NORTHEAST OHIO MEDIA GROUP
By Jeremy Pelzer
COLUMBUS, Ohio – A charter school operator was justified in charging 10 Northeast Ohio charter schools to keep computers, desks, and other property bought with taxpayer dollars, the Ohio Supreme Court ruled Tuesday.
In a split decision, Ohio’s highest court upheld contracts between the schools and their operator, White Hat Management, and stated it’s up to state lawmakers to decide whether to prevent private operators from keeping property bought with public money in the future.
The 10 charter schools received more than $90 million in public funds between 2007 and 2010. Almost all the money was routed through White Hat, which located school buildings, hired staff, and ran the schools’ day-to-day operations.
But the company soon ran into problems: as of the 2010-2011 school year, two of the 10 charter schools were closed by the state for academic failure, four were on “academic watch,” and one was listed in “academic emergency.”
White Hat demanded that the schools pay it to keep the equipment and property that it bought with state money. The schools refused and filed suit against White Hat in May 2010.
In Tuesday’s ruling, Justice Judith Ann Lanzinger found that White Hat’s contracts with the schools allowed it to buy the property in its own name and require the schools to buy back the property they wanted when the contracts expired.
“The schools were represented by their own legal counsel, and they agreed to the provisions in the contracts,” Lanzinger wrote. “They may not rewrite terms simply because they now seem unfair.”
Lanzinger later wrote, “We leave it to the General Assembly to determine whether public policy requires stiffening of the regulatory scheme governing these matters.”
Chief Justice Maureen O’Connor and visiting Judge John W. Wise from the Fifth Ohio District Court of Appeals joined in Lanzinger’s decision. Justices Sharon Kennedy, Judith French, and Bill O’Neill agreed with some aspects of the decision but dissented on other parts.
Justice Paul Pfeifer dissented completely, writing that a contract that requires the public to pay a company money for materials bought with taxpayer dollars “is extremely unfair” and “so one-sided that we should refuse to enforce it.”
Liberal advocacy group ProgressOhio called on lawmakers to quickly pass a law stating that school equipment bought with state money should belong to the public, not private charter school operators.
“Legislators must fix this injustice,” ProgressOhio Executive Director Sandy Theis said in a statement. “If the law is not changed, dishonest charter school operators will be able to legally fleece taxpayers for decades.”
The 10 charter schools involved in the case are:
- Hope Academy Broadway Campus
- Hope Academy Brown Street Campus
- Hope Academy Cathedral Campus
- Hope Academy Chapelside Campus
- Hope Academy Lincoln Park Campus
- Hope Academy University Campus
- Hope Academy West Campus
- Life Skills Center Lake Erie
- Life Skills Center of Akron
- Life Skills Center of Cleveland