J.D. v. DAVY

nduct discovery. Alternatively in that regard, they argue that the judge should not have dismissed their complaint with prejudice.

IV

In construing the right to equal protection implied in Article I, Paragraph 1 of the New Jersey Constitution, our Supreme Court has determined not to follow the multi-tier federal equal protection analysis (strict scrutiny, intermediate scrutiny, rational basis), but instead to employ a balancing test which considers "the nature of the affected right, the extent to which the governmental restriction intrudes upon it, and the public need for the restriction." Greenberg v. Kimmelman, 99 N.J. 552 , 567, 494 A.2d 294 (1985). "When a statute is challenged on the ground that it does not apply evenhandedly to similarly situated people, our equal protection jurisprudence requires that the legislation, in distinguishing between two classes of people, bear a substantial relationship to a legitimate governmental purpose." Lewis v. Harris, 188 N.J. 415, 443, 908 A.2d 196 (2006).

Our threshold determination is whether equal protection analysis is properly applicable to the statutes challenged here. In Robinson I, the challenge was to the statutory scheme of funding public education by which sixty-seven percent was paid by local taxes, twenty-eight percent by the State, and the! remaining five percent by the federal government. Robinson I, supra, 62 N.J. at 480, 303 A.2d 273. Because public schools were funded primarily by local taxes, schools in property-poor districts received less per pupil funding than those in wealthy districts. Id. at 481, 303 A.2d 273. The plaintiffs challenged the statutes on both equal protection and T E grounds.

The Court said it was "clear that there is a significant connection between the sums expended and the quality of the educational opportunity." Ibid. However, the Court went to great lengths to explain that equal protection was not the proper vehicle for addressing the education funding inequities, because such analysis may be unmanageable in light of the many services the State must provide and the many needs it must fulfill, as a result of which it would be inadvisable for a judicial determination of which services government should be compelled to provide and which needs it should fulfill and a single basis upon which it must act. Id. at 492, 303 A.2d 273. Expenditures among municipalities would inevitably vary as a consequence of varying revenues raised by local taxation among the municipalities. Id. at 494, 303 A.2d 273. The Court said it "will not pursue the equal protection issue in the limited context of public education." Id. at 500, 303 A.2d 273. The Court went on to hold that the then-current funding system violated the T E clause, on the limited record then before it, based on disparities in expenditures per student among the municipalities. Id. at 515, 303 A.2d 273.

In response to the Robinson litigation, the Legislature passed the Public School Education Act of 1975 (PSEA), N.J.S.A. 18A:7A-1 to -430, which was promptly challenged for facial compliance with the T E clause and upheld provided it was fully funded. Abbott I, supra, 100 N.J. at 282, 495 A.2d 376 (citing Robinson v. Cahill, 69 N.J. 449, 454, 467, 355 A.2d 129 (1976) ( Robinson V)).

Abbott I was a challenge to the PSEA on the grounds that, as funded, it was unconstitutional because there remained excessive financial disparities among the school districts. 100 N.J. at 282, 495 A.2d 376. The Court discussed the potential evidence that would be required to establish an equal protection claim and a T E claim:

Thus, in litigating the equal protection claim, it is anticipated that the parties will address issues that will overlap substantially with the questions raised by the claim based on the thorough and efficient clause. Both turn on proof that plaintiffs suffer educational inequities and that these inequities derive, in significant part, from the funding provisions of the 1975 Act. The claims may differ, however, in that the thorough and efficient education issues call for proofs that, after comparing the education received by children in property-poor districts to that offered in property-rich districts, it appears that the disadvantaged children will not be able to compete in, and contribute to, the society entered by the relatively advantaged children. The equal protection issues, on the other hand, call for proofs that, even if all children receive a minimally thorough and efficient education, the financing scheme engenders more inequality than is required by any other State interest. [ Id. at 295-96, 495 A.2d 376.]

Plaintiffs rely on this passage in Abbott I to support their contention that the Court has not foreclosed equal protection application in the school funding arena. However, the discussion in Abbott merely laid out the elements that would be required, respectively, to establish an equal protection or T E violation. When it came to deciding the issue, after development of a record, the Court in Abbott II decided the case on T E grounds, again refusing, as in Robinson I, to consider the equal protection claim:

We decline to rule on plaintiffs' state equal protection claim. The core of their argument is that wealth-based disparity is causing educational disparity. They contend, in effect, that what they consider the fundamental right of education is affected by the property wealth of the school district, that the system in reality consists of a classification of students that determines their level of education by a characteristic not only irrational but suspect, the property wealth of the districts they live in, and that there is no compelling State interest to justify the classification. We referred in Robinson I to the monumental governmental upheaval that

would result if the equal protection doctrine were held, applicable to the financing of education and similarly applied to all governmental services. We need not deal with those implications, for the remedy afforded in this opinion, although not based on equal protection, substantially mitigates plaintiffs' equal protection claim. [ Abbott II, supra, 119 N.J. at 389-90, 575 A.2d 359 (citation omitted).]

A panel of this court also refused to apply equal protection principles to an education funding constitutional claim, "when the last word by our Supreme Court has declared such an inroad to be `unmanageable.'" Stubaus v. Whitman, 339 N.J.Super. 38, 59, 770 A.2d 1222 (App.Div. 2001), certif. denied, 171 N.J. 442, 794 A.2d 181 (2002). The panel questioned whether it could "distinguish on a constitutional basis between the delivery of education to our children, even though protected by its own specific constitutional clause, and the delivery of fire and police protection, for example, for all our citizens including our children." Id. at 59, 770 A.2d 1222. The panel therefore expressed its "unease about pronouncing a willingness to decide the claim on an equal protection basis, and . . . conclude[d] that [it] remained] bound by Robinson I and rejected] any attempt to project equal protection into the school funding dispute." Id. at 60, 770 A.2d 1222.

However, another panel of this court did consider the equal protection argument presented by three suburban school districts challenging the approval of charter schools within their districts because they would siphon funds away from the operation of their traditional public schools. In re Grant of Charter Sch. Application, 320 N.J.Super. 174, 237-39, 727 A.2d 15 (App.Div. 1999), affd as modified, 164 N.J. 316, 753 A.2d 687 (2000). Although the panel found no equal protection violation, it considered the merits of the argument, applying the balancing test applicable to such challenges under the New Jersey Constitution. Ibid. In affirming with some modifications, the Supreme Court said nothing about the panel's consideration and disposition on the merits of the equal protection argument, which might be deemed approval of it.

The Court noted that the districts challenged the CSPA as unconstitutional "because it violates equal protection and due process, contravenes the prohibition against the donation of public funds for private purposes, and constitutes an improper delegation of legislative power to a private body." In re Charter Sch. Application, supra, 164 N.J. at 319, 753 A.2d 687. The Court then said that Judge King "comprehensively addressed" all of the challenges in the Appellate Division opinion, which the Court affirmed, "modifying only its articulation of the Commissioner of Education's responsibilities when reviewing the financial and racial impacts that approval of a charter school will have on a public school district." Ibid. (emphasis added).

It is therefore uncertain whether our precedents allow equal protection application in this context. Although plaintiffs attempt to distinguish this situation from those considered in the Robinson and Abbott cases, the same underlying impediment to equal protection analysis exists here as well. Limited state funds are available for funding a thorough and efficient system of education throughout the State. That system stands ready to accommodate all who choose to attend traditional public schools. Additional funds would be needed to provide facilities funding for charter schools. Although providing the additional ten percent for operational expenses would not directly require additional funds, the traditional public schools would suffer a loss in having to cover their overall fixed costs even though some of their students left for charter schools. We will discuss this later in this opinion.

Full funding of charter schools would divert funds from other governmental purposes. This is the very circumstance that impelled the Court to deem equal protection application unmanageable in this area. Although we recognize the uncertainty of equal protection application, we proceed to consider the claim on the merits.

V

The challenged statutes are presumptively valid. In re C.V.S. Pharmacy Wayne, 116 N.J. 490, 497, 561 A.2d 1160 (1989), cert. denied, sub. nom. C.V.S. v. Bd. of Pharmacy, 493 U.S. 1045, 110 S.Ct 841, 107 L.Ed.2d 836 (1990). "When a state statute is challenged on state constitutional grounds, the nature of state government and the distribution of sovereign power within it make the plaintiffs burden a heavy one." Smith v. Penta, 81 N.J. 65, 74, 405 A.2d 350, appeal dismissed, 444 U.S. 986, 100 S.Ct. 515, 62 L.Ed.2d 416 (1979).

As we have stated, plaintiffs have not alleged in their complaint that they are being deprived of a thorough and efficient education. Indeed, the charter school movement has been developed as a reform measure in the educational system to provide creative and innovative means of providing students with a better education than they receive in traditional public schools. The general assertion in their complaint that the funding disparity "negatively affects" their education states only a conclusory, speculative and hypothetical proposition. Indeed, if plaintiffs could plead in good faith that their education fell below applicable state regulations, guidelines and criteria as required to fulfill the T E obligation, they presumably would have done so. See In re Charter Sch. Application, supra, 164 N.J. at 331, 753 A.2d 687 (noting that none of the three suburban districts claimed "that the approval of the charter schools in [their districts] will cause [them] to cease providing a thorough and efficient education to [their] remaining pupils").

In assessing a state equal protection claim, we must first identify the nature of the affected right. That right is to receive a thorough and efficient education. Unlike the students involved in the Robinson and Abbott cases, who, by virtue of their residence, were required to attend specific public schools in their district, plaintiffs' enrollment in their charter schools is completely voluntary. They can withdraw at any time and enroll in the traditional public schools in Newark which are receiving the full funding which they seek for their charter schools. See In re 1999-2000 Abbott v. Burke Implementing Regulations, 348 N.J.Super. 382, 441, 792 A.2d 412 (App.Div. 2002) (rejecting constitutional challenge to regulations for excluding charter schools from the definition of "Abbott districts" because a charter school is an " optional program . . . [and] students may, at any time, exercise the option of withdrawing from the charter school if they wish to benefit from the Abbott remedial measures").

Undoubtedly, the affected right is an important one. See Abbott I, supra, 100 N.J. at 295, 495 A.2d 376. The extent to which the government restriction intrudes upon it is at most very minor, and possibly nonexistent. There are several reasons for this. First, the Legislature has deemed the establishment of charter schools an "educational reform by providing a mechanism for the implementation of a variety of educational approaches which may not be available in the traditional public school classroom." N.J.S.A. 18A:36A-2. To this end, the legislative history makes clear that charter schools are permitted to seek waiver of most board regulations in order to give them maximum control to devise innovative and creative methods of education. See Sponsor Statement to Assembly No. 592, at 3 (Dec. 11, 1995) ("[S]chools are also given the option of seeking waivers of State board regulations in order to provide a stimulus to meet educational objectives in novel and creative ways — [They] are intended to . . . give [teachers] the maximum amount of freedom possible to set educational goals and devise ways to achieve them."); James M. O'Neill, Charter Schools Get Senate Support, The Inquirer (Philadelphia), Dec. 22, 1995, at 15 ("Charter schools would presumably offer education alternatives to parents not satisfied with the education their' children receive in their [traditional] public schools."). See also In re Charter Sch. Application, supra, 164 N.J. at 321, 753 A.2d 687 ("Advocates view the charter schools as a way to increase innovation in public schooling, contending that increased activism will promote creativity in management and curricula.").

Thus, the charter school program was a reform measure by the Legislature to ensure that every child receives a thorough and efficient education by providing an innovative alternative to traditional public schools. Having enrolled in charter schools, plaintiffs, unlike traditional public school students, receive an education largely exempt from regulation.

Further, any time plaintiffs or their parents or guardians are dissatisfied with the education plaintiffs are receiving, they are free to give up the benefits conferred on charter schools and enroll in a traditional public school. The voluntariness of the program vitiates any asserted deprivation of a right to receive an education at a school that is fully funded to the same extent as other Newark public schools when charter school students have the unabridged option of attending one of those traditional public schools in their district.

It is also significant that, under the very strict statutory and regulatory provisions applicable to charter schools, they are required to provide at least the level of education, tested by the same standards as traditional public schools, that is designed to provide a thorough and efficient education. If charter schools do not meet that obligation, remedies other than funding remedies are available. The Commissioner is statutorily authorized to place a charter school on probationary status and oversee the implementation of a remedial plan. N.J.S.A. 18A:36A-17. If the remedial plan is unsuccessful, the Commissioner may revoke the charter. Ibid. Indeed, we recognized such an eventuality in Abbott v. Burke Implementing Regulations, supra, 348 N.J.Super. at 441, 792 A.2d 412, holding that there was no constitutional violation in excluding charter schools from the definition of Abbott districts and observing that "unlike Abbott school districts, a charter school will simply cease operating if the Commissioner vacates the charter."

The final step in the balancing test examines the public need for the restriction. Even if there is a slight governmental intrusion on charter school students, there must be some public need justifying the restriction, lest the State action be deemed arbitrary. Lewis, supra, 188 N.J. at 443-44, 908 A.2d 196; Robinson, supra, 62 N.J. at 492, 303 A.2d 273. The justification for the restriction is the public need to reduce the diversion of scarce resources from existing traditional public schools so that the State may continue to provide a thorough and efficient education to all students. Indeed, in the debates prior to enactment of the CSPA, "[t]he most frequently expressed objection was charter schools would divert tax dollars from existing districts without any corresponding decrease in their costs." In re Charter Sch. Application, supra, 320 N.J.Super. at 190, 727 A.2d 15 (referencing three public hearings in 1995 before the Senate and Assembly Education Committees).

The need to conserve scarce resources for traditional public schools was evident when the flip side of this controversy was presented in In re Grant of Charter School Application. Three local boards of education in suburban districts challenged the grant of proposed charter schools in their districts "on the grounds that the charter school would divert scarce funds from the existing school district." Id. at 185, 727 A.2d 15. The boards predicted that the loss of funds from their districts as a result of the ninety percent per pupil funding provision would "cause dire consequences for their respective school districts." 164 N.J. at 331, 753 A.2d 687. The Supreme Court ultimately upheld the grant of the charters, noting that the ninety percent funding provision was added to the legislation "to address concerns raised by various groups at the public hearings about funding." Id. at 332, 753 A.2d 687. The original version of the bill had provided for one hundred percent funding. Ibid. However, a "common theme" of two public hearings held by the Senate Education Committee "was the fear concerning what the loss of one hundred percent of the local levy budget per pupil would mean for the district of residence." Ibid. "In particular, commentors expressed concern about how a district would handle the loss of funds and still cover the fixed costs for the school district." Id. at 332-33, 753 A.2d 687. Accordingly, the Legislature reduced the per pupil amount for charter school students from one hundred percent to ninety percent. Id. at 333, 753 A.2d 687; N.J.S.A 18A:36A-12. "The evolution of this provision demonstrates that the Legislature responded to concerns about the loss of 100% of per-pupil funding to the charter school." 164 N.J. at 333, 753 A.2d 687.

The decision to fund the charter schools at ninety percent and to prohibit them from receiving state facilities funds was therefore not an arbitrary decision. It was a legislative compromise in response to the "worry that charter schools could siphon off public school funds and eventually undermine public education." Patrick Graham, Assembly OKs Charter School Bill, Courier Post (New Jersey), Jan. 5, 1996, at 4.

As to the absence of facilities funding for charter schools, the State posits that the legislative reason, although not specified in the legislation or its history, is self-evident, namely that traditional public schools are finite and will be in existence long term, whereas charter schools are transitory and may come and go. We find this proposition persuasive.

Thus, contrary to plaintiffs' arguments, the challenged statutes constituted an effort to ensure a thorough and efficient education for all children, not undermine it. Moreover, this method of legislative compromise was well within the State's purview. See Barone v. Dep't of Human Servs., 107 N.J. 355, 370, 526 A.2d 1055 (1987) ("State funds available for public assistance programs are limited. It is the Legislature that has the duty to allocate the resources of the State. As long as the classification chosen by the Legislature rationally advances a legitimate governmental objective, it need not be the wisest, the fairest, or the one we would choose. It is not for the courts to determine if there is a better way to allocate resources under these programs.") (emphasis added).

Quoting Abbott I, supra, 100 N.J. at 296, 495 A.2d 376, plaintiffs argue that even if T E is not burdened, an equal protection claim can succeed if "plaintiffs suffer educational inequities . . . that . . . derive, in significant part, from the funding provisions[,] [and] . . . even if all children receive a minimally thorough and efficient education, the financing scheme engenders more inequality than is required by any other State interest." We find this argument unpersuasive. Plaintiffs have not alleged that they suffer "educational inequities." Therefore, a necessary element of their claim is simply absent. The allegation in their complaint that the disparity in funding "negatively affects" their education is insufficient to meet this element. First, it is conclusory, vague and speculative. Second, it assumes the absence of any federal funding or receipt of any gifts or donations, which are contemplated and authorized by the CSPA. Third, there is no actual T E deficiency and the "negatively affects" allegation refers only to the fact of less than full funding, not that it will cause the charter schools "to cease providing a thorough and efficient education." In re Charter Sch. Application, supra, 164 N.J. at 331, 753 A.2d 687. Finally, if there were a T E deficiency, other remedies are available or, of course, plaintiffs could return to a traditional public school.

Plaintiffs further argue that the denial of all facilities funding constitutes a "categorical denial of a government service to a discrete group, despite the fact that the service is provided to other similarly situated persons [i.e. traditional public school students]." As we have stated, the funding provisions were a reasoned compromise intended to advance ensuring a thorough and efficient education for all public school students. We do not view this legislative decision as a "categorical denial of a government service" to any group.

The equal protection provision in the New Jersey Constitution "prohibits the State from adopting statutory classifications that treat similarly situated people differently." Stubaus, supra, 339 N.J.Super. at 57, 770 A.2d 1222 (citing Sanchez v. Dep't of Human Servs., 314 N.J.Super. 11, 30, 713 A.2d 1056 (App.Div. 1998)). Plaintiffs do not fall within this prohibition. Because their enrollment in a charter school is voluntary and optional, thus giving them a choice to attend a traditional public school, they are either not "similarly situated" to other Newark children who attend traditional public schools, or they are not treated "differently" than/them because plaintiffs too can attend the same traditional public schools.

Throughout the Robinson and Abbott decisions, it is clear that the constitutional T E mandate requires an equal educational "opportunity." Plaintiffs allegation of inequality between Newark charter schools and Newark traditional public schools is based solely upon the disparity in funding. Plaintiffs fail to demonstrate how they are deprived of the equal opportunity to attend the fully funded traditional public schools available to them in their city.

As we stated in In re Charter School Application, supra, 320 N.J.Super. at 239, 727 A.2d 15, application of the New Jersey equal protection balancing test leads to the conclusion "that the two categories created by the [CSPA] are reasonably designed to further the appropriate governmental intent of `promoting comprehensive education reform by providing a mechanism for the implementation of a variety of education approaches which may not be available in the traditional public school classroom.' N.J.S.A 18A:36A-2." We are unconvinced that plaintiffs have demonstrated that the classifications intrude upon their right to equal access to a thorough and efficient education.

The procedural posture in which this case, comes to us is from the granting of the State's motion to dismiss for failure to state a claim upon which relief can be granted, pursuant to Rule 4:6-2(e). Such motions should be granted "in only the rarest of instances" and after meticulous and indulgent examination of the complaint. Printing Mart-Morristown v. Sharp Elees. Corp., 116 N.J. 739, 772, 563 A.2d 31 (1989). "Where, however, it is clear that the complaint states no basis for relief and that discovery would not provide one, dismissal of the complaint is appropriate." County of Warren v. State, 409 N.J.Super. 495, 503, 978 A.2d 312 (App.Div. 2009), certif. denied, 201 N.J. 153, 988 A.2d 1176, cert. denied, sub. nom Shope v. N.J., ___ U.S. ___, 130 S.Ct. 3508, ___ L.Ed.2d ___ (2010). If dismissal is warranted, it should usually be without prejudice. Printing Mart-Morristown, supra, 116 N.J. at 772, 563 A.2d 31. However, when an equal protection challenge fails to state a claim, our courts have not hesitated to dismiss the complaint with prejudice. See, e.g., Sojourner A. v. N.J. Dep't of Human Servs., 117 N.J. 318 , 324, 828 A.2d 306 (2003); Felicioni v. Admin. Office of Courts, 404 N.J.Super. 382, 391, 961 A.2d 1207 (App.Div. 2008); Stubaus, supra, 339 N.J.Super. at 63, 770 A.2d 1222. Appellate review of the grant of a motion to dismiss is de novo. County of Warren, supra, 409 N.J.Super. at 504, 978 A.2d 312.

We reject plaintiffs' contention that, if their complaint is to be dismissed, the dismissal should be without prejudice. For the reasons we have stated, we are satisfied that dismissal with prejudice is appropriate in this case. Plaintiffs' arguments and the matters they wish to develop through discovery are better suited for presentation to the Legislature. The funding scheme that is now in place represents a deliberate and deliberative legislative design intended as a reform measure to enhance public education for all students in traditional public schools and charter schools. Because we find no equal protection violation, and because plaintiffs have not even alleged a T E violation, we find no occasion for judicial interference with the legislative will.

Affirmed.