CalSTRS Sponsors Legislation Grandfathering CalSTRS Enrollees Into the System and Revising The Definition of Creditable Service

April 2015
Number 26

New changes are once again on the horizon for CalSTRS enrollment. A new bill amending the definition of “creditable service” for the CalSTRS system will be considered by the legislature in the coming months. Retirement benefits under the Defined Benefit Plan administered by CalSTRS are calculated using a member’s years of creditable service, age at retirement, and final compensation. However, compensation is reported to CalSTRS only if paid for work that constitutes “creditable service,” as defined by applicable law. School district employees not performing “creditable service” should be enrolled in CalPERS.

In recent years the definition of creditable service has come under scrutiny. Specifically, in August 2012, CalSTRS issued an Employer Information Circular that called into question public retirement system enrollment practices by K-12 and community college districts. Importantly, certain administrative positions, including Human Resources and Education Technology employees, as well as certain “educational administrators” in community colleges, were no longer automatic CalSTRS enrollees even if those employees held credentials from the Commission on Teacher Credentialing or met minimum academic qualifications set by community college employers.

Under current law, an employee at a California K-12 school district, community college or County Office of Education performs creditable service only if they meet the two-part test in Education Code section 22119.5. That is, an employee: (1) must be required by law to hold a credential (or, in the community college setting, meet minimum qualifications for an academic position); and (2) must perform certain duties set forth by statute. Generally speaking, the prescribed duties are instructional or curricular in nature. Current law does not provide guidance on how to enroll an employee performing a mix of both instructional and non-instructional work.

On February 26, 2015, Assembly Bill (AB) 963, sponsored by CalSTRS, was introduced by Assembly Member Susan Bonilla. At this time, the legislation has not yet been adopted by the legislature and so is not yet law. As amended on March 24, 2015, the bill would revise current law in several ways. Below are some of the more important highlights from the bill:

  • CTC Credential Requirements Now Linked to Definition: Creditable service for K-12 employees will be linked to credential requirements of the California Commission on Teacher Credentialing.
  • Community College “Educational Administrators” Now Expressly Qualify: For community college employees, educational administrators will qualify for CalSTRS enrollment as long as they meet certain criteria.
  • All Members Must Perform Listed Duties Regardless of Meeting Credential Requirements or Minimum Qualifications: Regardless of their credential status or community college assignment, all employees enrolled in CalSTRS must still perform creditable service duties outlined in the revised statute.
  • New Duties Added to List: New activities that will count as creditable service include activities connected with the enforcement of laws relating to compulsory education, mentorship of teachers and principals, and the work of community college presidents and chancellors.
  • New “More than 50% Rule” For Full-Time Employees: Full-time employees who perform both creditable and non-creditable service duties will not be properly enrolled in CalSTRS unless their employer requires that they perform creditable service duties more than 50% of the time. The proposed law allows CalSTRS to require employers to provide information regarding the percentage of time that creditable service activities are performed by each position.
  • All Current Members Performing Non-Creditable Service Are Grandfathered Into CalSTRS: Any employee or retiree enrolled in CalSTRS who performed non-creditable service duties on or before December 31, 2015 will be grandfathered into the CalSTRS system. Employees will likely need to file an election to remain in the CalSTRS system upon moving into a new position or taking a job with another school district.
  • Option to Move to CalPERS for Grandfathered Employees & Retirees: Any employee or retiree who did not perform creditable service but nevertheless was enrolled in CalSTRS may choose to move to a different public retirement system (i.e., CalPERS) as long as they are otherwise eligible for that system and comply with the technical rules laid out in the proposed law.

The impact on California school district and community college employers will predominately be felt with the imposition of the new “50% Rule” and the administrative burden of addressing employee/retiree requests to move from CalSTRS to CalPERS. Additionally, employers should become familiar with the new creditable service definition and proper enrollment procedures for CalSTRS, including election requirements for employees moving into new positions.

Lozano Smith attorneys are available to provide guidance on creditable service, creditable compensation and other pre- and post- retirement employment issues for CalSTRS and CalPERS members, including the changes proposed by AB 963.

For a copy of AB 963 as amended on March 24, 2015, click here.

If you have any questions about CalSTRS or how retirement law governs public schools and their employees, please contact one of our nine offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written By

Michael Smith
Partner
Fresno Office
msmith@lozanosmith.com

Thomas Manniello
Partner
Monterey Office
tmanniello@lozanosmith.com

Ashley N. Emerzian
Associate
Fresno Office
aemerzian@lozanosmith.com

©2015 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

Water Conservation Rates Face Judicially Refined Constitutional Mandates

April 2015
Number 25

In Capistrano Taxpayers Association, Inc. v. City of San Juan Capistrano, (April 20, 2015) 2015 Cal.App.Lexis 330, the court of appeal ruled that the City’s tiered water rates or “fees” were unconstitutional in violation of Proposition 218 because the rates did not correspond to the actual cost of providing service at a given level of usage. Proposition 218 forbids local agencies from charging more for a property-related service such as water than the service actually costs. To promote water conservation, the City established four classes of water users (low, reasonable, excessive, and very excessive), which were charged progressively higher rates (i.e. “tiers”). However, the court observed that the City failed to calculate the incremental cost of providing water for the various levels of use. Instead, the City based pricing on predetermined water usage budgets that were calculated using historical data of usage patterns.

The court ruled that the City “had to correlate its tiered prices with the actual cost of providing water at those tiered levels.” For example, the City might charge higher users higher rates if it can show that the marginal fees are proportional to the cost of supplying those users the extra water. The court also ruled that charging customers for capital improvements to produce more or new water in the future does not necessarily violate the requirement in Proposition 218 that fees “may [not] be imposed for a service unless that service is actually used by, or immediately available to, the owner of the property in question.”

San Juan Capistrano is significant not only because of its holding, but because of its timing. Governor Brown’s recent Executive Order B-29-15 mandates a statewide reduction of 25% in potable urban water usage through February 2016. Urban suppliers will be directed to develop rate structures and other pricing mechanisms including “surcharges, fees, and penalties” to achieve the reduction, but those rate structures have now been called into question.

The decision in San Juan Capistrano is not yet final and a request for review before the California Supreme Court, which is discretionary, is likely. However, unless the California Supreme Court grants review in this case, cities and other urban water suppliers with tiered water rates should be prepared to review their rate studies to ensure that the rates correspond to the costs of providing the service, and if they do not, to make adjustments accordingly. Once rates are set, cities can achieve conservation goals by enforcing existing water waste provisions and establishing mandatory usage limits, such as those the State Water Resources Control Board is considering in response to the Governor’s Executive Order. Violators of those water waste provisions or usage limits can be subject to penalties that are separate and distinct from the fees charged for the cost of providing the water service.

If you have any questions regarding the San Juan Capistrano decision, please contact one of our nine offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written By

David J. Wolfe
Partner
Fresno Office
dwolfe@lozanosmith.com

William P. Curley III
Senior Counsel
Los Angeles Office
wcurley@lozanosmith.com

Gary B. Bell
Associate
Fresno Office
gbell@lozanosmith.com

©2015 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

Ninth Circuit Court of Appeals Addresses School Districts’ Ability to Recover Attorneys’ Fees for Frivolous IDEA, Section 504, ADA, and § 1983 Claims

April 2015
Number 24

School districts may recover attorneys’ fees and costs for frivolous claims under the Individuals with Disabilities Education Improvement Act (IDEA), section 504 of the Rehabilitation Act of 1973 (Section 504), the Americans with Disabilities Act (ADA), and/or 42 U.S.C. section 1983 (Section 1983). The Ninth Circuit Court of Appeals recently addressed a matter in which a school district attempted to recover such fees, overturning what would typically be the bulk of the award.

In C.W. v. Capistrano Unified School District (9th Cir. 2015) 2015 U.S. App. Lexis 3240, the Ninth Circuit held that school districts are entitled to attorneys’ fees and court costs where they show that the plaintiffs’ IDEA, Section 504, the ADA, or Section 1983 claims are frivolous. Claims are considered frivolous when the claim’s outcome is plainly obvious or the arguments in favor of a given claim are completely without merit. In Capistrano, the school district conducted an occupational therapy assessment of a disabled student. The student’s parent disagreed with the assessment and requested an independent educational evaluation (IEE) at public expense. The school district denied the parent’s request and filed a due process complaint before an administrative law judge (ALJ) under the IDEA 41 days later. The ALJ held that the school district’s assessment was appropriate and that 41 days was not an unnecessary delay.

After the ALJ’s decision, the student’s parent wrote the school district and offered to forgo an appeal in federal district court in exchange for a school district funded IEE and for payment of her attorneys’ fees and court costs. The school district responded by reserving its right to seek sanctions against the plaintiff and her counsel as the ALJ already determined the school district’s evaluation was appropriate and that the school district timely filed its due process complaint. In response, the plaintiff proceeded with her appeal in federal district court and added claims under Section 504, an ADA claim for intimidation, and a Section 1983 claim for monetary damages, asserting the school district’s response regarding sanctions constituted retaliation in violation of the plaintiff’s First Amendment rights. The district court upheld the ALJ’s findings on appeal, and went so far as to “invite” the school district to file a request for attorneys’ fees because “the base[s] for appeal were frivolous.” The school district ultimately sought such sanctions and attorneys’ fees from the plaintiff, and the district court awarded the district over $96,000.00 in fees and costs.

However, the plaintiff appealed to the Ninth Circuit and the appellate court determined that the plaintiff should not have to pay the portion of the school district’s attorneys’ fees in relation to the plaintiff’s IDEA or Section 504 claims, which typically would be the most significant portion of the fees. The appellate court emphasized that a case is frivolous only when the result is obvious or the arguments in favor are completely without merit, and noted the importance of resisting the “understandable temptation to engage in post hoc reasoning by concluding that, because a plaintiff did not ultimately prevail, his action must have been unreasonable or without foundation.” Applying the frivolousness standards established in Christiansburg Garment Co. v. EEOC (1978) 434 U.S. 412, 412-22, the Ninth Circuit had previously held that “[a] case may be deemed frivolous only when the result is obvious or the . . . arguments of error are wholly without merit.” Based in part on the fact that the school district’s occupational therapy assessment did not include a statutorily required statement of whether the pupil may need special education and related services, the appellate court concluded that the plaintiff had some basis on which to believe that the school district’s assessment was inappropriate. Thus, the court found that the plaintiff’s claims under the IDEA and Section 504 claims were not frivolous, and reversed the district court’s fee award to the school district in relation to those claims.

Applying the test for frivolousness to the plaintiff’s ADA intimidation claim, however, the Ninth Circuit held the claim was frivolous because it was obvious that the ADA does not protect plaintiffs seeking to vindicate the right to an IEE which is granted by the IDEA, not the ADA. Second, the court ruled that the plaintiff’s Section 1983 monetary damages claim was frivolous because “it is well established that a school district cannot be sued for [monetary] damages” under Section 1983 since school districts are state agencies entitled to immunity from such claims. As a result, the plaintiff’s failure to justify her claims supported the conclusion that her claims were frivolous, and the district court’s fee award to the school district for the portion of fees in relation to the plaintiff’s ADA and Section 1983 claims was affirmed.

If you have any questions regarding the Capistrano decision, or about whether the claims pending against your district might be frivolous, please contact one of our nine offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written By

Summer D. Dalessandro
Senior Counsel
San Diego Office
sdalessandro@lozanosmith.com

©2015 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

District’s Filing of TROs to Prohibit Communication by Special Education Parent May Violate ADA and Section 504

April 2015
Number 23

In Brason Lee v. Natomas Unified School District (February 25, 2015), 2015 U.S. Dist. Lexis 24253, the court determined that a school district may have unlawfully retaliated against a parent for advocating on his daughter’s behalf regarding special education services by filing temporary restraining orders (TROs) against the parent.

This case started out as a dispute between the parent and the District regarding the school’s psycho-educational assessment of the student, which concluded that the student had a disability falling on the autism spectrum. The parent disagreed with many of the conclusions in the assessment and sent numerous communications to the District disputing the accuracy of the student’s special education assessment. Additionally, the parent alleged the District failed to comply with student’s Individualized Education Program (IEP) and that District staff had falsified records to conceal the noncompliance. The parent also emailed the superintendent and governing board, complaining his daughter was not receiving speech therapy services. After a year of District staff, superintendent, and governing board members receiving many accusatory communications from the parent, District’s legal counsel directed the parent to send all of his communications only through counsel.

The parent subsequently filed letters with the Office of Special Education Programs (OSEP) alleging retaliation and falsification of records and also filed complaints with the National Association of School Psychologists (NASP) against the District’s psychologist regarding her assessment of the student. Shortly after the District learned of parent’s complaints, it filed applications for TROs in state court against the parent which, if granted, would have barred the parent from the school’s campus and would have prevented him from engaging in further communications with certain District staff members.

The TROs were ultimately denied and the parent sued the District in federal district court alleging retaliation under Section 504 of the Rehabilitation Act (Section 504) and Title II of the Americans with Disabilities Act (ADA), which permit non-disabled persons to bring claims for retaliation when protecting the rights of disabled persons. Retaliation claims brought under Section 504 and the ADA are analyzed under the same standard. In order to prevail on a retaliation claim, the parent must first establish a “prima facie” case of retaliation by showing that: (1) he engaged in a protected activity, (2) the District knew he was involved in the protected activity, (3) an adverse action was taken against him, and (4) a causal connection exists between the protected activity and the adverse action. Next, the burden shifts to the District to show a legitimate, non-retaliatory purpose for its actions. If the District is able to demonstrate such a purpose, then the parent must prove the District’s proffered reason is pretextual by showing it is not credible or that retaliation is the more likely motivation.

Here, the court determined that the parent successfully established a prima facie case of retaliation because he engaged in the protected activity of advocating on behalf of his disabled daughter by complaining about the special education services to the District staff and filing complaints with other agencies. The court concluded that the District had knowledge of the protected activity because it received the parent’s emails and complaints. The court also found the District had taken an adverse action against the parent by filing the TROs. The court explained that the District’s act of filing multiple TROs against the parent were actions “reasonably likely to dissuade a person from engaging in protected activity,” namely advocating for a disabled student, and therefore may amount to actionable retaliation. Lastly, the court found a causal connection because the adverse action closely followed the protected activity. The parent had lodged numerous complaints before the District filed its TRO applications, plus one of the TROs actually listed the parent’s complaint to the NASP as a basis for the TRO.

The District argued its actions were not retaliatory but were done to protect its staff members from feeling threatened, harassed, or interfered with in carrying out their duties. The court found that although the District presented evidence of non-retaliatory reasons for its actions, including a desire to protect staff members from the parent’s threatening and harassing behavior, a factual issue remained regarding whether the District’s rationale for filing the TROs was pretextual.

This case is a reminder that advocating for disabled students on issues related to federal and state special education rights is a protected activity. In this case, a school district’s claim that a parent engaged in harassing and threatening behavior did not in itself prove the school district had a valid reason for limiting parent’s contact with staff. Parents have a right to participate meaningfully in their children’s education, and trying to limit that right could result in a legitimate retaliation claim against the school district.

For more on information on this case, please contact one of our nine offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written By

Diane M. Willis
Senior Counsel
San Diego Office
dwillis@lozanosmith.com

Amanda E. Ruiz
Associate
Fresno Office
aruiz@lozanosmith.com

©2015 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

United States Supreme Court Declines to Review American Flag T-Shirt and Student Free Speech Case

April 2015
Number 22

The United States Supreme Court recently issued an order declining to review the Ninth Circuit Court of Appeals’ decision in Dariano v. Morgan Hill Unified School District (March 30, 2015) 2015 U.S. Lexis 2190. As previously reported by Lozano Smith (See Client News Brief No. 15, March 2014), in Dariano, the Ninth Circuit held that school administrators did not violate students’ constitutional rights to free speech when they prohibited students from wearing American flag clothing on Cinco de Mayo 2010. The Ninth Circuit found that considering the history of gang and race-related altercations on campus (one of which occurred on the prior year’s Cinco de Mayo), school officials reasonably believed a violent disturbance could again occur as a result of the American flag clothing, and had acted to prevent substantial disruption and maintain student safety at school.

As discussed in CNB No. 7, in December 2014, the student plaintiffs filed a petition for certiorari, asking the United States Supreme Court to review the Ninth Circuit’s decision. Amicus briefs supporting the plaintiffs were filed by entities such as the Center for Constitutional Jurisprudence and Alliance Defending Freedom, as well as individuals John and Mary Beth Tinker (two of the plaintiffs in Tinker v. Des Moines Independent Community School District (1969) 393 U.S. 503, a student free speech case concerning protests to the Vietnam War). The Dariano plaintiffs and their amici argued the Ninth Circuit’s decision had misinterpreted free speech law and conflicted with decisions issued by federal Courts of Appeals in other circuits.

In a one-line order without explanation or other comment, the United States Supreme Court declined to review the Ninth Circuit’s decision. As such, the Dariano decision will stand.

For more on information on Dariano and its implications for student free speech in California, please contact one of our nine offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written By

Sloan R. Simmons
Partner
Sacramento Office
ssimmons@lozanosmith.com

Karin M. Anderson
Associate
San Diego Office
kanderson@lozanosmith.com

©2015 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

With CalSTRS’ New Creditable Compensation Regulations in Effect – Opportunity to Restructure Administrator Employment Contracts by December 31, 2015

April 2015
Number 21

The CalSTRS creditable compensation regulations adopted this past September officially came into force January 1, 2015. The new regulations define creditable compensation for CalSTRS members who entered the public retirement system prior to January 1, 2013 (i.e., “classic” or “2% at 60” members). The regulations prescribe new rules governing which forms of compensation count for the Defined Benefit program as opposed to the Defined Benefit Supplement account, thereby directly impacting the amount of monthly retirement allowances. Importantly, in an effort to curb spiking, the regulations also provide new tests to determine “consistent treatment” of compensation over time.

Given the significant changes to the treatment of certain forms of compensation under the new rules, the regulations have a built-in opportunity to restructure employment contracts before the year’s end. If done properly, restructures completed by December 31, 2015 will likely meet the “consistent treatment” test. A proper restructure could allow non-creditable forms of compensation to become part of base salary. Now is the time to review all administrator contracts to determine whether any elements of compensation could be restructured in light of the new regulations before the window is closed.

Restructures are not without risk and the rules governing the process are complex. Both school district employers and administrators should clearly understand the benefits and risks of a restructure before moving forward.

The regulations also impact creditable compensation for bargaining unit members enrolled in the CalSTRS system. Accordingly, the regulations impact all certificated salary schedules, salary articles and extra duty pay as well. School districts should also consider reviewing these provisions in collective bargaining agreements to determine compliance.

Lozano Smith attorneys are available to provide guidance on contract restructures and the impact of the creditable compensation regulations at the bargaining table. We also provide workshops on these and other public retirement issues upon request at individual school districts or through county offices of education.

For a copy of the new creditable compensation regulations, click here.

For a copy of Lozano Smith’s co-authored article with ACSA explaining the creditable compensation regulations in greater detail, click here.

A copy of CalSTRS’ Employer Information Circular regarding the new creditable compensation regulations can be found here.

If you have any questions about the new CalSTRS creditable compensation regulations or how public retirement law governs California public schools and their employees, please contact one of our nine offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written By

Michael Smith
Partner
Fresno Office
msmith@lozanosmith.com

Thomas Manniello
Partner
Monterey Office
tmanniello@lozanosmith.com

Ashley N. Emerzian
Associate
Fresno Office
aemerzian@lozanosmith.com

©2015 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

The California Supreme Court Provides School Districts Guidance in Determining the Number of Classrooms to Provide Charter Schools Under Prop. 39

April 2015
Number 20

The California Supreme Court has weighed in on Proposition 39, the law that requires school districts to provide facilities to charter schools.

In California Charter Schools Association v. Los Angeles Unified School District (April 9, 2015) S208611, the California Charter School’s Association (CCSA) filed suit against the Los Angeles Unified School District (LAUSD), alleging that the use of “norming ratios” to calculate classroom allocations to charter schools in response to a Prop. 39 facilities request was illegal under California law. LAUSD used what it called “norming ratios” when apportioning facilities to charter schools, which purported to establish a uniform student/teacher ratio for each grade level throughout the district. LAUSD argued that the use of these district-wide ratios was both legal and appropriate.

CCSA, on the other hand, argued that norming ratios improperly reduced the number of classrooms provided to charter schools. CCSA contended that school districts should, instead, look to their gross inventory of classrooms at comparable schools when determining allocation of classrooms.

In a unanimous decision, the California Supreme Court announced something of a compromise between the two perspectives. The Court opted to require school districts to count the number of classrooms, but the classrooms owed to the charter school would not be a full inventory, as requested by CCSA. Rather, only classrooms “provided to” K-12 students at the comparison schools would be included in the calculations. The Court adopted a three-pronged approach to calculating the number of classrooms to provide a charter school and specified that, when a district receives a request for facilities, it must:

  1. Identify comparison group schools pursuant to State Board of Education regulations.
  2. Count the number of classrooms in the comparison group schools, and adjust the number to reflect those classrooms “provided to” K-12 students in the comparison group schools. The term “provided to” requires a site-specific, case-by-case analysis. While it does not require a school district to count all rooms in the comparison group schools, it also does not allow the school district to count only those rooms the schools elect to staff with a teacher.
  3. Use the resulting number as the denominator in the ADA-classroom ratio at the comparison schools. This is the ADA-classroom ratio to be allocated to the charter school.

Will this decision impact current Prop. 39 offers already presented to charter schools?
In rendering this decision, the Court contemplated a prospective application of this new approach to allocating facilities. Therefore, it is likely that this decision will not impact facilities offers that have already been presented to charter schools for 2015-2016.

Our attorneys have substantial experience handling all aspects of charter school issues. For assistance with processing Prop. 39 facilities requests or with any charter school matter, please contact one of our nine offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written By

Edward Sklar
Partner
Walnut Creek Office
esklar@lozanosmith.com

Ryan P. Tung
Associate
Walnut Creek Office
rtung@lozanosmith.com

©2015 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.