IN THE SUPREME COURT OF OHIO

CASE NO. 2010-1401

STATE ex rel. ELECTRONIC CLASSROOM OF TOMORROWRelator

-vs-

CUYAHOGA COUNTY COURT OF COMMON PLEAS;HON. RONALD SUSTER; HON. JAMES D. SWEENEY; SUPPORTIVE

SOLUTIONS TRAINING ACADEMY, L.L.C.Respondents.

ORIGINAL ACTION IN MANDAMUS AND PROHIBITION

RELATOR'S EXHIBITS

PAUI, W. FLOwaas Co. L.P.A.

30 Public Sq., Ste 3500

Cleveland, Ohio 44113

(216)344-9393

Fax: (216) 344-9395

John A. Demer, Esq. (#0003104)James A. Marniella, Esq. (#0073499)DEMER & MARNIELLA, LLC2 Berea Commons, Suite 200Berea, Ohio 44017(440) 8gi-1644FAX: (440) 891-1684

Deena M. Giordano, Esq. (#00734o8)370o High StreetColumbus, Ohio 43207

Attorneys for Relator, ElectronicClassroom of Tomorrow

^

SEP 0 7 2010

CLERK (1F COURTSUPREME COURT OF OHIO

Paul W. Flowers, Esq. (#0046625)[COUNSEL OF RECORD]

PAUL W. FLOWERS Co., L.P.A.

Terminal Tower, 35th Floor50 Public SquareCleveland, Ohio 44113(216)344-9393FAX: (216) 344-9395

In accordance with Sup. Ct. Prac. R. I0.7, Relator, Electronic Classroom of

Tomorrow, hereby submits the following evidence to be considered in support of the

requests for writs of mandamus and prohibition.

PAtn. W. Fcowerzs CO. L.P.A.

50 Publlc Sq., Ste 3500

Zleveland, Ohio 44113

;216) 344-9393

Fex: (216) 344-9395

RespectfuIly,,S^ibmitted,

Paul W. Flowers, gsq. (#0046625)[COUNSEL OF RECORD]

PAUL W. FLowElzs Co., L.P.A.

Deena 94. giorcfano (ver authority)Deena M. Giordano, Esq. (#0073408)

7ohn Demer(pei anthol'ity)John A. Demer, Esq. (#0003104)James A. Marniella, Esq. (#0073499)DEMER & 1VIARNIELLA, LLC

Attorneys for Relator, ElectronicClassroom of Tomorrow

2

INDEX OF EXHIBITS

Affidavit of Scott Kern dated August 30, 2010 ......................................................... oooi

Articles of Incorporation dated February 8, 2000 ................................................... 0003

Certificate of Incorporation dated February 11, 2000 .............................................. 0005

National Commission on Accreditation Certificate .................................................. ooo6

Affidavit of Deena M. Giordano, Esq. dated January 8, 2010 .................................. 0007

Report of Leigh Manasevit, Esq. dated December 22, 2009 .................................... 0009

PAUL W. FLowerzs CO. L.P.A.

50 Public Sq., Ste 3500

:leveland,Okuo44113

(216)344-9393

Fax: (216) 344-9395

3

CERTIFICATE OF SERVICE

I hereby certify that a copy of the foregoing Relator's Exhibits has been

served by e-mail and regular U.S. Mail on this 3rd day of September, 2010 upon:

Charles Hannan, Esq.Cuyahoga County Prosecutor's Office1200 Ontario St., 9th FloorCleveland, Ohio 44113

Attorney for Respondents, Cuyahoga County Court of Common Pleas, Hon. RonaldSuster, Hon. James D. Sweeney

Maureen Connors, Esq.Ann S. Vaughn, Esq.6ooo Freedom Square Dr., Suite 165Independence, Ohio 44131

Attorney for Respondent, Supportive Solutions Training Academy, L.L.C.

Respectfully submitted,

Paul W. Flowers, Esq. (#0046625)PAUL W. FLOWERS CO., L.P.A.Attorney for Relator,Electronic Classroom of Tomorrow

PAULW. FLOW e25 CO. L.P.A.

30 Public Sq., Ste 3500

: leveland, Ohio 44113

(216)344-9393

Fax: (216) 344-9395

4

State of OhioElectronic Classroom of Tomorrow

County of Franklin AFFIDAVIT

I, Scott Kern, being duly cautioned and sworn according to law, does hereby depose andstate as follows:

1. I am currently the President and Chief Financial Officer at the ElectronicClassroom of Tomorrow (ECOT). I have held the positions of President andChief Financial Officer since September 1, 2009.

2. I have been employed at ECOT in various positions since July 1, 2000.

3. ECOT is a not for profit corporation organized pursuant to Ohio RevisedCode Chapter 1702. ECOT has been incorporated since February 11, 2000.ECOT is also registered as a 501 (C ) (3) corporation with the InternalRevenue Service.

4. ECOT is a Community School established pursuant to Ohio Revised Code3314. As a community school, or a Charter School as it's commonlyreferred to, ECOT is part of the state system of public education.

5. ECOT is fully accredited through AdvancEd (formerly the Commission onInternafional and Trans-Regional Accreditation) and has been accreditedsince June, 2007.

6. ECOT was the first internet-based community school in Ohio and iscurrently the state's largest community school. ECOT's enrollmentexceeded 10,000 students in school year 2009-2010.

7. ECOT graduated 1,540 students in School Year 2009-20 10. In order to begranted a diploma, ECOT students must pass the achievement assessmentscontained in Ohio Revised Code 3301.0710 and complete the high schoolcurriculum developed by ECOT.

ECOT enrolls students in grades K-12. ECOT currently employs 462teachers all of whom are licensed by the Ohio Department of Education. All462 teachers are deemed "highly qualified" under the No Child Left BehindAct of 2001.

9. As part of the state system of public education, ECOT derives its operatingrevenue almost exclusively from state foundation funds and federal funds.

Relat'or's Exs. 00013700 South Hlgh Street, SWte 95 C.olumksus, Ohio 43207 888.326.8395 614.492 8884 fAX'. 614.492.8894

10. ECOT receives funding from the Ohio Department of Education on a perpupil basis. The formula used to determine funding to internet-basedcommunity schools is contained in Ohio Revised Code Chapter 3314 (C) (1)and (C ) (2). The Ohio Department of Education deducts money from thestate education aid calculated for each city, exempted village or local schooldistrict whose student is enrolled at ECOT. In school year 2009-2010,ECOT received $5,768.00 per pupil from the Ohio Department ofEducation. We receive no share of local property taxes to defray the cost ofeducating our students. School Districts are required to verify eachstudent's enrollment in order for ECOT to receive funding for a student.

11. ECOT is also the sub-recipient of federal funds pursuant to such federalprograms as The Elementary and Secondary Education Act of 1965,(reauthorized by No Child Left Behind Act of 2001), The McKinney-VentoHomeless Assistance Act, The Individual with Disabilities Education Act of2004 and the American Recovery and Reinvestment Act of 2009.

FURTHER AFFIANT SAYETH NAUGHT:

SWORN and subscribed in my presence the ^day ofAugust, 2010.

Relator's Exs. 0002

Doc ID --> 200004000112

ARTICLES OF INCORPORATIONOF THE

ELECTRONIC CLASSROOM OF TOMORROW

RECEIVEDFEB08p000

J.IKENNEfH 8[ACMNELLSECRETARYOFSTATE

The undersigned, desiring to form a nonprofit corporation pursuant to Chapter 1702 of theOhio Revised Code, does hereby certify that:

FIRST: The name of the corporztion shall be the ELECTRONIC CLASSROOM OFTOMORROW.

SECOND: The place in Ohio where the principal office of the corporation is to be locatedis Toledo, Lucas County, Ohio.

THQ2D: The corporation is organized exclusively for educational purposes within themeaning of Section 501(c)(3) of the Intemal Revenue Code of 1986, as amended, or thecorresponding provision of any future United States Internal Revenue Law (the "Code") to operateas a school in the State of Obio. This corporation shall not engage in activities which are not infurtherance of the educational purposes set forth in this Article THIRD.

(a) No part of the assets or of the net eatnings of the corpomtion shallinure to the benefit of any member, tmstee, or officer-of-thecorporation or any private individual (except that reasonablecompensation may be paid for services rendered to or for thecoeporation affecdng onc or more of its purposes). In the event of theliquidation or dissolution of the corporation, whether voluntary orinvoluntary, no member, trustee or officer of the corporation, or anyprivate individual, shall be entitled to any distribution or division ofthe remaining assets or their proceeds.

(b) No substantial part of the activities of the corporafion shall be thecarrying on of propaganda or otherwise attempting to influencelegislation, nor shall the corporation participate or intervene in(includingthepublicationanddistdbutionofstatements)anypoliticalcampaign on behalf of any candidate for public office.

(c) NotwithstandinganyotherprovisionintheseArticles,thecoeporationshall not conduct or carry on any activities not permitted to beconducted or carried on by an organization exempt under CodeSection 501(c)(3), or by an organization, contributions to whieh aredeductible underCode Section 170(c)(2), or corresponding provisionsof any subsequent federal tax laws.

J. HENNE(H BtACMNELLSECRETARY OF STATE

RECEIVEDFEB 11 2000

Page 2Relator's Exs. 0003

poc ID --> 200004000112

^ '. HIFfH: The names and addresses of the persons who are appointed to act in thecapacity of the Initial Tmstees of this corpomflon until the selection of their successors are asfollows:

Name Address

Donald F. Wibl 3281 Darraq Cr., Columbus, Ohio 43223

Clyde Card 2500 Lytham Rd., UpperArlington, Ohio 43220

Sherri Dembinski 1044 S. Brinker Ave., Columbus, Ohio 43204

David Brailsford 913 Madison Ave., Toledo, Ohio 43624

Diane King 3255 Winding Creek Dr., Columbus, Ohio 43223

SIXTH: In the event of the dissolution of the corporation, the corporation shall, afterpaying or makingprovision for the payment of all liabilities of the corpomtion, dispose of all of theassets of the corporation exclusively for the purposes set forth in Article THIRD of these Articlesof Incocporation.

IN Wl'INESS WEiEREOF, I have hereunto subscribed my name on Pebruary2- 2000.

2

Page 3Relator's Exs. 0004

Doc ID --> 200004000112

DATE DOCUMENTNO DESCRIPTION FILING EXPED PENALTY CERT COPY1. 2122/2000 200004000112 ARN UOMESTICARTICLES/N0N-PROFIT 25.00 1000 000 0.00 0.00

TOTAL 25.00 1000 0.00 000 0.00

Return To:CORPORATE SERVICES OF OHIO, INC.50 W BROAD ST, STE 1120COLUMBUS, OH 43215-0000

The State of Ohio

STATE OF OHIO

COUNTY OF CUYAHOGASS: AFFIDAVIT

Affiant, DEENA M. GIORDANO, being first duly sworn according to law, does hereby

depose and state as follows:

1. At all times relevant, I was employed by ECOT in the role of General Counsel,during which time several discussions with Supportive Solutions representativestook place.

2. ECOT did not contract with Supportive Solutions for related services.

a. In September 2007, during a telephone conversation with Yvette Ford, Iinformed her that ECOT will not contract with Supportive Solutions forrelated services as ECOT discovered several deficiencies in students' IEPsinvolving students referred to ECOT by Supportive Solutions.

b. I informed Yvette Ford that it had come to ECOT's attention that SupportiveSolutions was under investigation from the Ohio Department of Education(ODE) which was an additional reason ECOT decided not to contract withSupportive Solutions for any potential related services.

3. ECOT cannot expend federal funds for related services not provided for in astudent's IEP.

a. As required by law, a school is responsible for providing a free andappropriate public education (FAPE). This includes providing instruction inthe typical areas of math, reading, science, writing, etc. If a student has beendetermined to have special needs, the school additionally becomesresponsible for providing services only for those areas that impede ]eamingof the core subjects mentioned above. These services occur either throughthe school or through a related service provider and only pursuant to anindividual education plan (IEP).

i. For example, if a child is born with a hearing impairment, the childmay require cochlear implants andlor speech therapy in order tofunction better in the classroom and in order to understand andcommunicate the subjects learned.

ii. A school is only responsible for providing and paying for extraservices if the service relates to an impediment to learning the coresubjects, and if the service is listed on a student's (IEP) which isdeveloped by the school in conjunction with the parents.

b. Supportive Solutions claim payment for "Anger Management Assessments",and twelve sessions of "Anger Management Services" for EIGHTY-EIGHT

Itelator's Exs. 0007

students, "Social Work Services" for FORTY-TWO students, and"Transportation" for an unidentified amount of students.

i. ECOT did not contract for anger management services with anyprovider since these services were not required on any students' IEP.

ii. Anger management would not be a service normally contracted foranyway since it does not relate to a student's ability to leam the coresubjects that schools are required to provide.

c. ECOT is required to serve incoming students under their prior IEP until itcreates a new IEP (within 30 days of admission).

d. Of the ONE HUNDRED THREE (103) incoming students that wereassociated with Supportive Solutions and were identified as allegedlyrequiring special needs, only NINE of them required related services.

i. Of thepine, ZERO required anger management services, social workservices, or had a provision for transportation on their IEP.

e. When ECOT created new IEPs within the 30 day timeframe that compliedwith federal laws, only TWO students required related services.

i. Neither student required anger management or social work services;rather, these students required occupational and speech therapy;

ii. Neither student availed themselves of the related services becauseone student withdrew and the other parent declined services.

f. ZERO students required related services; specifically, anger management,social work, or transportation) through either their incoming or ECOT-created IEP.

4. ECOT has secured an expert report from Brunstein & Manasevit datedDecember 22, 2009 which is attached.

FURTHER AFFIANT SAYETH NAUGHT.

DEENq.M-: IORDANO

SWORN TO BEFORE ME and subscribed in my presence, this go day of January 2010.

JOHN A. DEMER Attorney at LawNOTARY PLI6LIC STA(E OF OHIO

My Commission Has No Expiration DateSection 147.03 RC

Relator's Exs. 0008

&JtJRUSTEINANASEVIT

ATTORNEYS AT LAW

December 22, 2009

Deena Giordano, General CounselElectronic Classroom of Tomorrow3700 S. High Street, Suite 98Columbus, OH 43207

Dear Ms. Giordano:

3105 South Street, NWWashington, DC 20007

phone 202.965.3652{ax 202.965.8913

email brumanQbrumcn.comwww.bruman.com

Re: Supporting Solutions, LLC v. ElectronicClassroom of Tomorrow, et al.Cuyahoga County Common Pleas CourtCase Number: CV 08 652873

You have requested that I provide a report as an expert witness on the allocation and allowable

uses of federal funds under the Individuals with Disabilities Improvement Act (IDEIA) in

connection with the above-captioned litigation.

Federal funds to support special education and related services are primarily provided by the

Individuals with Disabilities Improvement Education Act (IDEIA),1 Part B Grants to States.

IDEIA provides funds to eligible local educational agencies (LEAs) through a specific funding

formula. The Electronic Classrooms of Tomorrow (ECOT) is an eligible LEA under IDEIA.

The funding formula is applied on a State-by-State basis by the State educational agency (SEA).

In Ohio, the SEA is the Ohio Department of Education (ODE). Specifically, IDEIA Part B

Section 611 grants are allocated by ODE, as the SEA, to LEAs through a three part formula

wluch includes a base payment, population payment and poverty payment.

IDEIA LEA Funding Formula

Base Payment

Public education in Ohio comprises both traditional LEAs and conununity LEAs. Traditional

LEAs include physical school districts or the more historical "brick and mortar" LEAs, while

cotnmunity LEAs include virtual LEAs, like ECOT.

1 On July 1, 2005, the Individuals with Disabilities Educa6on Act (IDEA) was reauthorized and re-titled the

Individuals with Disabilities Education Improvement Act (IDELS).

Relator's Exs. 0009

IDEIA, Part B Allocation LetterPage 2 of 4

ODE must first calculate the base payment for each LEA. See 20 U.S.C. § 1411(a) and (d); 34

C.F.R. § 300.705. Base payments are initially calculated based on what the LEA would havereceived for fiscal year 1999, if the State had distdbuted seventy-five percent of its grant for thatyear. If a new LEA is created and the 1999 data does not exist, then the SEA calculates a basepayment adjustment for the new LEA. Community LEAs in Ohio are newer LEAs that do not

have 1999 data. Therefore, ODE calculates community LEAs' base payments, includingECOT's base payment, by multiplying the State per pupil allocation amount by the number ofeligible children with disabilities served by the LEA. Currently, ODE calculates ECOT's basepayment using the most recent December 1st child with disability count (Imown as thecommunity school average daily membership (CSADM)), which is reported to the Office ofSpecial Education Programs at the U.S. Department of Education. The current CSADM data isDecember 1, 2008. ODE then multiples that number by the annual per pupil allocation to create

ECOT's base payment.

Population and Poverty Calculation

The remaining IDEIA Part B funds are allocated through population and poverty counts. Eight-five percent of the remaining funds are allocated using the relative number of children enrolledin public ECOT, ages 6-21. The fmal fifteen percent is allocated based on the relative number of

children enrolled in ECOT living in poverty, as determined by ODE. See 20 U.S.C. § 1411(a)

and (d); 34 C.F.R. § 300.705.

Funds are not allocated based on services provided, costs inciuxed, anticipated services or

anticipated costs. Rather the funding formula is applied and ECOT is allocated its grant amountcalculated under that formula. Under the law, these funds must be spent only as detailed in the

following sections.

Use of IDEIA Allocated Funds

Student Elfgibility

Once funds are allocated to ECOT, ECOT must spend the IDEIA funds only on specialeducationand related services for students identified as children with disabilities under IDEIA.

IDEIA contains very specific definitions in this area. A child with a disability means a child

having mental retardation, a hearing impairment (including deafness), a speech or languageimpairment, a visual impairment (including blindness), a serious emotional di'sturbance (referredto in this part as "emotional disturbance"), an orthopedic impairment, autism, traumatic braininjury, an other health impairment, a specific learning disability, deafblindness, or multipledisabilities, and who, by reason thereof, needs special education and related services. Thedefinition may also include children aged three through nine experiencing developmental delays,

as determined by the State. See 20 U.S.C. §§ 1401(3); 1401(30); 34 C.P.R. § 300.8. Note there

are two parts to the definition. The child must have at least one of the enumerated disabilities,

Relator's Exs. 00010

1DEIA, Part B Allocation LetterPage 3 of 4

but that alone is not sufficient. As result of the disability the child must need special education

and related services.

TDEIA is very procedurally restricfive in regard to the activities that must occur before a child

receives services. To determine whether a child is an eligible student, the child must beevaluated in accordance with specific requirements2 and a multidisciplinary team (MDT) reviewsall evaluations to determine whether the child meets the eligibility criteria under IDEIA as a

child with a disability. See 26 U.S.C. §§ 1401(3 and (30); 34 C.F.R. § 300.8. The MDT must

include a group of qualified professional and the parent of the child. See 20 U.S.C. §§

1414(b)(4) and (5); 34 C.F.R. § 300.306.

Allowable Expenditures

If determined eligible by the IvIDT, an individualized education program (IEP) outlining the

special education and related services required to provide the student with a free and appropriatepublic education (FAPE) is then developed. A FAPE means special education and relatedservices that are provided at public expense, under public supervision and direction, and without

charge that meets State standards, and are provided in conformity with an IEP that meets the

requirements of §§ 300.320 through 300.324. See 20 U.S.C. § 1401(9); 34 C.F.R. § 300.17. An

LEA must reevaluate a student that.is determined eflgible under IDEIA every three years; unlessthe LEA and parent agree that a reevaluation is not required. Additionally, a parent may requesta reevaluation at anytime; however, an LEA will not violate a student's right to FAPE if it

refuses to conduct a reevaluation more than once in a school year. See 20 U.S.C. §§ 1414(a)(2);

34C,F.R. § 300.303.

Special education ineans specially designed instruction, at no cost to the parents, to meet theunique needs of a child with a disabillty, including- (i) instruction conducted in the classroom,in the home, in hospitals and ittstitutions, and in other settings; and (ii) instruction in physicaleducation. Special education inoludes each of the foll.owing, if the services otherwise nieet therequirements of this section- (i) Speech-language pathology services, or any other relatedservice, if the service is considered special education rather than a related service under State

standards; (ii) Travel training; and (iii) Vocational education. See 20 U.S.C. § 1401(29); 34

C.F.R. § 300.39.

Related services means transportation and such developmental, corrective, and other supportive

services as are required to assist a child with a disability to benefit from special education, andincludes speech language pathology and audiology services, interpreting services, psychologicalservices, physical and occupational therapy, recreation, including therapeu6c recreation, earlyidentificatian and assessment of disabilities in children, counseling services, includingrehabilitation counseling, orientation and mobility services, and medical services for diagnosticor evaluation purposes. Related services also inciude school health services and school nurse

2 5ee 20 U.S.C. § 1414; 34 CF.R §§ 300.304 through 300.311

Relator's Exs. 00011

IDEIA, Part B Allocation LetterPage 4 of 4

services, social worlc services in schools, and parent counseling and training. See 20 U.S.C. §

1401(26); 34 C.F.R. § 300.34.

The IEP team creates the IEP and detemtines the appropriate level of special education and

related services required to provide the child with a disability a FAPE. An IEP team mustinclude someone from each of the following categories: parent(s), LEA representative, generaleducation teacher if the child is participating in the general education setting, a special education

teacher if the child is participating in special education, and related service providers. See 34

C.F.R. § 300.321. Once members are identified, the team meets to develop the IEP. IEPsprovide the consent required to provide services to students. Therefore, after the IEP isdeveloped by the team, the IEP must be signed by the parent or authorized representative underIDBIA so that the LEA may begin to provide the agreed upon special education and relatedservices. The IEP must be reviewed and updated on an annual basis by the IEP team. IDEIA

includes very specific regulations regarding whether a meeting may be help without a requiredmember and the steps that an LEA must take to hold a meeting without a required member,

including the parent. See 20 U.S.C. § 1414(d); 34 C.F.R. §§ 300.321 and 300.322(d).

Additionally, IDEIA states that amendments to IEPs may be made without a formal revision ofan IEP as long as the LEA aud parent agree; however, the LEA is required to redraft a new IEP

at the request of the parent.

Once the IEP process is complete the special education and related services for all eligible and

participating children with disabilities are specifically described in each child's IEP.. IDEIAfunds are provided to LEAs to pay for those special education and related services in the IEPs. Itis an unallowable use of IDEIA fimds to spend IDEIA money on any other special education and

related services because there would be no benefit to the program, which means the cost would

not be allocable to IDEIA. See Education Department General Administrative Regulations

(EDGAR) 34 C.F.R. § 80.32; Offioe of Managemerit and Budget(OMB) Circular A-87: 2 C.F.R.Part 225, Appendix A, Section C. Therefore, even if services meet the definition of related

services, it is an unallowable use of IDEA funds if those services are not included in the IEP of

an identified and eligible child as those services do not meet.the definition of FAPE. See 20

U.S.C. § 1401(9); 34 C.F.R. § 300.17(d).

Relator's Exs. 00012

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