Monarch Acad. Balt. Campus, Inc. v. Balt. City Bd. of Sch. Comm'rs

Monarch Academy Baltimore Campus, Inc., et al. v. Baltimore City Board of School
Commissioners, No. 7, September Term, 2017. Opinion by Getty, J.
CIVIL PROCEDURE – APPEALABILITY OF A STAY ORDER – Maryland Code,
Courts & Judicial Proceedings Article § 12-301
This is a case involving charter schools. The operators of charter schools (“Charter School
Operators”) in Baltimore City filed a breach of contract claim in the Circuit Court for
Baltimore City against the Baltimore City Board of School Commissioners. The circuit
court entered an order staying (“Stay Order”) the breach of contract action, and Charter
School Operators appealed. The Court of Appeals determined that the Stay Order
suspended all claims before the circuit court and failed to specify what conditions the
Charter School Operators must complete in order for their breach of contract claims to
resume before the circuit court. Under these limited circumstances, the Court of Appeals
held that the Stay Order effectively put the operators of charter schools out of court and
was an appealable final judgment.
APPEAL – ABUSE OF DISCRETION
The Stay Order was an appealable final judgment because there was no indication that the
circuit court judge reviewed or considered either the prior proceedings or the prior decision
of another circuit court judge and because the Stay Order was devoid of necessary detail,
the circuit court judge abused his discretion in issuing the Stay Order.
ADMINISTATIVE LAW – PRIMARY JURISDICTION
Under the doctrine of primary jurisdiction, a court must determine whether an issue or
issues in a case must first be resolved by an agency “which, under a regulatory scheme,
have been placed within the special competence of an administrative body[.]” Arroyo v.
Bd. of Educ. of Howard Cty., 381 Md. 646, 658 (2004) (quoting United States v. Western
Pacific R.R. Co., 352 U.S. 59, 63-64 (1956)). The Court of Appeals determined that a
central issue underlying the Charter School Operators’ breach of contract claims was
whether they had received “an amount of county, State, and federal money for elementary,
middle, and secondary students that is commensurate with the amount disbursed to other
public schools in the local jurisdiction[,]” as mandated in Maryland Code, Education
Article § 9-109. And, the Court of Appeals held that because the State Board of Education
(“State Board”) has not provided a formal rule or regulation interpreting the charter school
“commensurate” funding requirement suitable for application by courts, disputes involving
charter school commensurate funding generally remain within the special competence of
the State Board. Therefore, the Court of Appeals concluded that the State Board had
primary jurisdiction over the commensurate funding issues underlying Charter School
Operators’ breach of contract action, and that on remand the circuit court would be within
its discretion to enter a more definite order staying proceedings to permit the parties to
obtain a ruling from the State Board as to the commensurate funding issues in dispute.
Circuit Court for Baltimore City
Case No. 24-C-15-005507
Argued: September 11, 2017
IN THE COURT OF APPEALS
OF MARYLAND
No. 7
September Term, 2017
MONARCH ACADEMY BALTIMORE
CAMPUS, INC., ET AL.
v.
BALTIMORE CITY BOARD OF SCHOOL
COMMISSIONERS
Barbera, C.J.
Greene,
Adkins,
McDonald,
Watts,
Hotten,
Getty,
JJ.
Opinion by Getty, J.
Greene, Watts and Hotten, JJ., concur and
dissent.
Filed: December 18, 2017
2
This Court has twice addressed appeals in which public charter schools alleged that
a local school board failed to meet the requirement in Maryland Code, Education Article
(“ED”) § 9-109 to provide the charter schools with funding that is “commensurate with the
amount disbursed to other public schools in the local jurisdiction.” See Frederick Classical
Charter Sch., Inc. v. Frederick Cty. Bd. of Educ., 454 Md. 330 (2017), reconsideration
denied (Aug. 24, 2017); Balt. City Bd. of Sch. Comm'rs v. City Neighbors Charter Sch.,
400 Md. 324 (2007). However, in both of those cases, charter schools initially challenged
a local school board’s proposed annual funding allocation in an administrative adjudicatory
proceeding before the State Board of Education (“the State Board”), and the dispute came
before the courts only when one of the parties subsequently filed a petition for judicial
review of the State Board’s decision.
In contrast, the Petitioners in the instant case, thirteen operators of charter schools
in Baltimore City (the “Charter School Operators”),1 sought to obtain relief in a similar
commensurate funding dispute by filing breach of contract complaints against the
Respondent, the Baltimore City Board of School Commissioners (the “City Board”),
directly in the Circuit Court for Baltimore City without first seeking review before the State
1
Petitioners are the following Baltimore City charter school operators: Afya
Baltimore, Inc., Baltimore International Academy Inc., Baltimore Montessori, Inc., City
Neighbors Charter School, Inc., City Neighbors Hamilton, Inc., City Neighbors High
School, Inc., Creative City Public Charter School Foundation, Inc., Empowerment Center,
Inc., Experiential Environmental Education, Inc., Kipp Baltimore, Inc., Patterson Park
Public Charter School, Inc., Southwest Baltimore Charter School, Inc., and Monarch
Academy Baltimore Campus, Inc. Some operators run a single charter school in Baltimore
City, while others operate more than one charter school.
Board. The contracts at issue all contained a provision in which the City Board agreed to
“allocate Commensurate Funding to the [Charter] School Operator,” and to provide
information as to its own finances and how it had reached a specific per-pupil
commensurate funding figure for the charter school. The Charter School Operators
contended that the City Board breached those contractual requirements by not providing
information as to its finances and commensurate funding calculations and by failing to
provide the correct amount of commensurate funding for the 2015-16 school year.
After the cases were consolidated before the circuit court, the City Board moved to
dismiss the case or stay the proceedings on the grounds that the State Board had primary
jurisdiction over commensurate funding determinations. After holding a hearing, Judge
Julie Rubin concluded that the State Board had “provided sufficient guidance” regarding
the meaning of commensurate funding so that the circuit court was “no longer obliged to
punt the issue to the expertise of the administrative body.” Therefore, she declined to
invoke the primary jurisdiction doctrine and denied the motion to dismiss.
On the same day as it filed its motion to dismiss before the circuit court, the City
Board filed a petition for declaratory relief before the State Board, requesting that the State
Board declare that its funding formula complies with ED § 9-109 and has resulted in
commensurate funding. After Judge Rubin’s order, the State Board dismissed the petition,
noting that the circuit court had “asserted its jurisdiction.” Thereafter, the City Board filed
a counterclaim against the Charter School Operators before the circuit court. The Charter
School Operators moved to dismiss the counterclaim, and a hearing on their motion to
dismiss was scheduled before the circuit court. At that hearing, Judge Alfred Nance
2
questioned counsel as to the procedural background of the case, instructing them to “[t]ell
me what happened that causes you to rightfully be in my courtroom.” After a brief recess
and off-the-record discussion in chambers, counsel for the City Board made an oral motion
to dismiss the Charter School Operators’ complaints. Judge Nance, after hearing
arguments for and against the motion, determined that “in lieu of” granting the motion he
would issue an order staying proceedings in the circuit court “pending administrative
review of the parties’ dispute by the State Board of Education.”
After the Stay Order ruling, the parties moved to proceed on separate procedural
tracks. The Charter School Operators appealed from the circuit court’s Stay Order to the
Court of Special Appeals, while the City Board once again filed a petition for declaratory
relief before the State Board. The State Board once again dismissed the City Board’s
petition, stating that “the case remain[ed] within the jurisdictional purview of the courts.”
Subsequently, in a reported opinion, the Court of Special Appeals dismissed the Charter
School Operators’ appeal after concluding that the circuit court’s Stay Order was not an
appealable order. Monarch Acad. Balt. Campus, Inc. v. Balt. City Bd. of Sch.
Commissioners, 231 Md. App. 594, 619 (2017). The Charter School Operators filed a
petition for writ of certiorari from that dismissal, which we granted on April 4, 2017.
Monarch Acad. Balt. Campus v. Balt. City Bd. of Sch. Comm’rs., 452 Md. 523 (2017).
On appeal to this Court, the Charter School Operators contend that the circuit court’s
Stay Order was a final and appealable judgment, and therefore urge us to hold that the
Court of Special Appeals erred in dismissing the appeal. The Charter School Operators
3
further assert that the State Board does not have primary jurisdiction over their breach of
contract claims, and therefore the circuit court erred in entering the Stay Order.
When a court determines that a party’s claim is within the authority of an
administrative agency under the doctrine of primary jurisdiction, it is ordinarily entirely
appropriate under the primary jurisdiction doctrine to enter a stay to permit that party to
bring his or her claim before the appropriate agency. Then, after the agency has had the
opportunity to evaluate and rule on the claim, a party may ordinarily seek judicial review
before the circuit court. In this appeal, however, we are confronted with a rare and unique
set of circumstances in which there is a strong likelihood that the Charter School Operators
would not be able to obtain an administrative ruling on their breach of contract claim.
Here, the State Board is the only agency to which the Charter School Operators can
bring their claim at the juncture at which the Stay Order was entered, and they can only do
so in the form of a petition for declaratory relief. However, the agency has twice denied
petitions for declaratory relief in this case, citing in the first denial the lack of any factual
record upon which it could review and issue a declaratory judgment. Despite the arguments
raised by the City Board in this appeal, there is no guarantee that the State Board would
grant a third petition for declaratory relief under the circumstances present here. The State
Board’s prior declaratory rulings and this Court’s precedent set forth a detailed and highly
fact specific inquiry for charter school funding disputes. Of great significance to our
decision, the contract between parties requires certain financial information to be
disclosed by the City Board to the Charter School Operators. However, the Charter School
Operators allege that they did not receive that information. If true, the Charter School
4
Operators simply may not have enough information to successfully frame a declaratory
petition to the State Board, or to obtain a declaratory order from the State Board that fully
resolves the charter school funding issues raised in their Complaint. And, although there
is the potential for a limited discovery process before the State Board, it is discretionary
and even if employed may not be sufficient to address this concern.
Finally, the Stay Order was entered in a rushed and improper manner, before there
was any opportunity for discovery as to the information necessary for the resolution of the
charter school funding claims, and without clear guidance to the State Board as to exactly
what issues needed to be resolved before the matter could resume before the circuit court.
Thus, the rushed and non-specific Stay Order at issue here further exacerbated the
difficulties facing the Charter School Operators in pursuing an administrative remedy and
eventually being able to return to court for a judicial resolution of their claim.
Therefore, under the above-described unique circumstances of this case, we shall
hold that the Stay Order was a final and appealable judgment and therefore shall reverse
the judgment of the Court of Special Appeals dismissing the appeal. We shall also hold
that the circuit court abused its discretion in staying the proceeding in order for the parties
to seek administrative review because the court did not first allow for discovery and did
not provide guidance as to how and when the case would resume in circuit court. However,
we shall also hold that the State Board retains primary jurisdiction as to the underlying
commensurate funding issues in dispute and that, after discovery before the circuit court is
concluded, it will be appropriate for the circuit court to enter a more definite order staying
proceedings for review of those issues before the State Board.
5
BACKGROUND
A. Primary Jurisdiction
The doctrine of primary jurisdiction derives from “the relationship between
legislatively created administrative remedies and alternative statutory, common law or
equitable judicial remedies.” Prince George’s Cty. v. Ray’s Used Cars, 398 Md. 632, 644
(2007). We have explained the relationship between those remedies as follows:
[W]henever the [General Assembly] provides an administrative and
judicial review remedy to resolve a particular matter or matters, the
relationship between that administrative remedy and a possible alternative
judicial remedy will ordinarily fall into one of three categories:
[T]he administrative remedy may be exclusive, thus
precluding any resort to an alternative remedy. Under this
scenario, there simply is no alternative cause of action for
matters covered by the statutory administrative remedy.
[T]he administrative remedy may be primary but not
exclusive. In this situation, a claimant must invoke and
exhaust the administrative remedy, and seek judicial review of
an adverse administrative decision, before a court can properly
adjudicate the merits of the alternative judicial remedy.
[T]he administrative remedy and the alternative judicial
remedy may be fully concurrent, with neither remedy being
primary, and the plaintiff at his or her option may pursue the
judicial remedy without the necessity of invoking and
exhausting the administrative remedy.
United Ins. Co. of Am. v. Maryland Ins. Admin., 450 Md. 1, 14-15 (2016) (quoting Ray’s
Used Cars, 398 Md. at 644 (quoting Zappone v. Liberty Life Ins. Co., 349 Md. 45, 60-61
(1998))) (emphasis in original) (footnote omitted).
When a party’s claim(s) could properly be brought before either a court or an
administrative agency, the agency remedy will generally be deemed primary “whenever
6
enforcement of the claim requires the resolution of issues which, under a regulatory
scheme, have been placed within the special competence of an administrative body[.]”
Arroyo v. Bd. of Educ. of Howard Cty., 381 Md. 646, 658 (2004) (quoting United States v.
Western Pacific R.R. Co., 352 U.S. 59, 63-64 (1956)). This Court has held that “[n]o fixed
formula exists for applying the doctrine of primary jurisdiction[,]” and that “[i]n every case
the question is whether the reasons for the existence of the doctrine are present and whether
the purposes it serves will be aided by its application in the particular litigation.” Id. at
658-59 (quoting Western Pacific R.R. Co., 352 U.S. at 63-64). However, the Court has
recognized that “[i]n the absence of specific statutory language indicating the type of
administrative remedy, there is a rebuttable presumption that an administrative remedy was
intended to be primary.” United Ins., 450 Md. at 15 (citing Zappone, 349 Md. at 63).
Of significance to this appeal, even when a court ultimately determines that one or
more claims filed before it are properly within the primary jurisdiction of an administrative
agency, that does not mean that the circuit court is divested of jurisdiction over the claim(s),
or necessitates the dismissal of the action before the court. Instead, the doctrine only
applies to preclude the court from adjudicating the claim(s) “until a final administrative
determination is made.” Arroyo, 381 Md. at 660 (emphasis in original). Thus, the
appropriate action for a trial court in such an instance is generally not to dismiss the
claim(s), but rather to “stay further proceedings regarding the judicial complaint” until the
party can obtain a final administrative determination as to the issue in dispute. Carter v.
Huntington Title & Escrow, LLC, 420 Md. 605 (2011); see also Maryland Reclamation
Assocs., Inc. v. Harford Cty., Maryland, 382 Md. 348, 367 (2004).
7
B. Authority of the State Board of Education
The General Assembly has vested the State Board of Education with expansive
authority to interpret the provisions of the Education Article. Pursuant to ED § 2-205, the
State Board has the authority to: “[d]etermine the elementary and secondary educational
policies of this State,” ED § 2-205(b); “[a]dopt bylaws, rules, and regulations for the
administration of the public schools” which “have the force of law when adopted and
published,” ED § 2-205(c); “explain the true intent and meaning” of the Education Article
and its own regulations and “decide all controversies and disputes” regarding those
provisions, ED § 2-205(e); and, “exercise general control and supervision over the public
schools and educational interests of this State,” ED § 2-205(g).
We have explained that the State Board’s authority under section 2-205 “constitutes
a visitatorial power of such comprehensive character as to invest the State Board with the
last word on any matter concerning education policy or the administration of the system of
public education.” Frederick Classical, 454 Md. at 370 (quoting City Neighbors, 400 Md.
at 342-43). We have held that the State Board’s visitatorial power “is not unlimited,” and
it is the courts that ultimately must decide purely legal questions. Id. at 371 (quoting City
Neighbors, 400 Md. at 343). But, “‘the broad statutory mandate given to [the State Board]
requires that special deference be given to its interpretation of statutes that it administers,’
. . . over and above that generally afforded to other administrative agencies[.]” Id. at 370(quoting City Neighbors, 400 Md. at 343).
C. Administrative Remedies Before the State Board
8
At the local level, the twenty-three Maryland counties and Baltimore City each have
a school board that has oversight and control of education matters in its jurisdiction. Each
local school system also has a superintendent—or, in Baltimore City, a Chief Executive
Officer—who is the administrator of that system and is responsible for enforcing the rules
and policies of both the local school board and the State Board, and for implementing State
law. See ED §§ 4-101, 4-102, 4-108. A county superintendent’s decision may be appealed
to a local school board within thirty days. ED § 4-205(3). And, if a party is dissatisfied
with the local school board’s decision, that party may appeal to the State Board within
thirty days from the decision of the local school board. Id.; see also Md. Code Regs.
(“COMAR”) 13A.01.05.02(A)-(C) (describing the required contents of an appeal to the
State Board, and a deadline to file the appeal “within 30 calendar days of the decision of
the local board”).
However, and of great significance to the present dispute, there is also another
process through which parties may ask the State Board to resolve a dispute as to the
meaning and proper application of State educational law or State Board rules, regulations,
or policies. If there is an “existing case or controversy” between an aggrieved party and a
local school board, either party—the aggrieved party or the local school board—may at
any time file “a petition for declaratory ruling by the State Board on the interpretation of
a public school law or regulation of the State Board that is material to [that] existing case
or controversy.” COMAR 13A.01.05.02(D).
D. Charter Schools and Commensurate Funding
9
Charter schools are a statutorily created alternative to traditional public schools that
are “in the nature of semi-autonomous public schools,” operating “under a contract with a
State or local school board.” City Neighbors, 400 Md. at 328. “The contract, or charter
[agreement], defines how the school will be structured, staffed, managed, and funded, what
programs will be offered, and how the school will operate and account for its activities.”
Id. In Maryland, charter schools are governed by the Maryland Public Charter School
Program (“Charter School Program”), ED §§ 9-101 et seq., which “sets forth a process for
establishing new charter schools as well as monitoring, oversight, and accountability
standards for charter schools once they are established.” Frederick Classical, 454 Md. at
344. The purpose of the Charter School Program is to “establish an alternative means
within the existing public school system in order to provide innovative learning
opportunities and creative educational approaches to improve the education of students.”
ED § 9-101(b).
Charter schools operate under the supervision of the local school board of the county
or local jurisdiction in which they are located. See ED § 9-103 (stating that local school
boards are the “public chartering authority” for the granting of a charter agreement); ED §
9-102(11) (mandating that charter schools operate “under the supervision of the public
chartering authority from which its charter is granted and in accordance with its charter”
and, with limited exceptions, “the provisions of law and regulation governing other public
schools”). Charter schools also receive funding from their local school board. ED § 9-109
provides a mandate for public funding of public charter schools:
10
A county board shall disburse to a public charter school an amount of county,
State, and federal money for elementary, middle, and secondary students that
is commensurate with the amount disbursed to other public schools in
the local jurisdiction.
(Emphasis added.) As we noted in Frederick Classical, “[t]he statutory interpretation of
[ED § 9-109] and deciphering the meaning of ‘commensurate’ in this context has required
extensive administrative deliberations” by the State Board. 454 Md. at 345.
a. City Neighbors Declaratory Rulings
In 2005, the State Board issued a set of three declaratory rulings, which constituted
its first definitive statements interpreting the meaning of ED § 9-109 and the commensurate
funding requirement. We have previously referred to these rulings, which ultimately came
before this Court in our decision in City Neighbors, as the “City Neighbors declaratory
rulings.” See Frederick Classical, 454 Md. at 346.
In the City Neighbors declaratory rulings, the State Board set forth a detailed, multi-
step formula for calculating a charter school’s per-pupil funding that the State Board would
deem to be “commensurate” with funding provided to other public school students:
The State Board concluded that ED § 9-109(a) “expressed a
legislative intent that a charter school ‘receive federal, State, and local
funding in an amount proportionate to the amount of funds expended for
elementary, middle, and secondary level students in the other public schools
in the same system.’” [City Neighbors, 400 Md. at 336.] Furthermore, the
State Board determined that the calculation of commensurate funds must
include “‘funding for services for which students in the public charter schools
are eligible such as free and reduced price meals, pre-kindergarten, special
education, English-language learners, Perkins, Title I, and transportation.’”2
2
“Perkins” refers to the Federal Carl D. Perkins Vocational Education Act. See 20
U.S.C. §§ 2301 et seq. “Title I” refers to Title I of the Federal Elementary and Secondary
Education Act of 1965, as amended from time to time. See 20 U.S.C. §§ 6301 et seq.
11
[Id.] The Board further specified that the commensurate funding was to be
calculated by starting with the local school system’s total annual operating
budget that includes all federal, State, and local funding,3 and dividing by
enrollment for the previous year4 to reach an average per-pupil figure, overall
and for each major category of spending. Id. at 336-37. Then, after
deducting two percent for central office administrative costs, the State Board
directed that local boards multiply the average per-pupil figure “by the
student enrollment of the charter school to determine the total funding
amount for the charter school.” Id. at 337.
The State Board determined that “[b]ecause the total school system
operating budget encompassed all funds,” including funds for specific
services, “the average per[-]pupil amount derived from [the total operating
budget] figure would be sufficient for the charter school to deliver the
services for which its students were eligible.” Id. The State Board noted,
however, that charter schools “would have to make budgetary allocations in
light of the students’ eligibility requirements” under federal or state law “and
in doing so must comply with all applicable Federal and State requirements.”
Id. “For the special services that must be provided to eligible students,” the
State Board determined that “[a] charter school could elect either to provide
the services directly or have them provided by the school system, but if it
opted for the latter, it would be required to reimburse the school system for
the proportionate cost of those services.” Id. at 337-38. A charter school
would also need to reimburse the local school board “‘for salary, local
retirement, and other fringe benefit costs for the public school employees
working in the charter school as well as for regular services and supplies that
the charter school requests the local school system to provide.’” Id. at 338.
Frederick Classical, 454 Md. at 347-48 (footnotes in original) (bracketed text added).
3
The State Board noted that for the purposes of this calculation, “the total annual
school system operating budget amount shall exclude appropriations for debt service and
for adult education[.]” City Neighbors Charter School v. Balt. City Bd. of Sch. Comm’rs,
MSBE Op. No. 05-17 (May 26, 2005), at 4 n.2.
4
The State Board explained that in calculating the per-pupil allocation, school
systems “shall use the approved school system annual operating budget for the year in
which the charter school application is filed.” City Neighbors Charter Sch. v. Balt. City
Bd. of Sch. Comm’rs, MSBE Op. No. 05-17 (May 26, 2005), at 4 n.3. However, because
the enrollment count for each school year is not finalized until November, “the school
system enrollment count for the previous school year shall be used for the calculation.” Id.
12
Of significance to this appeal, the State Board also stated that the detailed formula
it had set forth “should be used as ‘guidance and direction’ to [ ] other charter school
applicants and local school systems ‘for the refinement of their working relationships on
behalf of the public school children throughout this State.’” Id. at 349 (quoting City
Neighbors, 400 Md. at 339).
b. This Court’s City Neighbors Opinion
Several local school boards, including the City Board, took issue with the State
Board’s formula and filed petitions for judicial review of the State Board’s decision. Those
petitions ultimately came before this Court on appeal in City Neighbors, 400 Md. 324(2007).
We began our analysis in City Neighbors by considering the local school boards’
claim that the declaratory rulings were in effect a binding “regulation” and must be deemed
invalid because they were not issued in conformance with the requirements of Maryland
Code, State Government Article (“SG”) § 10-101 et seq. for formal rulemaking through
regulations. 400 Md. at 344. We rejected that claim, noting that declaratory rulings are
generally treated by courts “more in the nature of contested case adjudications than the
adoption of a regulation.” Id. at 345. And, we held that declaratory rulings as “a
permissible mechanism by which [the State Board] may exercise its statutory authority to
‘explain the true intent and meaning’ of the public school laws and decide ‘controversies
and disputes’ under those laws.” Id. at 346. We therefore concluded that the State Board
“was well within its discretion to proceed in the manner it did—adjudicating the cases
13
before it and offering ‘guidance’ to other applicants, rather than proceeding with more
formal and binding regulations.” Id.Turning to the principal question of whether the State Board “had properly
construed and applied ED § 9-109(a),” we concluded that the statute was “patently
ambiguous.” Id. at 346-47. We reviewed the statute’s legislative history and concluded
that the General Assembly had clearly intended “that the determination of commensurate
funding would necessarily be on a per[-]pupil basis.” Id. at 355. However, we also
determined that the General Assembly had not specified “what was commensurate and how
[ ] the amount disbursed to other public schools [was] to be determined,” and that it “must
have envisioned” that the State Board, “the body [the General Assembly] has consistently
vested with the ultimate administrative authority to interpret, explain, and apply the public
education laws,” would interpret the meaning of those terms. Id.
Finally, we addressed the city and county boards’ specific complaints about the
State Board’s formula: “the requirement that the funding be disbursed in cash, rather than
in services, inclusion of Title I and special education expenses, and the limitation of the
deduction for administration expenses to 2% in the calculation of commensurate funding.”
Id. at 356. We found no legal error in any of those claims. Noting that the statute calls for
the disbursement of “money,” the Court concluded that while charter schools may
“negotiate for the provision of services” such services “cannot be forced on the charter
schools at the whim of the county boards.” Id. The Court also held that the State Board
was “clearly entitled” to conclude that “commensurate” funding to charter schools must
include funding for Title I and special education funds “to the extent that students in the
14
charter school are eligible for those services.” Id. And the Court held that with respect to
the 2% cap in central administrative costs, the State Board reasonably determined that
“charter schools, being somewhat autonomous, would not need and should not be subject
to the full range of control exercised by the central administration over the regular public
schools, and that they therefore should not be charged with a share of that total expense.”
Id. at 356-57.
c. Frederick Classical
In Frederick Classical, our most recent case to examine charter school funding, the
Frederick County Board of Education withheld transportation funding from the calculation
of its annual per-pupil commensurate funding allocation to Frederick Classical, a charter
school, because the school did not provide transportation services to its students. 454 Md.
at 341. Frederick Classical contested the withholding of the transportation funds before
the local school board and, when it summarily refused to amend the allocation, appealed
to the State Board. Id. The State Board held that, as a matter of law, “a charter school is
not automatically entitled to funds for services it does not provide.” Id. at 363. It therefore
concluded that the local school board’s withholding of transportation funds from Frederick
Classical’s per-pupil allocation “was not contrary to state law” and was “consistent with
[its] past rulings.”5 Id.
5
In the alternative, the State Board also decided that the charter school was not
entitled to transportation funds because of language in its charter agreement with the local
board.
15
This Court, however, reversed the decision of the State Board. We determined that
the State Board’s ruling was contrary to its own precedent in the City Neighbors declaratory
rulings. We held that under the formula set forth in those rulings a local school board
calculating a charter school’s annual per-pupil allocation “generally must include in that
calculation funds budgeted for any of the services expressly identified in the declaratory
rulings—including funds for transportation services.” Id. at 392. Although local school
boards are not required to include in the calculation “funds for services that have detailed
eligibility requirements under state and federal law when the charter school does not meet
those eligibility requirements,” we established that “there are no such eligibility
requirements” for transportation services for the general student population.6 Id.
Consequently, we concluded that, under the City Neighbors declaratory rulings
formula, “a local school board must [] include the funds budgeted for [transportation] when
calculating a charter school’s per-pupil allocation, regardless of whether a charter school
provides transportation services to its general student population.” Id. As the State Board
had incorrectly ruled that withholding transportation funding when Frederick Classical did
not provide transportation services was “consistent with [its] prior rulings,” when in fact it
was not, we held that its ruling was an abuse of discretion. Id. at 405-406.
We then considered whether, on remand, the State Board was required to adhere to
its own City Neighbors declaratory formula for calculating a charter school’s
6
Under ED § 8-410, certain qualifying special education students must receive
transportation services.
16
commensurate funding, or if it had the discretion to modify that formula. Id. at 406. We
recognized that administrative agencies are generally accorded “ample latitude to adapt
their rules and policies to the demands of changing circumstances,” and may generally
proceed either through adjudications or through more formal notice-and-comment
rulemaking. Id. at 406-07 (quoting Montgomery Cty. v. Anastasi, 77 Md. App. 126, 137
(1988)). However, we also determined that courts have imposed some limits on agency
discretion to change policies or rules, and highlighted two of those limits. First, if the
policy that is being changed is “a policy of general application, embodied in or represented
by a rule” then “the change must be accomplished by rulemaking.” Id. at 408 (quoting
CBS Inc. v. Comptroller of the Treasury, 319 Md. 687, 696 (1990)). Second, an agency’s
discretion may be circumscribed “when there is substantial reliance on the agency’s settled
standard or interpretation and a change would have a detrimental impact.” Id. at 409.
We concluded that the first limitation that an existing rule may only be changed
through new rulemaking did not apply because the guidance set forth in the City Neighbors
declaratory rulings was not a formal “rule of widespread application.” Id. However, we
also noted that over a decade had passed since the State Board issued the City Neighbors
declaratory rulings, but that the State Board “has never adopted a formal rule or regulation
of general application interpreting the ‘commensurate’ funding requirement of ED § 9-
109.” Id. at 410. Accordingly, we concluded that “charter schools and their staff and
student population have substantial reliance interests in the current State Board approach
to determine a commensurate allocation of funds to their charter school in the City
Neighbors declaratory rulings.” Id. at 411. In light of those reliance interests, we held that
17
“if the State Board proceeds through an adjudicatory approach, it must offer a rational
explanation for such a change in its written decision.” Id. at 412. “That rational
explanation,” we emphasized, “must include how its new interpretation or approach is in
keeping with the plain language and, where ambiguous, the legislative history and statutory
purpose of ED § 9-109 and the Charter Schools Program statute as a whole, and account
for the substantial reliance interests of charter school operators, staff and students,
prospective charter school applicants, and local school boards.” Id.
We therefore remanded the case to the State Board “to render a decision as to the
claims raised by Frederick Classical consistent with our holdings . . . .” Id. at 422. And,
we specifically stated that if the State Board determined “that Frederick Classical is entitled
to additional funds” then the State Board “shall issue an order calculating the exact amount
of additional funds owed based upon Frederick Classical’s enrollment during the relevant
years, and directing the [local school board] to pay that amount.” Id.
E. Facts and Procedural History of the Instant Appeal
a. The Charter School Operators Complaints
In the fall of 2015, the Charter School Operators filed individual breach of contract
complaints against the City Board in the Baltimore City Circuit Court. The complaints,
which raised “substantively similar” breach of contract claims stemming from charter
agreement contracts entered into between each charter school and the City Board, were
subsequently consolidated by the circuit court.7
7
Judge Rubin originally ordered that the proceedings in the consolidated cases be
captioned as The Monarch Academy Baltimore Campus, Inc. v. Baltimore City Board of
18
In the complaints, the Charter School Operators alleged that they entered into
similar contracts with the City Board to operate one or more charter schools in Baltimore
City (collectively, the “Contract”). The complaints quoted a provision of the contract
regarding funding of the Charter Schools and financial transparency in the funding process,
and provided annotations for terms defined elsewhere in the Contract. Including relevant
annotations, the provision as quoted in the complaints reads as follows:
6.1 OPERATING FUNDS. The parties agree that Title 98 requires
funding of the charter school that is commensurate with the amount disbursed
to other public schools in the local jurisdiction, and that Commensurate
Funding9 is integral to this contractual relationship and essential to the
School Operator’s ability to operate the School hereunder and that all funds
provided by the [City Board] to the school are to be used solely for the benefit
of the school and its students. Accordingly, during each school year during
the Term, the School Board shall allocate Commensurate Funding to the
School Operator for the following school year pursuant to Applicable
School Commissioners, Case No. 24-C-16-000320. This order was later stricken and a
subsequent order was issued to title the proceedings in the consolidated cases as Baltimore
International Academy Inc. v. Baltimore City Board of School Commissioners, Case No.
24-C-15-005507. For this case, we will utilize the titling found in the Court of Special
Appeals case.
On appeal to this Court, the Charter Schools have submitted one representative
complaint, filed by Afya Baltimore, Inc. against the City Board, which they assert is
“substantially similar” to the other consolidated complaints. The record also contains a
second complaint, filed by Petitioners City Neighbors Charter School, Inc., City Neighbors
Hamilton, Inc., and City Neighbors High School, Inc.
8
“Title 9” is defined as “the Public Charter School Act of 2003, Title 9 of the
Education Article of the Maryland Annotated Code (‘Maryland Public Charter School
Program’), and any regulations promulgated hereunder (as now and hereafter in effect, and
as may be amended or modified . . . .”
9
“Commensurate Funding” is defined as “a per pupil funding level consistent with
and generally equivalent to the average level of resources provided to similar students
across the School System.”
19
Requirements.10 Any financial commitment on the part of the [Baltimore
City] School System contained in this Agreement is subject to the annual
appropriation by the [City Board]. The [City Board’s] staff shall deliver to
the School Operator a draft of the funding formula including the amount of
the estimated per pupil allocation for the applicable school year (determined
in accordance with the [City Board’s] “approved funding formula” and
Applicable Requirements) and will make a good faith effort to deliver these
materials in no less than two weeks prior to the budget (distinct from the
Budget of the School Operator covered in Section 6.2) submission deadline
for the School, such deadline to be consistent with the deadline for all School
System schools. The draft document will include: (i) the School System’s
budget and line item amounts necessary to calculate the per pupil allocation,
and (ii) copies of any materials or documentation related thereto that is
delivered to the [City Board] for public presentation. Additionally, the [City
Board] agrees to make reasonable efforts to provide to the School Operator
background information on the methodology and assumptions behind the
calculations as soon as such materials are available.
(Emphasis and bracketed text added, additional footnotes omitted).
The complaints raised a single count for breach of contract. Specifically, the Charter
School Operators asserted that the City Board breached the provision quoted above by
failing to provide the Charter School Operators with commensurate funding, and also by
failing to provide them with the budget and financial information specified in the provision.
The Charter School Operators claimed that the City Board had “never” provided
commensurate funding in line with the City Neighbors declaratory rulings formula,11 and
10
“Applicable Requirements” is defined as “Title 9, federal laws and regulations,
all other state laws and regulations, all [City Board] [p]olicies, rules[,] and regulations, all
[Baltimore City] School System guidance and requirements, all court orders, consent
decrees, requirements relating to correct action taken by [the Maryland State Board of
Education], and [Maryland State Department of Education] requirements.”
11
Although the Charter School Operators did not cite to a specific State Board
ruling, subsequent filings clarify that they were referring to the City Neighbors declaratory
ruling.
20
that the City Board has instead repeatedly “unilaterally changed their methodology in
developing the amount to be disbursed to charter schools.” And, they more specifically
asserted that the City Board failed to provide the Charter School Operators with
commensurate funding for Fiscal Year 2016, i.e., the 2015-16 school year.
According to the Charter School Operators, the Baltimore School System’s Chief
Financial Officer provided charter schools with a “Revised Per Pupil” allocation for the
2015-16 school year of $9387. The Charter School Operators maintained that per-pupil
figure “reflected an expectation that the State of Maryland . . . would cut State funding to
the System by approximately $35 million.” However, the City Board ultimately adopted a
budget for the 2015-16 school year that “reflected the restoration of over $27 million in
State funding and increases of $3 million dollars in City funding and $3 million from ‘other
revenue sources’ as compared to the earlier projections.” Nonetheless, the Charter School
Operators claimed that the City Board, “without explanation, kept the charter school per
pupil at the previously stated [$9387].” That figure is, according to the Charter School
Operators, 1.77% less than that provided for charter schools in the 2014-15 school year
budget. At the same time, the Charter School Operators asserted that the City Board
adopted a budget for traditional (non-charter) public schools that was roughly the same as
provided in the 2014-15 school year budget.12
12
In addition, the Charter School Operators also alleged that the $9387 represents a
decrease below the Fiscal Year 2014 and Fiscal Year 2011 school years, despite significant
increases in System funds since Fiscal Year 2011. The Charter School Operators also point
out that “[t]he System’s total budgeted allocation to . . . charter schools for Fiscal Year
21
The Charter School Operators also claimed that the City Board had not met its
contractual requirement to provide detailed information as to its finances and the basis of
its calculations of the annual per-pupil commensurate funding allocation. Instead, the
Charter School Operators alleged that the City Board “from year to year, arbitrarily
presented charter school operators with take-it-or-leave-it charter school per pupil figures
derived using varying (or no) calculation methodology, inflated estimates of overall
System enrollment, and unsupported and dubious financial and budget figures.”
Specifically, they claimed that for the 2015-16 school year, the City Board provided only
two single page documents in support of the $9387 “Revised Per Pupil” allocation.
b. Initial Motions to Dismiss or Stay the Action
The City Board filed motions “to dismiss, or in the alternative, motion to stay” the
complaints. In an accompanying memorandum, the City Board contended that “at the
heart” of the Charter School Operators complaints were the alleged failure of the City
Board to provide commensurate funding for charter school students as required under ED
§ 9-109. The City Board insisted that under the primary jurisdiction doctrine the
commensurate funding dispute is “for the State Board to decide in the first instance.”13
2016 . . . represents 9.3% of the total System budget . . . even though charter school
students are more than 15% of the total enrollment.”
13
The City Board also contended that the Charter School Operators failed to make
a prima facie case for breach of contract and failed to allege exhaustion of contractual
remedies.
22
The Charter School Operators opposed the City Board’s motions, asserting that the
circuit court, and not the State Board, “has proper jurisdiction over this breach of contract
action.” They also noted that the relief they were seeking included “monetary damages,”
which they contended was not available in a declaratory action before the State Board. In
the alternative, the Charter School Operators insisted that “[e]ven if the State Board had
jurisdiction and [was] able to provide the [Charter School Operators] with relief,” the State
Board had already issued a “comprehensive” interpretation of commensurate funding
under ED § 9-109, which was “litigated through final affirmance by the Court of Appeals.”
Thus, they claimed that “‘primary jurisdiction’ has already been satisfied.” Finally, they
requested that even if the court determined that the commensurate funding dispute needed
to first be resolved by the State Board, the court should permit the matter to proceed
through the discovery phase of litigation in circuit court and merely stay any ruling on a
motion for summary judgment or beginning a trial on the breach of contract claim pending
the decision of the State Board.14
On January 8, 2016, Judge Rubin held a hearing on the City Board’s motion to
dismiss, at which both parties offered extensive arguments as to whether the State Board
had primary jurisdiction over the parties’ dispute. The City Board argued that, although
the case was a breach of contract action, the claim that the City Board did not provide
funding for charter schools that was commensurate with funding provided to traditional
14
The Charter School Operators also contended in their motion that they had stated
sufficient factual allegations to satisfy the elements of a breach of contract claim, and that
they had satisfied the pre-suit notice requirements of the contract.
23
public schools “boils down to whether there has been compliance with [ED § 9-109].” The
City Board argued that, under this Court’s holding in City Neighbors, ED § 9-109 was
ambiguous and the State Board had the primary authority to interpret it. The City Board
acknowledged that the State Board had previously set forth a working definition of
commensurate funding and a formula for calculating that funding in the City Neighbors
declaratory rulings, but insisted that neither the State Board nor this Court has ever said
“that is the only formula that can be used.” The circuit court questioned the City Board’s
counsel on that point, resulting in the following exchange:
Judge Rubin: So the question that really I think where the
rubber meets the road in this instance is has the
issue of commensurate funding already been
determined and so to send it back [to the State
Board] is not only unnecessary, but, arguably,
inefficient and potentially unfair[.] . . . [T]he flip
side is that every single time a charter school
takes issue or challenges that proper
commensurate funding has been placed, at least
the way I see the logical extension of your
arguments is that . . . the State Board of
Education will always be entitled to make that a
moving target.
City Board Counsel: But that’s what [the State Board has] said in their
opinions. I agree with that. If they came out with
-- if the statute said this is what you need to do
and here are the details or if [the State Board]
came up with a regulation that said this is exactly
how it needs to be done . . . then I would say no[.]
[B]ut in a situation where you have this guidance
. . .then I think the State Board of Education
should weigh in on these issues and has to weigh
in on these issues . . . .
24
In response, the Charter School Operators argued that under some circumstances, a
party may elect to proceed before the circuit court for its breach of contract claim even if
that claim implicated provisions of the Education Article. Specifically, they contended that
“once the State Board has had the opportunity to have a crack at interpreting its statutes,”
parties may file a claim dependent on that interpretation before the circuit court. And, they
disputed the City Board’s contention that the State Board would have discretion to depart
from its previous interpretation and formula for calculating commensurate funding if the
parties’ dispute proceeded to adjudication before the State Board.
The Charter School Operators also opposed the City Board’s alternative request that
the case be stayed. They pointed out that their claim that the City Board had breached its
contractual obligations to provide information as to its budget and finances did not depend
on the interpretation of a statute or regulations by the State Board and was “squarely before
only the [c]ircuit [c]ourt.” They also argued that if the case proceeded before the State
Board, discovery to obtain that information would be restricted compared to the discovery
available in circuit court. The Charter School Operators therefore contended that even if
the court found that the commensurate funding dispute was in the primary jurisdiction of
the State Board, rather than grant a stay, the court should permit the case to proceed through
discovery in the circuit court. Finally, they requested that if any issue in the case needed
to go before the State Board, that the court issue “very specific instructions as to what
exactly the State Board would need to accomplish or could accomplish on any proceeding
that would be appropriate,” and also explain how to “bring this [matter] back to [the circuit
court] for actual resolution and remedies.”
25
During the hearing, Judge Rubin noted that the City Board’s reluctance to disclose
the facts supporting the commensurate funding calculations left the Charter School
Operators in a disadvantaged position considering the “illusory” nature of commensurate
funding:
Judge Rubin: [T]o the extent that the concept of commensurate
funding or what it means in each charter school
contract could be different from the next charter
school contract because there are different things
in play, as [City Board has] argued, on some
level does this not raise an issue that in essence
when the charter school contracts for, among
other things, its commensurate funding, that its
entitlement to whatever commensurate funding
is . . . somewhat illusory? In other words, we’ll
tell you what it is once you complain that we
haven’t given it to you.
Judge Rubin thereafter issued a comprehensive oral ruling from the bench, in which
she ultimately determined that the State Board had “provided sufficient guidance”
regarding the meaning of commensurate funding, including the “requisite factors to be
considered, the data to be considered.” She therefore concluded that the circuit court was
“no longer obliged to punt the issue to the expertise of the administrative body,” but rather,
it was entitled “to decline to invoke primary jurisdiction.” 15 Accordingly, she denied the
motion to dismiss.
c. The City Board’s Initial Petition for Declaratory Ruling
15
Judge Rubin also held that the complaints did state sufficient facts that, if accepted
as true, could support a breach of contract claim. And, she agreed that the Charter School
Operators had complied with the contractual pre-suit notice requirements.
26
On November 9, 2015, the same day that the City Board filed its motions to dismiss
the complaints in the circuit court, it also filed a petition with the State Board, requesting
that the State Board declare that its funding formula complied with ED § 9-109 and resulted
in commensurate funding. The Charter School Operators thereafter moved to dismiss the
declaratory petition. After Judge Rubin denied the City Board’s motions to dismiss before
the circuit court, the State Board dismissed the City Board’s petition for declaratory ruling.
In a written order, the State Board noted that the circuit court had “asserted its jurisdiction”
on the issue, and it did not serve the interests of conserving judicial (and quasi-judicial)
resources to have parallel proceedings.
The State Board also addressed whether it should stay or dismiss the declaratory
petition, and explained that the City Board had failed to present it with sufficient facts from
which it could declare the law:
Having reviewed the Petition, we find that it fails to present any
facts concerning the funding formula that the Baltimore City Public
School System (BCPSS) actually used to fund the charter schools. . . .
The Petition is, in essence, a request for an evidentiary hearing at which time
BCPSS states that it will present the facts and the formula it used.
A request for a declaratory judgment must present a “justiciable
controversy, rather than abstract, hypothetical, or contingent questions.”
Miller v. Augusta Mut. Ins. Co., 157 F. App’x. 632, 637 (4th Cir. 2005). The
Petition here presents no concrete facts from which we could declare the law.
(Emphasis added). The Charter School Operators requested that the State Board compel
the City Board to disclose its commensurate funding information. In a request for an appeal
in front of the State Board, a party must provide “a statement of the facts necessary to an
understanding of the appeal.” COMAR 13A.01.05.02(A)(3). While an appellant may
27
request to “present additional evidence on the issues in an appeal,” the State Board must
first deem the additional evidence as “material” and “that there were good reasons for the
failure to offer the evidence in the proceedings before the local board.” COMAR
13A.01.05.04(C). After satisfying these factors, the State Board may, but is not required
to: (a) “[r]emand the appeal to the local board for the limited purpose of receiving the
additional evidence,” or (b) “[r]eceive the additional evidence.” COMAR
13A.01.05.04(C). Here, the Charter School Operators did not possess the “additional
evidence” of commensurate funding information and thus did not have the ability to present
“additional evidence” in its petition to the State Board. Adhering to the confines of
COMAR, the State Board was unwilling, and statutorily unable, to conduct evidentiary
hearings regarding the disputed commensurate funding information.
d. Further Proceedings Before the Circuit Court
Subsequently, the City Board filed a counterclaim against the Charter School
Operators before the circuit court. In the counterclaim, the City Board contended that it
had provided the Charter School Operators with administrative services whose value were
significantly greater than 2% of the charter schools’ commensurate funding allocation, and
that the 2% cap on administrative services stated in the City Neighbors declaratory rulings
should only apply to mandatory functions “that may only be performed by the central office
of a local school system.” The City Board therefore requested that the circuit court issue a
declaratory ruling stating which services provided to charter schools were “mandatory”
and subject to the 2% deduction. And, the City Board requested that either the value of the
additional, non-mandatory services provided be counted as commensurate funding
28
received from the City Board, or in the alternative, that the Charter School Operators be
required to reimburse the City Board for the cost of those services to prevent unjust
enrichment.16
The Charter School Operators moved to dismiss the City Board’s counterclaim for
failure to state a claim upon which relief can be granted.17 On April 18, 2016, the circuit
court held a hearing on the Charter School Operators’ motion to dismiss. At that hearing,
Judge Nance questioned counsel about the procedural history of the case:
May I beg a question of both parties -- or both sides, if you would, please?
Tell me procedurally what happened in this case, procedurally in terms of
what [the Charter School Operators] did before it got to being a litigation in
the Circuit Court for Baltimore City. . . . My understanding is, is that if there
is a dispute, the dispute is raised with the local board. If there is a problem
in the resolution by the local board there is an administrative process. That
is the reason for my question. . . . Tell me what happened that causes you
to rightfully be in my courtroom.
(Emphasis added). Counsel for the City Board responded to the judge’s question:
I wish I were in front of you I think in January we had a hearing on a motion
to dismiss where we argued exactly what Your Honor is stating, the doctrine
of primary jurisdiction that this case should be stayed in favor of the State
Board . . . making a determination of these issues and our motion was denied.
16
The counterclaims also made a number of breach of contract claims against the
Charter School Operators.
17
The Charter School Operators asserted that the City Board’s claim for declaratory
relief should be dismissed because the issue it raised was already included in the Charter
School Operators’ complaints. They also claimed that the City Board’s unjust enrichment
claim should be dismissed because such claims are unavailable when there is an express
contract between the parties. Finally, as to the breach of contract claims asserted by the
City Board in its counterclaims, the Charter School Operators maintained that the City
Board had not provided sufficiently detailed factual allegations to meet the Maryland
pleading requirements for those claims.
29
Counsel for the City Board also informed the judge that there had been an administrative
proceeding pending before the State Board, but that it had been dismissed after Judge
Rubin’s order directing that the case proceed to trial.
Judge Nance thereafter took a brief recess during which he “had an opportunity to
review . . . part of the matters procedurally in chambers.” Upon returning to the bench, the
judge noted that the City Board “would like to make an oral motion at this time.” The City
Board then moved to dismiss “on the basis that the appropriate tribunal or court or body to
hear this matter is the State Board of Education.” Citing City Neighbors, counsel for the
City Board stated that the “case law is very clear that [the State Board] should be the first
one to take up matters such as the ones that have been raised by the Plaintiff here relating
to intricate, detailed, and important issues of public policy relating to education and
educational funding.”
Counsel for the Charter School Operators responded that the claim raised in their
complaints was for breach of contract, and the resolution of such disputes is for the courts
and did not need to first be resolved by the State Board. He also argued that proceeding
before the State Board would provide no remedy in the form of monetary damages. And,
he argued that the issue of commensurate funding had already been settled and affirmed by
the courts, thus “satisfying the requirements of primary jurisdiction of letting the
administrative agency have a crack at setting out the interpretation.”
At one point in the hearing, Judge Nance questioned counsel for the Charter School
Operators as to what proceedings had taken place before the City Board. Counsel
30
responded that the Charter School Operators had not sought a hearing or opinion from the
City Board. Later in the hearing, Judge Nance stated the following:
I want to make sure that this [c]ourt says specifically that it believes that
[the Charter School Operators] have a duty to seek administrative
review of a local [school] board and if not [then the State] Board as to
that which is asserted and claimed by [the Charter School Operators] in this
case for there to be an administrative review as to your claims before it comes
to the [c]ircuit [c]ourt.
(Emphasis added).
At the conclusion of the hearing, Judge Nance granted the Charter School
Operators’ motion to dismiss the City Board’s counterclaims without prejudice. The judge
also determined that, while granting the City Board’s verbal motion to dismiss was not
appropriate, “in lieu of [the City Board’s] motion to dismiss, this [c]ourt is granting an
order to stay as to these matters pending administrative review and appeal.” The following
day, Judge Nance entered a written order to that effect, which in pertinent part ordered that
the consolidated action was stayed “pending administrative review of the parties’ dispute
by the State Board of Education” (the “Stay Order”).
e. The City Board’s Second Petition for Declaratory Ruling
After the Stay Order was issued, the City Board filed a second petition for
declaratory ruling before the State Board.18 Unlike in its initial petition for declaratory
relief filed before the State Board, the City Board provided a partial explanation of its
18
A partial copy of the second petition was included in the Appendix to the City
Board’s brief to this Court. That copy did not include any of the exhibits referenced in the
petition.
31
charter school funding formula for the 2015-16 school year. The City Board stated that the
City School System’s “Total Operating Budget, for the 2015-16 school year was
$1,322,461,846.” The City Board explained that in calculating charter schools funding, it
began by excluding numerous categories of funds from that figure, including: “restricted
funds,”19 funds for debt servicing, adult education, retiree health benefits, pre-
kindergarten,20 and “non-public education,”21 contributions from the City School System’s
19
The declaratory petition asserted that the City School System segregates funds in
its budget into three categories: the General Fund, the Special Fund, or the Enterprise Fund.
According to the City Board, “the Special Fund and the Enterprise Fund are restricted” and
funds in those categories “can only be used for certain purposes.” It is unclear from the
petition, however, if the restrictions on the use of those funds derive from State or federal
law, or from City Board policy. The City Board also stated in the petition that “individual
charter schools receive upward adjustments to the base cash per-pupil for all restricted
funds to which they are entitled.” But it is unclear whether the Charter School Operators
would be entitled to receive any of the funds labelled as restricted, and if so, the amounts
to which they would be entitled.
20
The declaratory petition asserted that Baltimore City calculated “full-day [pre-
kindergarten] to [be] approximately 4,000 students,” a population spread across both
traditional public schools and some charter schools. The City Board maintained that it
provides “the same level of financial support . . . on the same basis” to all schools providing
pre-kindergarten. However, the City Board asserts that it excludes funding for the program
from its charter funding allocation, and does not count those students towards its overall
enrollment total, “[b]ecause the [pre-kindergarten] program benefits all schools, both
traditional and charter, and is an underfunded expense that City Schools is required to
provide[.]”
21
The City Board asserted in its petition that for a small population of students “with
physical, emotional, and developmental needs that cannot be adequately met in Baltimore
City public schools,” it is required by law to “pay for alternative placements” in private
schools for those students.
32
annual fund balance22 and “non-state/local revenue,”23 funding for special education
students, funding for students with limited English language proficiency (“ESOL” funds),
and funding for specialized transportation services, primarily for special education
students. The excluded funds amount to $572,978,187, or slightly over 43% of the City
Board’s total operating budget for the 2015-16 school year.
The City Board stated that its total budget after “adjusting” for the restricted funds
was $749,483,659. The City Board explained that it divided that figure by the population
of students enrolled in kindergarten through the twelfth grade in the City School System
from the previous year, 78,631, to reach a per-pupil figure of $9532. The City Board
explained that it then deducted 2% from that figure for central administrative costs, as
permitted by prior State Board precedent. And, the City Board stated that it added an
additional $46 to the per-pupil total as part of a “negotiated adjustment,”24 to reach a “base
cash charter per pupil allocation” of $9387.
22
The fund balance is “money that was not used in prior operating years.” In some
years, the City School System funds a portion of its budget expenses with a contribution
from the fund balance.
23
The City School System lists earnings from certain sources separately, including
“interest on investment earnings, tuition payments from students who live outside of
Baltimore City, payments for rental and special use of [its] buildings, revenue from cellular
telephone towers placed on [its] buildings, vending machine contracts, and other revenue
sources.” The City Board contends these sources are “not federal, state, or local
appropriations for K-12 education.”
24
In the declaratory petition, the City Board asserts that it “agreed” to a
“placeholder” base cash per-pupil figure of $9387 early in 2015 in order to provide “budget
stability” for charter schools while it was waiting for final figures for the State contribution
to its budget and projected enrollment. Once the final figures were received, the base cash-
per pupil under its formula was $9341, which was $46 less than the $9387 figure it had
33
Finally, the City Board then added to the $9387 proposed allocation the cost of
various “needs-based” services that it provides “in-kind” to charter schools, which it valued
at $3496, to reach a total figure of both cash and in-kind services of $12,883. It contended
that figure was slightly higher than would have been reached under the approved State
Board methodology, and thus was “commensurate” funding under ED § 9-109 and State
Board guidance.25 Furthermore, the City Board contended that its funding formula,
including all of the exclusions and its insistence on providing certain services “in-kind”
instead of as a cash allocation, was consistent with State Board precedent. Therefore, the
City Board requested that the State Board declare that it had provided commensurate
funding for the 2015-16 school year.
However, the City Board also asked that the State Board reconsider some of the
guidance it had provided in the City Neighbors declaratory rulings. Specifically, the City
Board contended that the limitation that it can only deduct up to 2% of a charter school’s
funding allocation for the cost of central administrative services “does not remotely cover
the true cost of those services, resulting in an unfair subsidy for charter schools.” The City
Board therefore requested that the State Board entirely “eliminate the 2% cap or lift it to
previously provided to charter schools. However, it elected not to modify the original
figure.
25
The City Board also contended that, in reviewing whether its funding formula
resulted in commensurate funding, the State Board should apply the deferential standard
of review stated in COMAR 13A.01.05.05(A)-(C), under which the decision of the City
Board would be considered “prima facie” correct unless “arbitrary, unreasonable, or
illegal.”
34
cover the actual cost of all services” that the City Board provides centrally. In the
alternative, the City Board requested that if the State Board reaffirms the 2% cap, that it
“clarify that the 2% cap covers only a limited number of services and that City Schools can
require reimbursement from charter schools for [additional services.]”26
The Charter School Operators filed a motion to dismiss the State Board’s petition,
contending that it was “outside of the State Board’s jurisdiction because it asks for
extensive fact finding instead of interpretation of laws,” and because they had appealed the
circuit court’s Stay Order to the Court of Special Appeals. In the State Board’s order, the
State Board considered the disposition of the “ongoing dispute.” The State Board
specifically referenced Judge Rubin’s holding that “the Circuit Court had proper
jurisdiction” when the circuit court denied the petition to dismiss Charter School
Operators’ complaint. The State Board then stated that “the Circuit Court case is stayed
and that [the Charter School Operators] have appealed the stay to the Court of Special
Appeals.” As a result, the State Board held that the “case remains pending in the judicial
system” and entered an order dismissing the petition “because the case remains within the
jurisdictional purview of the courts.”
f. Appeal to the Court of Special Appeals
The Court of Special Appeals stated that the Charter School Operators had presented
a single issue before it on appeal, which it had rephrased:
26
The City Board also requested that the State Board clarify whether the deduction
is 2% of its total operating budget, or 2% of its total operating budget minus permissible
deductions.
35
Did the circuit court err in staying the proceedings pending administrative
review on the ground that the State Board has primary jurisdiction over the
issues raised in the complaint?
Monarch Acad., 231 Md. App. 594, 600 (2017). However, the court declined to resolve
that issue. Instead, it determined sua sponte27 that “the circuit court’s order is not an
appealable order,” because it was neither a final judgment nor an appealable order under
the collateral order doctrine, and therefore dismissed the appeal. Id. at 600, 619.
The Court of Special Appeals noted that “to constitute a final judgment, a trial
court’s ruling ‘must either decide and conclude the rights of the parties involved or deny a
party the means to prosecute or defend rights and interests in the subject matter of the
proceeding.’” Id. at 613 (quoting Md. Bd. of Physicians v. Geier, 451 Md. 526, 545
(2017)). The intermediate appellate court determined that the Stay Order “did not conclude
the rights of the parties or adjudicate all of the claims in the action.” Id. at 613–14. And,
relying on federal case law, the court concluded that the Stay Order did not have the effect
of putting the Charter School Operators out of court, “because it merely directed that the
parties first go to the State Board[.]” Id. at 613-15 (discussing Crystal Clear Commc’ns,
27
Before the Court of Special Appeals, the City Board filed a motion to dismiss the
appeal on the ground that the circuit court’s stay order was not an appealable order.
Monarch Acad., 231 Md. App. at 612 n.10. The court denied the motion, “with leave to
seek that relief in Appellee’s brief,” but the City Board did not “include a motion to dismiss
in its brief or request a ruling on whether the Stay Order was an appealable order.” Id. Nor
was the issue raised in oral argument before the court. Id. Nonetheless, after oral argument,
the court “requested the parties to address whether the Stay Order was an appealable order”
in written supplemental filings. Id. The City Board thereafter “filed a memorandum stating
its view that the Stay Order was not an appealable order,” but also requested that the Court
of Special Appeals “in the interest of judicial economy and jurisdictional clarity,” issue a
ruling on the merits and hold that the State Board had primary jurisdiction over the dispute.
36
Inc. v. SW Bell Tel. Co., 415 F.3d 1171, 1175-78 (10th Cir. 2005) and Occidental Chem.
Corp. v. Louisiana Pub. Serv. Comm’n, 810 F.3d 299, 305-307 (5th Cir. 2016)). The court
also held that the Stay Order was not appealable under the collateral order doctrine. Id. at
615-19.
F. Appeal to this Court and Questions Presented
The Charter School Operators filed a petition for writ of certiorari to this Court from
the decision of the Court of Special Appeals, which we granted on April 4, 2017. Monarch
Acad., 452 Md. 523 (2017). In the petition, the Charter School Operators presented several
issues for our review, which we have rephrased and reordered:
1. Is the circuit court’s Stay Order an appealable order?
2. Did the circuit court abuse its discretion in entering the Stay Order prior to the
conclusion of discovery and without providing guidance to the parties?
3. Does the doctrine of primary jurisdiction require that proceedings before the circuit
court be stayed in order to permit the State Board to resolve the issue of whether the
City Board has provided the Charter School Operators with commensurate
funding?28
28
In their petition for writ of certiorari, the Charter School Operators presented the
following three questions for review:
1) Is a trial court’s issuance of an indefinite stay of plaintiffs’ action, requiring
“administrative review of the parties’ dispute,” an appealable order where it imposes a
condition that (a) is beyond the control of the plaintiffs to satisfy and (b) requires that
plaintiffs undertake actions that even if satisfied would substantively impair plaintiffs’
substantive and procedural rights?
2) Did the trial court err in determining that the State Board of Education has
“primary jurisdiction” over the Charter School Operators’ contract actions and, as a
consequence, staying the proceedings “pending administrative review of the parties’
dispute by the State Board of Education?”
3) If Question (2) is answered in the negative, then what process is available to
plaintiffs both at the State Board and then in court that would permit their claims to be fully
37
STANDARD OF REVIEW
The issue of whether the circuit court’s Stay Order is a final and appealable
judgment, or is appealable even if not a final judgment under the collateral order doctrine,
is a question of law that an appellate court reviews de novo. Balt. Home All., LLC v.
Geesing, 218 Md. App. 375, 381 (2014). Likewise, whether the State Board has primary
jurisdiction over some or all of the issues raised by the Charter School Operators, so that
they “must exhaust administrative remedies” before the State Board prior to seeking review
in circuit court is “a legal issue which the Court of Appeals reviews de novo.” United Ins.
Co. of Am. v. Maryland Ins. Admin., 450 Md. 1, 14 (2016); see also Falls Road Community
Ass’n, Inc. v. Balt. Cty., 437 Md. 115, 134 (2014).
As to the circuit court’s sua sponte entry of the Stay Order “in lieu” of dismissing
the Charter School Operators’ complaints, a court’s decision to grant or deny a stay order
is generally within its discretion, and is reviewed for an abuse of discretion. Fishman v.
Murphy ex rel. Estate of Urban, 433 Md. 534, 546 (2013); see also Geier v. Maryland State
Bd. of Physicians, 223 Md. App. 404, 450 (2015), reconsideration denied (July 31, 2015);
Bechamps v. 1190 Augustine Herman, LC, 202 Md. App. 455, 460 (2011). There is an
abuse of discretion when the trial court ruling was “clearly against the logic and effect of
facts and inferences before the court[ ] . . . or when the ruling is violative of fact and logic.”
Fishman, 433 Md. at 546 (quoting Aventis Pasteur, Inc. v. Skevofilax, 396 Md. 405, 419
heard and adjudicated, with relief granted, and that would not deprive Petitioners of their
substantive rights?
38
(2007)). In order to be reversed a circuit court’s decision generally must be “well removed
from any center mark imagined by the reviewing court and beyond the fringe of what that
courts deems minimally acceptable.” Skevofilax, 396 Md. at 418-19 (quoting Wilson v.
John Crane, Inc., 385 Md. 185, 198-99 (2005)).
DISCUSSION
“In Maryland, appellate jurisdiction, except as constitutionally created, is statutorily
granted.” Schuele v. Case Handyman & Remodeling Servs., LLC, 412 Md. 555, 565
(2010). And, “[w]here appellate jurisdiction is lacking, the appellate court will dismiss the
appeal on its own motion.” Id. (quoting Gruber v. Gruber, 369 Md. 540, 546 (2002)).
Therefore, we must first decide whether the Stay Order is appealable before turning to
whether the Stay Order was an abuse of discretion, and whether the underlying
commensurate funding issue must be referred to the State Board under the doctrine of
primary jurisdiction.
A. Appealability of the Stay Order
a. Finality of Judgment
Pursuant to Maryland Code, Courts & Judicial Proceedings Article (“CJ”) § 12-301,
a party may generally appeal only from “a final judgment entered in a civil or criminal case
by a circuit court.”29 However, as the Court noted in Metro Maintenance Systems South,
29
“[T]here are only three exceptions to that final judgment requirement: appeals
from interlocutory orders specifically allowed by statute; immediate appeals permitted
under Maryland Rule 2-602; and appeals from interlocutory rulings allowed under the
common law collateral order doctrine.” Addison v. Lochearn Nursing Home, LLC, 411
Md. 251, 273 (2009) (quoting Salvagno v. Frew, 388 Md. 605, 615 (2005)). Here, the
circuit court did not expressly “direct the entry of final judgment” as required for an
39
Inc. v. Milburn, CJ § 12-301 “does not define finality, but instead leaves it to this Court to
determine what makes a judgment ‘final.’” 442 Md. 289, 297 (2015).
This Court has “often stated that the purpose of the final judgment rule is to avoid
piecemeal appeals . . . and [that] the reason for avoiding piecemeal appeals is the promotion
of judicial efficiency.” Brewster v. Woodhaven Bldg. & Dev., Inc., 360 Md. 602, 616
(2000). One important aspect of judicial efficiency is avoiding the “interruption of the trial
court process by repeated application to appellate courts.” Id. Specifically:
Postponing review until the final judgment, or minimizing the number of
occasions for interlocutory appeal, also is important to avoid interference
with the trial process. . . . Repeated interruptions of the trial court process .
. . may require wasteful losses of familiarity with the case by court and
perhaps counsel as well.
Id. (quoting Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, 15A Fed.
Practice & Proc. § 3906, 277 (2d ed. 1991)). The Court has emphasized that such an
invidious interruption of the trial process “cannot occur” when there is a grant of a motion
to transfer a case to another venue or court, explaining that “[i]n the transferring court,
immediate appeal under Rule 2-602(b). Nor is this a permissible interlocutory appeal under
statute. CJ § 12-303 describes the interlocutory orders that a party may appeal from in a
civil case. However, none of the parties has contended that the circuit court’s stay order is
an appealable interlocutory order under that statute, and the stay order does not fit in any
of the permissible categories of appealable orders listed in the statute.
The Charter School Operators do contend that this Court has appellate jurisdiction
to resolve this appeal under the collateral order doctrine. However, we have held that “the
collateral order doctrine in Maryland is very limited” and that it “should be applied
sparingly in only the most extraordinary circumstances.” Schuele, 412 Md. at 572 (internal
quotation marks and citations omitted). As we believe that the appealability of the circuit
court’s Stay Order can be resolved under the final judgment rule, we need not reach the
Charter School Operators arguments as to the collateral order doctrine.
40
there are no longer any proceedings to interrupt, for the proceedings have been
terminated[,]” while “[i]n the receiving court, the proceedings cannot be interrupted,
because they have not yet begun.” Id.The Court has also provided guidance as to when a judgment is “final” and
appealable. We have held that “[i]n order to be an unqualified, final disposition, an order
of a circuit court must be ‘so final as either to determine and conclude the rights involved
or to deny the appellant the means of further prosecuting or defending his or her rights and
interests in the subject matter of the proceeding.’” Metro Maintenance, 442 Md. at 299
(quoting Rohrbeck v. Rohrbeck, 318 Md. 28, 41 (1989)) (italicized emphasis in original)
(additional emphasis added). Thus, “[e]ven if the order does not decide and conclude the
rights of the parties, it nevertheless will be a final judgment if it terminates the proceedings
in that court and denies a party the ability to further prosecute or defend the party’s rights
concerning the subject matter of the proceeding.” Id. Such an order has been described as
one that “has the effect of ‘put[ting] the [party] out of court.’”30 Id. (quoting McCormick
v. St. Francis de Sales Church, 219 Md. 422, 426-27 (1959)) (emphasis added).
30
In Metro Maintenance, the Court also identified two other “attributes” that a
ruling “ordinarily” must have in order to be a final judgment: “unless the court acts
pursuant to Maryland Rule 2-602(b) to direct the entry of a final judgment as to less than
all of the claims or all of the parties, it must adjudicate or complete the adjudication of all
claims against all parties” and “it must be set forth and recorded in accordance with Rule
2-601.” 442 Md. at 298.
In the instant case, the circuit court’s Stay Order stayed all claims in the consolidated
actions before it pending administrative review by the State Board. Therefore, the Stay
Order was a decision that affected “all claims against all parties” in the case. And, the
question of whether the Stay Order was effectively an “adjudication” of those claims is
subsumed in the question of whether the Stay Order was a final disposition of the matters
41
We have held that the “key question” as to whether an order that terminates
proceedings in a particular court has the effect of putting a party out of court is “whether
the order contemplates that the parties will no longer litigate their rights in that court.” Id.
In Metro Maintenance, we referenced our holding in Moore v. Pomory, 329 Md. 428, 431
(1993) as providing an “illustration” of the distinction between “an order that terminates
the proceedings in a particular court and one that does not”:
In [Moore], the Court held that an order dismissing a complaint in its entirety
“without prejudice” was a final judgment because it terminated the
proceeding in the particular court. By contrast, the Court stated, an order
of dismissal that expressly allows a plaintiff to file an amended complaint
does not terminate the proceedings, as it anticipates further proceedings
in the same court. Although a party has no obligation to file an amended
complaint and there may be no further proceedings, the case remains pending
in the event an amended complaint is filed. Once an amended complaint
is filed, the parties may continue to litigate their interests in the same
proceeding before the same court. Thus, when an order anticipates
additional proceedings in the same court during which the parties may
continue to litigate their rights in the particular matter, the order does not
terminate the proceedings in that court, and is not a final judgment.
before the court that had the effect of putting the Charter School Operators out of court.
See e.g., Black’s Law Dictionary (10th ed. 2014) (defining “adjudication” as a “judgment,”
which is “[a] court’s final determination of the rights and obligations of the parties in a
case”).
The remaining attribute of proper recordation under Rule 2-601 is “a creature of
court rule.” Hiob v. Progressive Am. Ins. Co., 440 Md. 466, 489 n.21 (2014). Accordingly,
“parties may waive the separate document requirement” on appeal. Id. Here, that is
precisely what occurred; neither party has raised the issue of Rule 2-601 recordation before
this Court. Furthermore, before the Court of Special Appeals, the City Board explicitly
asked that court to issue a ruling on the merits of the primary jurisdiction dispute “in the
interest of judicial economy and jurisdictional clarity[,]” despite the lack of recordation of
judgment. Therefore the issue of recordation of judgment under Rule 2-601 has been
waived.
42
Metro Maintenance, 442 Md. at 300-301 (emphasis added). We have consistently
recognized that any order that contemplates parties will no longer litigate their rights in
that court is a final judgment. See e.g., Brewster, 360 Md. at 615–16 (holding that an order
of the circuit court transferring a case to another circuit court under venue or forum non
conveniens grounds is an appealable final judgment because no further proceedings will
occur in the court of original jurisdiction); Ferrell v. Benson, 352 Md. 2, 7 (1998) (holding
that an order transferring a case from circuit court to District Court is a final judgment
because it terminates the proceedings in the circuit court, even though proceedings continue
in the District Court); Horsey v. Horsey, 329 Md. 392, 402 (1993) (holding that an order
compelling arbitration is a final judgment because it terminates the proceedings in that
court, even if proceedings continue before the arbitrator).
The issue before the Court in Metro Maintenance was whether a circuit court’s
remand of a case to an administrative agency for further proceedings, prior to the circuit
court conducting any review of the agency’s decision, was a final judgment. 442 Md. at
293-94. In that case, a truck driver quit his job, claiming racially motivated mistreatment,
and applied for unemployment benefits to the Department of Labor, Licensing, and
Regulation (“DLLR”). Id. at 294. A DLLR claim examiner denied him benefits on the
grounds that he had quit his job “without good cause.” Id. Mr. Milburn appealed within
the agency, but the claim examiner’s ruling was upheld by a hearing examiner, and then
adopted by the DLLR Board of Appeals. Id. at 295. Mr. Milburn thereafter appealed to
the circuit court. Id. However, before the circuit court, the DLLR filed a motion requesting
that the court remand the case to the agency before the court conducted its judicial review
43
so that the Board could review the hearing examiner’s decision. Id. at 296. The circuit
court granted the remand request, without reaching the merits of the claims on appeal. Id.
In evaluating whether the remand order was a final and appealable judgment, we
noted that many remands by a circuit court to an agency, which by their nature contemplate
additional proceedings before the agency, “may appear to be non-final in nature[.]” Id. at
301. However, we stated that under “principles of finality” in Maryland administrative
law, “many such remands are appealable final judgments.” Id. at 301.31 Applying those
principles, we considered whether the remand order at issue put the parties effectively out
of court. Id. at 308. We concluded that it did not, and that “the work of the [c]ircuit [c]ourt
here is not done” and explained:
Unlike an order transferring a case to another circuit court, to the District
Court, or to an arbitration panel, the remand order here contemplates that
judicial review awaits the return of the case following the remand.
Specifically, once the Board has an opportunity to review its decision, and
possibly correct what it perceives as an omission or defect, the [c]ircuit
[c]ourt would then . . . determine whether the decision reflects a correct
understanding of the law and whether there is “competent, material, and
substantial” evidence to support it. This type of remand is thus nothing more
than a brief delay in the ongoing review of the agency decision . . . that did
not divest [the circuit court] of its continuing jurisdiction over the case. It is
not a termination of the proceedings in that court.
Id. at 308-09 (internal quotation marks and citations omitted). We also concluded that the
remand at issue was “akin to the example that the Court offered in Moore of a non-final
31
Specifically, we held that as a general rule “a remand after a circuit court has
conducted judicial review that precludes the parties from further contesting or defending
the validity of the agency’s decision in that court—and leaves nothing further for the court
to do—is a final judgment.” Metro Maintenance, 442 Md. at 304.
44
order—dismissal of a complaint with leave to amend.” Id. at 309. We explained that while,
in both instances, “the parties have, in a sense, been ‘put out of court,’ . . . in both cases
there is a strong potential, bordering on certainty, that the issue at hand . . . will be back for
determination by the circuit court.” Id.
b. The Court of Special Appeals Opinion
The parties have not presented, and we have not found, any Maryland cases in which
courts have had occasion to apply the final judgment principles elucidated in Metro
Maintenance and the other cases discussed above to the specific circumstances presented
in this case―where a circuit court determines under the doctrine of primary jurisdiction
that a party must exhaust his remedy before an administrative agency prior to the court
ruling on an issue in the case before it, and stays proceedings to permit that party to exhaust
the administrative remedy. However, the Court of Special Appeals relied on two federal
cases which addressed the appealability of a stay in factually similar situations:
[I]n Crystal Clear Commc’ns, Inc. v. SW Bell Tel. Co., 415 F.3d 1171,
1173 (10th Cir. 2005), a federal trial court issued an order similar to the one
here, staying a lawsuit filed by several payphone providers against
Southwestern Bell Telephone Company, pending the resolution of certain
issues by federal and state agencies. The United States Court of Appeals for
the Tenth Circuit noted that, although a decision to stay litigation ordinarily
does not constitute a final judgment, there is an exception for a stay order
that puts a party “effectively out of court.” Id. at 1175 (quoting Moses H.
Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 10 n.11 (1983)).
The [c]ourt held, however, that the order in that case, staying the proceedings
in court pending resolution of certain issues by the agencies pursuant to the
primary jurisdiction doctrine, with contemplation of return to court, was not
a final decision. Id. at 1176-78.
That is not to say that a stay order pending administrative review can
never qualify as a final judgment. In Occidental Chem. Corp. v. Louisiana
Pub. Serv. Comm’n, 810 F.3d 299, 305, 307 (5th Cir. 2016), the United States
45
Court of Appeals for the Fifth Circuit addressed whether an order by a federal
court indefinitely staying proceedings to allow the Federal Energy
Regulatory Commission to act on an administrative complaint was a final
judgment when the court retained jurisdiction for a later determination on the
merits. The Fifth Circuit held that the order in that case “functioned as a
final decision” because it resulted in Occidental being “effectively out of
court” for a protracted and indefinite period, and therefore, the order was
appealable.
Monarch Acad., 231 Md. App. at 614-15 (italicized emphasis in original). The Court of
Special Appeals concluded that the facts of this case are more in line with the Tenth
Circuit’s holding in Crystal Clear, 415 F.3d 1171 (10th Cir. 2005). In a footnote, the court
noted that the Charter School Operators would appear to be able to file a petition for
declaratory review to the State Board under COMAR 13A.01.05.02(D). Id. at 615 n.12.
Although the court noted that the State Board had “declined to weigh in on the issue while
the matter was simultaneously being pursued in court,” it determined that justification for
declining to take up a declaratory petition “no longer is applicable.” Id. at 615. The court
therefore concluded that “there is no indication that there will be a substantial delay in
obtaining an administrative ruling” and that “the Stay Order does not place the Charter
School[] [Operators] ‘effectively out of court.’” Id.
We agree with the intermediate appellate court that both federal cases―which, like
Maryland law, recognize that an order that puts a party effectively out of court is a final
judgment―are persuasive authority. However, as we shall explain, we believe that the
more apt decision under the circumstances is the Fifth Circuit’s holding in Occidental
Chemical Corp. that a stay order that places a party effectively out of court for a “protracted
and indefinite period” is a final and appealable judgment.
46
c. Analysis
Generally, a stay order to permit a party to bring a claim before an administrative
agency will only temporarily put a party “out of court” and will carry with it the “strong
potential, bordering on certainty, that the issue at hand . . . will be back for determination
by the circuit court” if either of the parties is dissatisfied with the agency’s decision and
seeks judicial review before the circuit court. See Metro Maintenance, 442 Md. at 309.
However, under the unique circumstances of this case, the Stay Order issued by the circuit
court was a final and appealable order that had the effect of putting the Charter School
Operators entirely out of court with no clear procedural path they could follow to return to
court within a reasonable period of time.
First, the Stay Order suspended all claims before the circuit court, and no proceeding
was pending before the State Board at the time the order was entered. Thus, similar to the
transfer of cases between courts discussed in Brewster, 360 Md. at 602, 613-19, appellate
review of the Stay Order would not interrupt any ongoing trial process or administrative
process before the State Board. Therefore, appellate review of the Stay Order does not
conflict with the underlying purpose of the final judgment rule of avoiding piecemeal
appeals that interrupt the trial court and erode judicial efficiency. In this case, there is
simply no pending proceeding before any judicial or quasi-judicial body that would be
interrupted by appellate review.
Second, unlike the dismissal without prejudice in Moore, 329 Md. at 433, or the
remand order in Metro Maintenance, 442 Md. at 310, the Stay Order does not specify what,
precisely, the Charter School Operators need to do in order for proceedings to resume
47
before the circuit court. The Stay Order merely states that proceedings in the consolidated
breach of contract action are stayed “pending administrative review of the parties’ dispute
by the State Board of Education.” It does not specify which issues in the case need to be
resolved by the State Board in order for the breach of contract action to resume before the
circuit court, or how the Charter School Operators should bring those issues before the
State Board for administrative review.
The lack of clarity in the Stay Order might be of no moment if there were a clear
procedural mechanism through which the Charter School Operators could bring their
breach of contract claim before the State Board and obtain a ruling or decision as to all
aspects of that claim. However, the only procedural route available to the Charter School
Operators at this juncture―filing a petition to the State Board for a declaratory ruling under
COMAR 13A.01.05.02(D)―would not lead to a full resolution by the State Board of their
breach of contract claim.
Initially, the State Board may decline to issue a declaratory ruling for issues that do
not involve public educational laws or its own regulations. See COMAR 13A.01.05.02(D)
(stating that a party may file a petition for declaratory ruling by the State Board only as to
“the interpretation of a public school law or regulation of the State Board that is material
to an existing case or controversy.”). Thus, the Charter School Operators will be unable to
obtain a declaratory ruling as to the first part of their breach of contract claim, their
allegation that the City Board failed to provide them with the budget and financial
information specified in the Contract. That allegation does not involve any public school
law or State Board regulation; it is a pure contract law claim.
48
The State Board does not have the discretion to refuse to decide an issue involving
the interpretation of a public education law or State Board regulation that is material to a
live controversy or dispute when such an issue is properly put before it in a declaratory
petition. See e.g., Bd. of Educ. for Dorchester Cty. v. Hubbard, 305 Md. 774, 788-90
(1986) (citing Bd. of Educ. of Garrett Cty. v. Lendo, 295 Md. 55, 65-66 (1982)) (holding
that in the instance of a case requiring an explanation of the ‘true intent and meaning’ of a
provision of the Education Article or a State Board bylaw, a litigant has the choice of either
going first to the county superintendent under [ED] § 4-205 and then on up the appellate
ladder, or going directly to the State Board under [ED] § 2-205” and that “the State Board
is required to hear appeals taken under either section 2-205 or 4-205.”). Here, it does
appear that the Charter School Operators could file a petition with the State Board seeking
a declaratory ruling as to a key issue underlying their breach of contract claim, namely,
whether the City Board’s proposed charter school funding allocation for the 2015-16
school year is commensurate funding under ED § 9-109 and State Board precedent. That
petition would certainly present the State Board with the interpretation of a matter of State
public educational law.
However, a declaratory ruling issued by the State Board, like any State agency
declaratory ruling, generally is based solely “on the facts set forth in the petition.” SG §
10-305(b). Accordingly, even when a petition for declaratory ruling raises an issue
involving the interpretation of a public educational law or State Board regulation material
to an existing case or controversy, the petition must set forth sufficient facts to enable the
State Board to declare the meaning of the law. In this case, the State Board has already
49
denied two similar petitions for a declaratory ruling filed by the City Board, stating that it
was denying the first petition in part because it lacked “concrete facts from which [it] could
declare the law.”
Since that denial, the City Board ultimately divulged some details of its funding
formula for charter schools for the 2015-16 school year in its second petition for
declaratory ruling filed before the State Board. But, that information is incomplete and
one-sided, and may not be sufficient for the State Board to determine whether the City
Board’s proposed funding allocation is commensurate under the complex, multi-step
formula and approach developed by the State Board. For instance, the City Board did not
fully explain why certain funds were “restricted” and excluded from the calculation of
commensurate funding. Nor did the City Board describe which, if any, of the “in-kind”
services that it was providing to charter schools instead of cash funding had been
affirmatively requested by charter schools. And, the Charter School Operators note in their
brief to this Court that they “believe the City Board has not, as a factual matter, used
correct, accurate numbers to perform the funding calculation.” Thus, the Charter School
Operators may still lack sufficient concrete facts and information about the City Board’s
finances and commensurate funding formula to successfully petition the State Board to
declare whether the City Board’s proposed funding allocation is commensurate funding.
The State Board does have a procedural option available to it to develop a more
detailed factual record as to the City Board’s finances and charter school funding formula.
As counsel for the Charter School Operators and the City Board discussed in oral
arguments before this Court, the State Board does not have dedicated administrative law
50
judges (“ALJs”). However, the State Board can refer a case to the Office of
Administrative Hearings (“OAH”) for a fact-finding hearing before an ALJ. See COMAR
13A.01.05.06(C) (providing that, in an appeal or declaratory ruling action before the State
Board, “[u]pon review of the record, the State Board may transfer the case to the Office of
Administrative hearings for the scheduling of a hearing before an administrative law
judge.”) (Emphasis added). But the decision of whether to transfer a case to the OAH is
generally a discretionary matter.32 And, as a recent State Board decision indicates, the
State Board generally declines to transfer petitions for declaratory rulings to the OAH:
The superintendent [of the Board of Education of Howard County], alleging
a host of factual disputes, requests that this case be transferred to OAH. That
request is inappropriate in this proceeding. Specifically, in cases in which
the parties petition for declaratory rulings, the State Board’s legal obligation
is to issue an “interpretation of a public school law or regulation of the State
Board that is material to an existing [case or] controversy.” COMAR
13A.01.05.02(D). Neither that regulation nor the statute giving the State
Board authority to interpret the true intent and meaning of State education
law, [ED] § 2-205(e), envision that a declaratory ruling proceeding before
this Board is one in which the underlying factual controversy between the
parties was intended to be resolved. . . .
In re Bd. of Educ. of Howard Cty. v. Foose, MSBE Op. No. 17-13 (2017). Thus, if the
State Board follows the same policy it stated in Foose, the Charter School Operators will
32
COMAR 13A.01.05.07(A) provides that “[t]he State Board shall transfer an
appeal to the Office of Administrative Hearings for review by an administrative law judge”
under certain circumstances, including “[a]n appeal upon review in which the State Board
finds that there exists a genuine dispute of material fact.” However, that finding is itself a
discretionary matter. And, the Charter School Operators are likely to be unable to dispute
the figures provided by the City Board and show a material dispute of fact as to those
figures unless and until they can conduct further discovery.
51
have no further opportunity to obtain information as to the City Board’s finances and
budget figures before the State Board.
In light of the highly uncertain path forward for the Charter School Operators if they
were to file a petition for declaratory ruling before the State Board at the present juncture
of the litigation, we are not confident that there is “a strong potential, bordering on
certainty” that they would obtain a declaratory ruling from the State Board sufficient to lift
the stay and resume proceedings on their breach of contract claim before the circuit court.
See Metro Maintenance, 442 Md. at 309.
Finally, even assuming arguendo that the State Board did elect to grant a declaratory
petition and use the administrative procedures available to it to develop a more detailed
factual record as to the commensurate funding issue, the proceedings that would follow
would likely be indefinite and protracted. If the State Board referred the case to the OAH,
the parties would have the opportunity to conduct limited discovery and a fact-finding
hearing before an ALJ. COMAR 28.02.01.01 et seq. (describing the rules of procedure for
discovery and hearings before an OAH administrative law judge).33 The ALJ designated
by OAH could then proceed to make findings, conclusions of law and recommended
rulings, which would be referred to the State Board. See COMAR 13A.01.05.07(E). The
State Board would then need to make a final ruling based on those findings and
33
We note that while discovery is available before the OAH, it is significantly less
comprehensive than that available before the circuit court. Compare COMAR 28.02.01.13
and 28.02.01.14 (providing for limited written discovery requests and subpoenas before
the OAH) with Maryland Rule 2-401 et seq. (providing for discovery before the circuit
court, including depositions, interrogatories, and requests for production).
52
recommendations. See COMAR 13A.01.05.09. Presumably, given the financial stakes for
the parties, the losing party would then start an appeals process before the courts by filing
a petition for judicial review of the State Board’s decision before the circuit court. See
COMAR 13A.01.05.11 (summarizing procedures for appealing final decision of State
Board to the circuit court). If that appeals process was followed to its full extent, with
additional appeals to the Court of Special Appeals and this Court―as occurred recently in
Frederick Classical―the process could drag on for years before the Charter School
Operators could obtain a final decision as to the appropriate commensurate funding for the
2015-16 school year, from which it could then move to reopen its breach of contract action.
Therefore, under the persuasive authority stated in Occidental Chemical Corp., 810 F.3d
299 (5th Cir. 2016), the Stay Order would most likely place the Charter School Operators
out of court for a protracted and indefinite period and is akin to a final judgment.
In sum, we conclude that: appellate review of the Stay Order would not result in
piecemeal appeals or undermine judicial efficiency; the Stay Order is unclear as to what
issues need to be resolved by the State Board, and how and when the Charter School
Operators would be able to resume proceedings in the circuit court; and there is a
substantial likelihood that the Stay Order will result in the Charter School Operators being
effectively out of court for a prolonged and indefinite period. For those reasons, we hold
that the Stay Order is an appealable final judgment under these narrow circumstances.
B. Whether the Stay Order is an Abuse of Discretion
As we have held that the Stay Order is a final and appealable judgment, the issue of
whether the circuit court’s issuance of the Stay Order was an abuse of its discretion is
53
properly before us. For the following reasons, we conclude that the Stay Order was an
abuse of discretion.
Judge Nance interrupted counsel during the motions hearing as to the counterclaims
filed by the City Board to raise sua sponte the issue of whether the Charter School
Operators’ complaints were properly before the circuit court, instructing counsel to “[t]ell
me what happened that causes you to rightfully be in my courtroom.” Then, after a brief
recess, Judge Nance invited the City Board’s counsel to make an oral motion to dismiss
the complaints. During subsequent oral arguments as to that motion to dismiss, the City
Board argued that the issue of commensurate funding must be referred to the State Board
under the doctrine of primary jurisdiction. Judge Nance seems to have agreed with the
City Board, stating “[the Charter School Operators] have a duty to seek administrative
review of a local [school] board and if not [then the State] Board.” Ultimately, Judge
Nance entered the Stay Order “in lieu of” granting the motion to dismiss.
Initially, contrary to Judge Nance’s statements, the Charter School Operators were
not required to seek administrative review before the City Board or State Board prior to
filing their breach of contract action before the circuit court, and appear to have had a good
reason for not doing so. The Charter School Operators allege that they could not have
appealed to the City Board the proposed charter school funding allocation for the 2015-16
school year that they received from the Baltimore School System staff. If we assume that
the Charter Operators are correct, without deciding that issue, then the only available path
to bring their dispute before the State Board would be to file a petition for declaratory
review before the State Board. However, there is no statutory or regulatory basis for the
54
State Board to award damages in a declaratory ruling. COMAR 13A.01.05.05 et seq.34
And, as the Charter School Operators correctly point out, prior declaratory rulings in which
the State Board decided that local school boards failed to provide commensurate funding
to charter schools resulted in those charter schools not receiving reimbursement from their
local school boards. Thus, the Charter School Operators logically decided to instead first
bring a breach of contract action in circuit court, which would permit them to potentially
recover monetary damages from the City Board.
Moreover, as to primary jurisdiction, Judge Rubin had previously issued a ruling
denying the City Board’s first motion to dismiss the complaints on that ground. The
parties’ extensively briefed the issue of primary jurisdiction in written motions and
memoranda for that motion to dismiss, and Judge Rubin held a hearing in which she heard
extensive oral arguments from counsel regarding whether the commensurate funding issue
must be first decided by the State Board. Judge Rubin denied the motion, based in part on
her finding that the State Board had provided sufficient guidance as to how to determine
whether a charter school was receiving commensurate funding that the issue did not need
to be brought first before the State Board under primary jurisdiction. Although counsel for
the City Board informed Judge Nance of the prior ruling by Judge Rubin, there is no clear
34
We held in Frederick Classical that if the State Board ultimately decides that a
local school board failed to provide a charter school commensurate funding for a given
school year, the State Board should issue an order “calculating the exact amount of
additional funds owed . . . and directing the local school board to pay that amount.” 454
Md. at 422. However, that ruling was limited to an ED § 4-205 appeal from a local school
board decision, which is distinct from a declaratory petition filed directly before the State
Board.
55
indication in the record that Judge Nance reviewed that ruling prior to issuing the Stay
Order.
A circuit court judge is not necessarily bound to respect an earlier legal ruling in a
given case made by a fellow circuit court judge in the same way that a circuit court judge
must respect a legal ruling in a given case by an appellate court under the doctrine of the
law of the case. See e.g., Elec. Gen. Corp. v. Labonte, 454 Md. 113, 140 (2017) (“The
doctrine of the law of the case typically does not apply to a decision of a trial court because,
‘as a general principle, one judge of a trial court ruling on a matter is not bound by the prior
ruling in the same case by another judge of the court.’”) (quoting Scott v. State, 379 Md.
170, 184 (2004)). However, it is concerning for a trial judge to effectively reverse a prior
ruling made by another judge of the same court in the same case without even
acknowledging that he is doing so, and without any indication in the record that he had
reviewed and considered the earlier decision of his colleague.
The reversal in this case is particularly concerning because important arguments
were raised during the course of proceedings on the first motion to dismiss the complaints
before Judge Rubin. Specifically, the Charter School Operators argued against the
imposition of an immediate stay in both their written response to the City Board’s first
motion to dismiss and during oral arguments as to that motion before Judge Rubin. They
contended that if the circuit court felt that the case must first proceed before the State Board
under the doctrine of primary jurisdiction, the court should allow the case to proceed
through discovery before the circuit court. And, during oral arguments before Judge Rubin,
they argued that if a stay was issued the court should provide “very specific instructions as
56
to what exactly the State Board would need to accomplish or could accomplish on any
proceeding that would be appropriate,” and also explain how to “bring this [matter] back
to [the circuit court] for actual resolution and remedies.”
However, unlike in the first motion to dismiss, the City Board did not request a stay
as an alternative to a dismissal in the oral motion to dismiss before Judge Nance. Instead,
Judge Nance ordered that the circuit court proceedings be stayed sua sponte at the very end
of the hearing “in lieu of” granting the motion to dismiss. Thus, during the hearing before
Judge Nance, the Charter School Operators had no reason to offer, and did not offer, similar
arguments against an immediate stay.
Despite the arguments raised before Judge Rubin that a stay order needed detailed
instructions, the Stay Order did not clearly state which issues needed to be resolved before
the State Board and how the Charter School Operators could bring the case back and
resume proceedings before the circuit court.35 Furthermore, the Stay Order immediately
stayed all proceedings before the circuit court, thereby precluding the Charter School
Operators from conducting any further discovery before the circuit court. As noted above,
without the opportunity to conduct additional discovery as to the City Board’s finances and
funding formula, the Charter School Operators may be unable to successfully bring any of
35
In TON Servs., Inc. v. Qwest Corp., the Tenth Circuit found that an order
transferring a case under primary jurisdiction should be specific, or otherwise it is an abuse
of discretion. 493 F.3d 1225, 1238-41 (10th Cir. 2007) (finding that the district court
abused its discretion due to the court “misidentifying the issues to be referred and failing
to clearly direct its primary jurisdiction referral . . . .”).
57
the issues in their case before the State Board through the only procedural mechanism
available to them at this juncture, a petition for declaratory ruling.
In summary, the Stay Order reversed the prior decision of Judge Rubin without any
indication that Judge Nance had reviewed the earlier proceedings and decision before
Judge Rubin. And, during the proceedings before Judge Rubin, the Charter School
Operators raised cogent arguments against a stay, pointing out the importance of
conducting discovery in circuit court in order to be able to successfully take the case before
the State Board, as well as the need for clear instructions as to which issues needed to be
resolved by the State Board. However, Judge Nance imposed the Stay Order sua sponte,
and there is no indication that he was aware of or addressed the concerns regarding the
open-ended and unclear stay. For these reasons, we hold that Judge Nance’s decision to
impose the Stay Order was an abuse of discretion, and we shall vacate the Stay Order.
Our holding today does not suggest that in every instance where a party files an
action in circuit court that could also have been brought before an administrative agency,
that party is entitled to discovery in circuit court before a stay may be issued under the
doctrine of primary jurisdiction. Instead, we hold only that discovery must be permitted to
proceed before the circuit court under the unique circumstances of this case.
Here, the Charter School Operators have a Contract with the City Board, under
which the City Board was required to provide the Charter School Operators with detailed
information as to its finances and charter school funding formula. The Charter School
Operators, however, allege that the City Board has failed to provide them with such
information for the 2015-16 school year. And, in the absence of discovery as to the City
58
Board’s finances and charter school funding formula, the Charter School Operators may
not be able to successfully bring any issue in the case before the State Board. Further, even
if they were able to bring some or all of the issues in the case before the State Board, they
may not be able to conduct any further discovery or fact-finding before the State Board.
In many other situations, when a party does not have a contractual or other right to
obtain information from a state agency, or when there is a clear administrative process
available for a party to obtain an administrative ruling or resolution, it would likely be
appropriate for a court to stay a case under the doctrine of primary jurisdiction prior to
permitting the case to proceed to discovery.
C. Primary Jurisdiction Before the State Board
As we have held that the Stay Order was an abuse of discretion because of its vague
and open-ended nature, and because it occurred prior to the conclusion of discovery before
the circuit court, we shall remand the case to the circuit court. However, once discovery is
concluded on remand, the circuit court will once again be confronted with the question of
whether a new, more specific stay order must be entered under the doctrine of primary
jurisdiction to permit the State Board to review whether the City Board’s proposed charter
school allocation was commensurate funding. Therefore, in order to provide guidance to
the parties and the circuit court on remand, we shall also address whether the State Board
must decide the commensurate funding issue under the doctrine of primary jurisdiction.
See Md. Rule 8-131(a).
Under the doctrine of primary jurisdiction, the only question before the court is
whether an issue in the case must first be resolved by an agency “which, under a regulatory
59
scheme, [has] been placed within the special competence of an administrative body[.]”
Arroyo, 381 Md. 646, 658 (2004) (quoting Western Pacific R.R. Co., 352 U.S. at 63-64).
Unless the legislature expressly states that the remedy before the agency is exclusive,
courts must make this determination. Zappone v. Liberty Life Ins. Co., 349 Md. 45, 63
(1998). Courts have no fixed approach for deciding this but apply a presumption that the
administrative remedy is primary. Id. at 63-65.
Here, there is no legislative statement regarding whether claims that a local school
board failed to provide a charter school with commensurate funding must be brought before
the State Board. But, the presumption applies with heightened force because the State
Board has such a comprehensive role in setting educational policy, the State Board has
“visitatorial” power, and because the State Board has a “paramount role” in “interpreting
the public education law.” Balt. City Bd. of Sch. Comm’rs v. City Neighbors Charter Sch.,
400 Md. 324, 344, 355 (2007).
An instructive case for resolving whether the State Board has primary jurisdiction
over the underlying commensurate funding issue is Board of Education for Dorchester
County v. Hubbard, 305 Md. 774, 777 (1986). In that case, two groups of public school
teachers brought actions against local school boards, with one group raising grievances due
to their teaching certificates being downgraded, while the other group requesting that a
local school board provide an additional kindergarten teacher for their school. Id. at 780,
782-85. Both groups sought to bring their disputes to binding arbitration, as required in
collective bargaining agreement entered into between their unions and the local school
boards. Id. at 780, 782-83. The local school boards refused to enter into binding
60
arbitration, and filed a complaint before the circuit court, requesting declaratory judgment
and an order staying arbitration. Id. at 780, 782-84.
Before the circuit court, the local school boards argued that under the controlling
statute, any review of a decision by a county superintendent and county board was
specifically reserved for the State Board of Education and was not delegable to an
arbitrator. Id. at 781, 784. The circuit court in the first appeal disagreed and denied the
county board’s requests for relief, finding that “[u]nder the facts of these cases, respondents
have the election at this point to proceed either through the appeal process contemplated
by Code . . . § 4-205, or through arbitration under the applicable provisions of the
Negotiated Agreement.” Id. at 782 (emphasis in original). In the other appeal, the circuit
court found that the group’s grievance was arbitrable, and the arbitrator then held that the
county board must remedy the situation. Id. The county boards then appealed and the
groups’ appeals were consolidated. Id. at 784-85.
On appeal, this Court considered whether “courts [should] defer to the State Board
of Education under principles of primary jurisdiction, at least until the State Board
authoritatively decides whether the classification of teacher’s certificates and class size are
subject to collective bargaining and arbitration.” Id. at 785. After examining Maryland
case law regarding primary jurisdiction, the Court held that “circuit courts were authorized
to entertain actions to stay arbitration or to vacate arbitration awards,” but that “ultimately
the State Board of Education had primary jurisdiction over the question whether teacher’s
certificate and class size matters could, under the Education Article of the Code, be made
the subject of collective bargaining and arbitration.” Id. at 787. The Court then analyzed
61
ED §§ 2-205 and 4-205, which the Court found “expressly commit” decisions as to the
classification of teacher’s certificates and the size of classes to the jurisdiction of the State
Board of Education. Id. at 790. The Court held that once “statutory interpretation questions
have been resolved through the administrative and judicial review process,” a party “would
have an election of remedies.” Id. at 792.
The specific election of remedies at issue in Hubbard was whether a teacher should
bring a wage dispute before the State Board under ED § 4-205 or ED § 2-205, or whether
to bring the matter before arbitration. Id. at 782. In its brief and at oral argument, the City
Board attempted to distinguish the case on that point. However, in Hubbard the election
of either State Board review or arbitration was due to the contract the teachers had signed
which provided for binding arbitration. Id. at 782. In the present matter, the Contract
between the parties has no binding arbitration clause, and the election of remedies is
between State Board review and a breach of contract claim in circuit court.
In her ruling, Judge Rubin took the view that the history of declaratory rulings and
adjudications issued by the State Board regarding charter school commensurate funding
has effectively “resolved” the statutory interpretation issues for commensurate funding and
provided courts with sufficient guidance for courts to resolve the issue. However, in
Frederick Classical, we held that the State Board has not provided a formal rule for charter
school commensurate funding, and instead has stuck solely to a case-by-case adjudicatory
approach. 454 Md. 330, 410 (2017). And, we held that the State Board could change its
commensurate funding formula, although it would have to give a detailed reason for doing
so that accounts for charter schools’ reliance interests and comports with the controlling
62
statute. Id. at 411-12. Additionally, we note that the City Board contends that there are
several parts of its current funding formula that have not been previously ruled on or
resolved by the State Board in earlier commensurate funding decisions. Therefore,
following the analysis in Hubbard, the statutory interpretation issues have not been finally
resolved through regulation, and the State Board should resolve the level of funding
“commensurate” for the school year in question under the doctrine primary jurisdiction.
Judge Rubin, during the January 8, 2016 hearing on the City Board’s motion to
dismiss, stated “that every single time a charter school takes issue or challenges that proper
commensurate funding has been placed, . . . the State Board of Education will always be
entitled to make that a moving target.” We agree with Judge Rubin’s sentiment and note
that the State Board still has not provided a clear rule defining “commensurate funding”
even though it has been more than a decade since this Court’s City Neighbors decision. If
the State Board were to issue clear regulations regarding commensurate funding, the
possibility for disputes between charter schools and local school boards would diminish.
Furthermore, although the Charter School Operators were at significant risk of being
left in limbo and unable to return to the circuit court under the vague and open-ended Stay
Order entered prior to the conclusion of discovery, the commensurate funding issue could
easily be referred to the State Board without incurring that risk if the defects in the Stay
Order were rectified. Thus, once discovery has concluded, or the circuit court determines
that the Charter School Operators have obtained the financial and related information in
discovery necessary to fairly present the commensurate funding dispute before the State
63
Board, it would be appropriate to stay proceedings to permit the parties to obtain a
declaratory ruling from the State Board.
The Charter School Operators cite to Baltimore City Board of School
Commissioners v. Koba Institute, Inc., 194 Md. App. 400 (2010) and County Board of
Education v. Cearfoss, 165 Md. 178 (1933) in support of their position. Charter School
Operators argue that the present matter does not need to be referred to the State Board
regarding the commensurate funding. The Koba court did hold that there are well-defined
limits as to State Board review. 194 Md. App. at 417. But, in Koba, the State Board
refused to intervene in the dispute, whereas, here, the State Board has not. Id. at 407 n.8.
And unlike the present matter, Koba did not involve an ambiguous statute replete with
policy determinations, did not use the words “primary jurisdiction,” and the case’s only
discussion about primary jurisdiction came after the Koba court found in favor of the local
board on sovereign immunity grounds. Id. at 417.36 As for Cearfoss, this Court held only
that when a contract involves a provision of the Education Article, the administrative
remedy may not be so exclusive as to foreclose judicial review. 165 Md. at 178. This
holding does not conflict with the present matter. Here, Charter School Operators filed
their contractual claim in circuit court, the claim clearly identifies a contractual breach
involving the Education Article, and interpretation of the Education Article is specifically
granted to the State Board via the General Assembly. After the State Board has made a
36
We disapprove of the Koba court’s holding that the interpretation of an arguably
ambiguous educational statute in ED § 8-410 did not require State Board review. 194 Md.
App. at 417.
64
determination on the interpretation of commensurate funding in ED § 9-109, assuming
there is an appeal, the circuit court will have an opportunity to review the State Board’s
decision. As such, neither of these cases bolster Charter School Operators’ argument that
primary jurisdiction should not apply.37
In conclusion, we find the reasoning in Hubbard compelling as applied to the
present matter and see no reason to apply the analysis of any other cases cited by the parties
as to primary jurisdiction. In applying Hubbard to the case sub judice, the matter should
be stayed to permit the State Board to decide whether the City Board’s proposed per-pupil
funding allocation to charter school for the 2015-16 school year was commensurate
funding. Therefore, the circuit court should order the State Board to make a final ruling on
commensurate funding pursuant to its primary jurisdiction as we explain in more detail in
the conclusion.
CONCLUSION
37
The Charter School Operators also argue that the Court should utilize the Zappone
test to analyze whether concurrent or primary jurisdiction should apply. See Zappone v.
Liberty Life Ins. Co., 349 Md. 45, 64-66 (1998). The factors examined are: (1) the
comprehensiveness of the administrative remedy in addressing an aggrieved party’s claim;
(2) the administrative agency’s view of its jurisdiction over the matter; (3) the claim’s
dependence upon the statutory scheme; and (4) the claim’s dependence upon the
administrative agency’s expertise. Id. Charter School Operators’ claim, especially
pertaining to commensurate funding, is dependent upon the statutory scheme. Further, the
State Board undoubtedly possessed an unparalleled level of competence and expertise due
to its inherent duty to preside over “substantial educational policy” decisions and its
“visitatorial” authority. Additionally, Charter School Operators concede in their brief that
the Zappone factors have “not been applied to litigation concerning local boards of
education.” We find no reason to apply these factors to the present matter.
65
In summary, under the unique circumstances of this case, and in particular the
likelihood that the Stay Order would put the Charter School Operators entirely out of court
without a clear path forward to obtain an agency or judicial resolution of their breach of
contract claims, we hold that the Stay Order was a final and appealable judgment because
the factual disposition of this case fulfills the high standard necessary for a stay order to be
final and appealable. Therefore we reverse the judgment of the Court of Special Appeals
dismissing the appeal. Additionally, we hold that the circuit court abused its discretion in
staying the breach of contract proceedings when no factual record had yet been developed
through discovery that would enable the State Board to resolve that issue, and without
providing guidance to the parties as to how and when the case could resume before the
court. Lastly, we hold that the State Board has primary jurisdiction as whether the City
Board’s proposed per-pupil funding allocation to charter school for the 2015-16 school
year was commensurate funding.
Therefore, we direct a remand to the Circuit Court for Baltimore City for the parties
to complete discovery. Discovery should proceed so that the Charter School Operators
may receive more information and, either when the circuit court decides it has the
information it needs or discovery ends, a more detailed stay order would be appropriate.
Following the new stay order, Charter School Operators could file a declaratory petition
with the State Board within a reasonable period of time.38 See Maryland Reclamation
38
If the State Board declines the petition, the Charter School Operators can appeal
from that denial to the circuit court, which could order the State Board to proceed. See Md.
Rule 7-209.
66
Assocs., Inc. v. Harford Cty., Maryland, 382 Md. 348, 367 (2004); COMAR 13A.01.05.02.
The City Board may also file along with that petition. See COMAR 13A.01.05.03. The
State Board may then issue a declaratory order on commensurate funding pursuant to its
primary jurisdiction. Presumably, one of the parties will appeal from the State Board’s
ruling to the circuit court. See COMAR 13A.01.05.11. That appeal should be consolidated
with the breach of contract action. Then, the circuit court may proceed to review the State
Board decision under the more deferential substantial evidence standard of review for
agency decisions. See Md. Rule 7-201. Afterwards, the circuit court may resume
proceedings on the breach of contract actions, applying the State Board decision.
Until the State Board issues clear regulations on charter school funding instead of
relying on the 10-year-old City Neighbors declaratory rulings, the fiscal calculations
regarding commensurate funding for charter schools will remain, as Judge Rubin stated, a
“moving target.”
JUDGMENT OF THE COURT OF
SPECIAL APPEALS REVERSED; CASE
REMANDED TO THAT COURT WITH
DIRECTIONS TO REMAND THE CASE
TO THE CIRCUIT COURT, AND UPON
REMAND TO THE CIRCUIT COURT,
WITH ADDITIONAL DIRECTIONS TO
THAT COURT TO VACATE THE STAY
ORDER AND FOR FURTHER
PROCEEDINGS CONSISTENT WITH
THIS OPINION. COSTS IN THIS COURT
AND THE COURT OF SPECIAL APPEALS
TO BE PAID BY RESPONDENT.
67
Circuit Court for Baltimore City
Case No. 24-C-15-005507
Argued: September 11, 2017
IN THE COURT OF APPEALS
OF MARYLAND
No. 7
September Term, 2017
______________________________________
MONARCH ACADEMY BALTIMORE
CAMPUS, INC., ET AL.
v.
BALTIMORE CITY BOARD OF SCHOOL
COMMISSIONERS
______________________________________
Barbera, C.J.
Greene
Adkins
McDonald
Watts
Hotten
Getty,
JJ.
______________________________________
Concurring and Dissenting Opinion by Watts,
J., which Greene and Hotten, JJ., join.
______________________________________
Filed: December 18, 2017
Respectfully, I concur in part and dissent in part. I agree with the Majority that the
Maryland State Board of Education (“the State Board”) has primary jurisdiction over the
underlying commensurate funding issues. See Maj. Slip Op. at 5, 63-64, 66. I part ways
with the Majority, however, as to the issue of whether the stay order issued by the Circuit
Court for Baltimore City (“the circuit court”) is an appealable order. Unlike the Majority,
I would conclude that the stay order is not appealable because it is neither a final judgment
nor an order appealable under the collateral order doctrine. As such, I would have affirmed
the judgment of the Court of Special Appeals. Before explaining my reasons, it is helpful
to set forth some of the relevant factual and procedural background of the case, as well as
relevant law.
This case arises from complaints filed in the circuit court by various charter schools
in Baltimore City (“the Charter Schools”), Petitioners, against the Baltimore City Board of
School Commissioners (“the City Board”), Respondent, alleging that the City Board
breached contracts by failing to provide funding to the Charter Schools that was
commensurate with the amount disbursed to other public schools and by failing to provide
budget and financial information. Among other things, in the complaints, the Charter
Schools alleged that the City Board had “never provided ‘commensurate funding’” as
required by Md. Code Ann., Educ. (1978, 2014 Repl. Vol., 2016 Supp.) (“ED”) § 9-109,
and had instead, “from year to year, arbitrarily presented charter school operators with take-
it-or-leave-it charter school per pupil figures derived from using varying (or no) calculation
methodology, inflated estimates of overall System enrollment, and unsupported and
dubious financial and budget figures.” And, according to the Charter Schools, the City
Board had “failed to apply the per pupil calculation methodology put forth by the [] State
Board [] and affirmed by the Court of Appeals.” In addition, the Charter Schools alleged
that the City Board had “unilaterally changed [its] methodology in developing the amount
to be disbursed to charter schools.” The cases were later consolidated.
The City Board filed motions to dismiss, or in the alternative, to stay and
memoranda in support, contending that the complaints should be dismissed for failure to
state a claim upon which relief could be granted and for lack of primary jurisdiction.
Alternatively, the City Board sought to stay the cases “pending a ruling” from the State
Board. Specifically, among other things, the City Board argued that the “gravamen” of the
complaints—that the City Board failed to provide commensurate funding for charter school
students—was “a matter that should be decided” in the first instance by the State Board,
not the circuit court, pursuant to the primary jurisdiction doctrine. In the memoranda
accompanying the motions, the City Board alleged that, on November 9, 2015, it filed with
the State Board a petition for declaratory relief seeking a ruling that it has provided
commensurate funding to the Charter Schools and “that the funding formula has been
properly applied.”
The Charter Schools filed oppositions to the motions to the dismiss or stay,
contending that the circuit court, not the State Board, “has proper jurisdiction over th[e]
breach of contract action[s].” As to the City Board’s alternative request for a stay, the
Charter Schools contended that the request should be denied because the City Board’s
petition to the State Board did not seek or implicate “interpretation of the ‘true intent and
meaning’ of education law[,]” but rather sought “to apply the education law, as already
-2-
explained and interpreted, and incorporated into a contract, to a specific set of
circumstances.” Additionally, the Charter Schools argued that, because the State Board
was not required to issue a declaratory ruling, granting the motions to stay could result in
the Charter Schools being “left indefinitely without any result[.]”
On January 8, 2016, the circuit court conducted a hearing on the motions to dismiss
or stay, and, at the conclusion of the hearing, the circuit court denied the motion to dismiss
or stay, orally ruling from the bench. The circuit court determined that Balt. City Bd. of
Sch. Comm’rs v. City Neighbors Charter Sch., 400 Md. 324, 929 A.2d 113 (2007)
“provided sufficient guidance” as to the meaning of “commensurate funding,” including
the “requisite factors to be considered, [and] the data to be considered.” Under such
circumstances, the circuit court concluded that it was “no longer obliged to punt the issue
to the expertise of the” State Board “because there has been sufficient guidance through”
the State Board’s prior decisions on the issue of the meaning of “commensurate funding.”
On January 27, 2016, the City Board filed answers and affirmative defenses to the
various complaints.
Meanwhile, on February 23, 2016, the State Board issued an opinion dismissing the
City Board’s petition for declaratory ruling without prejudice. Specifically, the State Board
determined as follows:
The arguments raised in the underlying dispute are not addressed
herein. Rather, the issue here is whether the appeal should be stayed,
dismissed, or proceed for review. Moreover, whether or not the [c]ircuit
[c]ourt correctly ruled on the jurisdiction of the State Board is not an issue
here. Even if the State Board has concurrent jurisdiction with the [c]ircuit
[c]ourt over the issue raised, the [c]ircuit [c]ourt has already asserted its
jurisdiction on the consolidated proceeding before it and has elected to move
-3-
forward rather than impose a stay.
One of the central tenets of the legal process is the conservation of
judicial (and quasi-judicial) resources. As we recognized when we stayed
the State Board proceedings in [another case] while the corresponding court
case proceed, “[i]nstituting a parallel and simultaneous proceeding here
while the circuit court also hears this case would be contrary to that tenet.”
It is our view in this matter that it does not serve the interests of judicial
economy to proceed further.
(Last alteration in original). The State Board also noted that the petition for declaratory
ruling “fail[ed] to present any facts concerning the funding formula that [the City Board]
actually used to fund the [C]harter [S]chools[,]” and, thus, failed to present “concrete facts
from which [the State Board] could declare the law.”
Also on February 23, 2016, the City Board filed counterclaims against the Charter
Schools. On March 17, 2016, the Charter Schools filed a motion to dismiss the
counterclaims. On April 4, 2016, the City Board filed an opposition to the motion to
dismiss the counterclaims. And, on April 13, 2016, the Charter Schools filed a reply in
support of the motion to dismiss the counterclaims.
On April 18, 2016, the circuit court conducted a hearing on the motion to dismiss
the counterclaims.1 During the hearing, the circuit court asked whether an administrative
proceeding was pending and requested that the parties tell the court “what happened that
causes you to rightfully be in [the] courtroom.” The City Board’s counsel responded as
follows:
I wish I was in front of you several months ago. I think in January we had a
1
The April 18, 2016 hearing was conducted by a different judge of the circuit court,
and not the judge that had conducted and ruled at the January 8, 2016 hearing on the City
Board’s motions to dismiss or stay.
-4-
hearing on a motion to dismiss where we argued exactly what Your honor is
stating, the doctrine of primary jurisdiction that this case should be stayed in
favor of the State Board [] making a determination of these issues and our
motion was denied.
After additional discussion about the procedural history of the case, the circuit court took
a brief recess.
After the recess, the circuit court stated that it understood that the City Board wanted
to make an oral motion. At that point, the City Board’s counsel moved to dismiss the case
“on the basis that the appropriate tribunal or court or body to hear th[e] matter is the State
Board[.]” Relying on City Neighbors, 400 Md. 324, 929 A.2d 113, the City Board’s
counsel argued that “case law is very clear that [the State Board] should be the first one to
take up matters such as the ones that have been raised by the” Charter Schools “relating to
intricate, detailed, and important issues of public policy relating to education and
educational funding[.]” The Charter Schools’ counsel responded that the claim raised in
the complaint was for a breach of contract, and the resolution of such a claim is properly
with the circuit court, not the State Board.
At the conclusion of the hearing, the circuit court granted the Charter Schools’
motion to dismiss the counterclaims without prejudice. As to the City Board’s oral motion
to dismiss the complaints, the circuit court denied the motion to dismiss, but ruled that the
case should be stayed “pending the matter be[ing] administratively reviewed before it
comes to the [c]ircuit [c]ourt.” Essentially, the circuit court found that the State Board had
primary jurisdiction over the matter. The following day, April 19, 2016, the circuit court
issued an order granting the motion to dismiss the counterclaims without prejudice,
-5-
denying the motion to dismiss the complaints without prejudice, and staying the
consolidated case pending review by the State Board.
On May 5, 2016, the Charter Schools noted an appeal to the Court of Special
Appeals seeking review of the circuit court’s stay order.2 On July 15, 2016, the Charter
Schools filed in the circuit court a motion to lift stay, and on August 2, 2016, the City Board
filed an opposition to the motion to lift stay. On August 18, 2016, the circuit court issued
an order denying the motion to lift stay.
In the Court of Special Appeals, the City Board moved to dismiss the appeal on the
ground that the stay order was not an appealable order. See Monarch Academy Baltimore
Campus, Inc. v. Baltimore City Bd. of Sch. Comm’rs, 231 Md. App. 594, 612 n.10, 153
A.3d 859, 870 n.10 (2017). The Court of Special Appeals denied the motion to dismiss the
appeal with leave to seek that relief in the City Board’s appellee’s brief. Id. at 612 n.10,
153 A.3d at 870 n.10. The City Board, however, did not include a motion to dismiss in its
brief or otherwise request a ruling on whether the stay order was an appealable order, either
22
While the case was pending in the Court of Special Appeals, on May 31, 2016, the
City Board filed with the State Board a second petition for declaratory ruling, alleging that
it had provided, and continues to provide, “cash and services to all of its charter schools,
including the Charter Schools, that amount to more than commensurate funding.” Thus,
the City Board requested, among other things, a declaration that it had provided
commensurate funding to the Charter Schools. On June 3, 2016, the Charter Schools filed
with the State Board an emergency motion to stay or, in the alternative, for an extension of
time and additional relief, stating, in pertinent part, that the circuit court case had been
stayed and that they had appealed the stay order to the Court of Special Appeals. On June
20, 2016, the State Board issued an order dismissing the City Board’s second petition for
declaratory ruling, explaining that, “because the case remains within the jurisdiction
purview of the courts, the State Board declines to consider the Petition for Declaratory
Ruling.”
-6-
in its brief or at oral argument before the Court of Special Appeals. Id. at 612 n.10, 153
A.3d at 870 n.10. As such, after oral argument, in an order issued on December 15, 2016,
the Court of Special Appeals requested that the parties file memoranda addressing whether
the stay order was an appealable order and whether the State Board is required to issue a
decision on a request for a declaratory ruling, and if not, whether the failure to do so would
result in the Charter Schools “being placed effectively out of court.” In its memorandum,
the City Board contended that the stay order was not an appealable order, but asked that,
“in the interest of judicial economy and jurisdictional clarity, the Court of Special Appeals
rule on the merits and hold that the State Board had primary jurisdiction over the matter.
Id. at 612 n.10, 153 A.3d at 870 n.10.
On February 2, 2017, in a reported opinion, the Court of Special Appeals dismissed
the appeal, concluding that the circuit court’s stay order is not an appealable order. See
Monarch Academy, 231 Md. App. at 600, 153 A.3d at 862. Specifically, the Court of
Special Appeals determined that that the stay order is not a final judgment because it “did
not conclude the rights of the parties or adjudicate all of the claims in the action[,]” and
because it did not have the effect of putting the Charter Schools out of court. Id. at 613-
14, 153 A.3d at 870-71. The Court of Special Appeals also concluded that the stay order
is not appealable under the collateral order doctrine because the stay order did not resolve
an issue separate from the merits of the action. See id. at 616, 153 A.3d at 872. The Court
of Special Appeals stated that the determination of primary jurisdiction is “inextricably
bound up with a determination of the merits of a case.” Id. at 616, 153 A.3d at 872 (citation
and internal quotation marks omitted). Because it concluded that the stay order was not
-7-
appealable as a final judgment or under the collateral order doctrine, the Court of Special
Appeals dismissed the appeal and did not reach the merits of the primary jurisdiction issue.
See id. at 619, 612, 153 A.3d at 874, 870.
Thereafter, the Charter Schools filed in this Court a petition for a writ of certiorari,
which this Court granted. See Monarch Academy Baltimore Campus v. Baltimore City
Bd. of Sch. Comm’rs, 452 Md. 523, 157 A.3d 809 (2017).
At the risk of stating the obvious, this Court must have appellate jurisdiction to
consider the propriety of the circuit court’s issuance of the stay order, i.e., the stay order
must be an appealable order. Here, relevant case law leads to the conclusion that the stay
order is appealable neither as a final judgment nor under the collateral order doctrine.
Indeed, “[w]here appellate jurisdiction is lacking, the appellate court will dismiss the
appeal on its own motion.” Schuele v. Case Handyman and Remodeling Servs., LLC, 412
Md. 555, 565, 989 A.2d 210, 215 (2010) (citation and internal quotation marks omitted);
see also Md. R. 8-602(a)(1) (“On motion or on its own initiative, the Court may dismiss an
appeal for any of the following reasons: (1) the appeal is not allowed by these rules or other
law.” (Paragraph break omitted)). As this Court noted in Schuele, 412 Md. at 565, 989
A.2d at 215, “[i]n Maryland, appellate jurisdiction, except as constitutionally granted, is
statutorily granted.” (Citations omitted). Generally speaking, “a trial court’s decision on
a motion for a postponement, continuance, or stay is ordinarily not appealable.” Cty
Comm’rs. of Frederick Cty. v. Schrodel, 320 Md. 202, 213, 577 A.2d 39, 45 (1990)
(citation omitted). And, “[a]s a general rule, under Maryland law, litigants may appeal
only from what is known as a ‘final judgment.’” URS Corp. v. Fort Myer Constr. Corp.,
-8-
452 Md. 48, 65, 156 A.3d 753, 763 (2017) (quoting Md. Code Ann., Cts. & Jud. Proc.
(1973, 2013 Repl. Vol.) (“CJ”) § 12-301). CJ § 12-301 provides, in pertinent part: “Except
as provided in [CJ] § 12-302 . . . , a party may appeal from a final judgment entered in a
civil . . . case by a circuit court. The right of appeal exists from a final judgment entered
by a court in the exercise of original, special, limited, statutory jurisdiction, unless in a
particular case the right of appeal is expressly denied by law.”
In Addison v. Lochearn Nursing Home, LLC, 411 Md. 251, 273-74, 983 A.2d 138,
151-52 (2009), this Court stated that “[t]here are limited exceptions to the final judgment
rule[,]” and identified those exceptions as follows:
We have made clear that the right to seek appellate review of a trial court’s
ruling ordinarily must await the entry of a final judgment that disposes of all
claims against all parties, and that there are only three exceptions to that final
judgment requirement: appeals from interlocutory orders specifically
allowed by statute; immediate appeals permitted under Maryland Rule 2-602;
and appeals from interlocutory rulings allowed under the common law
collateral order doctrine.
(Citation and brackets omitted). As to appeals from interlocutory orders specifically
allowed by statute, pursuant to CJ § 12-303, “[a] party may appeal from [certain]
interlocutory orders entered by a circuit court in a civil case[.]” An order granting a stay
of the case for administrative proceedings is not one of the interlocutory orders identified
in CJ § 12-303. As to immediate appeals permitted under Maryland Rule 2-602, that Rule
provides that, where an order is entered that does not dispose of the entire action, and thus
is not a final judgment, the trial court may nonetheless “direct in the order the entry of a
final judgment” if the trial court determines “that there is no just reason for delay[.]” In
this case, in issuing the stay order, the circuit court did not direct the entry of a final
-9-
judgment. In other words, neither CJ § 12-303 nor Maryland Rule 2-602 is applicable in
this case; as such, an examination of more detail as to whether the stay order constituted a
final judgment or was appealable under the collateral order doctrine is needed.
Under the final judgment rule, “a final judgment exists only when the trial court
intends an ‘unqualified, final disposition of the matter of the controversy’ that completely
adjudicates all claims against all parties in the suit, and only when the trial court has
followed certain procedural steps when entering a judgment in the record.” URS Corp.,
452 Md. At 65, 156 A.3d at 763 (citation omitted). This Court has further explained:
Generally, to constitute a final judgment, a trial court’s rulings must either
decide and conclude the rights of the parties involved or deny a party the
means to prosecute or defend rights and interests in the subject matter of the
proceeding. Moreover, to be a final judgment in a controversy involving
multiple claims, the order must dispose of all claims in the action. An order
that is not a final judgment is an interlocutory order and ordinarily is not
appealable.
Schuele, 412 Md. at 565, 989 A.2d at 216 (citations and brackets omitted). Recently, in
Metro Maint. Sys. S., Inc. v. Milburn, 442 Md. 289, 298, 112 A.3d 429, 434 (2015), this
Court described the three attributes that a ruling ordinarily must have to constitute a final
judgment:
(1) it must be intended by the court as an unqualified, final disposition of the
matter in controversy, (2) unless the court acts pursuant to Maryland Rule 2-
602(b) to direct the entry of a final judgment as to less than all of the claims
or all of the parties, it must adjudicate or complete the adjudication of all
claims against all parties, (3) it must be set forth and recorded in accordance
with Rule 2-601.
(Citations omitted).
To constitute an unqualified, final disposition of the matter in controversy, “an order
- 10 -
of a circuit court must be so final as either to determine and conclude the rights involved
or to deny the appellant the means of further prosecuting or defending his or her rights and
interests in the subject matter of the proceeding.” Id. at 299, 112 A.3d at 435 (citations,
emphasis, and internal quotation marks omitted). This Court has stated, however, that “[a]n
order need not resolve the merits of a case . . . to constitute a final judgment[,]” explaining:
Even if the order does not decide and conclude the rights of the parties, it
nevertheless will be a final judgment if it terminates the proceedings in that
court and denies a party the ability to further prosecute or defend the party’s
rights concerning the subject matter of the proceeding. Such an order has
been described as one that has the effect of putting the party out of court.
Id. at 299, 112 A.3d at 435 (citations, brackets, and internal quotation marks omitted).
Importantly, “in determining whether an order that terminates proceedings in a particular
court can be said to ‘put that party out of court’ the key question is whether the order
contemplates that the parties will no longer litigate their rights in that court.” Id. at 299,
112 A.3d at 435 (citations omitted). And, “[t]he order need only have the effect of
terminating the proceedings in a particular court; the availability of another forum in which
the parties may litigate their dispute is irrelevant to finality.” Id. at 300, 112 A.3d at 435-
36 (citations omitted).
As to the procedural steps required for entry of a final judgment, “[o]ne of the
procedural steps for entry of final judgment—the ‘separate document requirement’—
requires the trial court to memorialize the judgment in a separate document that is signed
by either the court clerk or the judge and entered in the docket.” URS Corp., 452 Md. at
65-66, 156 A.2d at 763 (citations omitted). As one example of an order that constitutes a
final judgment, this Court has concluded “that an order compelling arbitration of a
- 11 -
controversy is immediately appealable as a final judgment even though it does not finally
dispose of all claims in the action in which it was filed because the order has the effect of
putting the parties out of court.” Schuele, 412 Md. at 571, 989 A.2d at 219 (citation and
internal quotation marks omitted). In contrast, this Court has determined “that a trial
court’s order denying a challenge to its jurisdiction is a nonappealable interlocutory order
because the order does not settle or conclude the rights of any party or deny him the means
of proceeding further.” Id. at 571, 989 A.2d at 219 (citation and internal quotation marks
omitted).
In Carter v. Huntington Title & Escrow, LLC, 420 Md. 605, 608-09, 24 A.3d 722,
723 (2011), this Court considered an “appeal from a judgment” of a trial court and held
that the Maryland Insurance Administration (“the MIA”) “possesse[d] primary jurisdiction
over [the plaintiff]’s claim,” such that the plaintiff “must seek relief initially through the
administrative adjudication process.” In Carter, id. at 609-10, 24 A.3d at 724-25, a plaintiff
filed in the trial court a complaint against a title insurance company alleging that the title
insurance company violated various statutes by applying to his refinance closing a more
costly original issue rate for the lender’s policy rather than a reduced policy reissue rate
mandated by the MIA. Specifically, the plaintiff alleged that Maryland statutes and
regulations required the title insurance company “to receive approval of rate schedules, not
to deviate from those rates once approved, and to award customers the best possible price
for which they qualify.” Id. at 612, 24 A.3d at 726 (citations omitted). The title insurance
company filed a motion to dismiss, arguing that the MIA, not the trial court, had primary
jurisdiction over the plaintiff’s claim. See id. at 613, 24 A.3d at 726. The trial court granted
- 12 -
the motion to dismiss in a written order. See id. at 614, 24 A.3d at 727. The plaintiff
appealed to the Court of Special Appeals, but before that court considered the case, this
Court granted a writ of certiorari. See id. at 614, 24 A.3d at 727.
On review, this Court discussed in detail the reasons why the MIA had primary
jurisdiction over the plaintiff’s claim. See id. at 627-35, 24 A.3d at 734-39. We also
rejected the plaintiff’s contention that, even if the MIA had primary jurisdiction, he should
not be required to go through the administrative process “because the relief afforded in the
Insurance Article is inadequate for any consumer, but especially him.” Id. at 635, 24 A.3d
at 739. This Court explained, in part, that “the fact that an administrative remedy may be
inadequate is considered usually an exception to exhaustion, but not necessarily primary
jurisdiction[,]” i.e., the plaintiff would be required to exhaust administrative remedies
before the MIA before proceeding in the trial court. Id. at 635, 24 A.3d at 739.
Then, in the final paragraph of the opinion, this Court considered whether the trial
court “should relinquish jurisdiction by dismissing [the plaintiff]’s complaint or stay th[e]
case pending the outcome of any administrative proceeding.” Id. at 637, 24 A.3d at 741.
This Court concluded that the trial court should have stayed the case rather than dismissing
it, explaining:
In Arroyo v. Board of Education of Howard County, 381 Md. 646, 650 n. 5,
851 A.2d 576, 579 n. 5 (2004), we reviewed a series of cases involving
primary jurisdiction and indicated ultimately that “the primary jurisdiction
of an agency . . . does not actually prohibit the filing of an independent
judicial action, only its adjudication prior to the exhaustion of the
administration remedy.” See also Converge Servs. Group, 383 Md. at 480,
860 A.2d at 881 (“[T]he court may stay its consideration of the invoked
judicial remedy and await the result of the administrative proceedings before
addressing the appropriateness of the relief sought in the litigation.”
- 13 -
(citations omitted)); Maryland-National Capital Park & Planning Comm’n
v. Crawford, 307 Md. 1, 18, 511 A.2d 1079, 1087-88 (1986) (“[I]n situations
like that in the present case . . . where the administrative agency may have
primary jurisdiction, and where the plaintiff invokes the judicial remedy prior
to exhausting the administrative procedures, it has been held that the trial
court may retain jurisdiction pending exhaustion of the administrative
procedures.” (citations omitted)). Therefore, we conclude that, although [the
plaintiff] did not file an administrative complaint, he was not foreclosed from
filing the present judicial action, only that he could not pursue it to a
conclusion at this time. The [trial c]ourt should stay further proceedings
regarding the judicial complaint until the outcome of the administrative
adjudication. If [the plaintiff] neglects to pursue administrative relief within
a reasonable time, then his judicial claim may not progress and, in all
likelihood, would be dismissed. See Maryland Rule 2-507 (authorizing
dismissal for lack of prosecution).
Id. at 637-38, 24 A.3d at 741 (ellipses and some alterations in original).
The collateral order doctrine, on the other hand, “is based upon a judicially created
fiction, under which certain interlocutory orders are considered to be final judgments, even
though such orders clearly are not final judgments.” Dawkins v. Baltimore City Police
Dep’t, 376 Md. 53, 64, 827 A.2d 115, 121 (2003) (emphasis in original). This Court has
emphasized that the judicial fiction “is a perceived necessity, in a very few extraordinary
situations, for immediate appellate review.” Id. at 64, 827 A.2d at 121 (footnote, ellipsis,
and internal quotation marks omitted); see also Schuele, 412 Md. at 572, 989 A.2d at 220(“[W]e emphasized that [the collateral order] doctrine should be applied sparingly in only
the most extraordinary circumstances.”). In Washington Suburban Sanitary Comm’n v.
Bowen, 410 Md. 287, 296, 978 A.2d 678, 684 (2009), this Court reiterated that the
collateral order doctrine is a “very narrow exception” to the final judgment rule. We have
explained that the collateral order doctrine
permits premature appeals from a limited class of cases in which the order
- 14 -
appealed does not adjudicate all claims against all parties but (1) conclusively
determines the disputed question, (2) resolves an important issue, (3)
resolves an issue that is completely separate from the merits of the action,
and (4) would be effectively unreviewable if the appeal had to await the entry
of a final judgment.
Schuele, 412 Md. at 572, 989 A.2d at 220 (emphasis in original) (citation and internal
quotation marks omitted). Significantly, “the four elements of the test are conjunctive in
nature and in order to fall within this exception to the ordinary operation of the final
judgment requirement, each of the four elements must be met.” Bowen, 410 Md. at 296,
978 A.2d at 684 (citation and ellipsis omitted).
In Schrodel, 320 Md. at 210, 214, 577 A.2d at 43, 45, this Court concluded that an
order that had the effect of enjoining a county from proceeding with a condemnation action
until the county obtained from the Maryland Department of the Environment a permit to
construct a landfill on a certain property was appealable under the collateral order doctrine.
In that case, this Court stated that the trial court’s order, which set the trial date out for a
period of eighteen months or later, “was not simply an order postponing the trial[,]” but
instead “was an order staying the condemnation action until the [c]ounty obtained a permit
to construct a landfill on the [] property.” Id. at 211, 577 A.2d at 44. In our view, the order
satisfied all four requirements to be appealable under the collateral order doctrine. See id.
at 211, 577 A.2d at 44. This Court explained, in pertinent part:
First, the order conclusively determined that the [c]ounty must wait
until it receives a permit from the Maryland Department of the Environment
before it can go to trial with its condemnation action. Second, the issue of
whether a court can lawfully impose such a condition on the government’s
power to acquire property by condemnation is clearly important. Many
essential public projects begin with a taking of land and require various
permits before completion.
- 15 -
Third, the question of whether the [c]ounty can be required to obtain
the permit before having a trial is obviously distinct from the trial itself. . . .
The court’s [] order . . . is unrelated to the issues to be litigated at the trial. it
is an order that there will be no trial until the permit is actually procured.
Fourth, if not appealable until the trial’s conclusion, the claim that the
[c]ounty’s right to condemn cannot be conditioned on first obtaining all
necessary permits would be irretrievably lost. . . . If the [c]ounty were to get
the permit, it would take the property after a trial on value only, and the issue
of whether the court could impose the condition would be moot on appeal.
Meanwhile, the [c]ounty, having gone through an expensive and time-
consuming permit process, would be in a position where it would be difficult
to exercise its right to abandon the taking if it considered the jury award to
be unreasonably high. Moreover, the [c]ounty would have to wait until it
gets the permit to begin preparing the property for a landfill. If it had the
property now, it could begin that work today.
Id. at 212-13, 577 A.2d at 44-45 (citation omitted). This Court further explained that the
trial court’s order was “no ordinary postponement of the trial”:
Not only is the length at least eighteen months, but it is certain that there will
never be a trial if the [c]ounty fails to obtain the permit. The order in this
case assures that if the [c]ounty does get the permit, only then can it prepare
the property as a landfill. An important government prerogative has been
delayed or defeated because of an allegedly unlawful condition. The vast
majority of postponement orders, in contrast, merely require a party to wait
longer for trial.
Id. at 214, 577 A.2d at 45. Accordingly, this Court determined that the trial court’s order
was appealable under the collateral order doctrine, but we “emphasized . . . that this is a
case where our holding concerning appealability goes no further than the circumstances
presented in th[e] case.” Id. at 214, 577 A.2d at 45 (citation and internal quotation marks
omitted).
Based on the case law set forth above, I would conclude that the stay order is not
appealable because it is neither a final judgment nor an order appealable under the collateral
- 16 -
order doctrine. I would begin by examining whether the stay order constitutes a final
judgment, and would determine that it does not. Significantly, the stay order does not
“decide and conclude the rights of the parties involved or deny a party the means to
prosecute or defend rights and interests in the subject matter of the proceeding.” Schuele,
412 Md. at 565, 989 A.2d at 216 (citation and internal quotation marks omitted); see also
Milburn, 442 Md. at 299, 112 A.3d at 435. Indeed, the stay order does not decide and
conclude the rights of the parties involved because it is not a ruling on or resolution of the
merits of the breach of contract claim, i.e., the stay order did not “decide” or “conclude”
the rights of the parties vis-à-vis the breach of contract claim.
Nevertheless, order does not need to resolve the merits of a case to constitute a final
judgment where the order denies a party the means to prosecute or defend rights and
interests in the subject matter of the proceeding and, thus, “has the effect of putting the
party out of court.” Milburn, 442 Md. at 299, 112 A.3d at 435 (citation, brackets, and
internal quotation marks omitted). As stated, in determining whether an order has the effect
of putting a party out of court, “the key question is whether the order contemplates that the
parties will no longer litigate their rights in that court.” Id. at 299, 112 A.3d at 435
(citations omitted). Here, the very language of the circuit court’s oral ruling and the stay
order demonstrates that the stay order does not contemplate that the parties will no longer
litigate their rights in the circuit court. In denying the City Board’s motion to dismiss, the
circuit court ruled that the case should be stayed “pending the matter be[ing]
administratively reviewed before it comes to the [c]ircuit [c]ourt.” And, the stay order
itself states, in pertinent part, “that the above-captioned consolidated action, and all actions
- 17 -
contained and consolidated therein, hereby are STAYED pending administrative review
of the parties’ dispute by the State Board[.]” (Emphasis in original). Simply put, the stay
order clearly contemplates that the parties will litigate their rights in the circuit court after
the State Board conducts its administrative review. Stated otherwise, the stay order directs
the parties to seek review first before the State Board concerning issues of commensurate
funding prior to litigating the breach of contract claim in the circuit court; notably, the stay
order does not state or even contemplate that the parties are prohibited from litigation in
the circuit court altogether. And, the stay order did not terminate the proceedings in the
circuit court; rather, the stay order is in the nature of a postponement, not an order that has
the effect of putting the Charter Schools out of court. See Milburn, 442 Md. at 300, 112
A.3d at 435-36 (“The order need only have the effect of terminating the proceedings in a
particular court; the availability of another forum in which the parties may litigate their
dispute is irrelevant to finality.” (Citations omitted)). Moreover, the stay order does not
send the Charter Schools to a different court and thus terminate the proceedings in the
circuit court, but rather the stay order places the case on hold pending review by the State
Board of the statutory issue.
The Charter Schools’ reliance on Carter for the proposition that the stay order is the
equivalent of a dismissal, and, thus, constitutes a final judgment that is immediately
appealable is not persuasive. Initially, I do not agree, as a general matter, that a dismissal
and a stay are the same and that both are final and immediately appealable. To be sure,
there may be circumstances where a stay order, perhaps indefinite in nature, can constitute
a final judgment. For example, an order staying proceedings and compelling arbitration
- 18 -
“is immediately appealable as a final judgment even though it does not finally dispose of
all claims in the action in which it was filed because the order has the effect of putting the
parties out of court.” Schuele, 412 Md. at 571, 989 A.2d at 219 (citation and internal
quotation marks omitted). But, as I would determine, the stay order in this case does not
have the effect of putting the parties out of court and, as such, is distinct from an order
dismissing a case, as was the case in Carter.
Indeed, in Carter, 420 Md. at 608-09, 613, 24 A.3d at 723, 726, this Court was clear
that the case involved an “appeal from a judgment” of a trial court in which the trial court
had granted a motion to dismiss, ruling that the MIA had primary jurisdiction over the
plaintiff’s claim, i.e., administrative proceedings needed to occur first. In the final
paragraph of Carter, id. at 637-38, 24 A.3d at 741, in considering whether the trial court
should dismiss a complaint or stay a case pending the outcome of administrative
proceedings where an administrative agency has primary jurisdiction, this Court concluded
that the trial court should have stayed the case rather than dismiss the case, explaining, in
pertinent part, that “the primary jurisdiction of an agency does not actually prohibit the
filing of an independent judicial action, only its adjudication prior to the exhaustion of the
administration remedy.” In other words, in Carter, this Court endorsed the view that, where
a trial court has ruled that an administrative agency has primary jurisdiction, the proper
procedure for the trial court to follow is to stay the judicial proceedings to allow for
administrative review first, after which time the parties may return to the trial court. That
is exactly what happened in this case—the circuit court concluded that the State Board has
primary jurisdiction and stayed the proceedings pending administrative review by the State
- 19 -
Board. This is so even if the parties have not filed an administrative complaint at the time
the stay is issued. See Carter, id. at 638, 24 A.3d at 741 (“[W]e conclude that, although
Carter did not file an administrative complaint, he was not foreclosed from filing the
present judicial action, only that he could not pursue it to a conclusion at this time.”).
That the State Board declined to weigh in on the commensurate funding issue while
the case was pending in the circuit court and then the Court of Special Appeals is of no
consequence because the State Board’s reasoning is now inapplicable, i.e., the court
proceedings are on hold pending the State Board’s administrative review. The State
Board’s order dismissing the City Board’s second petition for declaratory ruling
specifically explained that, “because the case remains within the jurisdiction purview of
the courts, the State Board declines to consider the Petition for Declaratory Ruling.” Now
that the court proceedings are stayed and the appellate process concluded by virtue of this
opinion, the State Board can begin administrative proceedings upon the filing of an
administrative complaint, request for a declaratory ruling, or the like. Moreover, nothing
in the record—aside from the Charter Schools’ contention—indicates that the State Board
will unduly delay in deciding the commensurate funding issue once the issue is properly
presented to it. As such, I would determine that the stay order does not put the Charter
Schools out of court; rather, the stay order simply postpones resolution of the breach of
contract claim pending guidance from the State Board on the commensurate funding issue,
which will inform the circuit court’s decision with respect to the breach of contract claim.
In short, the stay order does not end the litigation on the merits. Under these circumstances,
I would conclude that the stay order is not a final judgment.
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I likewise would conclude that the stay order does not fulfill the requirements of the
collateral order doctrine and is not immediately appealable under the collateral order
doctrine. As to whether the stay order conclusively determines the disputed question, I
would conclude that the disputed question at the heart of the breach of contract claim—
whether the City Board provided the Charter Schools with commensurate funding as
required by ED § 9-109—is not conclusively determined by the stay order. Indeed, the
stay order did not comment on, let alone conclusively determine or resolve, the merits of
the breach of contract claim.
Additionally, I would determine that the stay order does not resolve an issue that is
completely separate from the merits of the action. The issue of which entity has primary
jurisdiction, the circuit court or the State Board, and, thus, which entity determines in the
first instance the commensurate funding issue, is intrinsically tied to the merits of the case
and whether the City Board provided the Charter Schools with commensurate funding in
accord with the statute. As an initial matter, I note that I am not aware of any Maryland
case discussing whether a determination of primary jurisdiction is an issue completely
separate from the merits of the action. Thus, I turn to federal case law, and find instructive
the approach stated by the United States Court of Appeal for the Tenth Circuit.
In Crystal Clear Commc’ns, Inc. v. Sw. Bell Tel. Co., 415 F.3d 1171, 1173, 1175,
1180 (10th Cir. 2005), the Tenth Circuit considered, in relevant part, whether a district
court’s order staying an action pending submission of the claims to the Federal
Communications Commission (“the FCC”) and the Oklahoma Corporation Commission
(“the OCC”), which the district court concluded had primary jurisdiction, was appealable
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as a collateral order, and held that “[a] district court’s determination to invoke the primary
jurisdiction doctrine is not sufficiently separable from the cause of action to qualify for
interlocutory review.” The Tenth Circuit stated that “the issues involved in a determination
of primary jurisdiction are ‘inextricably bound up’ with a determination of the merits[.]”
Id. at 1179-80. The Tenth Circuit explained:
The entire purpose of the primary jurisdiction doctrine is to allow agencies
to render opinions on issues underlying and related to the cause of action.
Moreover, in order to determine whether the doctrine of primary jurisdiction
was implicated in this case, the district court was required to give preliminary
consideration to plaintiffs’ claims to determine the extent to which they fell
under the jurisdiction of the FCC and OCC. See Delta Traffic Serv., Inc. v.
Occidental Chem. Corp., 846 F.2d 911, 914 (3d Cir.1988) (“Only after [the
district court] had ascertained the nature of the claim and related defenses
could it know whether it needed to request the expert and specialized
knowledge of the [agency] as a preliminary step in the resolution of this
matter.” (quotation omitted)). In particular, the district court’s decision
whether to invoke primary jurisdiction required it to consider whether the
issues of fact in the case: (1) are not within the conventional experience of
judges; (2) require the exercise of administrative discretion; or (3) require
uniformity and consistency in the regulation of the business entrusted to a
particular agency. These issues are all highly dependent on the specific
allegations in plaintiffs’ complaint and required the district court to examine
factual and legal issues underlying the dispute. The parties’ briefs on appeal,
filled with detailed factual and legal arguments regarding plaintiffs’ claims,
further underscore the impropriety of reviewing the district court’s stay order
prior to final judgment.
Id. at 1179 (brackets in original) (some citations omitted). See also Beach TV Cable Co.,
Inc. v. Comcast of Florida/Georgia, LLC, 808 F.3d 1284, 1286 (11th Cir. 2015) (In another
case involving a stay so that the FCC could consider claims, the Eleventh Circuit stated:
“We lack appellate jurisdiction to entertain this interlocutory appeal. Stay orders are
generally not thought to be final orders . . . , particularly where the stay is designed to effect
a referral to a federal agency. . . . Nor does the collateral order doctrine apply to save
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appellate jurisdiction because the district court’s stay order is bound up with the merits of
the case and does not render the plaintiff’s suit effectively unreviewable on appeal from a
final judgment.”).
Although the federal cases are distinguishable from this case, the reasoning
concerning whether primary jurisdiction is a separate matter from the merits of the case for
purposes of the collateral order doctrine is instructive and logical. As such, I would
conclude that the circuit court’s determination of whether the primary jurisdiction doctrine
is applicable under the circumstances of this case “is not sufficiently separable from the
cause of action to qualify for interlocutory review.” Crystal Clear, 415 F.3d at 1180. Stated
otherwise, the determination of primary jurisdiction is bound up with the merits of the case
such that the stay order is not appealable under the collateral order doctrine. And, I would
also determine that the stay order is not effectively unreviewable if the appeal had to await
the entry of a final judgment. Once the State Board issues its decision in the case after
proper request by the parties, there is absolutely no prohibition against the Charter Schools
eventually obtaining review of the circuit court’s decision to issue the stay order and its
determination of primary jurisdiction. See Md. R. 8-131(d) (“On an appeal from a final
judgment, an interlocutory order previously entered in the action is open to review by the
Court unless an appeal has previously been taken from that order and decided on the merits
by the Court.”); see also Beach TV Cable, 808 F.3d at 1293 (“[I]f the district court had
erroneously referred the matter to the administrative agency in the first place, that
determination too could be reviewed by an appellate court once the administrative agency
had concluded its review.” (Citation omitted)).
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In my view, the Charter Schools’ reliance on Schrodel, 320 Md. at 210, 214, 577
A.2d at 43, 45, is misplaced, as the case is factually and legally distinguishable from this
case. Schrodel involved an issue of whether a permit was required before condemnation
proceedings in the trial court, which involved a purported postponement so that the county
could seek the permit from the Maryland Department of the Environment. In other words,
Schrodel did not involve issues of primary jurisdiction and a stay for administrative review
of a legal issue. And, significantly, in Schrodel, 320 Md. at 213, 577 A.2d at 45, this Court
expressly acknowledged that “a trial court’s decision on a motion for a postponement,
continuance, or stay is ordinarily not appealable.” (Citation omitted). Moreover,
importantly, in Schrodel, id. at 214, 577 A.2d at 45, the order at issue was not simply a run-
of-the-mill postponement or stay order; rather, it was an order that would essentially
deprive the parties of a trial if the county failed to obtain the permit. That is obviously not
the case here—the stay order does not put the parties out of court or otherwise deprive them
of the ability to litigate the merits of the breach of contract claim after the State Board
conducts its administrative review of the statutory issue concerning commensurate
funding. In other words, the stay order in this case is more like a postponement of a trial,
and not a deprivation altogether of the right to proceed with a trial. In sum, I would
determine that the stay order is not appealable under the collateral order doctrine.
Although I would conclude otherwise and do not endorse the Majority’s holding,
the Majority’s language limiting the holding that the stay order is a final judgment and is
appealable to “the unique circumstances of this case” is welcome. See Maj. Slip Op. at
47. The Majority states:
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Generally, a stay order to permit a party to bring a claim before an
administrative agency will only temporarily put a party “out of court” and
will carry with it the “strong potential, bordering on certainty, that the issue
at hand . . . will be back for determination by the circuit court” if either of
the parties is dissatisfied with the agency’s decision and seeks judicial review
before the circuit court. However, under the unique circumstances of this
case, the Stay Order issued by the circuit court was a final and appealable
order that had the effect of putting the Charter School Operators entirely out
of court with no clear procedural path they could follow to return to court
within a reasonable period of time.
Maj. Slip Op. at 47 (citation omitted) (emphasis and ellipsis in original). From my
perspective, as a cautionary note, the significance of the Majority’s limitation cannot be
overstated. The Majority essentially counsels that trial courts and the Court of Special
Appeals should not interpret this opinion to mean that stay orders in general or stay orders
pertaining to matters other than those involving the unique circumstances of this case are
final judgments and therefore appealable. In other words, nothing in the majority opinion’s
holding undermines the conclusion that stay orders in general are neither final judgments
nor appealable under the collateral order doctrine.
Because I would conclude that the stay order in this case is not a final judgment and
is not appealable under the collateral order doctrine, I would dismiss the appeal for lack of
appellate jurisdiction. And, because I would dismiss the appeal for lack of appellate
jurisdiction, I would not reach the issue of whether the State Board has primary jurisdiction.
However, were I to reach that issue, I agree with the Majority that the State Board has
primary jurisdiction over the underlying commensurate funding issues.
Thus, for the above reasons, respectfully, I concur in part and dissent in part.
Judge Greene and Judge Hotten have authorized me to state that they join in this
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opinion.
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