GREGORY G. LUKE (SBN 22533) EXEMPT FROM FILING FEES …library.ccsa.org/2017-01-20-Memorandum of Points and... · 2017. 1. 20. · GREGORY G. LUKE (SBN 22533) DALE K. LARSON (SBN

GREGORY G. LUKE (SBN 22533) DALE K. LARSON (SBN 266165) STRUMW AS SER & WOOCHER LLP

2 10940 Wilshire Boulevard, Suite 2000 Los Angeles, California 90024

3 Telephone: (310) 576-1233 Facsimile: (310) 319-0156

4 Email: [email protected]

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DA YID R. HOLMQUIST GENERAL COUNSEL (SBN 179872)

MARK FALL (SBN 162497) LOS ANGELES UNIFIED ~CHOOL DISTRICT 333 S. Beaudry Avenue, 23t Floor Los Angeles, California 90017 Telephone: (213) 241-7600 Facsimile: (213) 241-3311 Email: [email protected]

Attorneys for Re~pondents and Defendant Los Angeles Unijted School District, Board of Education of the Los Angeles School District, and Michelle King

EXEMPT FROM FILING FEES PER GOV'T CODE§ 6103

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SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES, CENTRAL DISTRICT

CALIFORNIA CHARTER SCHOOLS ASSOCIATION, a not-for-profit California corporation,

Petitioner and Plaintiff,

V.

LOS ANGELES UNIFIED SCHOOL DISTRICT; BOARD OF EDUCATION OF THE LOS ANGELES SCHOOL DISTRICT; MICHELLE KING, in her capacity as Acting/Interim Superintendent of Schools; and ALL PERSONS INTERESTED IN THE MATTER OF THE V ALIDITIY OF THE NOVEMBER 10, 2015, BOARD OF EDUCATION DECISION TO UPDATE THE SCHOOL UPGRADE PROGRAM AND REALLOCATE BOND PROGRAM FUNDS,

Respondents and Defendants.

Case No. BS 159804

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPPORT OF RESPONDENTS/DEFENDANTS' DEMURRER

Date: Time: Dept.: Judge:

April 18, 2017 9:30A.M. 82 Honorable Mary H. Strobel

Printed on Recycled Paper

MEMORANDUM OF POINTS & AUTI-IORIT!ES ISO RESPONDENTS/DEFENDANT'S DEMURRER

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TABLE OF CONTENTS

TABLE OF AUTHORIT'IES ................................................................................................................... ii

INTRODUCTION .................................................................................................................................... 1

STATEMENT OF 1'1:-IE CASE ................................................................................................................ 2

The Voters Adopted Measure Q In 2008 to Support the 1,390 Construction and Repair Projects Listed in the Measure, Without Earmarking Any Amount of Bond Revenues For Any Specific Project or Category of Projects .............................................................................. .4

LAUSD Generates and Adjust Its Projected "Targets" For Facilities Spending in Response to Changing Circumstances .......................................................................................... 5

A.

B.

C.

2008 Bond Summary ........................................................................................................ 6

2013 School Upgrade Program ......................................................................................... 7

2015 Adjustments to SUP ................................................................................................. 7

13 ARGUMENT .......................................................................................................................................... 8

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I.

23 II.

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CCSA FAILS To STATE FACTS SUFFICIENT To CONSTITUTE ANY CAUSE OF ACTION

ALLEGING VIOLATIONS OF MEASURE Q ...................... ············································· .................... 8

A.

B.

C.

D.

Measure Q Does Not Earmark $450 Million for Charter Schools Under a Statutory Interpretation ..................................................................................................... 8

Measure Q Does Not Earmark $450 Million for Charter Schools Under a Contractual Interpretation ............................................................................................... 10

None of the extrinsic documents identified in CCSA's amended pleading, including the 2008 Bond Package Summary, constitute any part of Measure Q's legislative history or part of a quasi-contractual agreement with the voters.

CCSA Further Fails to Plead a School Bond Validation Cause of Action ..................... 12

UNDER THE SEPARATION OF POWERS DOCTRINE, THE COURT DOES NOT HAVE JURISDICTION TO ADJUDICATE CCSA'S OBJECTION TO LAUSD'S BUDGETARY PLANNING ...................................................................................................... 14

CONCLUSION ....................................................................................................................................... 15 26

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MEMORANDUM OF POINTS & AUTHORITIES ISO RESPONDENTS/DEFENDANT'S DEMURRER

1 TABLE OF AUTHORITIES

2 Federal Cases

3 Smith v. LAUSD, U.S.Dist.Ct. Case No. CV 93-7044-LEW(GHKx) (C.D.Cal.) .................................... 7

4 State Cases

5 Associated Students of North Peralta Community College v. Board o_[Trustees

6 (1979) 92 Cal.App.3d 672 .......................................................................................................... 10

7 Beckwith v. Dahl (2012) 205 Cal.App.4th 1039 ..................................................................................... 13

8 Blatty v. New York Times Co. (1986) 42 Cal.3d 1033 .............................................................................. 2

9 California School Boards Assn. v. State (2011) 192 Cal.App.4th 770 ................................................... 14

10 County of Butte v. Superior Court (1985) 176 Cal.App.3d 693 ............................................................. 14

11 De Jong v. Pasadena Unified School Dist. (1968) 264 Cal.App.2d 877 ................................................ 12

12 Evans v. City of Berkeley (2006) 38 Cal.4th I ................................................................................... 2, 12

13 Glaski v. Bank of America, National Association (2013) 218 Cal.App.4th 1079 .................................. 13

14 Jones v. Lodge.at Torrey Pines Partnership (2008) 42 Cal.4th 1158 .................................................... 11

15 Kaufman & Broad Communities, Inc. v. Performance Plastering, Inc.

16 (2005) 133 Cal.App.4th 26 ........................................................................................................ 11

17 Kidd v. State (1998) 62 Cal.App.4th 386 .................................................................................................. 9

18 Lungren v. Deukmejian (1988) 45 Cal.3d 727 ......................................................................................... 9

l 9 Mills v. SF. Bay Area Rapid Transit Dist. (1968) 261 Cal.App.2d 666 ............................................ 2, 11

20 Monette-Shaw v. San Francisco Bd. of Supervisors (2006) 139 Cal.App.4th 1210 ....................... 1, 9, 10

21 Pacific Legal Foundation v. Brown (1981) 29 Cal.3d 168 ....................................................................... 9

22 People v. Castro (1985) 38 Cal.3d 301 .................................................................................................... 9

23 People v. Patterson (1999) 72 Cal.App.4th 438 ..................................................................................... 11

24 Platzer v. Mammoth Mountain Ski Area (2002) 104 Cal.App.4th 1253 ................................................ 13

25 Robert L. v. Superior Court (2003) 30 Cal.4th 894 .................................................................................. 9

26 Sacks v. City of Oakland (2010) 190 Cal.App.4th 1070 ......................................................................... 10

27 San Lorenzo Valley Community Advocates for Responsible Educ. v.

28 San Lorenzo Valley Unified School Dist. (2006) 139 Cal.App.4th 1356 ....................... 10, 11, 12

II


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Scott v. Common Council (1996) 44 Cal.App.4th 684 ........................................................................... 14

Taxpayers for Accountable School Bond Spending v. San Diego Unified School District

(2013) 215 Cal.App.4th 1013 ................................................................................................... 1, 9

Constitutions

Cal. Const. art. XIII A,

§1, subd., (b)(3)(B) ....................................................................................................................... 4

Statutes

Code Civ. Proc.,

§ 1859 ......................................................................................................................................... 13

Ed. Code,

§ 5322 ··········································································································································· 4

§ 15110 .................................................................... : ........................................................ 8, 12, 14

§ 15120 ......................................................................................................................................... 4

§ 15266 ......................................................................................................................................... 4

§ 35160 et seq ......................................................................................................................... 6, 15

§ 35160.1, subd. (a) .................................................................................................................... 15

§ 35160.1, subd. (b) .............................................................................................................. 14, 15

Elec. Code,

§ 9312 ........................................................................................................................................... 4

§ 9313 ··········································································································································· 4

§9401 ....................................................................................................................................... 4,5

§ 9402 ........................................................................................................................................... 4

§ 9405 ··········································································································································· 4

§ 9503 ........................................................................................................................................... 5

§ 9504 ................................................................................................................................ , ........... 5

§ 13300 ········································································································································· 5

§ 13303 ......................................................................................................................................... 5

§ 13305 ......................................................................................................................................... 5

lll


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2 Gov. Code,

3 §53511 ....................................................................................................................................... 13

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iv MEMORANDUM OF POINTS & AUTHORITIES ISO RESPONDENTS/DEFENDANT'S DEMURRER

1 INTRODUCTION

2 The central premise of the amended pleading filed by California Charter School Association

3 ("CCSA") is still demonstrably false: each cause of action revolves around the claim that the Los

4 Angeles Unified School District ("LAUSD") has illegally "reduced" or "reallocated" $450 million of

5 bond revenues that the voters of Los Angeles had "earmarked" for charter schools when they approved

6 a 2008 construction bond measure. But, as this Court has already determined, Measure Q did not

7 earmark· a single cent for any specific project or category of school construction projects.

8 On October 18, 2016, this Court sustained LAUSD's demurrer to the original Verified Petition

9 and Complaint ("Original Petition") filed by CCSA, finding that "the plain language of [Measure Q]

10 does not earmark $450 million to charter schools or show intent to earmark any specific amount of

11 money to charter schools," that Measure Q is not ambiguous on the question of earmarking because it

12 "contains express statements that voters did not intend to guarantee any specific amount of money to

13 charter schools," and that, even if one assumed arguendo that Measure Q were ambiguous, Petitioner

14 had failed to show that any of the extrinsic documents proffered by CCSA constituted evidence of a

15 contrary voter intent because it had not alleged that those documents were "distributed to the

16 electorate" nor alleged "evidence the voters were cognizant of, and relied on [those] materials when

17 casting their vote." (Tentative Decision on Demurrer [adopted as Final], Declaration of Dale K.

18 Larson ["Larson Deel."], Exh. 13 ["Ruling"], pp. 4-7.) CCSA's First Amended Verified Petition and

19 Complaint ("Amended Petition" or "F AP") presents nothing that would alter any of those conclusions.

20 First and foremost, this Court's finding that the terms of Measure Q are not ambiguous

21 forecloses resort to extrinsic indicia of voter intent as a matter of law. (Ruling, p. 4 ["' If the language

22 is clear and unambiguous[,] there is no need for construction, nor is it necessary to resort to indicia of

23 the intent ... of the voters."'], quoting Taxpayers for Accountable School Bond Spending v. San Diego

24 Unified School District (2013) 215 Cal.App.4th 1013, 1025-1026.) "No principle of statutory

25 construction allows petitioner's circular argument-using extrinsic evidence of voters' intent to create

26 an ambiguity, using that ambiguity to allow consideration of extrinsic evidence, and then using the

27 original extrinsic evidence to construe an ambiguity it created itself." (Monette-Shaw v. San Francisco

28 Bd. of Supervisors (2006) 139 Cal.App.4th 1210, 1219.) Thus, CCSA's allegations regarding


1 materials other than the unambiguous terms of Measure Q are categorically unavailing.

2 Further, CCSA's new speculation "on information and belief' that unspecified numbers of

3 voters "relied on" documents that no California court has ever deemed indicative of voter intent to

4 reach conclusions about Measure Q that contradict the express terms of that measure are not

5 allegations that courts can credit on demurrer, as courts "do not . . . assume the truth of 'mere

6 contentions or assertions contradicted by judicially noticeable facts."' (Evans v. City of

7 Berkeley (2006) 38 Cal.4th 1, 20, 40 Cal.Rptr.3d 205, 129 P.3d 394; see also Blatty v. New York Times

8 Co. (1986) 42 Cal.3d 1033, 1040 ["when the allegations of the complaint contradict or are inconsistent

9 with such facts, we accept the latter and reject the former"].) This principle is also expressed in the

10 general rule that "statements 'disseminated to the general public' before [an] election ... cannot be

11 deemed to modify the ... language of the proposition in fact submitted to the voters." (Mills v. S.F.

12 Bay Area Rapid Transit Dist. (1968) 261 Cal.App.2d 666.)

13 Even if the Court were to indulge CCSA's impermissible attempt to concoct ambiguity, the

14 amended pleading introduces nothing that can alter the plain meaning of Measure Q. CCSA copies

15 nearly verbatim the allegations from its original pleading ( except for the Public Records Act claim

16 which has been dropped) and merely adorns those allegations with legal argument and surmise meant

17 to bolster a revived claim the "2008 Bond Package Summary" somehow reflects the voters' intention

18 to allocate $450 million of bond funds for charter schools. But this Court has already ruled: ( a) that

19 this Summary is not evidence of voter intent; (b) that the phrase "FUNDING TARGET" on its face

20 "implies that the exact amount of funding [due to all listed categories] is subject to further revision;"

21 and, (c) that the Summary, when viewed "in context" with the accompanying Board Report and the

22 text of Measure Q itself, "does not support Petitioner's allegation that ... '$450 million of Measure Q

23 funds were earmarked for charter schools." (Ruling, p. 6.)

24 In a vain attempt to circumvent this Court's prior findings, CCSA proposes two new

25 documents as evidence of an alleged voter intent that is contrary to the express disclaimers contained

26 in Measure Q: a Power Point document that was "available to" interested persons on the District's

27 website and a "Measure Q Talking Points" document that was "intended to assist Board members and

28 LAUSD staff in responding to inquiries regarding Measure Q." (FAP, 1 36, 40.) Those documents,

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1 like all the other District-generated materials this Court rejected in its original demurrer ruling, say

2 precisely nothing about the earmarking of any specific sum of money for charter schools. Further,

3 CCSA does not, and cannot, allege that those documents were in fact distributed to and relied upon by

4 the 1.77 million voters registered and eligible to cast votes on Measure Q. CSSA nonetheless claims

5 "on information and belief' that unspecified "voters" viewed those documents alongside the Bond

6 Package Summary and somehow reached the conclusion that the provisional "FUNDING TARGETS"

7 listed in that Summary were in fact permanent, final "allocations" to charter schools. The precise

8 mechanics of this convoluted surmise is left to the imagination of the reader.

9 Equally vague and unavailing are CCSA's new references to two opinion articles from the

10 Daily News and Los Angeles Times accompanied by general allegations of those papers' respective

11 circulation. CCSA does not and, again, cannot allege that those articles were in fact distributed to and

12 relied upon by the 1.77 million voters who were registered and eligible to cast votes on Measure Q as

13 the combined circulation of those papers is roughly half the size of the relevant electorate. Notably,

14 these articles do not assert that funding has been "earmarked" irrevocably for charters (in derogation

15 of the plain terms of Measure Q), and are thus equally susceptible of the interpretation that LAUSD

16 had simply made provisional spending plans. Likewise, CCSA does not, and cannot, allege that those

17 1.77 million voters in fact watched and relied on a public access broadcast of the July 2008 LAUSD

18 Board meeting at which the District's provisional plans for the spending of Measure Q proceeds were

19 discussed.

20 Because each cause of action asserted by CCSA hinges on the false conceit that the voters of

21 Los Angeles "earmarked" $450 million for charter schools when adopting Measure Q, the Amended

22 Petition devolves into a bald objection to the District's periodic generation of, and adjustments to,

23 provisional spending targets for categories of school construction projects. But California law is clear

24 that the budgetary planning of local legislative bodies is not justiciable: the separation of powers

25 doctrine prohibits judicial interference in that core legislative function of local governance. Because

26 the foundation of CCSA's claims is irreconcilable with the text of Measure Q and established

27 California law, LAUSD respectfully asks the Court to sustain its demurrer to all causes of action

28 asserted in the Amended Petition, without leave to amend.

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STATEMENT OF THE CASE

The Voters Adopted Measure O in 2008 To Support 1,390 Construction and Repair Projects Listed in the Measure, Without Earmarking Any Amount of Bond Revenues For Any Specific Project or Category of Projects

By resolution adopted July 31, 2008, the LAUSD Board directed that the County Registrar of

Voters place Measure Q on the November 2008 general election ballot to raise funds for

improvements to District facilities. (Larson Deel., Exh. 1.) Pursuant to the Education Code and

Elections Code, that resolution directed the Registrar to publish or otherwise make available to the

public the Full Text of the Measure Q ("Full Text") "in any official document required to contain the

full statement of the bond measure." (Ibid.; Ed. Code, §§ 5322, 15120, 15266; Elec. Code, §§ 9312,

9313; see also Elec. Code § §9401, 9402, 9405.)

In keeping with relevant constitutional requirements, the Full Text of Measure Q lists all the

specific projects that may be supported by the anticipated bond revenues. (Larson Deel., Exh. 3; Cal.

Const. art. XIII A, § 1, subd. (b)(3)(B).) Only projects that appear on the Project List may be funded

by Measure Q revenues. (Cal. Const., art. XIII A, § 1, subd. (b)(3)(B).) The text of Measure Q

contains no language allocating, encumbering or otherwise earmarking any specific amount of bond

revenues to any project or category of projects. (Larson Deel., Exh. 3.) To the contrary, the text of

Measure Q expressly disclaims any specific earmarking of proceeds for any project or category of

project. (Id., p. 8 ["Approval of this Measure does not guarantee that all of the projects proposed to be

financed by this Measure will be funded beyond the local revenues generated by the measure."].) The

text of Measure Q also expressly disclaims the notion that all projects will be funded:

"The Board does not guarantee that the Bonds will provide sufficient funds to allow completion of all listed projects. The numbers of seats to be created that are stated in the Bond Project List are approximate and may be adjusted according to District needs . . . The Board may reallocate seats and designate new locations for facilities identified in the Bond Project List as it deems fit in response to demographic changes, cost considerations, site conditions, or other changes in circumstances. The Bond Project List describes work that the District may undertake, provided funds are sufficient to complete the work contemplated." (Ibid.)

The sole general reference to "charter schools" in the Full Text of Measure Q reads in full:

"Provide new seats through the acquisition, purchase, lease, construction, reconstruction, repair, rehabilitation, furnishing, and equipping of facilities for use as charter schools, and to furnish and equip charter-operated facilities, pursuant to a

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program to be adopted by the Board governing the qualifications and selection of charter schools with regard to their capacity to assist in the relief of overcrowding on the District's most impacted campuses and the need to meet the District's responsibilities under Education Code Section 47614." (Id., p. 17.)

The only other references to charter schools are the sixteen individual charters that appear on the list of

existing schools whose facilities might be repaired and rehabilitated with bond revenues. None of these

references expresses, suggests, or implies the earmarking of any amount of bond revenues towards any

specific charter school, or towards charter schools generally. (Id., pp. 48-61.) Likewise, the July 31,

2008 Board resolution submitting Measure Q to the electors contains no reference whatsoever to

charter schools, much less reference to funds earmarked for charter schools. (Larson Deel., Exh. 1.)

Notably, the terms of Measure Q do not contemplate or permit the expenditure of any bond

revenues, except through a complex process involving the adoption and updating of a Strategic

Execution Plan by the District Board, the identification by District Staff of specific projects to be

funded, and the ultimate approval of each of those projects by an independent Bond Oversight

Committee and the District's own governing Board. (Larson Deel., Exh. 3.)

The Full Text was delivered to Registrar for inclusion in Official Ballot Pamphlet Materials.

(Larson Deel., Exh. 2.) Accordingly, the Official Sample Ballot and Voter Instructions contained a

Notice to Voters stating that the Full Measure Text was available to voters who called a phone number

or who went to the www.lavote.net website. (Id., Exh. 4, p. 40.) In conformity with the Election

Code, the official Measure Q materials published or otherwise made available by the Registrar

included only the ballot question, the impartial analysis generated by the Los Angeles County

Counsel, the District's Tax Rate Statement, the Arguments for and Against, the Rebuttals, and the

measure's Full Text. (Id., pp. 40-47; Elec. Code,§§ 9401, 9503, 9504, 13300, 13303, 13305, 13307.)

On November 4, 2008, 1,281,319 of 1,770,975 eligible voters cast votes for or against Measure

Q. (Larson Deel., Exh. 6.) Measure Q was approved by more than 69% of the voters. (Ibid.)

LAUSD Generates and Adjusts Its Projected "Targets" for Facilities Spending In Response to Changing Circumstances

In the exercise of the authority committed to it by the Legislature to manage its own affairs,

LAUSD has elected for many years to generate periodic, provisional spending targets for its various

5 MEMORANDUM OF POINTS & AUTHORITIES ISO RESPONDENTS/DEFENDANT'S DEMURRER

1 facilities construction projects. (See, Ed. Code, § 35160 et seq.) These targets understandably have

2 always been subject to revision in light of changing fiscal and operational circumstances.

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A. 2008 Bond Summary

On the same date that the Board resolved to place Measure Q on the ballot, the Board approved

a staff recommendation regarding the provisional "targets" and "goals" for the allocation of bond

proceeds contemplated in Measure Q among the many categories of construction needs the District

faced, and anticipated, at that point in time. (Larson Deel., Exh. 7.) In its final form, the District's

provisional construction spending "targets" were memorialized in a one-page document entitled "2008

Bond Package Summary Final." (Id., Exh. 8 (the "Target Summary").) Each of the District's

provisional spending goals in this document is expressly labelled as a "FUNDING TARGET" - a

phrase that denotes objects subject to refinement or further revision. (Ibid.)

The Target Summary is not a part of Measure Q, and is not included, excerpted, or referenced

anywhere in the Full Text of Measure Q. (Id., Exh. 3.) Most importantly, the Target Summary was

not provided or otherwise made available to District voters as part of the official Measure Q ballot

materials. (Id., Exh. 5.)

The official staff Report generated for the meeting in which the LAUSD Board resolved to

place Measure Q on the ballot and also approved the Target Summary makes clear that this document

was merely a provisional plan for the allocation of Measure Q revenues - subject to future revisions by

the Board - that was subservient to, and superseded by, the terms, goals, and process for project

approval set forth in Measure Q itself:

The foregoing amounts [in the Target Summary] are subject to further refinement by Board action should such refinement prove necessary to accomplish the objectives set forth in the Bond Project List that is part of the ballot measure to be approved by the voters, and it is ultimately the Bond Project List, if approved by the voters, that will control the expenditure of the bond funds. (Larson Deel., Exh. 7, p. 4.)

Because Measure Q does not permit the expenditure of any bond revenues except through a complex

process involving the adoption of a Strategic Execution Plan by the District Board, the identification

by District staff of the specific projects to be funded, and the ultimate approval of each of those

projects by an independent Bond Oversight Committee and the District's own governing Board, the

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hypothetical spending targets noted in the Target Summary were merely provisional planning goals,

not allocations of bond revenues for expenditure on any specific projects in any precise time frame. B. 2013 School Upgrade Program

As anticipated by the Board, the District's funding targets were refined in 2013 because of

changing and unpredicted fiscal circumstances. On December 10 of that year, as alleged in paragraphs

52-60 in the Amended Petition, the Board approved a School Upgrade Program ("SUP"). (Larson

Deel., Exh. 9.) The SUP noted that it was setting funding targets for funds from a variety of sources

including interest earned on state bond cash balances, bond proceeds from Measures Rand Y, as well

as bond proceeds from Measure Q. (Id., p. 1.) The SUP was not a new set of revised funding targets

only for Measure Q, as CCSA implies, but rather an overarching strategic plan for construction from

all available sources of funding. Moreover, the Board Report accompanying the SUP observes that it

replaces the Target Summary while admonishing readers that "[ a ]pproval [ of the new SUP] does not

permit the expenditure of bond proceeds on projects" - because of the myriad procedural

requirements in the bond measures themselves. (Id., p. 2.) Thus, the revision of "funding targets" by

the SUP was not, and cannot reasonably be mistaken as, any actual allocation of bond revenues.

Notably, the report cited the "nationwide economic downturn in 2009" as a reason why

Measure Q bonds had not yet been issued as anticipated and that as a result of changing fiscal

circumstances related to the Great Recession, the Target Summary "has become outdated." (Id., pp. 2-

3.) Finally, the report noted that changes were made to several funding targets in the Target Summary,

not just to the amount targeted for spending on charter school facilities. (Id., p. 3.)

C. 2015 Adjustments to SUP

In October 2015, then-Superintendent Raymond Cortines wrote to the Board to inform them

that "there is an immediate need to fund necessary and prioritized structural changes to school

facilities in order to comply with the program accessibility requirements of the Americans with

Disabilities Act (ADA) Title II Regulations" and with the requirements of a modified consent decree

("MCD") issued in the litigation captioned Chanda Smith v. LAUSD, U.S.Dist.Ct. Case No. CV 93-

7044-LEW(GHKx) (C.D.Cal.). (Larson Deel., Exh. 10, p. 1; MCD available at http://www.oimla.com/

pdf/20030512/mcd_text_05122003.pdf.) As a result of this exigency, Superintendent Cortines

recommended that the Board update the SUP to shift approximately $600 million in funds from


1 previous funding targets towards projects required under the ADA and MCD. (Id., p. 3-4.) The letter

2 notes that the proposal to revise the SUP "does not authorize the actual expenditure of bond proceeds"

3 because additional steps are required before actual projects may be funded. (Id., p. 3.)

4 Subsequently, on November 10, 2015, the Board passed the proposed update to the SUP.

5 (Larson Deel., Exh. 11.) To help cover the estimated $600 million required to comply with the ADA

6 and MCD, the updated SUP allocated $528.25 million of bond program funding - from all of the

7 bonds noted in the original SUP, not just Measure Q - to ADA and MCD compliance. (Id., p. 1.)

8 None of the aforementioned budget plans has altered any terms or requirements of Measure Q.

9 None has effected any allocation or expenditure of Measure Q bond proceeds on any specific project.

10 ARGUMENT

11 Because the voters did not earmark any specific amount of Measure Q bond revenues to charter

12 schools, CCSA fails to state facts sufficient to constitute any cause of action. CCSA also fails to state

13 a cause of action for reverse validation because it fails to allege actual fraud on the part of LAUSD, as

14 required by Education Code section 15110. Unable to identify a violation of Measure Q or the laws

15 governing school bond measures, CCSA's claims devolve into a grievance over LAUSD's provisional

16 spending targets - a core legislative function that the courts may not control under the separation of

17 powers doctrine.

18 I. CCSA FAILS TO STATE FACTS SUFFICIENT TO CONSTITUTE ANY CAUSE OF ACTION

19 ALLEGING VIOLATIONS OF MEASURE Q

20 As with its original pleading, CCSA fails to state any cause of action in its Amended Petition

21 because each is premised on the false conceit that LAUSD has violated the intent of the voters by

22 imposing improper "reductions" to $450 million of Measure Q bond proceeds allegedly "earmarked"

23 for charters. (F AP, ,r,r 106-107 [Reverse Validation]; 117-118 [Reverse Validation]; 124-131 [Writ of

24 Mandate]; 137-142 [Taxpayer Waste]; 147-155 [Bond Violation]; 157-158 [Declaratory Relief]; 160

25 [Injunctive Relief].) (See Ruling, Larson Deel., Exh. 13, p. 3.)

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A. Measure Q Does Not Earmark $450 Million for Charter Schools Under a Statutory Interpretation

This Court has already ruled that the "the plain language of the measure does not earmark $450

million to charter schools or show intent to earmark any specific amount of money to charter schools"

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1 and that "no express language in Measure Q earmarks $450 million in bond funds to charter schools."

2 (Ruling, pp. 4-5.) The Court also emphasized that "Measure Q contains express statements that voters

3 did not intend to guarantee any specific amount of money for the listed projects." (Ibid.) Pursuant to

4 the extensive authorities cited in LAUSD's original demurrer, which are incorporated as though fully

5 set forth herein, the Court ruled that this finding of no ambiguity precludes an examination of any

6 extrinsic sources. (Ibid., quoting Taxpayers for Accountable School Bond Spending v. San Diego

7 Unified School District (2013) 215 Cal.App.4th 1013, 1025-1026; see also Monette-Shaw, 139

8 Cal.App.4th at p. 1219; Robert L. v. Superior Court (2003) 30 Cal.4th 894, 911.)

9 CCSA has made no new allegations whatsoever regarding the plain meaning of Measure Q in

10 its amended pleading. Indeed, CCSA conceded in its opposition to LAUSD's first demurrer that "no

11 express language in Measure Q earmarks $450 million in bond funds to charter schools." (Ruling, p.

12 4.) Thus, there is no basis for the Court to revisit its prior ruling, and, critically, no basis for

13 considering any extrinsic sources. (Monette-Shaw, 139 Cal.App.4th at p. 1219.)

14 Courts may look beyond the text of a measure for indicia of voters' intent only if the language

15 of the measure is ambiguous (Robert L., 30 Cal.4th at 911 ), and even then, the analysis, information,

16 and arguments in the official ballot pamphlet materials provided or made available to voters in 2008

17 are the only indicia of the voters' intent accepted by California courts. (Lungren v. Deukmejian (1988)

18 45 Cal.3d 727, 741-743; People v. Castro (1985) 38 Cal.3d 301,312; see also, Pacific Legal

19 Foundation v. Brown (1981) 29 Cal.3d 168, 182-83 [ consulting arguments in Ballot Pamphlet to

20 construe Prop. 7]; Kiddv. State (1998) 62 Cal.App.4th 386,407 fn. 7 [considering Legislative

21 Analyst's Ballot Pamphlet analysis of Prop. 209].)

22 This Court's finding of no ambiguity was, and is, enough to resolve this case, but the Court

23 analyzed the permissible extrinsic sources for sake of argument. This Court found that none of the

24 materials contained in or referenced by the Official Sample Ballot makes any mention of $450 million

25 in spending earmarked for charter schools. (Ruling, p. 5; see Larson Deel., Exh. 4, pp. 40-47.) The

26 Court noted that the Official Sample Ballot expressly informs voters that the projects on which bond

27 revenues would be spent are yet to be determined: "[n]ot a single bond dollar can be spent until it is

28 allocated to a specific project, included in a Strategic Execution Plan, reviewed by the Citizens' Bond


Oversight Committee and approved by the Board." (Id., p. 5, fn. 3.) Thus, even if the Court were to

2 presume ambiguity, judicially noticeable documents indicate no evidence that voters had any intent to

3 earmark $450 million in spending on charter schools in passing Measure Q.

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B. Measure Q Does Not Earmark $450 Million for Charter Schools Under a Contractual Interpretation

6 CCSA's Amended Petition fares no better under a quasi-contract interpretation of Measure Q.

7 Under a contractual-interpretation analysis, the four "primary elements" from which courts may derive

8 the terms of the "contract" are: (1) the statutes creating the bonding entity and authorizing bonded

9 indebtedness; (2) "[t]he resolution by which the bonding entity resolves to submit the issue to [its]

10 electors"; (3) "the ballot proposition submitted to the voters"; and ( 4) the voters' assent or ratification.

11 (Monette-Shaw 139 Cal.App.4th at p. 1215, quoting Associated Students a/North Peralta Community

12 College v. Board a/Trustees (1979) 92 Cal.App.3d 672, 677-678.) Here, again, the Court has already

13 found that these four primary elements are silent as to any specific expenditure of Measure Q funds on

14 charter schools. (Ruling, pp. 8-9.) The Court also noted that, if any of these primary sources are

15 ambiguous, Courts may also consider extrinsic documents that "were themselves specifically referred

16 to in one of the primary documents." (Id., p. 8, quoting Monette-Shaw 139 Cal.App.4th at pp. 1215-

17 1216, 1219; Sacks v. City a/Oakland (2010) 190 Cal.App.4th 1070, 1093, as modified on denial of

18 reh'g (Jan. 5, 2011)].) The Court then found that "it does not appear there is sufficient ambiguity to

19 resort to extrinsic sources," and that even ifthere were ambiguity, the 2008 Bond Package Summary

20 - which remains the sole source cited by Petitioners of a dollar amount being associated with charters

21 (specifically, as a "FUNDING TARGET")-was not referenced in any of the primary elements. (Id.,

22 pp. 8-9.)

23 The Amended Petition thus does not include any allegation that the primary sources reference

24 any documents containing a "promise" of specific allocations not found in Measure Q. I

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I CCSA now cites in its Amended Petition San Lorenzo Valley Community Advocates for Responsible Educ. v. San Lorenzo Valley Unified School Dist. (2006) 139 Cal.App.4th 1356, 1397 for the proposition that Courts have the discretion to consider extrinsic sources. (F AP, ~ 4 7.) The case actually helps LAUSD, however, because while it states a general principle that there are certain circumstances in which extrinsic documents may be considered, it limits this principle by stating that "statements 'disseminated to the general public' before the election ... cannot be deemed to modify

10 MEMORANDUM OF POINTS & AUTHORJTIES ISO RESPONDENTS/DEFENDANT'S DEMURRER

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C. None of the extrinsic documents identified in CCSA's amended pleading, including the 2008 Bond Package Summary, constitute any part of Measure Q's legislative history or part of a quasi-contractual agreement with the voters.

The Amended Petition contains no new documents or information indicating that LAUSD

4 earmarked $450 million, or any other amount, in bond funds to charter schools. CCSA's new

5 allegations relate only to documents that are not, as a matter of law, indicia of voter intent because of

6 the well-established rule restricting indicia of voter intent to the official ballot pamphlet. (See F AP, ,r,r

7 34-49.) Nor are they elements of a quasi-contract with the voters. CCSA's vague and speculative new

8 allegation that the "2008 Bond Package Summary" was "widely disseminated" is thus unavailing.

9 Aside from the fact that the document is not of the type that courts have recognized as indicia of voter

10 intent in passing ballot measures, the new allegations fail to allege that all voters registered and

11 eligible to vote on Measure Q had read and considered the bond summary before voting, as would be

12 required under a traditional statutory analysis. (See, e.g., Jones v. Lodge at Torrey Pines Partnership

13 (2008) 42 Cal.4th 1158, 1172, [Supreme Court refused to consider document in Assembly Committee

14 bill file because it was unknown "which legislators, if any, read it."]; Kaufman & Broad Communities,

15 Inc. v. Performance Plastering, Inc. (2005) 133 Cal.App.4th 26, 39 [refusing to consider extrinsic

16 source absent a showing that the source was "communicated to the Legislature as a whole"]; People v.

17 Patterson (1999) 72 Cal.App.4th 438, 443-444 ["[I]t is not reasonable to infer that enrolled bill reports

18 prepared by the executive branch for the Governor were ever read by the Legislature."].) The new

19 allegations state only that the bond summary was translated to other languages, available on LAUSD's

20 website, discussed in newspapers whose circulation, combined, was roughly half the 1.77 million

21 voters who were the legislative body eligible to vote on Measure Q, and discussed in a LAUSD Board

22 meeting that was broadcast on local public access television. None of this constitutes an allegation

23 that the bond summary was in fact read, and relied on, by all District voters. Courts have expressly

24 refused to credit vague speculation about communications that may have been read by voters,

25 especially when those communications posit an "intention" of the voters that is directly contradicted

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27 the intentionally broad language of the proposition in fact submitted to the voters, the call of election published to them, and the statutes authorizing the procedure adopted [citation]." (San Lorenzo

28 Valley, l 39 Cal.App.4th at p. 1397 [ citing Mills v. SF. Bay Area Rapid Transit Dist. (1968) 261 Cal.App.2d 666, 668].)


1 by the language of the measure under consideration. (San Lorenzo Valley Community Advocates for

2 Responsible Educ., 139 Cal.App.4th at p. 1397.)

3 Finally, even if all District voters had read the bond summary, the Court has already found that

4 the phrase "FUNDING TARGET" used in the document "implies that the exact amount of funding is

5 subject to further revision." (Ruling, p. 6.) Nobody could reasonably mistake that document as a

6 formal, final, and binding allocation of bond proceeds that had yet to be issued, particularly in light of

7 the express language in Measure Q and the Official Sample Ballot that the spending targets were

8 subject to change or additional review and approval.2 (Larson Deel., Exh. 3, p. 8; Exh. 4, p. 45.) For

9 all of these several reasons, the Amended Petition fails to allege that LAUSD voters earmarked $450

10 million in bond funds to charter schools under a statutory interpretation analysis of the measure.

11 D. CCSA Further Fails to Plead a School Bond Validation Cause of Action

12 As noted in the Court's prior Ruling, CCSA's reverse validation causes of actions

13 independently fail because they are premised on the allegation that voters earmarked $450 million in

14 bond funds to charter schools. (See Ruling, p. 9.) These two causes of action - the First and Second

15 - fail for the additional reason that CCSA still does not allege actual fraud. Education Code section

16 15110 is the specific statutory authority for a "reverse" validation action "to determine the validity of

17 [ school district] bonds and of the ordering of improvement[s] or acquisition[ s ]" pursuant to such bond

18 revenues. This section requires that "[i]n such action[ s ], all findings, conclusions and

19 determinations of the legislative body which conducted the proceedings shall be conclusive in the

20 absence of actual fraud." (Ed. Code, § 15110 [emphasis added]; see De Jong v. Pasadena Unified

21 School Dist. (1968) 264 Cal.App.2d 877, 880 [ noting that reverse validation actions are "limited by the

22 conditions and restrictions set forth in the statute" and holding that a plaintiff had failed to state a

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2 CCSA now alleges that voters clearly understood the phrase "FUNDING TARGET" to mean final funding allocations because a few numbers in the Target Summary correlate to a few numbers in a District Power Point presentation that used the phrase "Distribution of Funds." (FAP, 1136-39.) The argument appears to be that all District voters had seen the Target Summary and the Power Point presentation, had compared the nomenclature in the two documents, and deduced that "FUNDING TARGET" in the bond summary actually meant "Distribution of Funds." The Court is not required to credit such convoluted and speculative "contentions or assertions contradicted by judicially noticeable facts."' (Evans, 38 Cal.4th at p. 20.)

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1 triable claim when failing to allege actual fraud].)

2 The Amended Petition does not allege any of the elements of actual fraud. Instead, it alleges

3 that the Board's November 2013 adjustment to the District's construction spending targets "is not

4 supported by substantial evidence, misuses taxpayer funds, is arbitrary, capricious and/or [is] entirely

5 lacking in evidentiary support, and involves an action the Board had no authority to take." (F AP, 11

6 107, 118.) The only new allegation in this regard states that "on information and belief' proposed

7 "reallocations" of funds pursuant to Board Report No. 157 - 15/16 "may have been prepared with

8 skewed facts in order to persuade the Board into approving" the board report. (FAP, 185.) This

9 tentative speculation is not an allegation of actual fraud, as it does not allege with particularity the

10 substance of the misrepresentation, the knowledge of the falsity of the persons making that

11 representation, the intent to defraud, the justifiable reliance by the party claiming the fraud, nor the

12 resulting damage. (Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 1060.) "These elements may not

13 be pleaded in a general or conclusory fashion." (Glaski v. Bank of America, National Association

14 (2013) 218 Cal.App.4th 1079, 1090-1091 [affirming denial of leave to amend fraud claim because

15 plaintiff had repeatedly pleaded "only the essential elements for the claim" without the "facts ... upon

16 which liability depends."].) Indeed, it is altogether unclear what CCSA's theory of the fraud is.

17 CCSA has attempted to plead around this deficiency by splitting its single reverse validation

18 cause of action into two separate causes of action-one based on the specific, controlling statute from

19 the Education Code, and a second based on the general validation statute applying to all government

20 agencies found in the Government Code. But CCSA overlooks the fundamental canon of statutory

21 interpretation that a specific statute controls over a more general statute, regardless of whether they are

22 pleaded as a single or multiple causes of action. (Code Civ. Proc., § 1859 [" ... when a general and

23 particular provision are inconsistent, the latter is paramount to the former. So a particular intent will

24 control a general one that is inconsistent with it."]; Platzer v. Mammoth Mountain Ski Area (2002) 104

25 Cal.App.4th 1253, 1260 ["A specific statute on a subject controls over a general provision."].)

26 Government Code section 53511 is a general statute about validation actions and Education Code

27 section 15110 governs validation actions about school bond measures. CCSA's interpretation would

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1 impermissibly render section 15110' s fraud requirements meaningless and allow any future plaintiffs

2 to circumvent it by ignoring it and relying only on the Government Code.

3 Here, the Legislature authorized stakeholders to challenge the validity of education bonds or

4 the ordering of improvements funded by bond revenues only by alleging actual fraud. CCSA' s

5 conclusory allegations regarding the insubstantiality of evidence or the arbitrariness of District actions

6 are thus - by statute - patent irrelevancies.

7 II.

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UNDER THE SEPARATION OF POWERS DOCTRINE, THE COURT DOES NOT HAVE

JURISDICTION TO ADJUDICATE CCSA's OBJECTION TO LAUSD's BUDGETARY PLANNING

9 Given that the voters did not earmark any amount of Measure Q proceeds to charter schools,

10 the remaining allegations in the Amended Petition, as they did in the Original Petition, devolve into

11 CCSA's objection to the periodic decisions of the LAUSD Board of Education to generate and modify

12 provisional "targets" for construction spending in response to the shifting circumstances and myriad

13 exigencies it faces. But the Legislature has expressly and exclusively committed to local educational

14 agencies the authority to make whatever plans they wish regarding "the expenditure of funds and

15 activities which, in the determination of the governing board of the school district ... are necessary or

16 desirable in meeting their needs." (Ed. Code, § 35160.1, subd. (b).) And the courts are not a forum

17 for the resolution of such grievances.

18 The judicial branch has long and consistently recognized that the separation of powers doctrine

19 prohibits the courts from adjudicating generalized complaints about the budgets of legislative bodies.

20 ( California School Boards Assn. v. State (2011) 192 Cal.App.4th 770, 798-803 ["CSBA"]

21 ["formulation of a budget bill, including the items to be placed in the bill, is inherently a discretionary

22 and a legislative power ... beyond the interference of courts."]; Scott v. Common Council (1996) 44

23 Cal.App.4th 684, 690 ["adoption of the budget is a legislative function ... [that] may not be controlled

24 by the courts."]; County of Butte v. Superior Court (1985) 176 Cal.App.3d 693, 699.) Here, the

25 Legislature has expressly committed to the governing boards of local educational agencies like

26 LAUSD broad authority to plan their future expenditures and to manage their own budgets:

27 "[I]t is the intention of the Legislature to give school districts ... broad authority to carry on activities and programs, including the expenditure of funds for programs and

28 activities which, in the determination of the governing board of the school district ... are necessary or desirable in meeting their needs and are not inconsistent with the

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MEMORANDUM OF POINTS & AUT!-IORITJES ISO RESPONDENTS/DEFENDANT'S DEMURRER

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purposes for which the funds were appropriated. It is the intent of the Legislature that Section 35160 be liberally construed to achieve this objective." (Ed. Code, § 35160.1 (b ); see also Ed. Code, § 35160 et seq. ["Powers and Duties of Local Educational Governing Boards"])

Granting this authority, the Legislature found and declared "that school districts . . . have diverse

needs unique to their individual communities and programs ... [and that] in addressing their needs,

common as well as unique, school districts ... should have the flexibility to create their own unique

solutions." (Ed. Code, § 35160.1, subd. (a)) Where, as here, an aggrieved stakeholder does not

challenge a local agency's formal budget - but merely a provisional budgetary planning exercise - the

power of the judiciary to interfere in such legislative activity is at its nadir. CCSA's generalized

grievances about the periodic determinations of the LAUSD Board regarding its construction spending

priorities are not justiciable; they are purely political. The separation of powers of powers doctrine

wisely erects a jurisdictional bmTier around which the CCSA cannot plead.

CONCLUSION

The voters of Los Angeles did not "earmark" any amount of money for charter schools when

adopting Measure Q. The added allegations in the First Amended Verified Petition and Complaint add

nothing to change this conclusion. And, whether conceived as an absence of jurisdiction or a

deficiency in pleading, CCSA's grievances regarding the shifting spending targets periodically

adopted by the LAUSD Board are not justiciable. LAUSD accordingly requests that the Court sustain

its demurrers to each and every cause of action without leave to amend.

Dated: January 20, 2017 Respectfully submitted, STRUMW AS SER & WOOCHER Gregory G. Luke Dale K. Larson

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MEMORANDUM OF POINTS & AUTI-IORITIES ISO RESPONDENTS/DEFENDANT'S DEMURRER

1 PROOF OF SERVICE

2 STATE OF CALIFORNIA COUNTY OF LOS ANGELES

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Re: California Charter Schools Association v. Los Angeles Unified School District, et al., L.A.S.C. Case No. BS 159804

I am employed in the County of Los Angeles, State of California. I am over the age of 18 and not a party to the within action. My business address is 10940 Wilshire Boulevard, Suite 2000, Los Angeles, California 90024.

On January 20, 2017, I served the foregoing document(s) described as MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPPORT OF RESPONDENTSillEFENDANTS' DEMURRER on all appropriate parties in this action, as listed on the attached Service List, by the method stated:

~ If electronic-mail service is indicated, by causing a true copy to be sent via electronic transmission from Strumwasser & Woocher LLP's computer network in Portable Document Format (PDF) this date to the email address(es) stated, to the attention of the person(s) named.

D If U.S. Mail service is indicated, by placing this date for collection for mailing true copies in sealed envelopes, first-class postage prepaid, addressed to each person as indicated, pursuant to Code of Civil Procedure section 1013a(3). I am readily familiar with the firm's practice of collection and processing correspondence for mailing. Under that practice, it would be deposited with the U.S. Postal Service on that same day with postage thereon fully prepaid at Los Angeles, California, in the ordinary course of business. I am aware that on motion of the party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing contained in the affidavit.

D If overnight service is indicated, by placing this date for collection by sending true copies in sealed envelopes, addressed to each person as indicated, pursuant to Code of Civil Procedure, section 1013(d). I am readily familiar with this firm's practice of collecting and processing correspondence. Under that practice, it would be deposited with an overnight service in Los Angeles County on that same day with an active account number shown for payment, in the ordinary course of business.

I declare under penalty of perjury under the laws of the State of California that the above is true and correct.

Executed on January 20, 2017, at Los Angeles, California.

)

PROOF OF SERVICE

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SERVICE LIST California Charter Schools Association v. Los Angeles Unified School District, et al.

L.A.S.C. Case No. BS 159804

James L. Arnone Winston P. Stromberg Daniel J. Aleshire Justine M. Wallace LATHAM & WATKINS LLP 355 South Grand Avenue Los Angeles, California 90071-15 60 Phone: (213) 485-1234 Fax: (213) 891-8763 Email: james.arnone(a),lw.com

[email protected] danny [email protected] justine. [email protected]

Attorneys for Petitioner and Plaintiff California Charter Schools Association

SERVICE LIST

Documents

GREGORY G. LUKE (SBN 22533) EXEMPT FROM FILING FEES …library.ccsa.org/2017-01-20-Memorandum of Points and... · 2017. 1. 20. · GREGORY G. LUKE (SBN 22533) DALE K. LARSON (SBN