N.C. Supreme Court sets Aug. 31 for Leandro oral arguments

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  • North Carolina's Leandro school funding lawsuit returns to the N.C. Supreme Court on Aug. 31.
  • Plaintiffs and lawyers representing the State Board of Education want the court to reinstate a forced money transfer ordered last November.
  • Lawyers representing N.C. legislative leaders urge the court to throw out the November order entirely.

The long-running Leandro school funding lawsuit will return to the N.C. Supreme Court for oral arguments on Aug. 31.

The court’s updated calendar sets a 9:30 a.m. hearing on that date. A court order issued June 1 had said that oral arguments would be scheduled during the week of Aug. 29, “with an opinion to be filed upon a date to be chosen in the Court’s discretion.”

The announcement of a date for oral arguments comes five days after the deadline for the first round of legal briefs in the case. Two sets of plaintiffs, N.C. Justice Department lawyers representing the State Board of Education, and attorneys representing the N.C. General Assembly’s leaders all filed documents by the July 1 deadline.

The state’s highest court will decide what to do about a Nov. 10, 2021, trial court order in Leandro, a case that dates back to 1994. It’s official title is Hoke County Board of Education v. State. The state Supreme Court already has issued major rulings in the case in 1997 and 2004.

The November order from Judge David Lee would have forced the state controller, treasurer, and Office of State Budget and Management to transfer $1.75 billion out of the state treasury. Lee ordered the money sent to the state Department of Public Instruction, Department of Health and Human Services, and the University of North Carolina System for education-related expenses.

Those expenses were tied to the second and third years of a court-endorsed Comprehensive Remedial Plan. San Francisco-based education consultants developed the plan with the endorsement of Leandro plaintiffs and state government lawyers. The multiyear, multibillion-dollar plan was designed to help resolve the Leandro dispute.

Eight months after Lee’s initial order, several pieces of the Leandro puzzle have changed.

First, State Controller Linda Combs challenged Lee’s order in court. Combs argued that she could not transfer any money from the state’s coffers without authorization from the General Assembly.

The N.C. Court of Appeals agreed with Combs. That court issued a rare “writ of prohibition” blocking Lee’s order. The state Supreme Court then agreed to hear the case, but ordered the trial court to re-examine the $1.75 billion order. Justices asked the trial judge to determine whether a new state budget signed into law on Nov. 18, 2021, affected the contents of Lee’s order.

On the same day that the full Supreme Court ordered the new trial court review, Chief Justice Paul Newby replaced Lee with Special Superior Court Judge Michael Robinson.

In reviewing Lee’s order, Robinson agreed with state government lawyers that the budget covered almost $1 billion of the items on Lee’s list. In an April 26 decision, Robinson scaled back the size of Lee’s original order to $785 million.

Robinson also struck the portion of Lee’s order calling for the forced money transfer. While the new Leandro judge agreed that the state owed the money to the state agencies and university, his order said nothing about how the money would reach its destination.

Now plaintiffs and state Justice Department lawyers argue that the Supreme Court should reverse the portion of Robinson’s order striking the forced money transfer.

“The trial court did not have jurisdiction on remand to strike the remedial portion of an order already on appeal to this Court,” argued attorney Melanie Black Dubis for the original Leandro plaintiffs.

“In this extraordinary situation, where the State has failed for so long to adequately comply with a core constitutional obligation despite so many opportunities to cure that failure, the extraordinary measures adopted by the court below were appropriate and necessary,” according to a brief from N.C. Senior Deputy Attorney General Amar Majmundar.

“Without the inclusion of the transfer provisions in the November 2021 Order, it is almost certain that the General Assembly will continue to abdicate its constitutional duties and more classes of children will pass through schoolhouse doors denied a sound basic education,” according to a brief from a second set of plaintiffs known as the “Penn-Intervenors.”

On the other side of the argument, legislative leaders want the state Supreme Court to throw out Lee’s entire Nov. 10 order.

Since the state Supreme Court’s last major Leandro ruling, “the trial court has increasingly disregarded this Court’s holdings on the limits of judicial authority over public education policy and funding,” according to a brief from attorney Matthew Tilley. “During that time, a decision that this Court expressly limited to the constitutionality of school conditions in Hoke County mutated into a platform for seemingly permanent judicial supervision over all aspects of public education policy and funding in the State of North Carolina.”

“This Court, applying its prior decisions in this very case, should reiterate the limitations of the Judicial Branch’s authority to provide remedies for violations related to public education and the limited scope of the matter that is actually before the Court.”

In another Leandro-related development, attorney Robert Hunter filed paperwork Wednesday to substitute Nels Roseland’s name for Combs’ name as the case proceeds. Combs retired as state controller on June 30. Gov. Roy Cooper has nominated Roseland to succeed Combs.

The General Assembly has not yet voted on Roseland’s confirmation, but the filing says Roseland is serving now as acting controller.

Roseland’s June 22 confirmation hearing generated some fireworks in the N.C. Senate. Under questioning from Sen Ralph Hise, R-Mitchell, Roseland said he intended to continue Combs’ legal position in the Leandro case.

But Roseland refused on three separate occasions to say whether he would transfer money out of the state treasury if the state Supreme Court orders him to take that step.

More briefs are due in the Leandro case on Aug. 1 and Aug. 12. Then the seven-member state Supreme Court will hear from attorneys on the last day of August, as schoolchildren across North Carolina settle in for another school year.

Editor’s note: This story was updated at 1:20 p.m. Wednesday to add information about the state controller’s legal position in the Leandro case.