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Pdfsussex County Opening Brief in Motion to Dismiss

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Pdfsussex County Opening Brief in Motion to Dismiss IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE DELAWAREANS FOR ) EDUCATIONAL ) OPPORTUNITY and NAACP ) DELAWARE STATE ) C.A. No. 2018-0029-JTL CONFERENCE OF ) BRANCHES, ) Plaintiffs, ) ) v. ) ) JOHN CARNEY, Governor of ) the State of Delaware; SUSAN ) BUNTING, Secretary of ) Education of the State of ) Delaware; KENNETH A. ) SIMPLER, Treasurer of the ) State of Delaware; SUSAN ) DURHAM, Director of ) Finance of Kent County, ) Delaware; BRIAN ) MAXWELL, Chief Financial ) Officer of New Castle County, ) Delaware; and GINA ) JENNINGS, Finance Director ) for Sussex County, ) Defendants. ) DEFENDANT GINA JENNINGS’ OPENING BRIEF IN SUPPORT OF HER MOTION TO DISMISS THE VERIFIED COMPLAINT PURSUANT TO COURT OF CHANCERY RULE 12(B)(6). MARGOLIS EDELSTEIN /s/ Herbert W. Mondros Herbert W. Mondros, Esq. ID No. 3308 Helene Episcopo, Esq. ID No. 6406 300 Delaware Ave., Suite 800 Wilmington, DE 19801 (302) 888-1112 Email:[email protected] Counsel to Defendant Gina Jennings DATED: April 13, 2018 Table of Contents I. Nature and Stage of Proceedings…………………..……………………… 1 II. Statement of Relevant Facts…………………………………………….… 3 III. Questions Involved……………………..…………………………….….... 7 IV. Argument…………………………………………………………………. 8 A. Standards for a Motion to Dismiss Under Rule 12(b)(6)……….…. 8 B. The Court of Chancery Lacks Subject Matter Jurisdiction Over This Case Because Adequate Remedies At Law Exist. )………………. 9 1. This Court Lack Subject Matter Jurisdiction Over This Declaratory Judgment Action Because There Is No Underlying Basis for Equity Jurisdiction……………….……………….. 9 2. This Court Lack Subject Matter Jurisdiction Over This Case Because Plaintiffs Are Truly Seeking A Writ of Mandamus..15 C. Counts I, II, and III Should Be Dismissed Because Plaintiffs Complaint Seeks An Advisory Opinion Disguised As Declaratory Relief.…..………….……………………………………………… 16 D. The Court Should Dismiss Gina Jennings From The Litigation As She Is An Improper Party to the Law Suit………………………....19 E. Plaintiffs’ Claims Should Be Dismissed For Failure To Exhaust Administrative Remedies. ………………………………………... 21 V. Conclusion…………………………………………………………..….... 23 i Table of Authorities CASES Abry Partners V, L.P. v. F & W Acq. LLC, 891 A.2d 1032, 1059 (Del. Ch. 2006)………………………………………………………………………………45 Addy v. Short, 47 Del. 157, 163 (1952)……………….…….…………………… 42 Allen v. El Paso Pipeline Gp Co., 113 A.3d 167, 177, 2014 Del. Ch. LEXIS 104, *17-18, 2014 WL 2819005…………………………………………………….… 37 Allen v. El Paso Pipeline GP Co., LLC, 2014 Del. Ch. LEXIS 104, 2014 WL 2819005, at *10 (Del. Ch. June 20, 2014)…………………………………..…… 59 Allied Capital Corp. v. GC-Sun Hldgs., L.P., 910 A.2d 1020, 1032 (Del. Ch. 2006)…………………………………………………………………………..… 59 Aspen Advisors, LLC v. UA Theater Co., 861 A.2d 1251, 1265-66 (Del. 2004).. 56 Bebchuk v. CA, Inc., 902 A.2d 737, 740 (Del. Ch. 2006)………………..……… 23 Candlewood v. Timber Group, LLC v. PanAm. Energy, LLC, 859 A.2d 989, 997 (Del. 2004)..…………………………………………….…………….……... 52, 59 Christiana Town Center, LLC v. New Castle County, 2003 Del. Ch. LEXIS 60, at *14 (Del. Ch. June 6, 2003…………………………………………….….…….. 18 Cummings v. Estate of Lewis, 2013 Del. Ch. LEXIS 65, at *27-28, 2013 WL 979417 (Del. Ch. Mar. 14, 2013)….…………………………………………….. 23 Gelof v. Schramm, 1984 Del.Ch.LEXIS 498, at *5 (Del. Ch. June 4, 1984) …… 16 Gloucester Holding Corp. v. U.S. Tape & Sticky Prods., LLC, 832 A.2d 116, 123 (Del. Ch. 2003) ……………………………………………………………….… 46 Grobow v. Perot, 539 A.2d 180, 187 & n.6 (Del. 1988)..……….………………. 14 ii H-M Wexford LLC v. Encorp, Inc., 832 A.2d 129, 139 (Del. Ch. 2003)…..….… 14 In re Peierls Family Inter. Trusts, 59 A.3d 471, 477 (Del. Ch. 2012…………… 23 Medek v. Medek, 2008 Del.Ch.LEXIS 132, at *10, 2008 WL 4261017, (Del. Ch. Sept. 10, 2008)…………………………………………………………………….16 Morris v. Board of Education of Laurel Sch. Dist., 401 F.Supp. 188, 203-04 (D. Del. 1975) …………………………………………………………..…………… 28 Organovo Holdings, Inc. v. Dimitrov, 162 A.3d 102, 113 (Del. Ch. 2017)….…...58 Rollins Int’l, Inc. v. Int’l Hydronics Corp., 303 A.2d 660, 662-63 (Del. 1973)…. 23 SimplexGrinnell,L.P. v. Del. DOL, 2012 Del. Ch. LEXIS 254, at *13 (Del. Ch. Oct. 31, 2012) ……………..….………………………………………………..……... 27 Smyrna v. Kent County Levy Court, 2004 Del.Ch. LEXIS 163, at *14 (Del. Ch. Nov. 9, 2004) …………….………………………………………………..……...16 Sprint Nextel Corp. v. iPCS, Inc., 2008 Del. Ch. LEXIS 90, at *52 (Del. Ch. July 14, 2008) ……………………………………………………................................ 23 Theis v. Board of Educ., 2000 Del. Ch. LEXIS 48, at *10, 2000 WL 341061 (Del. Ch. Mar. 17, 2000………….……………………………………………………...16 Western Air Lines, Inc. v. Allegheny Airlines, Inc., 313 A.2d 145 (Del. Ch. 1973)16 Young v. Red Clay Consol. Sch. Dist., 159 A.3d 713, 780-781 (Del. Ch. 2017)....18 RULES and STATUTES 9 Del. C. § 7001...…………………………………………………………..……. 20 9 Del. C. § 7002….…..…………………………………………..………………. 20 iii 9 Del. C. § 7004(c)…..…………………………………………..………………. 19 9 Del. C. § 8306.....………………………………………………..……….… 20, 24 10 Del. C. § 6501...……………………………………………………………….19 14 Del. C. § 121(a).…………………………………………………………...19, 22 14 Del. C. § 122(a).……………………………………………………………….15 14 Del. C. § 201...……………………………………………….………………. 19 14 Del. C. § 220...…………………………………………….…………………. 16 14 Del. C. § 1702(a)..………………………………………………………..…… 3 14 Del. C. § 1704…..……………………………………………………………..10 14 Del. C. § 1902…..……………………………………………………………. 26 Chancery Rule 56…………………………………………………………..…… 37 iv I. NATURE AND STAGE OF THE PROCEEDINGS Plaintiffs Delawareans for Educational Opportunity, and the NAACP Delaware State Conference of Branches (“NAACP-DE”)(collectively, the “Plaintiffs”), filed this action in the Court of Chancery for the State of Delaware against Defendants John Carney, Governor of the State of Delaware (“the Governor”), Susan Bunting, Delaware Secretary of Education and head of the Delaware Department of Education (“the Secretary of Education”), Kenneth A. Simpler, Treasurer of the State of Delaware (“the State Treasurer”), Susan Durham, Director of Finance for Kent County (“Defendant Durham”), Brian Maxwell, Chief Financial Officer for New Castle County (“Defendant Maxwell”), and Gina Jennings (“Defendant Jennings”), Finance Director of Sussex County, (collectively the “Defendants”). Plaintiffs allege that Defendants violated the Education Clause of Delaware’s Constitution, for a myriad of reasons. Plaintiffs’ Verified Complaint (the “Complaint”) is attached hereto as Exhibit A. Plaintiffs’ fifty-six-page Complaint memorializes the history of Delaware’s Education system and reform, describes the State’s current system, and describes the alleged deficiencies within the State’s public education system. This is the brief in support of the Motion to Dismiss filed by Defendant Jennings, the Finance Director for Sussex County. Because (i) this Court lacks 1 jurisdiction; (ii) Plaintiffs’ Complaint seeks an advisory opinion; (iii) Defendant Jennings is an improper party; and (iv) Plaintiffs fail to demonstrate that they exhausted their administrative remedies before seeing judicial review of this action, the Complaint must be dismissed in its entirety. These arguments are amplified below. 2 II. STATEMENT OF RELEVANT FACTS Without reiterating every factual allegation and proffered statistic in the Complaint, a summary of Plaintiffs’ alleged facts relevant to this Motion are set forth below. The crux of Plaintiffs’ Complaint is their plea to increase funding and restructure Delaware’s policies for the education of “disadvantaged students,”1 as they deem necessary to comply with the State’s constitution. Compl. at ¶ 7. One of Plaintiffs’ primary funding grievances is the process by which the State2 provides funding to the schools, which is referred to as Delaware’s “Unit Funding Approach.” Id. at ¶¶ 34-42. The “Unit Funding Approach” codified at Title 14, Chapter 17 of the Delaware Code, provides that Delaware’s public schools receive funding from the State through three “divisions.” 14 Del. C. § 1702(a). Division I funding is designated to compensate the employees of the school districts, and Division II appropriations include all other school “costs and energy, except those for debt service and the transportation of pupils.” Id. Finally, Division III appropriations go toward “educational advancement.” Id. Division III funding is also referred to as 1 As a note, Plaintiffs do not define who these disadvantaged students are with clarity. 2 The public schools obtain funding through three main avenues: the federal government, the state government, and then the localities. Compl. at ¶ 27. 3 “equalizing funding.” 14 Del. C. § 1704. Plaintiffs claim that the purpose of the Division III funding is to “compensate for the different abilities of local school districts to raise additional funds through real estate taxes, but “it does not fulfill that purpose.” Compl. at ¶ 28. Plaintiffs claim that this funding approach causes inequality between the districts because the calculation of division funding is based on the number of “units” of students in the district (Id. at ¶ 31), and that the statute enacted to rectify this issue (division III funding) does not consider the “greater needs of Disadvantaged Students.” Id. at ¶¶ 43-50. Plaintiffs also contend that issues arise when local funding for education— which is derived from local real estate taxes—becomes “reduced and stagnant” because the tax percentages are “based on an assessment of real estate done in the last century.” Id. at ¶¶ 51-54. Plaintiffs next contend that the between 1981 and 2018, the State has not changed the pupil
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