Court Revives E-School Fight Against $80M Deduction

COLUMBUS, Ohio (CN) – A shuttered online charter school fighting Ohio’s clawback of $80 million persuaded a state appeals court to remand its challenge of an administrative decision from the state school board that led to the loss in funding.

Electronic Classroom of Tomorrow, or ECOT, is fighting to overturn the multimillion-dollar funding deduction on multiple fronts, with a case still pending in the Ohio Supreme Court. The school closed in January after nearly two decades of offering classes through a web-based platform.

Tuesday’s favorable ruling in the Ohio Court of Appeals’ 10th Appellate District means that the school’s challenge to the state Board of Education’s decision under administrative hearing laws will go back to the Franklin County Court of Common Pleas for further consideration.

The school board voted to claw back the funding after it concluded that the school had inflated its enrollment numbers. ECOT now has an opportunity to formally challenge the $60 million clawback for the 2015-2016 school year and $20 million for the 2016-2017 school year.

ECOT attorney Marion Little said the issues at the trial court level are “separate and distinct” from those claims before the Supreme Court, which have challenged the statutory authority of the Ohio Department of Education to determine state funding based on students’ actual time spent on learning and instruction.

“This gives us a chance to challenge the $60 million determination as well as the $20 million determination,” Little said in a phone interview Friday. “Even if ECOT was unsuccessful before the Supreme Court, this provides a separate mechanism for challenging the department’s determination.”

The Department of Education referred Courthouse News to the Ohio attorney general’s office for comment. Spokesman Dan Tierney said the appellate ruling was procedural and noted that it was just one of four separate cases in the ECOT litigation.

“We will continue to defend the Ohio Department of Education in court in their efforts to hold ECOT accountable,” Tierney said.

In the appeals court’s opinion, Judge Jennifer Brunner noted that the courts did not give ECOT an opportunity to “directly dispute” the school board’s findings and that the Ohio Supreme Court had denied its request for hearing on the matter without explanation.

“ECOT is entitled to the opportunity to dispute not just the substantive and procedural merits of their action,” Brunner wrote, “but also to appeal the particular findings and decisions of the administrative adjudication, especially as to the ‘clawback’ of funds already appropriated and distributed by the state of Ohio.”

Judge Luper Schuster dissented, writing that the Ohio Department of Education’s decision is final and is not appealable under state law.

This week, Ohio Supreme Court Justice Patrick DeWine recused himself from the case in the high court, where ECOT is arguing that the state used a flawed methodology based on the duration of recorded time spent on instruction and so-called “learning opportunities” to yank funding when it should have looked more closely at student enrollment.

DeWine did not explain his decision to recuse himself. However, his father, Ohio Attorney General Mike DeWine is involved in the litigation. This month, DeWine announced that the state would try to recover the public funding from the school’s founder Bill Lager.

Tierney said his office could not comment on the reasons for the recusal.

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