Liddell, et al v. Board of Education, et al
Filing
519
OPINION, MEMORANDUM AND ORDER - IT IS HEREBY ORDERED that the Motion to Enforce Settlement, [Doc. No. 468 ], is granted in part and denied in part. IT IS FURTHER ORDERED that from the date of this Opinion, Memorandum and Order, all local desegregati on tax funds, whether paid to the District or allocated to the Charter schools through a deduction from the funds given to the District, and provided to the Charter schools, shall be used solely for desegregation programs. IT IS FURTHER ORDERED that if no desegregation programs exist in the Charter schools, the funds shall be turned over to the District to continue to implement and fashion the programs contemplated by the Settlement Agreement.. Signed by District Judge Henry Edward Autrey on 11/24/2020. (AAT)
Case: 4:72-cv-00100-HEA Doc. #: 519 Filed: 11/24/20 Page: 1 of 11 PageID #: 2248
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
CRATON LIDDELL, et al.,
)
)
Plaintiffs,
)
)
v.
)
)
BOARD OF EDUCATION OF THE )
CITY OF ST. LOUIS, MISSOURI, et )
al.,
)
)
Defendants.
)
No. 4:72CV100HEA
OPINION, MEMORANDUM AND ORDER
This matter is before the Court on Plaintiff’s Motion to Motion to Enforce
Settlement. The parties have submitted memoranda in support of their respective
positions. Additionally, the parties have provided supplemental briefs in response
to the Court’s Order of October 27, 2020. For the reasons set forth below, the
Motion is granted in part and denied in part.
Facts and Background
The Eighth Circuit Court of Appeal has set forth a succinct factual
background of this decade old case:
In 1972, Minnie Liddell, on behalf of African American school
children in St. Louis and their parents, filed suit against the St. Louis
Board of Education (the City Board). Liddell alleged that the City
Board and its administrators had perpetuated racial segregation and
discrimination in St. Louis public schools in violation of her children's
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constitutional rights. See Liddell v. Bd. of Educ., 469 F.Supp. 1304
(E.D. Mo. 1979).
In 1973, the district court certified the Liddell plaintiff class. In 1976,
another group of students and parents, together with the NAACP,
intervened in the litigation. We refer to them as the Caldwell-NAACP
plaintiffs. See Liddell v. Caldwell, 546 F.2d 768, 769 (8th Cir. 1976).
In 1977, the State of Missouri, the Missouri State Board of Education,
and the State Commissioner of Education were made defendants.
Liddell, 469 F.Supp. at 1312.
In 1983, the parties agreed on a comprehensive desegregation plan
that provided for a voluntary suburban transfer program, magnet
schools, new education programs, capital improvements, and
improved vocational education in the school district. Liddell v. Bd. of
Educ., 567 F.Supp. 1037 (E.D. Mo. 1983). The State and the City
Board funded this plan.
In 1996, the State moved for a declaration that the City Board no
longer operated a segregated school system and for relief from its
funding obligations under the desegregation plan. After three years of
negotiations, the parties reached, and the court approved, the 1999
Desegregation Settlement Agreement (the Agreement).
Under the Agreement, the parties agreed that the City Board would
continue various remediation programs. In exchange, the St. Louis
Public School District (the District) would receive a minimum of $60
million in funding per year, consisting of a combination of state aid
and local tax revenue. Senate Bill 781, passed in 1998, set forth a
revised funding formula for calculating state aid to the District. The
remainder of the Agreement's funding came from a “desegregation
sales tax” that St. Louis voters approved on February 2, 1999.
Senate Bill 781, in addition to providing state funding under the
Settlement Agreement, created St. Louis charter schools and provided
for their funding. The 1998 law required the District to pay charter
schools a per pupil portion of its state aid for each resident student
[2]
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who chose to attend a charter school rather than a District school.
From 1999 until 2006, however, the District did not include any
revenue raised from the desegregation sales tax in the funds that the
District transferred to the charter schools.
In 2006, the General Assembly passed Senate Bill 287, which revised
the state aid funding formula for public schools. See generally Mo.
Rev. Stat. § 163.031 (2006). Senate Bill 287 allowed charter schools
to be formed as “local educational agencies,” meaning that St. Louis
charter schools would receive aid directly from the State instead of the
District. Under the 2006 law, when a charter school declares itself a
local educational agency, the State must “reduce the payment made to
the school district by the amount specified in this subsection and pay
directly to the charter school the annual amount reduced from the
school district's payment.” Id. § 160.415.4. While Senate Bill 781 in
1998 had not required the District to pay any portion of its local tax
revenue to the charter schools, Senate Bill 287 in 2006 mandated that
charter students receive a per pupil percentage of local tax revenues
received by the District. Id. § 160.415.2(1), 160.415.4.
Liddell v. Special Admin. Bd. of Transitional Sch. Dist. of City of St. Louis, 894
F.3d 959, 963–64 (8th Cir. 2018).
Discussion
The parties are once again before the Court for a determination of whether
the State has violated the Desegregation Agreement by the mandate that charter
students receive a per pupil percentage of the local sales tax.
A district court possesses the inherent power to enforce a settlement
agreement where the terms are unambiguous. Barry v. Barry, 172 F.3d 1011, 1013
(8th Cir.1999)). It is well established that settlement agreements are governed by
principles of contract law. MLF Realty L.P. v. Rochester Ass'n, 92 F.3d 752, 756
[3]
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(8th Cir. 1996). “The essential elements of a valid settlement agreement are the
involvement of parties who are competent to contract, a proper subject matter,
legal consideration, mutuality of obligation, and mutuality of agreement.”
Chaganti & Assocs., P.C. v. Nowotny, 470 F.3d 1215, 1221 (8th Cir. 2006) (citing
L.B. v. State Comm. of Psychologists, 912 S.W.2d 611, 617 (Mo. Ct. App. 1995)).
“Courts are bound to enforce a contract as written if the terms of the contract are
clear, plain and unequivocal.” Kells v. Missouri Mountain Properties, Inc., 247
S.W.3d 79, 85 (Mo. Ct. App. 2008) (citing Malan Realty Investors, Inc. v. Harris,
953 S.W.2d 624, 626–27 (Mo. banc 1997)). “The creation of a valid settlement
agreement requires a meeting of the minds and a mutual assent to the essential
terms of the agreement.” St. Louis Union Station Holdings, Inc. v. Discovery
Channel Store, Inc., 301 S.W.3d 549, 552 (Mo. Ct. App. 2009).
There is no, nor can there be, any dispute that the Charter Schools were not
an entity party to the Settlement Agreement. Charter Schools did exist at that time.
Thus, it could not be contemplated by the parties that a separate group of City
students would need to be factored into the Agreement; there were no separate
“charter school” current resident City students at the time. The Charter Schools
were created by Senate Bill 781, which also provided a portion of the funding
under the Settlement Agreement.
[4]
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Plaintiffs argue the per pupil percentage violates the Settlement Agreement.
Plaintiffs contend the tax was an impetus for entering into the Settlement
Agreement in order to implement the plan for desegregation. It is, under the
Agreement, to be used solely for remediation of the segregation and discrimination
which prompted the filing of this lawsuit; since the State does not require the funds
to be used for remediation purposes, the allocation of the tax revenue to the Charter
schools is a violation of the agreement.
The State argues it has not violated the Settlement Agreement. It contends
that, reading the Settlement Agreement as a whole, rather than taking provisions
out of context, its actions in allocating the per pupil percentage to the Charter
Schools is proper under Section 11, subtitled “Funding,” of the Settlement
Agreement.
The relevant portions of Section 11 provides:
11.1 FUNDING-The parties agree that an express condition to the City
Board’s decision to accept this Agreement is that the sales tax and the
resulting State aid will produce a minimum of $60 million in additional
funding for the St. Louis Public Schools based on current SLPS enrollments
and current levels of participation in the interdistrict transfer program.
Towards this end, the signatories agree that at no time will any proration
factor affecting Line 14(a) or (b) be less than the highest proration factor
applied to Lines 1(a) or (b) of the State Foundation. The parties also agree
that with a proration factor of 1.0, the Formula will generate funds as set
forth in Appendix B, Columns 4, 5 and 6. For the 1999-2000 school year,
no revenue amounts received because of half-count transfer students during
the 1998-1999 school year will be included in lines 7, 8 or 9 of the State Aid
Formula.
[5]
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11.2 The State contractually guarantees the City Board for current resident
City students after deductions that full funding of SB 781 will in fact be
provided in the future as follows: (1) the amount per pupil for 1999-2000
shall be $4,154 for a free and reduced lunch student and $2,838 for a nonfree and reduced lunch student for Lines 1 and 14 of the Formula after
deductions, and (2) for each year thereafter, the State contractually
guarantees payment of Lines 1 and 14 of the Formula after deductions of the
greater of the amount computed for the 1999-2000 or the amount calculated
for the then current year.
Without limiting any current (or future new) source of funding to which
Participating Districts or the New Entity are entitled based on services
provided, staffing or any other criteria, the State contractually guarantees the
City Board and the New Entity that full funding of SB 781 on a per pupil
basis shall be provided, and further specifically agrees as follows:
(1)
For 1999-2000, the State contractually guarantees to pay to the
new entity (or its designee) for per-pupil State aid the greater of the
total amount set forth below (which is based in part on DESE
estimates and current year actuals as indicated) or the total amount
hereafter calculated based on actual year-end figures for 19992000:…..Total $6,459.00
In addition, for each pupil qualifying for the free and reduced lunch
program, line 14 funding is also contractually guarantee by the State in the
following minimum amounts per pupil: …Total $1,335.94
(2)
For each year thereafter (subject to the temporal limit set forth
below in this paragraph 11), the State guarantees contractually
payment of the greater of the per pupil amounts guaranteed for the
1999-2000 less $465 per pupil (which is a stipulated deduction
solely for the purpose of establishing a floor) or the amounts
calculated for the then current year. Furthermore, the State
guarantees contractually that in any future year (subject to the
temporal limit set forth below in this paragraph 11), the Formula
items in the foregoing calculations (line 1, 14a and line 14b) shall
not be reduced below the amounts guaranteed for those items for
1999-2000 (less the aforesaid stipulated $465 per pupil).
[6]
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Clearly, pursuant to the specific terms of the Settlement Agreement, the
parties intended the funding to be based on a “per pupil” basis for City public
school students. It is indisputable that charter school students are public school
students. The charter school students, therefore, should be entitled to the same per
pupil funding formula as District school students. There is no violation of the
Agreement with the State reducing the amount of the tax revenue to the District
from District funds.
The violation, however, arises with the use by the Charter schools of the funds
deducted from the amount the State gives to the District. The Settlement
Agreement sets out the reasons for its creation and the reasons, compelling as they
were and are, the parties mutually agreed to forego further litigation in the class
action suit challenging the segregation of St. Louis City schools. They resolved
this case by continuing the Court ordered remediation requirements and by
agreeing to implement substantial measures to eliminate the discrimination and
segregation in the school system. They agreed to fund these measures through the
State aid and the local “desegregation” sales tax. It is curious and interesting the
State argues thaprovisions of the Settlement Agreement, with regard to its per pupil
argument, should not be taken out of context, while it chooses to ignore other
equally significant terms of the Agreement. As a result of a legislative strike on the
[7]
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legislative roulette wheel the Charter schools are not providing remedial constructs
to racial segregation as contemplated and required by the settlement agreement.
The parties unambiguously set out their intent and the purpose of the
Agreement, while recognizing that the City Board was required, by previous Court
Orders, to implement remedial programs.
The parties recognize that the substantive remedial obligations of the City
Board are set forth in various court orders. These include, but are not
limited to: the District Court's Order of July 5, 1983, Liddell v. Board of
Education, 567 F. Supp. 1037 (E.D.Mo. 1983) (providing inter alia, for
magnet schools, part-time educational programs, quality education
initiatives, and other Milliken 11 programs in the public schools of the City
of St. Louis); the District Court's Order of May 21, 1980, Liddell v. Board of
Education, 491 F.Supp. 351 (E.D. Mo. 1980) (providing for a
comprehensive desegregation plan including, inter alia, student assignment,
transportation, faculty and. staff assignment, certain magnet schools, and
educational improvements); and various other subsequent remedial orders
directed to the City Board.
The Plaintiffs, the United States and the City Board recognize the need
for continuing remedial efforts to ensure that the enjoyment of full equality
of opportunity by plaintiff school children is not impaired by the effects of
past segregation.
This Agreement is intended to provide a complete substitute for and
modification of all substantive remedial obligations placed upon the City
Board by the above referenced orders, subject to financing pursuant to
Missouri Senate Bill 781.
This Agreement is intended to serve as a final judgment as to the State
Defendants and the City Board in the Liddell litigation and to terminate the
continuing jurisdiction and supervision of the Court over the State
Defendants and City Board subject only to Section 22 of this Agreement.
[8]
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The parties have entered into this Agreement to dispense with the likelihood
of further complex, lengthy and expensive litigation and to provide an
appropriate education for St. Louis children.
Section 9 of the Settlement Agreement provides:
The City Board, the SSD, the Metropolitan Cooperative and all parties
recognize that desegregation serves important remedial and educational
goals and helps children to prepare for participation in a pluralistic society.
Therefore, the City Board, the SSD, the Metropolitan Cooperative and all
parties will continue to pursue a policy of desegregation, which will
include decisions and actions relating to the assignment of students to
schools and classrooms, the construction, consolidation, closing or
renovation of school facilities and the assignment of faculty and staff to
schools.
As a substitution for the remedial Orders entered in this litigation, the City
Board continues to be obligated to use the agreed funding to implement
desegregation measures in the District schools. The same applies to the funds
allocated to the Charter public schools. But for the agreement to fund the
remediation programs, the Agreement would not have been consummated.
Plaintiffs urge the Court to order the State to repay the funds previously
withheld from the District schools and given to the Charter schools. The District,
however, did not object or otherwise challenge the violation until 2016, and the
District has failed to adequately argue that it did not relinquish its right to
challenge these payments. Moreover, there has been some suggestion that the
District did not utilize all funds for remediation purposes. That portion of the
Motion to Enforce Settlement will be denied, without prejudice upon the
[9]
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justification for the delay and establishment that all funds collected through the
local tax have been utilized by the District for remediation purposes.
Conclusion
The purpose of the Settlement Agreement was to resolve the ongoing
litigation over desegregation in the St. Louis public schools. The parties, including
the State of Missouri, agreed that the Settlement Agreement was a substitution for
the remediation obligations of the City. As such, the parties agreed that the
funding of the Settlement would come from the State and a local sales tax. These
funds would be limited solely to remediation programs. In light of the current state
of affairs in our nation today, it is imperative of our collective conscience that all
discriminatory, segregationist, and otherwise divisive activities be fully and
absolutely denounced by all citizens who abide in this republic. Considering this, it
is incumbent upon those entities charged with providing the education of the public
school students to rise above and fulfill the duty to provide a nondiscriminatory
and desegregated school system. Equality and the path for opportunity extends not
only outside the public school system in St. Louis, but within it as well. The local
sales tax was intended to implement desegregation programs for all public school
students, whether they attend District public schools or Charter public school.
Ergo, the tax funds must be utilized as such in Charter schools as well as District
schools.
[10]
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And, so it is.
Accordingly,
IT IS HEREBY ORDERED that the Motion to Enforce Settlement, [Doc.
No. 468], is granted in part and denied in part.
IT IS FURTHER ORDERED that from the date of this Opinion,
Memorandum and Order, all local “desegregation” tax funds, whether paid to the
District or allocated to the Charter schools through a deduction from the funds
given to the District, and provided to the Charter schools, shall be used solely for
desegregation programs.
IT IS FURTHER ORDERED that if no desegregation programs exist in
the Charter schools, the funds shall be turned over to the District to continue to
implement and fashion the programs contemplated by the Settlement Agreement.
Dated this 24th day of November, 2020.
___________________________________
HENRY EDWARD AUTREY
UNITED STATES DISTRICT JUDGE
[11]
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