Opportunity Scholarship Program lawsuit heads back to trial court

Court of Appeals split ruling overturns previous decision, sends case to three-judge panel

RALEIGH — A majority of an N.C Court of Appeals panel has ruled in favor of the defendants in a lawsuit involving the state’s popular Opportunity Scholarship Program, sending the case back to be heard by a three-judge panel in Wake County Superior Court.

The ruling reverses a decision by Wake County Superior Court Judge Bryan Collins that said the lawsuit should remain before only one judge.

“After a careful review of the record and applicable law, we reverse the trial court’s order and remand to the trial court to enter an order to transfer this case to a three-judge panel of the Superior Court of Wake County pursuant to N.C. Gen. Stat. § 1-267.1 and Rule 42(b)(4),” Court of Appeals Judge April Wood wrote in the ruling.

The Court of Appeals decision was a two-to-one split ruling with Court of Appeals Judge Toby Hampson dissenting and Judge Richard Dietz agreeing with Wood. A split ruling by the Court of Appeals opens the door for the plaintiffs to appeal, which could trigger a review by the N.C. Supreme Court.

The Opportunity Scholarship Program (OSP) was created by the legislature in 2013 and offers funding to low-income families who meet certain income thresholds for tuition at eligible private and parochial schools in the state. Scholarship awards can total up to $6,168 depending on income criteria of the applicants.

The OSP saw 22,818 students enrolled in the program during the last school year per the NCSEAA. NCSEAA data also shows over $63 million in OSP scholarships offered to students for the 2022-23 school year. The program has also had consistent wait lists that average 800-900 students a year.

Intervenor Defendants in the case include the N.C. State Education Assistant Authority (NCSEAA) which oversees the program, Senate Leader Phil Berger (R-Eden), House Speaker Tim Moore (R-Kings Mountain) and four parents.

Plaintiffs include North Carolina Association of Educators (NCAE) President Tamika Walker Kelly along with several parents.

Attorneys for the Republican legislative Defendants and Intervenor-Defendants objected to Collins’ ruling, arguing that a three-judge panel is required to hear the case because the Plaintiff-Intervenors goal is to do away with the program entirely. Defendants also posit that the plaintiff’s case represents a facial challenge, referring to an act or statute that is unconstitutional on its face.

The Court of Appeals panel agreed, writing in their ruling that “After a careful review of the record and applicable laws, we agree with Defendants and Intervenor-Defendants and conclude Plaintiffs’ complaint is a facial challenge to the Program.”

The “plaintiffs have been unable to identify any conceivable remedy for their claims that would not require either rewriting the statute or imposing sweeping court supervision on scholarship approvals by regulators,” Wood wrote. “These remedies are unmistakable markers of a facial challenge.”

Near the end of March 2021, N.C. Attorney General Josh Stein filed a motion on behalf of the NCSEAA to dismiss the case. The motion drew from the previous failed attempt by the NCAE and stated that NCAE’s claims were “barred by the doctrine of res judicata,” a legal measure that blocks a party from relitigating a claim where a court has previously issued a final order or judgment.

The OSP has survived other past legal challenges, including a 2015 ruling by the state supreme court that the plaintiffs failed to prove the OSP violated the state constitution.

Democratic Gov. Roy Cooper and the NCAE have both been vocal opponents of the program.

Both Cooper and the NCAE have repeatedly claimed the OSP is a voucher system that “defunds” public schools. The OSP’s funding is actually separate from the state’s public education budget and is overseen by the NCSEAA.

While running for governor in 2016, Cooper’s campaign website stated, “I oppose vouchers that drain money from public schools.”

During his tenure as governor, Cooper has discounted parental involvement by claiming the OSP “lacks accountability.” He has also attempted to defund the program both through his budget proposals and through a 2017 lawsuit where Cooper claimed the legislature was usurping his executive power by expanding the OSP. In April 2018, a Superior Court judge panel ruled against Cooper, citing that the General Assembly had the authority to require OSP money be included in the governor’s budgeting process.

In the past year, Cooper appears to have relented by signing the most recent budget which includes provisions to expand the OSP income eligibility threshold to up to 200% of the amount required for the student to qualify for the federal free or reduced-price lunch program. The budget also included $56 million in recurring funds to the Opportunity Scholarship Grant reserve.

About A.P. Dillon 1206 Articles
A.P. Dillon is a North State Journal reporter located near Raleigh, North Carolina. Find her on Twitter: @APDillon_