Shook, Karen v. DC Fincl Respsble

United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT Argued November 4, 1997 Decided January 6, 1998 No. 97-7087 Karen Shook, et al., Appellants v. District of Columbia Financial Responsibility and Management Assistance Authority, Appellee Appeal from the United States District Court for the District of Columbia (96cv2601) Barbara S. Wahl argued the cause for appellants, with whom Evan S. Stolove and Ronald C. Jessamy were on the briefs. Daniel A. Rezneck argued the cause and filed the brief for appellee. Alan B. Morrison argued the cause for amici curiae Missionary Baptist Ministers Conference for Washington D.C. and Vicinity, et al. Before: Silberman, Williams, and Garland, Circuit Judges. Opinion for the Court filed by Circuit Judge Silberman. Silberman, Circuit Judge: Appellants challenge an order issued by the District of Columbia Financial Responsibility and Management Assistance Authority (Control Board), di- vesting the District of Columbia Board of Education of con- trol over the District's public schools and transferring the vast majority of the Board of Education's powers to an Emergency Transitional Education Board of Trustees. The district court dismissed appellants' claims that the order exceeded the scope of the Control Board's statutory authority and violated appellants' Fifth Amendment rights. We affirm in part and reverse in part. I. The District of Columbia Board of Education was created by Congress in 1906. At the time of its inception, its nine members were appointed by the judges of the Supreme Court of the District of Columbia (something of a forerunner to the present federal courts). Congress placed "control" of the District's public schools in the Board of Education, giving it a wide range of powers, including determination of general educational policy, appointment of teachers, and selection and supervision of the Superintendent. In 1968, Congress changed the method of selecting the Board of Education to election by District citizens. Five years later, Congress passed the District of Columbia Self-Government and Gov- ernmental Reorganization Act (Home Rule Act), which grant- ed greater rights of self-determination to District citizens and set forth the structural framework of the District government in the District Charter. Similar in certain respects to a state constitution, the Charter established the Board of Education as one of five independent agencies existing outside the control of the executive or legislative branches of the District government. Home Rule Act ' 495, D.C. Code Ann. s 31-101 (1981). Under the Charter, the Board of Education retained all authority that previously had been granted to it by Congress, including "control of the public schools." The Board of Education is required to appoint a Superintendent who "shall have the direction of and supervision in all matters pertaining to the instruction in all the schools under the Board of Education." D.C. Code Ann. s 31-107 (1981). The Superintendent may be removed at any time by the Board of Education "for adequate cause affecting his character and efficiency as Superintendent." D.C. Code Ann. s 31-110 (1981). In 1995, 22 years after the advent of home rule, Congress found that the District government was in the midst of a "fiscal emergency," plagued by "pervasive" mismanagement and "fail[ing] to deliver effective or efficient services" to residents. District of Columbia Financial Responsibility and Management Assistance Act of 1995, Pub. L. No. 104-8, s 2(a)(1), (2) & (4), 109 Stat. 97, 98 (1995) (FRMAA). In response, it established what is popularly known as the Control Board. Composed of five members appointed by the President of the United States, the Control Board has been given wide-ranging powers to improve the District govern- ment's operations. In 1996, Congress amended the FRMAA to strengthen the Control Board. Under section 207(d), it was given the ability to issue: such orders, rules, or regulations as it considers appro- priate to carry out the purposes of this Act and the amendments made by this Act, to the extent that the issuance of such an order, rule, or regulation is within the authority of the Mayor or the head of any depart- ment or agency of the District government, and any such order, rule, or regulation shall be legally binding to the same extent as if issued by the Mayor or the head of any such department or agency. (Emphasis added). The Control Board, exercising power under that section, issued an order on November 15, 1996, reorganizing adminis- tration of the District's public schools. After finding what it perceived as the alarming condition of the school system, the November Order "established a 9-member Emergency Tran- sitional Education Board of Trustees ... to assume immedi- ate responsibility for the operation and management of the District of Columbia public school system." 1 November Or- der at p 2. The Board of Trustees was delegated "all the authority, powers, functions, duties, responsibilities, exemp- tions, and immunities of the Board of Education." Id. at p 6. The Order also discharged the Superintendent and re- designated his position as the CEO-Superintendent, an agent of the Control Board. The Control Board asserted the power to appoint the first CEO-Superintendent, but delegated the responsibility to appoint his successors to the Board of Trust- ees subject to the Control Board's approval. The Control Board or the Board of Trustees with the approval of the Control Board was empowered to remove the Superintendent from office at will. Id. at pp 7, 21. The Board of Education was left only with authority to license charter schools and to provide advice to the Board of Trustees, although its Presi- dent was made a member of the Board of Trustees. The Control Board's order relied on authority under sec- tion 207(d) to step into the shoes of the Board of Education, and with that power it in turn relied on D.C. Code section 31-107, which reads in part, "[t]he Board of Education is authorized to delegate any of its authority to the Superinten- dent. The Superintendent is authorized to redelegate any of his or her authority subject to the approval of the Board." The order, however, provides for a direct delegation from the __________ 1 The Board of Trustees is made up of five members appointed by the Control Board, a parent with at least one child in the District public schools (selected by the Control Board from a list of three parents provided by the Mayor), a teacher in the District public schools (selected by the Control Board from a list of three teachers provided by the Council), the CEO-Superintendent of the public school system, and the President of the Board of Education. No- vember Order at p 2. Control Board to the Board of Trustees and a direct delega- tion from the Control Board to the Superintendent to perform all the duties theretofore performed by the old Superinten- dent as well as any other powers delegated by the Board of Trustees. Appellants are 11 present and former members of the Board of Education who voted in the November 1996 Board of Education elections and sued in the district court seeking declaratory and injunctive relief. They claimed for a number of reasons that the order exceeded the Control Board's authority and even violated the Constitution by abridging their Fifth Amendment right to vote for school board mem- bers. The district court rejected all of appellants' claims on a motion to dismiss. Addressing appellants' argument that even if the Control Board had the power to step into the shoes of the Board of Education it surely could not, in that capacity, delegate the Board of Education's responsibility to a Board of Trustees--it could only delegate to the Superinten- dent--the court said, In promulgating the November Order, the Control Board delegated nearly all of the Board of Education's authori- ty to the Board of Trustees. Some of that power has been re-delegated by the Board of Trustees to the CEO- Superintendent. D.C. Code section 31-107 clearly con- templates that such a delegation would be lawful if undertaken by the Board of Education itself to the Superintendent, and by the Superintendent to a third party. Therefore, the delegation, when undertaken by the Control Board, standing in the Board of Education's shoes, must also be lawful under FRMAA section 207(d). Shook v. D.C. Fin. Responsibility and Management Assis- tance Auth., 964 F. Supp. 416, 429 (D.D.C. 1997) (emphasis added). II. The Control Board contends, prompted by our own request that both parties discuss the issue, that we lack jurisdiction to review its action because section 207(d)(3) of the statute creating the Control Board provides that: "[t]he decision by the [Control Board] to issue an order, rule, or regulation pursuant to this subsection shall be final and shall not be subject to judicial review." We certainly respect congression- al limitations of judicial review, see, e.g., Ayuda, Inc. v. Thornburgh, 880 F.2d 1325, 1339-40 (D.C. Cir. 1989), vacated, 498 U.S. 1117 (1991), aff'd on remand, 948 F.2d 742 (D.C. Cir. 1991), vacated sub nom. Ayuda, Inc. v. Reno, 509 U.S. 916 (1993), aff'd on remand, 7 F.3d 246 (D.C. Cir. 1993), cert. denied, 513 U.S. 815 (1994), but we are bound to follow the Supreme Court's doctrine under which "[t]he presumption in favor of judicial review may be overcome only upon a showing of 'clear and convincing evidence' of a contrary legislative intent." Traynor v. Turnage, 485 U.S. 535, 542 (1988) (citing Abbott Lab. v. Gardner, 387 U.S. 136, 141 (1967) (citations omitted)). With that in mind, we note that the preclusion of review language is rather peculiar. It does not say that an order issued by the Control Board is immune from judicial review, but rather that the decision to issue such an order is not reviewable. Turning to the legislative history for clarifica- tion, we find in the Conference Report accompanying the 1996 Amendments an explanation that the language was designed to "waive[ ] all judicial review as to the authority of the control board to issue orders, rules, or regulations but does not waive judicial review as to the content of the orders, rules, and regulations." H.R. Conf. Rep. No. 104-863, at 1182 (1996). We confess that we are uncertain as to what line Congress was drawing. It appears most likely that Congress meant the Control Board could not be challenged as to its basic authority to issue orders, rules, or regulations--it is an unpaid voluntary group that was to be recognized as exercis- ing governmental powers--and that its internal decisionmak- ing process was not reviewable, but the actual content of individual orders could be challenged as exceeding its authori- ty. The Control Board's counsel bravely asserted that no Control Board order, no matter how outrageous (including, hypothetically, taking control of the Prince George's County school system), could be challenged in federal court, but we simply do not believe that such an awesome delegation of unchecked authority can be drawn from Congress' unclear statutory wording (and an ambiguous Conference Report). If we had any doubt as to that conclusion--which we do not--we would have to consider that preclusion of judicial review is particularly disfavored when applied to prevent a plaintiff from asserting a constitutional claim. See Bowen v. Michi- gan Academy of Family Physicians, 476 U.S. 667, 681 n.12 (1986). III. Turning to the merits, appellants present both broad and narrow challenges to the Control Board's order. The broad challenge--contesting the Control Board's authority to en- croach into the domain of the Board of Education--is based primarily on the claim that the Control Board's power is limited vis-