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CHARLES AND PATSY BROWN AND PREVAILING FAITH MINISTRIES AKA/DBA PREVAILING FAITH CHRISTIAN ACADEMY v. JOHN WHITE, SUPERINTENDENT LOUISIANA DEPARTMENT OF EDUCATION and LOUISIANA DEPARTMENT OF EDUCATION STATE OF LOUISIANA and LOUISIANA BOARD OF ELEMENTARY AND SECONDARY EDUCATION (BESE)
Plaintiffs, Charles Brown and Patsy Brown, as co-pastors and operators of Prevailing Faith Christian Academy, filed suit against the Louisiana Department of Education, John White in his capacity as former Superintendent of the Louisiana Department of Education, and the Board of Secondary and Elementary Education (BESE), seeking declaratory relief and alleging due process violations and tort claims.1 For the following reasons, the trial court's July 21, 2022 judgment granting the motion for summary judgment in favor of the Department, Superintendent White, and BESE is affirmed in part and reversed in part. Additionally, we notice a peremptory exception raising the objection of no cause of action, sua sponte, finding the plaintiffs fail to state a cause of action against the Board of Secondary and Elementary Education and render judgment dismissing this defendant, with prejudice.
Legal History & Applicable Law
In 2008, the Louisiana legislature enacted the “Student Scholarships for Educational Excellence Act” and created the “Student Scholarships for Educational Excellence Program.” La. R.S. 17:4011, La. R.S. 17:4014. The program, sometimes colloquially referred to as the “voucher program,” was intended to “create additional options” for all Louisiana schoolchildren by providing scholarships to eligible students to attend participating schools. La. R.S. 17:4012.
The Louisiana Department of Education administers the program and determines student eligibility for scholarships. La. R.S. 17:4014, La, R.S. 17:4015(1). The Department notifies parents and students whether they have been awarded a scholarship and remits scholarship payments to participating schools on behalf of scholarship recipients. La. R.S. 17:4015(4) and (5); La. Admin. Code tit. 28, Pt. CLIII, § 303. The amount to be paid for a scholarship is divided into four equal payments made to each participating school in September, December, February, and May of each school year. La. R.S. 17:4017(A); La. Admin. Code tit. 28, Pt. CLIII, § 501(E).
A school that chooses to participate in the voluntary program and elects to enroll scholarship recipients must annually notify the Department of its intent to participate and specify the number of seats the school will have available for scholarship recipients at each grade level. La. R.S. 17:4020; La. Admin. Code tit. 28, Pt. CLIII, § 301(B). To be eligible to participate, a nonpublic school must, among other things, meet program requirements and must be approved by BESE. La. R.S. 17:11, La. R.S. 17:4013(3), and La. R.S. 17:4021; La. Admin. Code tit. 28, Pt. CLIII, § 101, § 1303. Pursuant to a legislative directive, BESE adopted and promulgated rules and regulations in accordance with the Administrative Procedure Act to implement the provisions of the Student Scholarships for Educational Excellence Act. La. R.S. 17:4025(A). Bulletin 133, published in the Louisiana Administrative Code, was promulgated in accordance with this requirement. La. Admin. Code tit. 28, Pt. CLIII, § 101, et seq.
Pertinently, a participating school must submit to the Department an independent financial audit of the school conducted by a certified public accountant who has been approved by the legislative auditor. La. R.S. 17:4022(3); La. Admin. Code tit. 28, Pt. CLIII, § 501(G), § 901(A)(6), and § 1303. The annual audit shall address rules of financial practice contained in Bulletin 133. These rules require that scholarship funds be spent on “educational purposes” and prohibit any expenditure of scholarship funds constituting “gross irresponsibility.”2 La. Admin. Code tit. 28 Pt. CLIII, § 1303. “Violations may result in a school being declared ineligible to participate.” La. Admin. Code tit. 28, Pt. CLIII, § 1303. Similarly, failure to correct violations of the rules contained in Bulletin 133 or evidence of gross fiscal irresponsibility “may result in penalties including the school being declared ineligible to participate.” La. Admin. Code tit. 28, Pt. CLIII, § 1303.
Prevailing Faith Christian Academy, a nonpublic school in Monroe, Louisiana, participated in the program. During the 2013-2014 school year, the Academy submitted to the required program audit performed by Postlethwaite & Netterville, an independent accounting firm appointed by the legislative auditor. Postlethwaite & Netterville identified non-payroll expenditures by the Academy that either lacked supporting documentation or did not meet criteria for “educational purpose” and concluded that a program overpayment was made to the Academy in the amount of $13,635.75. By May 2014, the Academy had not provided Postlethwaite & Netterville with documentation to address the areas of non-compliance. As a result, the Department withheld $10,200 from program funds disbursed to the Academy in May 2014.
Thereafter, the legislative auditor conducted an investigation of the Academy. See La. R.S. 17:4022(3), La. R.S. 24:513. In its September 2015 report, the legislative auditor concluded that the Academy did not maintain adequate financial records for the period July 1, 2013 to July 1, 2014. It found $84,924 of expenditures in program scholarship funds, which were either unsupported by documentation or did not meet criteria for “educational purpose.” The legislative auditor concluded that the Academy “should return the $84,924 to the Department of Education.” As a result of this determination, $74,724 of scholarship funds was withheld from the 2015-2016 first quarter disbursement made to the Academy, for a total amount of $84,924 in withheld program funds.3 The Academy was removed from the program due to its purported “gross fiscal irresponsibility.”
The Browns, in their capacity as administrators of the Academy (collectively referred to as “the Academy”), filed a petition for declaratory relief and damages against the Department, former Superintendent John White, and BESE. The Academy sought a declaration that the Department acted outside of its statutory authority and violated state law by removing the Academy from the program “prior to first placing [it] on a one year probation.” The Academy also alleged that the Department violated state and federal due process principles by removing it from the program “without a hearing or some other form of due process of law.” Finally, the Academy asserted tort claims and sought damages, including reputational damages and lost income.
The defendants filed a motion for summary judgment in May 2019, asserting that the Academy had no vested property interest in the program and was not entitled to a one-year probationary period prior to being terminated from the program. Therefore, the defendants argued that the Academy could not succeed on a due process claim.
The defendants also moved for summary judgment on the basis that they are entitled to discretionary immunity pursuant to La. R.S. 9:2798.1 or quasi-judicial immunity. The defendants asserted that the actions taken in response to the Academy's purported violation of program rules were discretionary and were “purely adjudicative” decisions. According to the defendants, the relevant statutes do not set forth specific steps that must be taken before a school may be removed from the program; “rather, the decision is merely discretionary.” In the defendants’ reply memorandum in support of the motion, they asserted that Superintendent White is entitled to “qualified immunity for the alleged constitutional violations under the Fourteenth Amendment.” This defense appears to be based on qualified immunity as applied in actions brought against government officials under 42 U.S.C. § 1983. See Petersen v. Johnson, 57 F.4th 225, 232 (5th Cir. 2023).
In opposition to the motion, the Academy argued that certain testimony by Superintendent White undermined the defendants’ assertion that the complained-of decisions were discretionary. Particularly, Superintendent White testified that, when a school is declared ineligible, it is a function of the regulations and a determination of whether the facts satisfy the criteria, not the decision-making authority of the state superintendent or any other official. Thus, the Academy argued that whether the Department was engaged in policymaking or discretionary acts within the course and scope of its lawful duties was an unresolved issue of material fact.
The Academy further asserted that the evidence offered by the defendants demonstrated that the challenged actions were taken by the Department, not Superintendent White or BESE; therefore, neither of these defendants were entitled to immunity for policymaking or discretionary acts. Additionally, the Academy maintained that the Department exceeded its statutory authority by removing the Academy from the program. According to the Academy, once the Department concluded that it was not compliant with program criteria, the only option was to place the Academy on probation pursuant to La. R.S. 17:4022(3).
On the issue of due process, the Academy argued that it had protected property interests in both the money it already received and its “legal status” as a program participant, which it already attained. Finally, the Academy objected to the Postlethwaite & Netterville report attached to the defendants’ motion on the basis that the document was “written hearsay” and argued that the accounting firm, not the Department, made the ultimate decision regarding the Academy's eligibility to participate in the program, an unauthorized exercise of the Department's statutory authority.
A contradictory hearing was held on June 27, 2022. The trial court overruled the objection to the Postlethwaite & Netterville accounting report, finding it was commissioned and utilized by the state and was a public record. The trial court granted the defendants’ motion for summary judgment at the conclusion of the hearing. The trial court found there was “no protected property interest involved here” and, therefore, no due process violation. The trial court also concluded that all defendants were entitled to “qualified immunity.”
A written judgment in conformity with this ruling was signed on July 21, 2022, and this appeal by the Academy followed. The Academy asserts that the trial court erred by finding the defendants “were cloaked with the protection of qualified immunity from suit” and by concluding that it had no property interests in its status as a program participant and in the funds “seized” by the Department.
Motion for Summary Judgment Standard and Standard of Review
After an opportunity for adequate discovery, a motion for summary judgment shall be granted if the motion, memorandum, and supporting documents show there is no genuine issue as to material fact and the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966(A)(3). Using the same criteria as the trial court, appellate courts review evidence de novo to determine whether summary judgment is appropriate. Lester v. BREC Foundation, 2022-0514 (La. App. 1st Cir. 11/4/22), 356 So.3d IB, 22, writ denied, 2023-00019 (La. 3/7/23).
Since the Academy will bear the burden of proving the merits of its due process claim at trial, the shifting burdens of proof set forth in La. C.C.P. art. 966(D)(1) apply to this claim. Pursuant to Article 966(D)(1), the initial burden of proof is on the party filing the motion for summary judgment. The documentary evidence, offered by the mover in accordance with Article 966(A)(4), must prove the essential facts necessary to carry his burden. Thus, in deciding a motion for summary judgment, it must first be determined whether the supporting documents presented by the mover are sufficient to resolve all material fact issues. Once the motion has been properly supported by the moving party, and the mover has made a prima facie showing that the motion should be granted, the burden then shifts to the non-moving party to produce factual support sufficient to establish that he will be able to satisfy his evidentiary burden of proof at trial, that is, the existence of a genuine issue of material fact or that the mover is not entitled to judgment as a matter of law. See La. C.C.P. art. 966(D)(1). If the non-moving party fails to produce factual support in opposition sufficient to establish that he will be able to satisfy his evidentiary burden of proof at trial, Article 966 mandates the motion for summary judgment be granted. Flynn v. Anytime Fitness, LLC, 2022-0742 (La. App. 1st Cir. 12/29/22) ____ So.3d ____, 2022 WL 17982922, *2, writ denied, 2023-00108 (La. 4/4/23) ____ So.3d ____, 2023 WL 2768954.
A different standard applies to the determination of whether the motion for summary judgment should be granted on the issue of immunity, which is an affirmative defense. The party asserting the defense bears the burden of proof, and immunity statutes are strictly construed against the party claiming immunity. See Dominique v. St Tammany Parish, 2019-0452 (La. App. 1st Cir. 9/16/20), 313 So.3d 307, 314, writ denied, 2020-01202 (La. 12/22/20), 307 So.3d 1045. When the moving party will bear the burden of proof at trial, he must support his motion for summary judgment with credible evidence that would entitle him to a directed verdict if not controverted at trial.4 Lester, 356 So.3d at 22-23; Hines v. Garrett, 2004-0806 (La. 6/25/04), 876 So.2d 764, 766 (per curiam). Such an affirmative showing shifts the burden of production to the party opposing the motion and requires the opposing party to produce evidence to demonstrate the existence of a genuine issue for trial. Lester, 356 So.3d at 23; Hines, 876 So.2d at 766-767.
On appeal, the Academy asserts that its due process rights protected by the Fourteenth Amendment were violated when the Department terminated its participation in the program and withheld program funds.
The Fourteenth Amendment provides both substantive and procedural due process protections.5 Holden v. Perkins, 398 F.Supp.3d 16, 22 (E.D. La. 2019). To establish a violation of either, the plaintiff must first establish a denial of a constitutionally protected property right. Bryan v. City of Madison, Mississippi, 213 F.3d 267, 274 (5th Cir. 2000). A protected property interest requires more than a person's abstract need, desire, or unilateral expectation of it. A property interest is created when a person has secured an interest in a specific benefit to which the individual has “a legitimate claim of entitlement.” Holden, 398 F.Supp.3d at 22-23. Cases similarly hold that, for purposes of due process, a right is vested when “the right to enjoyment, present or prospective, has become the property of some particular person or persons as a present interest. The right must be absolute, complete and unconditional, independent of a contingency, and a mere expectancy of future benefit ․ does not constitute a vested right.” Paul v. State, Department of Public Safety, 2015-0073 (La. App. 1st Cir. 9/18/15), 182 So.3d 178, 185, writ denied, 2015-1930 (La. 11/30/15), 184 So.3d 34.
We find the defendants satisfied their burden of demonstrating the absence of a protected due process right, and the Academy failed to rebut this by showing a vested property interest existed in either its continued participation in the program or in the receipt of scholarship funds. Bulletin 133 makes it clear that a school's continued participation is contingent upon its compliance with program criteria and financial rules. La. Admin. Code tit. 28, Pt. CLIII, § 901, § 1303. Additionally, a school must submit notice to the Department of its intent to participate every year; participation is not automatically renewed. La. R.S. 17:4020; La. Admin. Code tit. 28, Pt. CLIII, § 301(B). See Holden, 398 F.Supp.3d at 23 (finding student did not have a protected property interest in the renewal of her year-to-year athletic scholarship or in her participation on the women's volleyball team). Superintendent White confirmed there is “no inherent right to participate in the program.”
Program statutes and Bulletin 133 also make it clear that scholarship funds are awarded to students, not participating schools. Louisiana Revised Statutes 17:4013(5) defines “scholarship” as “the funds awarded to a parent or other legal guardian on behalf of an eligible student to attend a participating public or nonpublic school.” “Scholarship recipient” is defined as “an eligible student who is awarded a scholarship.” La. R.S. 17:4013(6); La. Admin. Code tit. 28, Pt. CLIII, § 101. See also La. R.S. 17:4015(3)(a) (Department shall “award scholarships to eligible students.”) Additionally, unlike schools, “[s]cholarship recipients shall remain eligible to receive scholarships in each succeeding year that they remain enrolled in a participating school through grade twelve.” La. R.S. 17:4018. It is apparent that hands are not awarded directly to the schools, but are merely disbursed to schools on behalf of enrolled participating students. See La. R.S 17:4015(5) (requiring the Department to “[r]emit scholarship payments to participating schools on behalf of a scholarship recipient.”) See also La. Admin. Code tit. 28, Pt. CLIII, § 303(A)(6). Finally, schools are expressly advised that they “shall return to the state any funds that the legislative auditor determines were expended in a manner inconsistent with state law or program regulations.” La. R.S. 17:4022(3). See also La. Admin. Code tit. 28, Pt. CLIII, § 501(G)(4).
Any unilateral expectation the Academy had in its continued participation in the program and in receiving program funds did not give rise to a protected property right due process clause. See Holden, 398 F.Supp.3d at 22-23; Paul, 182 So.3d at 185. We affirm the portion of the July 21, 2022 judgment in favor of BESE, the Department, and Superintendent White that granted the motion for summary judgment to dismiss the Academy's due process claims.
Type of Immunity at Issue
As an initial matter, we must clarify the type of immunity at issue. The defendants’ motion for summary judgment cited La. R.S. 9:2798.1, Louisiana's discretionary immunity statute, as the statutory source of the immunity to which they are allegedly entitled. They alternatively maintained that they are entitled to quasi-judicial immunity as an agency performing an adjudicatory role. Although the defendants’ motion for summary judgment referred to “qualified immunity,” the legal principles of qualified immunity articulated in cases dealing with claims under 42 U.S.C. § 1983 were not discussed until the defendants’ reply memorandum. For instance, the defendants’ reply memorandum cited the two-step § 1983 qualified immunity analysis that considers (1) whether the defendant's conduct violated the plaintiff's constitutional right and (2) whether the right was “clearly established” at the time of the challenged conduct. See Anderson v. Valdez, 845 F.3d 580, 599-600 (5th Cir. 2016) (applying this two-step inquiry to determine whether the government defendants were entitled to qualified immunity on the plaintiff's claim under 42 U.S.C. § 1983).
We also note that the trial court found that Superintendent White was entitled to “qualified immunity,” because he acted within the scope of his authority as superintendent - a standard more in line with La. R.S. 9:2798.1 discretionary immunity rather than § 1983 qualified immunity. See Dominique, 313 So.3d at 316 (finding sheriff's deputies were acting in the course and scope of their lawful powers and duties at the time of the challenged conduct and were entitled to discretionary immunity under La. R.S. 9:2798.1).
Because the defendants' motion for summary judgment discussed immunity for discretionary decisions pursuant to La. R.S. 9:2798.1 and for quasi-judicial functions, we address only these types of immunity. Pursuant to La. C.C.P. art. 966(F), “[a] summary judgment may be rendered or affirmed only as to those issues set forth in the motion under consideration by the court at that time.” Therefore, the defendants’ entitlement to qualified immunity for constitutional violations, as typically applied in the context of a 42 U.S.C. § 1983 claim, may not be considered because it was raised for the first time in their reply. See Smith v. Moreau, 2017-0003 (La. App. 1st Cir. 6/2/17), 222 So.3d 761, 766.
The Academy's Objection to Postlethwaite & Netterville Report
On appeal, the Academy re-urges its objection to the Postlethwaite & Netterville accounting report on the basis that it contains “written hearsay lacking foundational support for forensic use against [the Academy].” We find the report is admissible, proper summary judgment evidence and overrule the Academy's objection.
The Postlethwaite & Netterville report, formally titled “Scholarships for Educational Excellence Program Agreed-Upon Procedures Report for the Year Ended June 30, 2014,” is attached to the affidavit of Elizabeth Scioneaux, the Deputy Superintendent of Management & Finance for the Louisiana Department of Education. According to Ms. Scioneaux's affidavit, she is responsible for overseeing the maintenance, care, custody, and control of the Department's reports as part of her regular duties. Through her affidavit, Ms. Scioneaux authenticated the attached Postlethwaite & Netterville report as a “certified, true[,] and correct copy of [the] official record/document/entry authorized by law to be recorded and filed” with the Department. She further attested that the report was kept in the course of the Department's regularly conducted business activity and was made as a regular practice of the Department. See La. C.E. arts. 901, 905. Therefore, the Postlethwaite & Netterville report is proper summary judgment evidence. See La. C.C.P. arts. 966(A)(4) and 967. We further agree with the trial court that, based on the undisputed facts, the Postlethwaite & Netterville report is a public record, not excluded by the hearsay rule. See La. C.E. art. 803(8).
Actions by the Defendants
The Academy asserts that the defendants’ evidence establishes that the challenged actions - removing it from the program and “seizing” program funds - “were taken solely by the Department of Education and did not involve action by the Superintendent or [BESE].” (Emphasis in original.) Therefore, the Academy contends that neither Superintendent White nor BESE are entitled to discretionary immunity. We agree as to BESE only.
BESE is a body corporate constitutionally charged with the responsibly of supervising and controlling the public elementary and secondary schools and special schools under its jurisdiction. La. Const. art. VIII, § 3; La. R.S. 17:1. The Department is likewise a statutorily created entity. See La. R.S. 17:24. John White is sued in his capacity as the former superintendent of the Department. The superintendent is the administrative head of the Department and serves as the ex officio secretary for BESE. La. Const. art. VIII, § 2; La. R.S. 17:21, La. R.S. 17:22. The superintendent is responsible for implementing the policies adopted by BESE and the laws affecting schools under its jurisdiction. La. R.S. 17:22.
During his deposition, Superintendent White testified that, in his capacity as administrative head of the Department, he was responsible for carrying out program policies established by the legislature and by BESE. The summary judgment evidence also demonstrates that Superintendent White communicated with the legislative auditor on behalf of the Department concerning the Academy during the auditor's investigation. Therefore, as it relates to actions challenged by the Academy, we find no distinction between the actions taken by the Department and those taken by Superintendent White, as he carried out the functions of the Department.6 Therefore, in our discussion concerning discretionary immunity, we refer to Superintendent White and the Department collectively as “the Department.”
As it relates to the program, BESE adopted standards and guidelines concerning curriculum requirements for nonpublic schools, as well as rules and regulations to implement the program. La. R.S. 17:11(A)(1), La. R.S. 17:2025(A). See also La. Admin. Code tit. 28, Pt. CLIII, § 101, et seq. As Superintendent White explained, once BESE established program criteria, enforcement became the role of the Department. The Academy's first amended petition, which added BESE as a defendant, contained no factual allegations against BESE and did not allege that BESE negligently performed its program responsibilities, engaged in any of the challenged conduct, or participated in the decision to remove the Academy from the program or to withhold program funds. As a matter of law, BESE is not responsible for determining a school's continued program eligibility and is not involved in recouping program funds. Absent alleged wrongful conduct, BESE's actions cannot be tested pursuant to the discretionary immunity analysis. See Dominique, 313 So.3d at 316. Therefore, the trial court erred by granting summary judgment in BESE's favor based on immunity. This portion of the trial court's July 21, 2022 judgment is reversed.
However, for these reasons, we notice on our own motion that the Academy's petitions fail to state a cause of action against BESE and render judgment in favor of BESE, dismissing it from this suit.7 See La. C.C.P. art. 927(B) (The failure to disclose a cause of action may be noticed by the appellate court on its own motion.) See Moreno v. Entergy Corp., 2010-2268 (La. 2/18/11), 64 So.3d 761, 762 (recognizing a court of appeal may raise the peremptory exception of no cause of action sua sponte). See also La. C.C.P. art. 2164 (“The appellate court shall render any judgment which is just, legal, and proper upon the record on appeal.”) Accepting all well-pleaded allegations of fact set forth in the Academy's petitions as true, we must conclude that the Academy has failed to set forth a cause of action against BESE for which the law provides a remedy. See Sauce v. Burke, 2022-0541 (La. App. 1st Cir. 11/7/22), ___ So.3d ___, 2022 WL 16732252, *4-5.
We also conclude, based on the applicable program statues and guidelines, as well as the facts alleged, that the stated grounds of the objection cannot be removed by amendment of the petition. Therefore, an opportunity to amend is not warranted. See La. C.C.P. art. 934; Foster v. Bias, 2022-0329 (La. App. 1st Cir. 12/22/22), ___ So.3d ___, 2022 WL 17845488, *9, writ denied, 2023-00090 (La. 3/28/23) ___ So.3d ___, 2023 WL 2660741 (recognizing a court is not required to allow an amendment of the pleadings where the grounds for the objection of no cause of action cannot be removed by the amendment).
Discretionary Immunity per La. R.S. 9:2798.1
Louisiana Revised Statutes 9:2798.1 pertinently states:
A. As used in this Section, “public entity” means and includes the state and any of its branches, departments, offices, agencies, boards, commissions, instrumentalities, officers, officials, employees, and political subdivisions and the departments, offices, agencies, boards, commissions, instrumentalities, officers, officials, and employees of such political subdivisions.
B. Liability shall not be imposed on public entities or their officers or employees based upon the exercise or performance or the failure to exercise or perform their policymaking or discretionary acts when such acts are within the course and scope of their lawful powers and duties.
C. The provisions of Subsection B of this Section are not applicable:
(1) To acts or omissions which are not reasonably related to the legitimate governmental objective for which the policymaking or discretionary power exists; or
(2) To acts or omissions which constitute criminal, fraudulent, malicious, intentional, willful, outrageous, reckless, or flagrant misconduct.
* * * *
Pursuant to this statute, a public entity and its employees are immune from tort claims based on their policymaking decisions or discretionary acts when such acts are within the course and scope of their lawful powers and duties. Dominique, 313 So.3d at 314-315. Louisiana courts apply a two-part test to determine whether a defendant is entitled to immunity pursuant to La. R.S. 9:2798.1. See Dominique, 313 So.3d at 315. A court must first determine whether a statute, regulation, or policy requires the government employee to follow a particular course of action. If there is such a requirement, then there is no choice or discretion involved, and immunity does not apply. See Dominique, 313 So.3d at 316. However, in those instances where the exercise of discretion is involved, the court must then determine whether that discretion is the kind that is shielded by the exception, i.e., is grounded in social, economic, or political policy. Dominique, 313 So.3d at 315.
The Academy argues that the Department exceeded its statutory authority by removing it from the program. According to the Academy, the Department's only recourse was to place the Academy on probation for one year upon concluding that it violated program criteria. The Academy cites La. R.S. 17:4015(8)(a) as the source of this purported requirement. This statute provides that, in administering the program, the Department shall,
(8)(a) Place any participating school that fails to comply with the audit provisions pursuant to R.S. 17:4022(3) on probation for a period of one year during which such school shall not be permitted to enroll additional scholarship recipients)8
As noted, La. R.S. 17:4022(3) requires participating schools to submit to the Department an independent financial audit of the school conducted by a certified public accountant who has been approved by the legislative auditor. It is apparent from the plain and unambiguous language of La. R.S. 17:4015(8)(a) and La. R.S. 17:4022(3) that the one-year probationary period does not apply under the facts of this case. The Academy undisputedly complied with the audit requirements. Therefore, this argument lacks merit.
Next, the Academy cites excerpts from Superintendent White's deposition to support its assertion that a genuine issue of material fact remains concerning whether the decisions made by the Department were discretionary. After reading the entirety of Superintendent White's deposition, attached to the Academy's opposition to the motion, in conjunction with program regulations, we conclude that the excerpt cited by the Academy does not support its contention. Superintendent White testified that the determination of whether a participating school violated program criteria is not a “decision per se.” He explained that a school's ineligibility is a “function of the [program's] regulations.” Facts gathered during an investigation are applied to program criteria, and the school either satisfied the criteria or it did not. If not, the Department determines the school is ineligible to continue participating in the program. The applicable revised statutes, cited above, and Bulletin 133 do not dictate the actions that must be taken by the Department if a participating school fails to comply with program requirements. Instead, as the entity responsible for administering the program, the Department has the discretion to make this determination. See La. R.S. 17:4014. Bulletin 133 states,
A. To participate in the scholarship program, nonpublic schools shall satisfy the criteria within this Chapter in addition to criteria for participation already established in law. Schools that do not meet these criteria may be declared ineligible to participate in the program. Ineligibility to participate may result in the school enrolling no new students for one or more years, enrolling no new students permanently, or ending all participation immediately.
* * * *
Participating schools shall comply with the following rules regarding financial practice. Violations may result in a school being declared ineligible to participate.
* * * *
Failure to correct violations of the rules contained in this bulletin, or evidence of gross fiscal irresponsibility, may result in penalties including the school being declared ineligible to participate.
La. Admin. Code tit. 28, Pt. CLIII, § 1303 (Emphasis added.). Concerning program funds, Bulletin 133 provides that if the “audit yields a finding regarding tuition and fees or attendance, payment adjustments will be made to the May payment.” La. Admin. Code tit. 28, Pt. CLIII, § 501(E)(3). In accordance with this provision, the Department reduced the amount of program funds disbursed to the Academy in May 2014. Otherwise, neither La. R.S. 17:4011, et seq. nor Bulletin 133 prescribe how the Department must recoup program funds, particularly where, as here, the investigation into the full amount owed by the Academy was on-going at the time the May 2014 disbursement was made. The evidence demonstrates that communication between the Department, the Academy, and the legislative auditor concerning financial issues first identified during the 2013-2014 audit continued until September 2015. The applicable provisions require that a participating school “shall return to the state any funds that the legislative auditor determines were expended in a manner inconsistent with state law or program regulations.” La. R.S. 17:4022(3); La. Admin. Code tit. 28, Pt. CLIII, § 501(G)(4).
Having found that the Department had the discretion to determine whether to terminate the Academy's program eligibility and when/how to recoup the full amount of program funds owed by the Academy, the next inquiry is whether this statutory discretion is based on social, economic, or political concerns. See Dominique, 313 So.3d at 315-316.
There is a presumption that when government employees exercise discretion given to them by a statute or regulation, they are doing so based on the same policy concerns that animate the controlling statute or regulation itself. Dominique, 313 So.3d at 316. When the legislature enacted the program, it expressly recognized, “It is in the public interest that all Louisiana schoolchildren receive the best education that its citizens can provide, and the state of Louisiana has the right, responsibility, duty, and obligation to accomplish the objective of quality education for all Louisiana children.” La. R.S. 17:4012(1). Through the program, eligible students are provided with scholarship funds to attend a participating public or nonpublic school. La. R.S. 17:4012(2) and (6), La. R.S. 17:4015. By naming the Department as the administrator of the program, the legislature made the Department the steward of the students’ scholarship dollars, funds specifically allocated by the Department for this program. La. R.S. 17:4014, La. R.S. 17:4016. Thus, the same social, economic, and political policy considerations that served as the impetus for the program form the basis of the Department's discretion, and the exercise thereof, to determine continued program eligibility and whether, when, and how to recoup program funds owed to the Department. The discretionary immunity set forth in La. R.S. 9:2798.1 applies to the Department and Superintendent White.9 The portion of the July 21, 2022 judgment granting the motion for summary judgment in favor of the Department and Superintendent White, granting these defendants discretionary immunity pursuant to La. R.S. 9:2798.1, is affirmed.
For the foregoing reasons, the July 21, 2022 judgment granting the motion for summary judgment in favor of the Louisiana Department of Education, John White in his capacity as former Superintendent of the Louisiana Department of Education, and the Board of Secondary and Elementary Education is affirmed in part and reversed in part.
Specifically, we affirm summary judgment in favor of the Louisiana Department of Education, John White in his capacity as former Superintendent of the Louisiana Department of Education, and the Board of Secondary and Elementary Education dismissing the plaintiffs’ due process claims with prejudice.
We affirm summary judgment in favor of the Louisiana Department of Education and John White in his capacity as former Superintendent of the Louisiana Department of Education, finding these defendants are entitled to discretionary immunity pursuant to La. R.S. 9:2798.1. Therefore, the plaintiffs’ remaining claims against these defendants are dismissed with prejudice.
We reverse summary judgment in favor of the Board of Secondary and Elementary Education, finding this defendant is not entitled to discretionary immunity pursuant to La. R.S. 9:2798.1, but we sustain a peremptory exception raising the objection of no cause of action recognized by this court and render judgment in favor of the Board of Secondary and Elementary Education, dismissing it from the plaintiffs’ suit with prejudice.
Costs of this appeal are assed to plaintiffs, Charles Brown and Patsy Brown.
AFFIRMED IN PART; REVERSED IN PART; JUDGMENT RENDERED SUSTAINING PEREMPTORY EXCEPTION RAISING THE OBJECTION OF NO CAUSE OF ACTION AND DISMISSING THE BOARD OF ELEMENTARY AND SECONDARY EDUCATION WITH PREJUDICE.
1. Although the case caption identified Prevailing Faith Miniseries as a plaintiff, the petition did not identify this entity as a plaintiff. Instead, the only persons who asserted factual allegations and sought relief were Charles Brown and Patsy Brown, in their capacity as operators of Prevailing Faith Christian Academy, which appears to be a “doing business as” designation for Prevailing Faith Miniseries.
2. Bulletin 133 does not define “gross irresponsibility,” but “educational purposes” refers to the definition of the term found in the “most recently approved Minimum Foundation program formula.” La. Admin. Code tit. 28, Pt. CLIII, § 1303.
3. Two figures - $10,200 and $13,636 - appear in the record as the amount withheld from the Academy in May 2014. However, based on the subsequent withholding of $74,724 and the total amount due of $84,924, figures that are not in dispute, it appears that the amount withheld in May 2014 was $10,200.
4. A motion for directed verdict is appropriately granted when, after considering all evidentiary inferences in the light most favorable to the party opposing the motion, it is clear the facts and inferences are so overwhelmingly in favor of the moving party that reasonable men could not arrive at a contrary verdict. Wachovia Mortgage Corp. v. Hoover, 2021-1035 (La. App. 1st Cir. 4/8/22), 342 So.3d 1, 4.
5. The Due Process clause of the Fourteenth Amendment declares that no State shall “deprive any person of life, liberty, or property without due process of law.” U.S. Const. amend. XIV, § 1.
6. We find no merit in the Academy's argument that the Department improperly ceded its decision-making authority to Postlethwaite & Netterville regarding the Academy's program eligibility. It is evident from the record that both Postlethwaite & Netterville and the Department appropriately performed their respective functions pursuant to program requirements. See La. R.S. 17:4015(6), La. R.S. 17:4022(3); La. Admin. Code tit. 28, Pt. CLIII, § 501.
7. The peremptory exception raising the objection of no cause of action tests “the legal sufficiency of the petition by determining whether the law affords a remedy on the facts alleged in the pleading.” Everything on Wheels Subaru, Inc. v. Subaru South, Inc., 616 So.2d 1234, 1235 (La. 1993). The court reviews the petition and accepts well-pleaded allegations of fact as true, and the issue is whether, on the face of the petition, the plaintiff is legally entitled to the relief sought. Everything on Wheels Subaru, Inc., 616 So.2d at 1235.
8. Bulletin 133 similarly states that the Department shall place any participating school that fails to comply with the audit provisions pursuant to La. R.S. 17:4022(3) on probation for a period of one year during which such school shall not be permitted to enroll additional scholarship recipients. La. Admin. Code tit. 28, Pt. CLIII, § 501(H)(1).
9. Because we dispose of the plaintiffs’ claims on other grounds, we pretermit discussion of the defendants’ arguments concerning quasi-juridical immunity.
Welch, J. concurs without reasons.
Response sent, thank you
Docket No: 2022 CA 1122
Decided: April 14, 2023
Court: Court of Appeal of Louisiana, First Circuit.
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