen the case about?
MR. TRACTENBERG: We think that the
legislation does have -- some of the legislation in the
past will have a material impact on the public
educational system and we think we need to update the
record for the Supreme Court and we think that if the
Supreme Court would need to see the -- have an updated
record on what the system stands -- you know, what the
system looks like as it stands now in light of the
legislation for them to rule on the decision.
THE COURT: Well, I'm somewhat confused.
We are in State Fiscal Year '13, I believe, which ends
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August the 31st of this year, which was appropriated in
the 2011 legislative session. So we couldn't possibly
begin to know the effect of the legislation that was
passed in this present year until some substantial time
after September the 1st, 2013. We don't know -- we
don't know what -- how the formulas are impacted, what
the education agency that's responsible for the
implementation of this is going to look like, and so we
don't really know until sometime a good ways in under
the timetable, that 18-month timetable that TEA
testified to in terms of setting and then adjusting the
education figures. We don't know about that until nine
to 12 months into it.
MR. TRACHTENBERG: I do think we know that
there were definitely changes to the statutory formulas.
There were changes to the basic allotment. There were
other changes to the statutory formulas that we know
have happened. There were changes to the end-of-course
regime in the -- and there will be changes to the
accountability system. So there are certain things that
we know for certain will happen in light of the passage
of the legislation, Senate Bill 1 in particular.
THE COURT: Well, have you explored with
the state what the State's position is?
MR. TRACTENBERG: I believe -- I don't
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want to speak for Ms. Dahlberg, but --
THE COURT: So have you explored with the
State.
MR. TRACHTENBERG: I do believe that they
agree that there needs to be some form of evidentiary
hearing before this case goes up. If I'm wrong, I will
stand corrected.
THE COURT: So maybe this is a propitious
time to hear from the State.
MS. DAHLBERG: Your Honor, the State's
position is that the system was constitutional as we
have argued over a lengthy trial, and we do believe that
it remains constitutional today. The issue before the
Court as you know is that the relief that the plaintiffs
are seeking is prospective, and because an injunction
has to be based on a system that's in place, there
are -- I think Mr. Thompson has even characterized the
changes as -- that the Legislature has made as
significant, and because they are significant, we do
believe that there should be limited evidentiary hearing
to put on evidence about the legislative changes, what
the formulas will look like going forward for the fiscal
year '13-'14 and '14-'15 school years. TEA will --
pardon me -- will be able to generate some of those
numbers, and I will -- do agree with Mr. Trachtenberg
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that after June 16th, I believe, which is the veto date,
Governor Perry's veto date, we will know whether House
Bill 5 is law or not, and that does implement
significant changes to the curriculum and the testing
system, which were both subject to -- both under a hotly
contested issue in this litigation.
THE COURT: Well, that leads to the -- to
the question that I'm encouraging -- first of all, I
think it's fair to say that the Court itself will not
sua sponte reopen the evidence. If it is to reopen the
evidence, it's going to have to be with a substantial
agreement of the parties. Notice I didn't say
unanimity. I said substantial agreement, because there
may be a party or parties that do not want to reopen,
and it depends on who those parties are.
But then the second question then becomes
what are the limitations with respect to that evidence.
For instance, what's being suggested is that we just
take a look at the differences in the funding formulas
I would expect for Tier 1, Tier 2, and Tier 3, but don't
we also have to take a look at things like the number of
students that are in, because one of the criticisms of
what the Legislature did in the 2011 was to not fund
growth in addition to the $5.1 billion of cuts, 4
billion in the funding and 1 point -- I beg your
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pardon -- 1.5, I believe, in the grants. So don't we
have to look at growth and don't we have to look at
whether or not the funding formulas prospectively in the
fiscal years '14 and '15 take into account growth,
because conceivably, my recollection from the evidence
that we heard at trial is that the system grows
approximately at 70 to 80,000 students per annum. And
so over that four-year stretch from '11 to '15, you're
talking approximately 280- to 300,000 students of growth
within the state system, and just standing here off the
cuff, I'm not sure that we have fully considered the
implications of what needs to be done, but I'm inviting
y'all to think about that and then -- and then bring it
back -- bring it back to the Court, because there's --
y'all have been very courteous to one another, but the
parties themselves may be in substantial disagreement as
to what the limitations are.
Then that leads to a subsidiary issue, and
that is when and under what circumstances are y'all --
there's going to have to be some depositions. There's
going to have to be -- we couldn't have this without
deposing Ms. Fisher -- Dr. Fisher once again for days on
end. So what are the limitations on discovery and --
and then, when are we going to do it, because we have to
make a calendar allotment for 15 lawyers and a judge.
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So how much time do y'all need to think about all of
this?
MR. TRACHTENBERG: I think -- I think we
can continue discussions. I know we have some internal
disagreements on some of those issues. I think our
position is -- we can certainly -- to answer your first
question, we can certainly get a written motion on file
under Rule 270.
THE COURT: I think that's best.
MR. TRACHTENBERG: And identify what
additional areas of evidence we think we need. What we
had envisioned --
THE COURT: And then I think it's best
that after y'all continue to talk, that y'all think
about a spreadsheet which sets out the disagreements in
terms of the limitations or the procedure.
MR. TRACHTENBERG: What we were thinking
was an evidentiary hearing of a week, maybe a little bit
longer. We would -- we envision maybe a month of
discovery that was limited to the impact of the new
legislation and not opening up the door for everything.
So a month before the hearing having expert disclosures
and reports and an opportunity for depositions.
THE COURT: Is there anybody that
disagrees that y'all can conclude the talks, maybe
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without resolution, within a week?
MR. TRACHTENBERG: I would --
THE COURT: You do?
MS. DAHLBERG: Ms. Bunker Henderson and I
will both be on our very well deserved vacations next
week. So yes, it would be -- it would be difficult for
us to have -- we're not going together. Although that
would be awesome. Our vacation dates just correspond.
THE COURT: Yeah, that's --
MS. DAHLBERG: So maybe two weeks.
THE COURT: Are we talking about the week
of the 17th through the 21st?
MS. DAHLBERG: We're talking about the
week of the 10th, right, starting --
THE COURT: Next week is the week of the
10th through the 14th and y'all say you're going to be
on vacation.
MS. DAHLBERG: That's that the week that
we're both out.
THE COURT: So could we do it the week of
the 17th through the 21st?
MS. DAHLBERG: Yes.
THE COURT: I'm not seeing any dissent.
So what about Wednesday, June the 19th?
MS. DAHLBERG: Is that to have the motion
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on file or to come back and --
THE COURT: It's to have the motion on
file, the spreadsheet, which sets out any type of
disagreements and for me to make a decision.
MR. TRACHTENBERG: That's fine.
MS. DAHLBERG: That should be fine.
MR. HINOJOSA: Your Honor, may I say
something?
THE COURT: Sure.
MR. HINOJOSA: One of the problems moving
forward without any current findings of fact and
conclusions of law based on the three-month trial that
we have is we don't know exactly where the Court -- we
know the Court's ultimate ruling, but we don't know --
we don't have a further guide on what matters the Court
thinks were most important.
For example, on the equity issue, is the
simple analysis -- you know, is that what the Court
relied on and/or a weighted analysis, the impact of
pre-K programs, for example, on English language learner
and at risk youth s. You know, we can presume some
things, but without having a guide, it's very difficult
for us to figure out, okay, well, what should the motion
to reopen be limited to or not? And so we would
respectfully, you know, urge the Court to, at the very
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least, provide us findings of fact and conclusions of
law based on the system as it currently sits, and as it
was tried for three months, and then we can kind of
better determine, "Okay, where should we go from here,"
particularly being able to inform our clients on whether
or not the scope of a motion for an evidentiary hearing
is appropriate or not.
THE COURT: David, I think this is my --
my first blush answer to that, that I could not see the
reopening being a chance to clean up or make stronger
what occurred between October the 22nd and February the
4th, that I would -- I really think that the -- that the
consideration is, was there a material change in the
circumstances, a substantial change in the circumstances
by reason of this most recent Legislature.
So I think it was Lubbock Online queried
the other day, "Where is the Judge's order?" And the
Judge's order is -- was it 185?
Yeah, so I'm going through 285 of the most
densely packed pages, and I'm making editorial comments
here and there, and at the same time, I'm seeing how
insupportable people's marriages have become and doing
custody cases and other types of discovery disputes, and
I'm doing the best I can, but -- but I don't know that I
can provide you any comfort about what I think about
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what happened during the 45-day trial. So -- but I
really think that if we do reopen, it's -- the
consideration is limited to what the Legislature passed
and has become law. So we have to wait on the -- what's
the date?
MS. DAHLBERG: I believe it's the 16th,
Your Honor.
MR. THOMPSON: 16th.
THE COURT: 16th, and so we'll be in a
better position on June the 19th to realize what still
stands and then to consider -- whether or not to
consider the impact of that upon the findings that we
made out of the 45-day trial, is the best way I can
respond to that.
MR. TRACHTENBERG: Your Honor, I'll
volunteer to put together a spreadsheet of everybody's
schedule, all the lawyers' schedules that we can present
to the Court by -- on the next hearing date or before,
if you prefer.
THE COURT: So there's -- so there's
another thing to think about, and that is, now that
we've gotten substantial experience in the trial of
that, is, if we opened it up, how much time is that
going to take, because then we have to start blocking
out -- we have to start blocking out time and then --
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give me one second here. What I'd like to do is I'd
like to take about two or three minutes and then
chitchat, and then be back with y'all.
(Brief recess)
THE COURT: So I'm -- thank y'all. I'm
not looking for an answer today, but I will be looking
for an answer on June the 19th, and I'm wondering if I
would be considering whether or not the Legislature's
most recent actions cured what the Court found to be
constitutionally inadequate, structural and funding
problems under suitability, whether or not the most
recent legislative actions would cure the adequacy
deficiencies that the Court found, and whether or not
the most recent legislative actions cured the financial
efficiency/equity deficiencies that the Court found, and
then I have a -- then I have a question. And my
question is, is my consideration restricted to the
Appropriations Act, and the specific financial, or do we
get into the expansion for -- as an example -- where's
Mr. Diamond? I'm so used to seeing you there.
MR. DIAMOND: Seeing me there. I'll move.
THE COURT: Thank you. It's just
comforting somehow.
You know, whether or not the expansion in
the charters, am I going to get in -- am I going to get
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into a consideration of that? And so I will tell you
that, with some comfort over on this side, that anything
y'all agree to, I will sign off on, but it's -- what
happens if y'all don't agree, and so I need to know what
y'all's thinking is about those things.
In other words, are we just looking at
funding? There were some -- the changes in the
end-of-course exams and the changes in the standards,
because, in part, the failure to fund the remediation
and the increased cost of the standards was a
consideration in the Court's decision. I don't think
that's news. And so am I going to consider that? So
that's -- that's another thing.
So I need to know the breadth of what all
I'm going to consider, and then to the extent that y'all
can pinpoint the issues -- because I would prefer to
have -- I hesitate to use this, a laser focus, but I
would rather the -- if it's opened, if we reopened
evidence, that it at least be focused on specific
issues, and so I need a menu of what those issues are.
MR. TRACTENBERG: Your Honor, we can
provide that in our written motion and I can answer your
first question right now.
THE COURT: I don't want it right now.
MR. TRACHTENBERG: Okay.
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THE COURT: Because you have not dealt
with all the parties, and what I'm trying to do is to
set this up to encourage as much agreement as is
possible.
MR. TRACHTENBERG: I think on the point
that -- what -- we all are in agreement that the
Legislature's actions on the funding side were a step in
the right direction, but we still believe that we could
and should still prevail on our adequacy and tax claims.
I'm confident that that's a unanimous opinion on this
side.
THE COURT: And Ms. Dahlberg feels that
you cannot.
MR. TRACHTENBERG: That's correct.
MS. DAHLBERG: Well, and Your Honor, just
to the extent as -- when we're talking about the scope,
I think it's important for the State to note that if --
if the plaintiffs are somehow suggesting that we're
going push this out for months and months and we're
going to re-litigate a lot of these issues, that that is
the stuff of a new and different lawsuit and that their
pleadings do not support the unconstitutionality of the
system going forward, and it is the State's position
that they should nonsuit that case and file a new one,
if that's the direction that they're headed.
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THE COURT: Well, I don't know that I can
answer directly point by point, but what I've tried to
indicate is that I don't see the scope of whatever we
would do theoretically by reopening the evidence as
re-litigating. I do agree with you that their pleadings
only -- only cover the past, but it seemed to me that
there was an identity of interest. I can't help but
note that there were several prominent members of the
Legislature who said, "Well, this ought to affect the
Judge's decision." And so maybe there is an identity
of -- well, it was Senator Patrick.
And so I didn't know whether there was an
identity of interest, but you do bring up a good point,
that they would have to amend the pleadings to support
the admission of the evidence, and then we'll cross
that -- we'll cross that, but this is something that I
think we can resolve, I hope, this summer, for I do have
more than one case. Okay. What else can I do for y'all
this morning?
MR. DIAMOND: Your Honor, I would just
like to add that we are obviously going to be piping in
on how it changed the efficiency case and all of that
and would like to be included in on the spreadsheet of
issues and --
THE COURT: I insist that you're included,
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Mr. Diamond.
MR. DIAMOND: Okay. And we were not given
notice of this hearing until late, but I wanted to make
sure also that there weren't any other communications in
the meantime over the last 90 days that I've missed out
on. Nothing? Okay.
THE COURT: I've remained mute.
Anything else for y'all?
MR. TRACTENBERG: That's it.
THE COURT: Then I'll see y'all at 10:00
a.m. June the 19th.
MR. TRACHTENBERG: Thanks, Your Honor.
MS. DAHLBERG: Thank you.
THE COURT: Thank y'all.
(Hearing concluded)
EXHIBIT B
CAUSE NO. D-1-GN-11-003130
THE TEXAS TAXPAYER & STUDENT § IN THE DISTRICT COURT FAIRNESS COALITION, et al; § CALHOUN COUNTY ISD, et al; § EDGEWOOD ISD, et al; § FORT BEND ISD, et al; § TEXAS CHARTER SCHOOL § ASSOCIATION, et al. §
Plaintiffs § § § §
JOYCE COLEMAN, et al § Intervenors §
§ vs. § 200th JUDICIAL DISTRICT
§ MICHAEL WILLIAMS, COMMISSIONER § OF EDUCATION, IN HIS OFFICIAL § CAPACITY; SUSAN COMBS, § TEXAS COMPTROLLER OF PUBLIC § ACCOUNTS, IN HER OFFICIAL § CAPACITY; TEXAS STATE BOARD § OF EDUCATION, and the TEXAS § EDUCATION AGENCY § Defendants. § TRAVIS COUNTY, TEXAS
ADVISORY TO THE COURT OF PARTIES’ POSITIONS REGARDI NG RE-OPENING
OF THE EVIDENCE AND ENTRY OF JUDGMENT
TO THE HONORABLE JOHN K. DIETZ, TRAVIS COUNTY DISTRICT COURT:
Defendants, Michael Williams, Commissioner of Education in his Official Capacity,
Susan Combs, Comptroller of Public Accounts in her Official Capacity, the State Board of
Education and the Texas Education Agency file this Advisory to the Court to record the parties’
positions regarding the re-opening of evidence and entry of judgment in this matter. Defendants
have attached as Exhibit A to this advisory a chart compiled by all the parties to this suit with
their respective positions on re-opening the evidence under Texas Rule of Civil Procedure 270,
the scope of any new evidence taken should the Court re-open the evidence, whether the Court
should enter judgment now or after any additional evidence is admitted, and other procedural
matters.
Respectfully submitted,
GREG ABBOTT Attorney General of Texas
DANIEL T. HODGE First Assistant Attorney General
DAVID C. MATTAX Deputy Attorney General for Defense Litigation JAMES “BEAU” ECCLES Division Chief, General Litigation Division
/s/__Shelley N. Dahlberg___________________ SHELLEY N. DAHLBERG Assistant Attorney General Texas Bar No. 24012491 General Litigation Division LINDA HALPERN, Assistant Attorney General Texas Bar No. 24030166 General Litigation Division NICHOLE BUNKER-HENDERSON Assistant Attorney General Texas Bar No. 24045580 Administrative Law Division Texas Attorney General's Office P. O. Box 12548, Capitol Station Austin, Texas 78711 Phone: (512) 463-2121 Fax: (512) 320-0667 Attorneys for Defendants
CERTIFICATE OF SERVICE
I hereby certify that on the 19th day of June, 2013, the foregoing document was filed via electronic filing and served via email on the following:
Richard E. Gray, III Toni Hunter GRAY & BECKER 900 West Ave. Austin, TX 78701 Randall B. Wood Doug W. Ray RAY & WOOD 2700 Bee Caves Rd., Suite 200 Austin, TX 78746 Mark R. Trachtenberg HAYNES AND BOONE, LLP 1 Houston Center 1221 McKinney Street, Suite 2100 Houston, Texas 77010 John W. Turner HAYNES AND BOONE, LLP 2323 Victory Avenue, Suite 700 Dallas, Texas 75219 Mexican American Legal Defense and Education Fund, Inc. David G. Hinojosa Marisa Bono 110 Broadway, Ste 300 San Antonio, TX 78205
Multicultural, Education, Training and Advocacy, Inc. Roger L. Rice 240A Elm St., Ste 22 Somerville, MA 02144 J. David Thompson, III Philip Fraissinet THOMPSON & HORTON LLP Phoenix Tower, Suite 2000 3200 Southwest Freeway Houston, TX 77027 Holly G. McIntush 400 West 15th Street, Suite 1430 Austin, Texas 78701 J. Christopher Diamond THE DIAMOND LAW FIRM, P.C. 17484 Northwest Freeway, Suite 150 Houston, Texas 77040 Craig T. Enoch ENOCH KEVER PLLC 600 Congress, Suite 2800 Austin, Texas 78701 Robert A. Schulman Joseph E. Hoffer Betsy Hall Bender SCHULMAN, LOPEZ & HOFFER, L.L.P. 517 Soledad Street San Antonio, Texas 78205-1508
/s/ Shelley N. Dahlberg SHELLEY N. DAHLBERG Deputy Chief – General Litigation Division
PARTIES’ VIEWS ON ISSUES PERTAINING TO MOTION TO REOPEN
1
Position on Reopening the Evidence Topics to be covered Views on possiblewitnesses required
Length ofhearing
Timing ofhearing
Scope and timing ofdiscovery
Issuance of findings
Calhoun CountyISD Plaintiffs
In light of the significant impact ofthe legislation identified in our Rule270 motion, the record should bereopened to reflect the changes to theschool finance system, accountabilitysystem, and graduation requirements.We do not believe that the legislativechanges negate the Court’s ultimaterulings on either the adequacy or thestate property tax claim. But we dobelieve it is important to have arecord that reflects these changeswhen the case is appealed to theSupreme Court.
In addition, the changes indistribution of funding betweendistricts do affect the financialefficiency claim, and show that thelegislature has further narrowed theper-WADA funding gaps betweendistricts. We believe these changes indistribution among districts must beconsidered by this Court and by theSupreme Court when evaluating thisclaim.
If the record is not modified to reflectthese changes, we believe there is asignificant possibility that theSupreme Court would remand foradditional fact-finding or otherwisefind that the Court’s findings havebeen superseded by the legislativechanges.
(1) Changes to the statutoryfunding formulas and theresulting impact on the amountand distribution of publiceducation funding (both on anabsolute level and on a per-student basis, taking intoaccount projected studentpopulation growth during thebiennium). These changesaffect both the statewideaverage funding levels, and thelevels of relative per studentand per-WADA funding amongdistricts.(2) Changes to the STAARend-of-course testing regimeand graduation requirements,along with 2013 studentperformance data relating tothese tests(3) Changes to theaccountability system(4) Raising of the statutory capon open-enrollment charters.
While the Court may takejudicial notice of the newlegislation itself, we believethe impact of the newlegislation on the relevantfacts and legal argumentsmust be established througha limited number ofadditional witnesses.
We envision Lynn Moak,Lisa Dawn-Fisher, andperhaps 1-2 TEA witnesseson changes toaccountability system,graduation requirements,and STAAR/EOC regime.
We do not believe it isnecessary or desirable torecall superintendents ornational experts on subjectssuch as pre-K, class size,the relationship of money tostudent performance, andother topics covered atlength during trial. Weneed not and should notrevisit such debates. Theadditional hearing shouldbe a supplement to the maintrial and should be narrowlyfocused on the majorchanges made in the recentlegislative session and onan updating of the test data.
5-7 days Sometimebetween mid-August andThanksgiving,subject to theCourt’s andcounsels’schedules. Webelieve delayinga hearing datebeyond this timewould create aconcern aboutundue delay andcould result in asituation wherethe SupremeCourt does notrule even beforethe 2015legislativesession.
Limited to impact oflegislative changes to thesystem. We propose adisclosure deadline onemonth before hearingwhere parties disclosewitnesses and any expertopinions, with depositionsto occur in the monthbefore the hearing. Noother written discovery.
The findings and final judgmentshould issue together after anyevidentiary hearing. If a finaljudgment were issued now, theCourt would lose plenary powerafter 30 days (or 105 days withpost-trial motion). If the Courtagrees that final judgment shouldbe delayed, so should findings. Thepurpose of findings is to supportand explain this Court’s rulings inits final judgment. If the Court isgoing to wait to issue a finaljudgment, we think it should alsowait to issue the findings that willsupport that judgment at the sametime. See TRCP 299 (“Whenfindings of fact are filed by the trialcourt, they shall form the basis ofthe judgment upon all grounds ofrecovery and of defense embracedtherein.”).
In addition, some of the proposedfindings are outdated in light of thepassage of the legislation; they nolonger describe the system goingforward. If findings similar tothose that the parties submitted inMarch were issued now, it may notbe clear which findings areapplicable going forward and whichones are not. Some of thosefindings would have to be latermodified, and some would nolonger be accurate when issued.We believe a single set of findings,issued after the conclusion of thesubsequent hearing, is the mostreasonable and efficient approach.
EXHIBIT A
PARTIES’ VIEWS ON ISSUES PERTAINING TO MOTION TO REOPEN
2
Position on Reopening the Evidence Topics to be covered Views on possiblewitnesses required
Length ofhearing
Timing ofhearing
Scope and timing ofdiscovery
Issuance of findings
Fort Bend ISDPlaintiffs
The Fort Bend ISD Plaintiffs are notjoining the motion to re-open, but wedo believe that re-opening theevidence is needed so that the recordfully reflects actions taken by the83rd Texas Legislature and theimpact, if any, on the trial Court'sdecision, in order to avoid a potentialremand and unnecessary delay, whichwould be injurious to our districts.
The Fort Bend ISD Plaintiffsbelieve that any supplementalevidence should focus onsignificant changes made bythe 83rd Texas Legislature, andthat the best way to identify thetopics to be covered is todesignate specific bills thatmay have created such changes,including SB 1, HB 10, HB1025, HB 5, SB 2, etc.
Fort Bend ISD Plaintiffspotential witnesses includeMr. Lynn Moak, Dr. CurtisCulwell, possibly somesuperintendents from ourdistricts.
The Fort BendISD Plaintiffsbelieve that itprobably willtake two four-day trial weeksfor an additionalevidentiaryhearing.
The Fort BendISD Plaintiffsprefer that theadditionalevidentiaryhearing takeplace in Januaryor February2014. If thehearing occurssooner, the trialweeks ofSeptember 9thand September16 appear to begood options.Mr. Moak willbe out of thecounty the lastweek ofSeptember andthe entire monthof October.
The Fort Bend ISDPlaintiffs believe thatnecessary discovery canbe conducted in onemonth to six weeks beforethe new hearing.
The Fort Bend ISD Plaintiffssupport the Court issuingpreliminary FOF and COL soon, toassist with framing the issuesneeded to be covered at the newhearing, with final FOF and COLissued after the hearing. We do notsupport issuing the Final Judgmentuntil after the new hearing.
TTSFC PlaintiffsWe do not join in the motion. If the evidence is reopened, it
seems to us that an explanationof all of thelegislation and its affects andanticipated affects would becovered.
We would anticipate thatexpert witnessesand fact witnesses would benecessary.
Dependingon topics tobe covered,2 weeks orso
Late 2013 orearly 2014
Expert reports to be due30 days prior to hearingand depositions to beconcluded 2 weeks priorto hearing
We strongly urge the court to enterits findings now and if theevidence is reopened and if theCourt chooses to supplementits finding to do so following anyhearing.
Edgewood ISDPlaintiffs
The Edgewood ISD Plaintiffs will besetting forth their positions in aseparate filing.
PARTIES’ VIEWS ON ISSUES PERTAINING TO MOTION TO REOPEN
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Position on Reopening the Evidence Topics to be covered Views on possiblewitnesses required
Length ofhearing
Timing ofhearing
Scope and timing ofdiscovery
Issuance of findings
EfficiencyIntervenors
If the Court is inclined to re-open thecase as to the ISD’s claims, then itwill be necessary to also re-open andexamine the efficiency and chartercap issues in recent legislation,including, but not limited to SB1,SB2 and HB5.
Efficiency issues regarding theincreased funding anddecreased accountability passedduring the session.Additionally, the meager andinadequate increase in thecharter license cap, as well asevidence that the current statedistrict school system foughtthe increase of the charter capfor political reasons andignored the best interest ofchildren and the obviousincreasing demand for charters.
Difficult to say until thescope of the ISD’s potentialhearing is revealed. As itstands, and reserving theright to amend, 2-3witnesses (experts and/orfact witnesses) will berequired to cover thecurrent scope of topics.There may also be a need tohave additional witnesses torespond to any ISD or stateclaims.
The court shouldconsideradmitting asmuch evidenceas possible byway ofstipulation. Thecourt shouldalso considertaking briefs onthe specifictopics thatparties believeneed to beincluded in theadditionalevidence.
Difficult to sayuntil the scopeof the ISD’spotential hearingis revealed. TheEfficiencyIntervenorscould put onadditionalevidence in 1 ½to 2 days.
When everyonenecessary foreach party,attorneys andwitnesses areavailable. TheEfficiencyIntervenors donot see anyreason thisneeds to beexpedited, i.e.thatAugust/September time frame isnecessary.ChairmanGrusendorf isnot available inSeptember untilthe week of the23rd. Hispresence at trialis necessary as aclientrepresentativeand potentialwitness
30 days prior to thehearing/trial. The partiesshould consider takingtrial depositions and havethose simply entered in therecord to decrease theamount of time in trial.
One consideration forsetting the hearing/triallater in the year, is thatdiscovery can beconducted at a reasonablepace, i.e., greater than 30days, and not requiringeveryone to put theirremainder of their practiceon hold.
No position on this issue.
PARTIES’ VIEWS ON ISSUES PERTAINING TO MOTION TO REOPEN
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Position on Reopening the Evidence Topics to be covered Views on possiblewitnesses required
Length ofhearing
Timing ofhearing
Scope and timing ofdiscovery
Issuance of findings
Charter SchoolPlaintiffs
Opposed. Recent Legislative actions, ifconsidered through judicialnotice.
Unlimited if accomplishedthrough trial depositions (SeeScope and timing ofdiscovery”)
Limited only by number ofdepositions allowed perparty (See Scope andtiming of discovery)
Hearingunnecessary(See Scope andtiming ofdiscovery)
Mid- to lateOctober at theearliest.
The charter schoolplaintiffs are opposed toreopening the evidence,but if the trial is reopened:(1) limit evidence tocourt’s judicial notice ofall Legislative actions. (2)Or….utilize trialdepositions with fullevidentiary objectionsobviating necessity for in-court testimony. Whileextended discovery periodwould be required, acombined discovery/trialterm would besignificantly longer
Necessary if trial is reopened andevidence limited.
PARTIES’ VIEWS ON ISSUES PERTAINING TO MOTION TO REOPEN
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Position on Reopening the Evidence Topics to be covered Views on possiblewitnesses required
Length ofhearing
Timing ofhearing
Scope and timing ofdiscovery
Issuance of findings
State Defendants The Legislature passed in its 83rd
Regular Session over 100 bills thatimpact public education. The State isopposed to re-opening the evidenceunless and until the plaintiff’sdemonstrate whether and how thebills passed by the Legislature –including all bills that repealed,amended, or replaced the keycomponents of the existing schoolfinance framework - impact theirclaims. Specifically, for each claim,including the claims supporting theplaintiffs’ proposed findings of factand conclusions of law, the plaintiffsshould identify if their claims stillexists, how the new laws impact theirclaim, and when the bills impactingtheir claims will be or are anticipatedto be fully implemented.
Preliminarily, the Court must re-assess in light of these changeswhether it has jurisdiction over thePlaintiffs claims. The Court shouldhold a preliminary, evidentiaryhearing to examine the bills theLegislature passed and determine ifthe Plaintiff’s claims still exist or thatthe Plaintiffs can obtain the reliefthey seek on the present record.
Assuming the Court determinesit has jurisdiction over thePlaintiffs’ claims, the Statesubmits that the record shouldbe re-opened and evidenceshould consist of the followingfacts: what the new legislationdoes, who is responsible for itsimplementation, when it isexpected to be implemented,and when outputs resultingfrom the change can beanticipated. Any hypotheticalor speculative evidenceregarding the actual impact ofthe legislation on student ordistrict outputs or resultsshould not be admitted. Suchspeculation is about events,which may or may not occur, atsome future date and isunreliable.
Assuming the plaintiff’sclaims still exist and theevidence is re-opened, theState believes TEAwitnesses regarding thechanges to the criticalcomponents of schoolfinance system framework,including changes to thefunding, testing,curriculum, charter, andaccountability systems,when those changes will beimplemented and by who,and when outputs can beanticipated, at a minimumwould be necessary. TheState reserves the right toadd to this list if necessary.
2 weeks at most. Mid-September Very limited. Discoveryshould be limited to factsincluding understandingwhat bills have thepotential to impact theplaintiff’s claims, what thebills do, when the bill willbe implemented and bywhat entities, and whenstudent or district outputsas a result of the changesmight be available.Discovery abouthypothetical or speculativeevidence about futurestudent or districts outputs– which may or may notoccur – should not bepermitted.
The State submits that furtheranalysis of the impact of theseparate education related bills andtheir impact on the plaintiffs’claims is necessary before theCourt can enter judgment and issuefindings. If the court entersjudgment on laws that no longerexists as a result of the bills thatrepealed, replaced and amendedexisting school finance law andpolicy, the Court’s opinion wouldbe inappropriately advisory innature.
If the Court is inclined to issuefindings before re-opening theevidence, it should enter judgmentfirst. The parties then can proceedaccording to the Rules of CivilProcedure.
EXHIBIT C
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THE COURT: Thank y'all. Please be
seated. So I'm thinking about rebranding this case from
"The School Finance Case" to "As the World Turns" and
the reason is not because it's a soap opera, but because
there were 13,858 episodes of "As the World Turns" and
we're getting pretty close.
So here's my plan. I want to hear three
to five minutes or less from each of the parties, and
then I have an announcement to make. So starting
with -- if I could, the Texas Taxpayers. Since you were
on vacation, Mr. Gray, you should be well rested for
your start.
MR. GRAY: Your Honor, we do not take a
position in support or in opposition to the motion. If
the Court was inclined to grant the motion, we would
urge the Court to issue its findings based upon the
first trial forthwith so that we would have a baseline
by which to determine where do we go in the subsequent
hearing. Two, we would urge the Court to not set the
hearing any earlier than November. The reason for that
is two-fold. First, there will need to be some time to
determine the scope of the hearing, discovery, expert
reports, et cetera, and then on a more personal note, I
am the lead counsel for the lead plaintiffs' group in
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the ongoing redistricting battles and also for
Congressmen Vela and Congressman Gallego, and we are --
I anticipate that we will be set by the three-judge
panel in San Antonio sometime in August, September, for
further hearings on the mass, and I simply am going to
be somewhat under water dealing with that issue.
And I guess my last observation is, if
what I have read is correct, the Legislature
appropriated approximately 3.5 billion back in the
system after taking approximately 5.4 billion out of the
system two years ago, and 3.5 still leaves you about
$2 billion short of where we were in an inadequate
system two years ago. So I don't see that there's any
possibility that they have made the system adequate.
Likewise, on the Legislative Budget Board's documents
that are attached to Mr. Trachtenberg's motion as
Exhibit A, under the State's analysis, the gap has been
closed by approximately $100 to $200, which certainly is
not closing the equity gap likewise.
Thank you, Your Honor.
THE COURT: May I hear from Fort Bend?
MR. FRAISSINET: Good morning, Your Honor.
Good to see you again.
THE COURT: Good morning, Philip.
MR. FRAISSINET: The Fort Bend plaintiffs
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have not specifically joined the Calhoun County motion.
We do agree with the request for a hearing and to reopen
the evidence. We have our own reasons that we
articulated in the document we filed yesterday. We
think it's important to supplement the record, but we
believe that evidence will simply confirm that the
system remains unconstitutional on all the grounds the
Court found back in February.
If the Court is inclined to reopen
evidence and have a hearing on this, our biggest
practical issue is that Lynn Moak is unavailable for all
of October, the last part of September. He's a joint
expert for three of the groups, and so I think that's an
issue for several of us. We do think Mr. Moak and some
of his folks would need to testify on some of this.
We would add to Mr. Gray's point that in
addition to the flaws that remain, the Legislature did
nothing to change any of the formula structure that
remains in place. That system has now been in place.
The formulas, the last time they were changed, was 20
years ago, and I think the latest test scores this year
confirm that, especially with our economically
disadvantaged student population, we continue to have a
major problem in the resources available to get those
students up to our standards. That's our position, Your
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Honor. Thank you.
THE COURT: Mr. Hinojosa, for MALDEF.
MR. HINOJOSA: Your Honor.
Your Honor, the Edgewood plaintiffs
request that the Court deny the motion to reopen
evidence. They urge the Court to issue its findings of
fact and conclusions of law and its declaratory judgment
at the very least, declaring what the Court found and
what the Court ruled from the bench back in February 4th
of 2013. That was based on the system as it currently
existed at that time and as it currently exists today.
The record was supplemented by the parties throughout
the trial as the Court is well aware with most
up-to-date information.
If the answers on the motion to reopen are
whether the offered evidence is decisive, whether such
evidence, consideration of such evidence would cause
undue delay, granting the motion will cause an
injustice, then certainly the answer should be no to
reopening the record, mainly because much of the
evidence that the Calhoun County plaintiffs want the
Court to consider, certainly is not in effect at this
time. For example, in HB-5, the graduation requirements
don't come into effect until 2014-2015. So how can the
Court consider evidence related to graduation
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requirements that are not even in effect at this time.
The accountability of the school district rating system
that was created through HB-5 will not become effective
until 2016-2017. So how can the Court consider evidence
of the new accountability system if it's not in effect.
The same goes for school district ratings under the new
rating system. None of those ratings have been released
and I'm not certain whether or not even the rating
system for schools alone, not districts, whether or not
that has been finalized, but nevertheless, there still
is no new evidence that the Court can consider on that
specific issue. Related to SB-1 and HB-1025, which pour
more money into the system. We don't have good numbers
in order for the Court to evaluate the equity in the
system. Certainly there are projections from the LBB
but those are mere projections, and since this Court
pointed out during the trial back in November of 2012,
it stated that -- it determined that the most up-to-date
information, the most accurate and reliable information
concerning school finance data, when looking at the
equity issue, was only for the 2011-2012 school year.
So if the Calhoun County plaintiffs want this Court to
consider what the impact of SB-1 will be on the equity
questions, the financial efficiency questions for the
Court, then we're going to have to wait until November
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of 2014 just to see the impact of the first year of the
biennium until winter of 2015 to have good reliable
numbers in order to determine the impact.
We've laid out, you know, more of this in
our response, but for these reasons, we ask the Court to
deny their motion.
If the Court does intend to grant the
motion, then the Edgewood plaintiffs would ask for ample
time for discovery, depending on the scope of the
evidence that this Court requests, and once again, we
would urge the Court not to reopen the financial
efficiency issue, and then allow at least one month
between the end of the discovery period, and we
recognize that it would be a relatively short discovery
period, but if that's two months and then wait a month
after that, and then hold the evidentiary hearing on
supplementing the record. Thank you.
THE COURT: Calhoun.
MR. TRACHTENBERG: Good morning, Your
Honor. We don't think it's in anybody's interest to
have this case go up to the Texas Supreme Court on an
incomplete record. The first question the Texas Supreme
Court will ask is did the new legislation cure the
constitutional deficiencies that you found on February
4th. We strongly believe the answer to that question is
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no. But we believe we need to show the Court why that
is so. If we don't, we believe --
THE COURT: How -- how would the Supreme
Court have notice of that?
MR. TRACHTENBERG: I think they -- anybody
from the State could file a motion saying these changes
are changed circumstances. I mean, I think they're
aware of the existence of that legislation. They could
take judicial notice that the legislation occurred, any
number of ways that could come before the Court, but I'm
highly confident.
THE COURT: Give me one.
MR. TRACHTENBERG: The State could file a
motion to remand for additional fact findings. The
State could file a motion to dismiss on the grounds of
mootness, any number of ways. Somebody could file a
motion to take judicial notice of the legislation to
discuss the impacts. In any case, whatever the pathway,
we feel confident that it be highly likely we'd be right
back in this court in six months if we don't reopen the
record. What I think's really important to understand
that we're not seeking -- that the plaintiffs are not
merely seeking a declaration --
THE COURT: I want you to remember that
quote.
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MR. TRACHTENBERG: Which one?
THE COURT: We feel confident that we
highly likely will be right back in this court in six
months.
MR. TRACHTENBERG: Duly noted, Your Honor.
I think one important point is that all the parties here
are seeking prospective relief in the form of an
injunction, and that injunction would seek to enjoin the
operation of the school finance system then in effect,
not one that has been superseded, and the Texas Supreme
Court will be reviewing that injunction, assuming this
Court enters one, in 2014, once we're well into the next
biennium. And it's critical, we believe, that that
injunction be based on a record that reflects the
current legislative developments that impact the public
education system.
We may not know exactly what every
districts' revenue per WADA numbers will be in 2014 and
2015, but we do know some things for certain. We know
that the basic allotment will jump from 4,765 to 5,040
by 2015. We know that the guaranteed yield in the
golden penny tier will increase. We know that the RPAF
will be restored to 1.0. We know a lot of things about
how this legislation will impact the funding system and
we don't believe you can turn a blind eye to the impact
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of that -- of that legislation, and as well as the
legislation on the standards side. Again, we believe
that we can still prove and will still be able to prove
that the system remains unconstitutional, but we believe
we need to do it on the most up-to-date record,
particularly since all the plaintiffs here are asking
for prospective relief in the form of an injunction
enjoining operation of the school finance system then in
effect.
We would ask -- we believe an evidentiary
hearing can take place within five to seven days, if the
Court provides those parameters. I think the parties
can follow the Court's guidance on that. We believe
that such a hearing should take place at some point this
fall depending on counsel's and the Court's availability
and the schedules, and we believe that a final judgment
should issue after such an evidentiary hearing and the
Court should issue supportive findings, which would
incorporate much of the proposed findings that we've
already submitted in one document in support of that
final judgment. And that's our -- that's where we are
on this, Your Honor.
THE COURT: Thank you. Ms. Dahlberg, I
assume. So my first question, Ms. Dahlberg, is, is it
really 100 bills that affect education?
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MS. DAHLBERG: My understanding is that
there are 125 that made it out of the two houses, and
that Governor Perry vetoed either all or some portion of
six of those bills.
THE COURT: So that sounds like only 119.
MS. DAHLBERG: Only 119.
THE COURT: And --
MS. DAHLBERG: Some of them are very --
THE COURT: And do you know, just offhand,
and I wouldn't expect you to know totally, but do you
know offhand how many of those 119 prospective bills
touch upon the issues that we litigated for four months?
MS. DAHLBERG: I can say with some
certainty and I think the other parties agree that there
are at least five bills that affect -- materially affect
issues that were hotly litigated in this case. I also
have here a list from TEA's website that I downloaded
yesterday that has the education legislation status of
the bills, and only looking at the description that's on
that list, I highlighted just on the first three pages,
I have one, two, three, four, five, six, seven bills
that I thought at least in some way might possibly
impact the issues in this case, and I do have at least
one bill, more than three, on most of these pages that I
believe touch on issues in this case. And there's 17
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pages of -- on this list.
THE COURT: So what's the State's
position?
MS. DAHLBERG: Your Honor, it is the
State's position that --
THE COURT: Besides that it was an
improvident decision that I made in February, and you
still believe that, but taking that, your further
position?
MS. DAHLBERG: The State's further
position is that the Court can't go forward without
considering these legislative changes, at least somehow
getting them into the record. You asked the parties at
the last hearing whether the changes cured any of the
constitutional -- alleged constitutional infirmities
that they made, and while I'm not sure that we can
answer that question without any outputs on the new
system going forward, we do believe that the Court
should at least engage in a threshold inquiry limited to
any actual facts that are in existence, including what
those legislative changes are, the policy changes that
TEA may be making in response to those legislative
changes, who will be implementing those in a timeline.
THE COURT: So when I -- I read that on
the spreadsheet, I was kind of curious -- how do I say
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this? I believe that's true, that in some fashion, we
need to evaluate and deduce whether there have been
material and substantial changes, or even just changes
to the circumstances that are outlined in my February
4th decision and part of the thousand plus findings of
fact that I'm still working on.
What I was curious about is the procedure,
because here's what I imagined. I imagined that those
who believe that there were changes or were not changes,
would have pleadings, because the only way to get
evidence is to have pleadings that support the
contention, and the evidence only comes in if you've got
those pleadings. So it seemed to me that there were --
there was necessity of new pleadings. Then there would
be the opportunity that if those pleadings don't give
fair notice, have some type of defect, that there would
be an opportunity to procedurally challenge those
through special exceptions.
Additionally, after 23 years, I've come to
learn that the State will, from time to time, challenge
the Court's jurisdiction, and so I would imagine that
y'all would challenge, once again, the Court's
jurisdiction, but that's how I procedurally imagined it.
Did you have something else in mind?
MS. DAHLBERG: I think we're primarily on
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the same page. I believe it was Mr. Hinojosa -- and
actually know that it was Mr. Hinojosa and the Edgewood
plaintiffs who are asking the Court to go ahead and
issue findings so that they will know, for purposes of
going forward, what's -- what's problematic and what's
not and what you accepted, and based on that argument, I
really came to the conclusion that I think the best
place to start is with the pleadings that are on file
now and looking at those. I mean, we have the factual
allegations in every single one of those and they're
very detailed. They point out specific statutes that
the plaintiffs and intervenors are relying on in
claiming that the system is -- that create the
system-wide constitutional conundrum, and they have
their legal claims, and I think it's a
paragraph-by-paragraph analysis as to, does Senate Bill
1 or does House Bill 5, or which bill impacts this piece
of their pleadings, and then, yes, Your Honor, I think
it is -- it's -- we get into this question of is this
case that's on file today substantially moot, moot in
total? Would a new case going forward be ripe and
redressable. I mean, I agree, there are lots of ways
that we can do that, but we would imagine that we would
proceed under the Rules of Civil Procedure just like in
any other lawsuit.
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THE COURT: So now I have a second
question, and I'm glad that we're seeing at least
through the fog somewhat clearly. So my second question
is I tried to recollect Dr. Fisher's testimony regarding
the 18- to 24-month cycle of budgets, and here's what I
think I know, but I'm inviting correction. The school
year that just finished, with all the little kids out
for summer, that there will be a NEEIR final, as --
using that as a term of art, late October, early
November. "How did you come up with that?" And the way
I came up with that is I looked at the finance section
of the TEA website and looked at what had been done in
the years '10, '11 and '12, and it appeared to me that
there was a NEEIR final.
Additionally, there's some steps that I
don't recollect that I could get in our -- only of our
one million pages of documents that we have in, that
somewhere after the start of school in late August,
early September, somewhere there's a report to the State
about how many kids have shown up, and we start doing
counts and preliminary figures are available, and I
thought that's what we got somewhere in November of '12
during the course of this trial, is -- is my
recollection, but I don't have a great recollection, but
I'm sure Dr. Fisher could really -- or whoever's
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Dr. Fisher's replacement could help us on the timetable,
but in thinking about where we're going, that's what
I've been thinking about.
MS. DAHLBERG: I think you are right about
the NEEIR final data for the '12-'13 school year.
THE COURT: Which would have been the last
year of the 2011 Legislature. Was that the 82nd?
MS. DAHLBERG: Yes.
THE COURT: The 82nd's biennium
appropriation.
MS. DAHLBERG: Yes.
THE COURT: And so we -- and there's one
other factor, too. In addition to the school numbers,
there's the -- this is my recollection. My recollection
in the 82nd Legislature, in 2011, the comptroller made a
preliminary budget revenue estimate that there would be
an approximate 15.1-billion-dollar shortfall comprised
of loss of one-time federal stimulus money, a -- as I
recollect, a 4.9-billion-dollar deficit out of the 2009
appropriation and some other things, which led the
Legislature to make these cuts of approximately 15.1
billion in education within Medicaid and State
government. So out of that 15 billion, the education
cuts constituted approximately a third.
At the start of the 83rd legislative
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session, the comptroller just this January, February,
made the announcement that it was not a 15 -- that with
the 15.1-billion-dollar cuts, that there was now
projected an 8.8-billion-dollar surplus, which kind of
suggests that perhaps we over-cut or underestimated, and
by September, at the close of the State's fiscal year,
we should have some pretty firm numbers as to what the
revenue actually was, whether it was 8.8 billion or
greater. And I stand to be refreshed on my memory on
that topic, which is an invitation for y'all to refresh
my memory.
MS. DAHLBERG: I understand.
THE COURT: What else from the State's
position?
MS. DAHLBERG: If we're going to reopen,
we would prefer to do this sooner and later -- sooner
than later, not and later. And sometime early to mid
September. We don't believe that it should last more
than maybe four, five, six trial days at the most.
THE COURT: Is that it?
MS. DAHLBERG: That's it.
THE COURT: Mr. Diamond.
MR. DIAMOND: Thank you, Your Honor. As
far as the motions that are before the Court, we're not
opposing Mr. Trachtenberg's motion or the motion that
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Mr. Thompson joined. Our position on that is if it's
going to be opened, then the efficiency issues will need
to be addressed, but we believe that our current record,
that the legislation didn't necessarily affect what we
currently have pled and what we have currently proven
and if those are brought up, then issues such as a whole
trial about "look how bad we're doing," which is
answered by more money and --
THE COURT: Or "how good we're doing."
MR. DIAMOND: Or "how good we're doing,"
it's answered with more money and less accountability,
that we think that that shows further inefficiency in
the system. So those kind of things we would want to
bring out during that -- anything that's reopened, but
we're not opposing it, but if for some reason the Court
didn't reopen, we would not move or push for that
either. So we do want those efficiency issues
addressed.
The charter cap issue also we would want
to address that as well, and we don't believe it's
adequate and we would bring evidence to that regard.
Wouldn't take much more than probably a few hours.
As far as availability, we're not really
available until after mid September for trial, although
if we wanted to start gearing up, you know, discovery
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and stuff by then, that's fine, but Chairman Grusendorf
is out until mid September. He'd be a necessary part of
needing to be at trial, not only as a client, but as a
potential witness, depending --
THE COURT: He's kind of our good luck
charm.
MR. DIAMOND: He's our good luck charm.
So that's just to let the Court know practically and as
far as availability is concerned, that's out there. I
would ask the Court that if we're looking at doing this,
to spread discovery out as much as possible so that
we're not taking 30 days out of our current practice and
shutting that down yet again. If we have time, and if
it's going to be spread out, to let us do that, and I'd
also urge that any depositions taken be trial
depositions and to the extent -- instead of reinventing
the wheel or doing that every time, take the trial depo,
and then just put it into the record, and that would
save a lot of trial time as well. So that's kind of
where we stand on it.
THE COURT: Thank you for being so
efficient.
MR. DIAMOND: Give the remainder of my
time to the gentleman from San Antonio.
THE COURT: Mr. Schulman.
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MR. SCHULMAN: Thank you. I, like
everyone else in this room, is anxious to hear what the
Court has to say on this so I'll be extremely brief. We
are opposed to the movant's motion as presented. That
said -- for the reasons that we've set out in the
spreadsheet. Were the Court to reopen this case, we
believe that it could be done by both judicial notice
and if evidentiary hearings are required or if evidence
is required, we agree with Mr. Diamond that it could be
done through trial depositions. We don't think it's
necessary to spend an another couple weeks back in the
courtroom. We hope it's not necessary. Thank you.
THE COURT: So may I take a short break,
and by short, I mean 15 minutes, and see trial counsel
in the jury room.
(Recess taken - Court and counsel in jury
room)
THE COURT: Thank y'all. Please be
seated. So Texas Rule of Civil Procedure 270, which
governs additional testimony says, "When it clearly
appears to be necessary for the due administration of
justice, the Court may permit additional evidence to be
offered at any time." And the passage of the wealth of
bills during this 83rd Legislature has created a
situation where, in the interest, we need to assay and
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concentrate as to whether that legislation changed the
circumstances during the 45-day trial that we had.
So I'm setting a trial date of January the
6th, 2014. This is subject to revision, but I'm
anticipating a six-week or less hearing. I am requiring
that by July the 17th, that there be presented a chart
that has the input from all parties concerning what
bills that we believe we need to discuss during this
additional evidence. That is, the ones that have an
impact -- I was going to say material and substantial,
but it's really if any of them have an impact on our
decision and our considerations.
I'm going to require the parties to
replead, that they're to allow the additional evidence
by July the 17th, 2013. We're to have a scheduling
order which will set out -- give me one second -- it
will include the date for the trial, a discovery period
during which all discovery must be conducted, which
includes written discovery, requests for disclosures and
depositions, appropriate limits for the amount of
discovery and deadlines for amending or supplementing
pleadings, and the designation of expert witnesses.
I was trying to think if there was
anything else. I believe that touches on everything
that we've discussed. I'm wondering if, as part of the
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July 17th, if y'all could not look at either sometime in
August or September for a three-hour or less kind of
conference, similar to what we had to the three
conferences that we had before we started the last case.
I would just kind of like to see and be apprised if
there are problems, particularly like any of the data
problems, Ms. Dahlberg, because I know there are
substantial demands upon TEA's time, and so any -- and I
think this goes without saying, and that is, I would
rather have a 30-minute phone conference if we have
discovery or other type of procedural problems than a
one-hour or two-hour hearing and -- so I look forward to
seeing what y'all present on July the 17th. Thank
y'all.
And we're adjourned.