Deed restrictions against charter schools ruled illegal

Good news for charter schools in Ohio! Remember when Toledo Public Schools and the Toledo City Council tried to implement a deed restriction in the sale of Libbey HS that would have prevented the property from ever being used/sold for a charter school? As a result of my blog post exposing the illegality of that provision, the deed restriction was removed.

Well, Cincinnati Public Schools weren't so wise and their attempt to do the same thing ended up before the Ohio Supreme Court which ruled the act illegal.

Here is the Press Release from the 1851 Center for Constitutional Law which represented a charter school in the lawsuit:

High Court Rebukes Attack on Cincinnati Charter Schools

CPS Deed Restrictions Against Charter and Private Schools Illegal, Cincinnati Charter Schools to Remain Open

Columbus - Cincinnati Public Schools' (CPS) policy of prohibiting the sale of unused available public school buildings to charter schools and private schools is unlawful and must end, today ruled the Supreme Court of Ohio. This decision rebuffs CPS efforts to shut down numerous successful charters schools in Cincinnati, and is a considerable victory for charter and private school operators throughout the state.

1851 Center for Constitutional Law represented Theodore Roosevelt Community School, a Cincinnati charter school CPS had sued to shut down. Theodore Roosevelt School had purchased an unused school building located in the Fairmount neighborhood, where all CPS schools are in academic emergency, and 80 percent of families are of minority status, and live in poverty. The school opened in August of 2010, and currently serves nearly 300 students and employs 45 staff members.

CPS attempted to enforce a deed restriction prohibiting the use of school buildings previously owned by CPS for use by a charter or private school. The 1851 Center asserted such restrictions are void by Ohio's public policy in favor of school choice, and cheat taxpayers of sales revenue from the buildings.

The Court's decision, authored by Justice Lanzinger, acknowledged held ". . . the inclusion of a deed restriction preventing the use of property for school purposes in the contract for sale of an unused school building is unenforceable as against public policy." The Court added, "[t]he restriction, on its face, prevents the free use of property for education purposes . . . Furthermore, the restriction is not neutral; it seeks to thwart competition by providing that the restriction applies to all buyers except CPS itself."

"The Court's decision upholds a landmark ruling in favor of school choice in Ohio, and against adversarial school districts who attempt to block alternative schools' right to exist," said 1851 Center Executive Director Maurice Thompson.

"Deed restrictions like the one struck down in this case were devised simply to stop new charter and private schools from opening in Cincinnati, so that CPS could retain students and protect its state funds. In its brief, CPS compares itself to a 'gas station' or 'hotel' that has a right to use hardball tactics against its competition. It seems to have forgotten that it's a public school that exists to educate children, rather than amass revenue."

The Court's decision suggested promise for the 1851 Center's overarching approach of using the doctrine "public policy" -- the requirement that contract terms are subject to the public interest -- to nullify government contract terms that attack school choice and reward special interests. While the Court acknowledged that the doctrine is narrow, it affirms 1851's position that special scrutiny should apply to government contracts: "in this case, however, involving a contract between a private party and a political subdivision, there is a compelling reason to support application of the doctrine [of public policy]."

This additional ruling exposing CPS to the loss of millions of dollars in funding from the Ohio School Facilities Commission (OSFC), which requires that school districts follow all state rules related to charter schools. The fate of this funding is still in dispute, in a second case brought by the 1851 Center and the Ohio Coalition for Quality Education, still pending before Judge Ruehlman.

All briefs in the case can be viewed here.

Oral Arguments from the case can be viewed here.

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