On January 26th, 2016, the Ohio Supreme Court will hear oral arguments in a case to determine whether a public school district may implement a more restrictive policy on release of student directory information by requiring that parents “opt in” before the information can be released.
The case was brought by School Choice Ohio, Inc. (“SCO”) against the Springfield City School DistrictBoard of Education(“Springfield”). SCO is a registered non-profit corporation formed in the state of Delaware. The corporation informs students and parents across the state about scholarships the state provides, especially to students of low performing or at risk schools. SCO relies on school directory information that public schools provide through a records request to generate its mailing lists.
In January of 2013, SCO submitted a request for student directory information to Springfield. The District denied the request, citing a new policy it had recently passed which purportedly stopped the District’s collection of directory information, and further required parents to sign a consent to “opt in” to release of the data for lawful records requests. SCO countered that under state public records law, codified in ORC §149.43, the District does not have the authority to refuse an otherwise lawful request for directory information that the District maintains. Through its case, SCO seeks an order from the Ohio Supreme Court that would prevent Springfield from denying SCO’s requests for directory information on that ground.
State and federal law, specifically Ohio Revised Code §3319.321 and the Family Educational Rights and Privacy Act (20 USC §1232g/20 CFR Part 99), permit public schools to release limited student information defined as directory information in certain circumstances. In general, federal law defines directory information to include a student’s name, address, telephone number, date and place of birth, honors and awards, and dates of attendance. Ohio’s definition of directory information is more expansive. However, schools are required to provide an annual notice to parents that allow them the opportunity to opt out of directory information releases. Schools also are prohibited from releasing directory information to anyone who may use the information for a profit making plan or venture.
The Supreme Court’s decision in this case could have far-reaching policy implications for districts, and may open the door for additional challenges to the release of directory information in the future. A decision from the Court is not expected before early summer 2016. We will keep you posted on the status of the case. In the meantime, seek legal counsel if you have questions about application of your directory information policies and procedures.
The University of Toledo undertook a construction project consisting of an addition connecting two existing portions of the University’s hospital and a remodel of existing hospital space. The University hired an electrical contractor for the electrical trades work on the project. There were a number of delays on the project including material deliveries and progress of the work itself. There were additional issues with the project schedule that caused the electrical contractor to have to accelerate its work at additional expense.
The contractor, from time to time, issued letters to the University outlining various issues on the project and their impacts on the contractor’s work. Ultimately, about a month after the contractor’s work was substantially complete, the contractor provided the University with a “certified claim” in the amount of $450,898.29 representing additional compensation the contractor was due from the University due to the various delays and issues on the project that were not the fault of the contractor. The dispute was not resolved informally and a suit was filed by the contractor in the amount of $473,455.00.
In its defense, the University asserted that the contractor failed to comply with the procedures for submitting a claim to the University as required by the construction contract. The contract provided that any claims must be asserted within ten days of the time the event which gave rise to the claim occurred. According to the contract, failure to do so would result in a waiver of the contractor’s claim. Additionally, once the claim was submitted, there were additional steps required of the contractor to substantiate the claim. These too were not fully complied with by the contractor.
The Court of Claims sided with the University finding that the contractor did indeed fail to comply with the contractor claims requirements of the contract. Hence, even if the contractor was correct in its claim and was entitled to additional compensation, its failure to comply with the contractual procedures for submitting claims to the project owner had the effect of waiving such claims.
Districts should be aware that the burden is on them to prove a defense of non-compliance with contractual requirements. The District’s construction managers, architects, and owner representatives should take care to fully document the chain of events regarding any contractor claims in the event it becomes necessary to assert a defense such as this.
IPS Elec. Servs., L.L.C. v. Univ. of Toledo
On December 30th, 2015, the Ohio Supreme Court unanimously declared that real property owned by a public school district board of education is tax exempt regardless of whether it is currently used for school purposes. Ennis Britton Shareholder Gary Stedronsky represented the Talawanda City School District Board of Education at all levels of appeal, including before the Supreme Court.
The case involved a provision in Ohio law that generally exempts real property owned by a public school district from property taxes, which is codified in Ohio Revised Code section 3313.44. In this case, the Talawanda City School District Board of Education (the “Board”) purchased 154 acres of land to build a new high school. A portion of this land was not needed for the high school and was leased by the Board to a farmer.
In January of 2010, the Board filed an application to exempt all 154 acres from real property taxes. The Tax Commissioner approved the exemption application for all but the portion of the land that was leased to the farmer. The Tax Commissioner concluded that the pecuniary benefit realized by the farmer disqualified the land from tax exemption because the property was not being used for school purposes.
The Board appealed the Tax Commissioner’s decision to the Ohio Board of Tax Appeals (“BTA”), which affirmed the Tax Commissioner’s decision. The Board further appealed to the Ohio Supreme Court.
The Supreme Court was tasked with deciding whether the BTA decision was supported by the language in Ohio Revised Code section 3313.44. The applicable version of section 3313.44 simply states: “Real or personal property owned by or leased to any board of education for a lease term of at least fifty years shall be exempt from taxation.” The Board argued that this statute requires that a board of education merely own real property in order for it to qualify for tax exemption. In other words, there is no requirement in the statute that the property must be used for school purposes in order for the tax exemption to apply.
The Ohio Supreme Court agreed with the Board’s argument and concluded that the property that was leased to the farmer was exempt from taxation regardless of the specific use of the property. The Supreme Court acknowledged that past interpretations by the Tax Commissioner may have correctly interpreted an implied use restriction in the prior version of the statute. However, the Court recognized that the General Assembly chose not to include such a restriction when the statute was amended in 2010 even though it had authority to do so. Therefore, the Court held that the statute does not include an implied use restriction and the Board’s property is entitled to tax exemption even though it was leased to a farmer.
The Court also dismissed the Tax Commissioner’s argument that the Board’s request for tax exemption must be denied on grounds that the Board overstepped its legislative authority by leasing the land to a farmer for a commercial purpose. The Court held that a Board of Education’s property is entitled to tax exemption as long as it meets the conditions of the exemption statute in Ohio Revised Code section 3313.44, which merely requires ownership.
Ultimately, the Supreme Court decision clarifies that a board of education is entitled to a property tax exemption for all real property owned by the board of education regardless of how the property is currently being used. This decision is very favorable to school districts and will be used in the future to support applications for tax exemptions.
Talawanda City School District Board of Edu. v. Testa, Tax Commissioner (Ohio 2015), Slip Opinion No. 2015-Ohio-5450.
The U.S. Supreme Court heard oral arguments on January 11th in an important case that could eliminate union “fair share fees” and make every state in the country a “right to work” state.
The case was initially filed in California and involves a group of teachers who decided not to join the teachers’ union. It is interesting to note that the case has almost no factual record. This is because the teachers admitted that the lower courts did not have the authority to decide in their favor in light of the U.S. Supreme Court’s 1977 decision in Abood v. Detroit Board of Education, 431 U.S. 209 (1977). They requested that the lower courts rule against them so the case could be presented directly to the Supreme Court.
It was somewhat surprising that the Supreme Court even agreed to hear the appeal because it previously approved fair share fees in the Abood decision. We thought this might be an indication of the Court’s willingness to overturn its Abood decision and prohibit mandatory fair share fees. Our initial thinking was further bolstered yesterday by the tough questions posed by the Court to the union at oral argument. For instance, Justice Kennedy, who often serves as a swing vote, said:
“The union basically is making these teachers compelled riders for issues on which they strongly disagree. Many teachers think that they are devoted to the future of America, to the future of our young people, and that the union is equally devoted to that, but that the union is absolutely wrong in some of its positions. And agency fees require, as I understand it, correct me if I’m wrong, agency fees require that employees and teachers who disagree with those positions must nevertheless subsidize the union on these very points.”
Ohio law (R.C. 4117.09) permits fair share fees if the public employer and union have agreed in a collective bargaining agreement to require fair share fees as a condition of employment. A ruling in this case against the union will have huge implications for Ohio’s public sector unions. If the Court rules in the favor of the non-union teachers, it would declare that it is unconstitutional for a state to allow public sector unions to charge a mandatory fair share fee to non-members. This would likely mean that non-members could not be forced to pay a fair share fee if they do not agree to pay the fee, which would obviously have a negative impact on the revenue of unions and could lead to more resentment from union members against non-members (or so-called “free riders” as they are often referred to).
A decision in this case is expected later this summer. We will continue to monitor any developments and will update our clients as soon as the decision is announced.
Friedrichs v. California Teachers Association (Case No. 14-915).
The U.S. Supreme Court announced on March 29th, 2016 that it was deadlocked with a 4-4 decision on a case brought before it to challenge the practice of public employer unions collecting fair share fees.
Initially filed in California by a group of teachers who decided not to join the union, the case served as a direct challenge to a well-recognized U.S. Supreme Court decision from 1977, Abood v. Detroit Board of Edn., which declared fair share fees legal.
Many interpreted the Supreme Court’s decision to hear the case as an indication that Abood may be overruled given the Court’s more conservative composition. However, the death of Antonin Scalia, who presumably would have provided the swing vote to overturn Abood, passed away before the decision was rendered.
A split decision in this case means that, at least for now, Abood remains good law and the practice of fair share fees will continue. This is a decisive victory for unions across the nation, although representatives from both sides have indicated that they may request a rehearing on the matter.