NY Appeals Court Upholds Plaintiffs’ Claims of Insufficient School Funding in Long-Pending “Small-Cities” Case

Last week, in a striking decision, a five-judge panel of the Appellate Division, Third Department, ruled unanimously that the plaintiffs in each of eight small-city New York school districts (Jamestown, Kingston, Mount Vernon, Newburgh, Niagara Falls, Port Jervis, Poughkeepsie and Utica) had proved they were being denied the opportunity for a sound basic education guaranteed by Article XI of the New York State Constitution.

This decision in the case of Maisto v. State of New York again criticized the trial court judge, Albany County Supreme Court Judge Kimberley O’Connor, for misreading the applicable legal requirements.

This was the third time the case, originally filed in 2009, had been appealed to the Appellate Division. Rather than sending it back to the trial court once again, the court decided this time to undertake a rare “de novo” review and study the 5,000-page trial transcripts and 30 boxes of exhibits themselves and issue a final ruling, without any further input from the trial judge.

In its 52-page decision, the Appeals Court emphasized the needs of the “at-risk” student populations in these districts. The plaintiffs had presented extensive evidence that many of the districts lacked adequate academic intervention services (AIS) for students struggling academically, language services for students learning English, as well as social workers and guidance counselors. Emphasizing the importance of these resources, the court wrote:

Although we agree with [the trial court] that the educational system cannot be charged with resolving all of society’s problems, we believe that the services and programming in question are foundational, and the level provided was insufficient to meet student need.

In addition, the court criticized Justice O’Connor for her wholesale rejection of the testimony of plaintiffs’ expert witnesses and for failing to accept one of the experts’ findings regarding the importance of small class sizes, especially considering the Court of Appeals’ precedent on this point in the Campaign for Fiscal Equity (CFE) v. State case.

The court also expounded upon, and applied to this case, legal principles established by the Court of Appeals, New York’s highest court, in its three major decisions issued more than 15 years ago in the CFE litigation:

The Education Article requires defendant to offer “all children” the opportunity for a sound basic education … including those who “present with socioeconomic deficits” (Campaign for Fiscal Equity v. State of New York, 100 NY 2d at 915). … As explained by multiple qualified witnesses, providing at-risk students with a meaningful high school education … necessarily requires two general categories of resources: (1) a student and family support team comprised of adequate numbers of social workers, guidance counselors and parent and community liaisons; and (2) early, intensive academic interventions and extended learning opportunities. As noted by the Court of Appeals in CFE II, “all children can learn given appropriate instructional, social, and health services” …. [A]dequate AIS programming, language services and support personnel are relevant factors to consider when assessing the inputs portion of such a claim.

The panel of judges also noted, “Proof that a school district or its board of education has mismanaged its district is not defense to an otherwise established Education Article claim, as school districts are agents of [the State] (see [CFE II] at 922).”

After reviewing all the facts concerning services provided to students in each of the eight small-city school districts, the court held that the State had violated the constitutional rights of students in every one of these districts. The Appellate Division did not determine a remedy for these extensive constitutional violations; instead, it remitted the case to the trial court for further proceedings to determine an appropriate remedy.

The State has not yet indicated whether it will appeal this decision to the Court of Appeals. Nor is it clear what impact the state legislature’s recent commitment to fully fund foundation aid over the next few years will have on the remedy.

History of the Maisto Litigation

In 2009, a number of small-city New York school districts filed an adequacy challenge to the state’s education funding system. After seven years of procedural wrangling, a trial was held in the spring of 2016. In September 2016, the trial judge, Kimberley O’Connor, issued a decision that rejected plaintiffs’ claims and dismissed the case.

The judge essentially ignored all the evidence of inadequate educational inputs and below-par educational outcomes presented by the plaintiffs during the months-long trial; instead, she ruled that as a matter of law the State need not provide the level of aid its own foundation aid formula had determined to be necessary to provide students the opportunity for a sound basic education.

Although she agreed the performance of the students in the plaintiffs’ districts was “not acceptable,” Justice O’Connor determined that the remedial action required is “not in the form of a specific dollar amount, but is instead a blend of funding, oversight, and proper allocation of resources by the districts.” She also held that detailed analysis of the causal link between insufficient resource inputs and unacceptable student performance outputs, of the type the Court of Appeals had undertaken in 2003 in CFE v. State of New York when it upheld the plaintiffs’ claims of inadequate funding for students in New York City, was no longer necessary because we are now “in the post-CFE environment.”

Plaintiffs appealed Justice O’Connor’s decision to the Appellate Division, Third Department. The appeals court unanimously decided in October 2017 to reverse the decision and send the case back to the trial court to issue specific findings on whether the plaintiffs had presented sufficient evidence that inadequate resources are a direct cause of the poor educational outcomes of students in those districts.

The Appellate Division strongly rejected the notion that there is a “post-CFE environment,” and the indication the Court of Appeals’ approach to analyzing constitutional deficiencies in CFE applied only to that case. Noting that the Court of Appeals had recently reaffirmed the continued relevance of the CFE precedent for current litigations in its 2017 decision in Aristy-Farer/NYSER v. State, the court held that Justice O’Connor must review all the evidence the parties had presented and provide specific findings of fact for each of the eight school districts regarding the needs of their respective students.

In January 2019, Justice O’Connor issued a 113-page opinion that again concluded plaintiffs had failed to meet their burden of proof and the case should be dismissed.

In this decision, the court acknowledged that the educational outputs in all eight districts are “undeniably inadequate” and concentrated on the question of whether resource inputs were inadequate and, therefore, caused the unacceptable outcomes. It systematically examined issues of class size, teacher qualifications, facilities, instrumentalities of learning, and supplemental services for “at-risk” students in each of the districts.

Despite the fact that the plaintiffs established that, in every one of the eight districts, many “at-risk” students were not receiving the full extent of supplemental academic intervention services required by state law, Justice O’Connor held that full compliance was “aspirational” and not a constitutional requirement.

She then concluded that resources were adequate in all of these areas in all of the districts and that the basic cause of the inadequate outcomes was “ineffective leadership” and failures to “reevaluate … operations and allocation of resources.”

The plaintiffs again appealed this decision to the Appellate Division, which, in May 2021, issued its decision reversing Justice O’Connor’s findings.

Note: The Center for Educational Equity, Teachers College, Columbia University, submitted an amicus brief in support of the plaintiff’s decision.

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