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Pitt County schools have fulfilled the obligations to effectively integrate their schools as required under desegregation orders first entered more than 40 years ago, and need no longer remain subject to federal oversight, the 4th U.S. Circuit Court of Appeals ruled in a 2-1 decision released today.

Writing for the panel in Everett v. Pitt County Board of Education, U.S. Circuit Court Judge Albert Diaz said:

[W]e need look no further for proof than the fact that the desegregation orders remained administratively closed for over thirty-five years, during which time the Board undertook the task of integrating the schools relatively undisturbed. Until 2008, no party came before the district court accusing the Board of neglecting or disregarding its obligations under the desegregation orders. And when this case was reopened, it was as a consequence of a dispute regarding the 2006-07 student assignment plan in which certain parents essentially argued that the Board went too far in its efforts to desegregate the schools. Moreover, in the proceedings leading up to the district court’s 2009 consent order, Plaintiffs and the Board were both aligned in opposition to the Association’s motion for declaration of unitary status.

From the date the district court entered its desegregation orders, school administrators took immediate steps to effectively integrate their schools and move them toward unitary status. In very short order, both school districts had almost completely eliminated racially identifiable schools. While racial imbalance returned over the succeeding years, the respective boards consistently took measures to bring their schools back into balance.

Post-merger, the consolidated Board used satellite attendance areas and busing to maintain racial balance. When demographic factors caused an increase in racially identifiable schools, the Board took reasonable steps to restore balance. Ultimately, a substantial number of schools were able to achieve racial balance, and maintain it as of the 2011-12 school year. In short, we are convinced that the Board has acted in good faith since the entry of the desegregation orders in 1970.

Judge Paul Niemeyer joined in the opinion, but Judge James A. Wynn, Jr. dissented.

In finding that the district applied a flawed analysis and the majority on the appeals panel compounded that error, Wynn said:

Our consideration of this case does not occur in a vacuum. The rapid rate of de facto resegregation in our public school system in recent decades is well-documented. As one scholar put it, “Schools are more segregated today than they have been for decades, and segregation is rapidly increasing.”

Today the majority upholds the Board’s promulgation of a student assignment plan that, Appellants argue, furthers this trend. The majority reaches that result out of deference to a district court decision that utterly fails to analyze the facts in this case in compliance with this Court’s instructions and established Supreme Court precedent.

Though it is pleasing to hear that the district court takes comfort in the Supreme Court’s recent proclamation in Shelby County v. Holder, that our “Nation has made great strides” in ensuring the civil rights of minorities since the 1960s, these words are not a panacea for difficult cases involving race, particularly when the “facts on the ground” “caution . . . against” resting on the laurels of prior generations. Undeniably, in certain cases, there are other famous words that ring all the more true: “The past is never dead. It’s not even past.”

For more on the arguments in the Fourth Circuit, read here.

For more on the Pitt County case and other continuing desegregation battles in the South, read here.

News

The General Assembly’s 2013 repeal of the teacher tenure law amounted to an unconstitutional taking of contract and property rights as to those teachers who’d already attained that status, according to a Court of Appeals opinion released this morning.

Writing for the court, Judge Linda Stephens said:

[W]e cannot escape the conclusion that for the last four decades, the career status protections provided by section 115C- 325, the very title of which—“Principal and Teacher Employment Contracts”— purports to govern teachers’ employment contracts, have been a fundamental part of the bargain that Plaintiffs and thousands of other teachers across this State accepted when they decided to defer the pursuit of potentially more lucrative professions, as well as the opportunity to work in states that offer better financial compensation to members of their own profession, in order to accept employment in our public schools.

The ruling by the three-judge panel affirms Superior Court Judge Robert H. Hobgood’s decision handed down a little over a year ago.

Under North Carolina’s “Career Status Law,” teachers in their first four years were deemed “probationary” and employed year-to-year under annual contracts. At the end of the four-year period, they became eligible for career status, giving them rights to continuing contracts and due process protections from arbitrary or unjustified dismissals.

In summer 2013, lawmakers enacted a repeal of that law in an effort to rid the state of tenure by 2018, saying that it enabled bad teachers to stay in the system.

They eliminated tenure for teachers who had not reached career status by August 2013 and revoked career status for all teachers by July 2018.

As an enticement for already-tenured teachers to act sooner, lawmakers also required local school boards to offer 25 percent of them temporary 4-year contracts with annual raises of $500 in exchange for giving up their tenure rights early.

In May 2014, Judge Hobgood ruled that the revoking of tenure for teachers who’d already reached career status was unconstitutional, as was the “25 percent” plan, which Hobgood said included no standards to guide school districts and served no public purpose.

As to teachers who had not yet achieved career status, though, Hobgood found that they had no protectable contract rights and thus could not challenge the repeal.

Two judges on the panel, Stephens and Martha Geer, largely agreed with Hobgood’s ruling.

But Court of Appeals Judge Chris Dillon issued a separate opinion in which he agreed only with the lower court’s finding that tenured teachers had property rights warranting a hearing in the event they were dismissed (something the repeal did not allow).

Read the full opinion here.

News

Duke Energy Coal Ash Spill in North CarolinaAs Triangle Business Journal first reported late last week, Duke Energy has been hit with yet another shareholder lawsuit arising out of the coal ash mess, this time by shareholder E.F. Greenberg and filed in federal court in Raleigh.

Greenberg contends that Duke Energy’s directors made significant admissions regarding their conduct in response to coal ash problems weeks before board elections took place, yet failed to disclose as much to shareholders and to the Securities and Exchange Commission.

“Despite their obligations under applicable federal law, the director defendants caused Duke to prepare, file and disseminate the proxy statement to Duke shareholders in materially incomplete and misleading form in order to secure the election of directors supported by the director defendants,” the shareholder alleges in her complaint.

Admissions of misconduct, and underlying facts, only became public a week after elections at Duke’s May 14 criminal sentencing hearing.

Here’s more from the complaint:

17. To be clear, plaintiff is not contending that any plea agreements, plea negotiations, sentencing memoranda, or even the Statement of Facts itself were required to be included verbatim in the Proxy Statement. However, the substance of the salient factual matters admitted to by Duke were highly material to shareholders called upon to vote upon directors, and should have been included in or referred to some meaningful extent in the Proxy Statement, just as the Judgment of Sentence, at paragraph 3B requires that Duke advise shareholders of the “criminal behavior.”

18. Further startling disclosures concerning the matters to which Duke had previously admitted and agreed to, including appropriately imposed far reaching and stringent monetary and non-monetary therapeutic relief and judicial oversight are set forth in the Judgment of Conviction and Sentencing entered by the Court following the sentencing hearing on May 14, 2015.

19. The substance of these highly relevant and material facts that Duke admitted to in February of 2015 but did not disclose until one week after the Annual Meeting of Shareholders, involved a documented course of environmental recklessness.

20. These admitted facts were so serious and so extensive that Duke’s management and Board were deemed to be so unreliable and untrustworthy as to environmental matters, that Duke was appropriately required, as part of the Court’s sentence, to agree to cede extensive control of the Company’s operations for the foreseeable future to the management of a Court Appointed Monitor ).

21. Therefore, the substance of the facts to which Duke had admitted in February of 2015 was such as to demonstrate that the very individuals who had been entrusted to manage and oversee Duke’s compliance with its responsibilities under the environmental laws (including the defendants named in this Complaint) had failed so utterly and so completely, that they could no longer be trusted to run the Company on their own, without extensive and invasive outside monitoring and oversight.

That makes at least seven shareholder lawsuits filed against the company arising out its coal ash debacle.

Five had already been filed in Delaware Chancery Court and one in North Carolina Business Court – alleging that the company knew about the clean water act violations at its coal ash plants but failed to take action and exposed the company to potentially billions of dollars in liability. All seek changes in corporate governance and damages from losses resulting from clean-up and fines.

Company officials had asked both the Delaware and North Carolina courts to stay proceedings in the shareholder suits until after the criminal cases have been resolved.

Read the Greenberg complaint here.

News

VoteIn a 2-1 decision released this morning, the 4th U.S. Circuit Court of Appeals reversed the lower court and held that the Wake County citizens’ lawsuit challenging the redistricting of Board of Education electoral districts could proceed toward trial.

Writing for the court in Wright v. North Carolina,  U.S. Circuit Judge James A Wynn, Jr. said:

Thirteen citizens of Wake County, North Carolina challenge a state law redrawing the Wake County Board of Education electoral districts. Plaintiffs contend that under the new redistricting plan, some citizen’s votes will get significantly more weight than other’s in violation of the Fourteenth Amendment’s guarantees of one person, one vote and the North Carolina Constitution’s promise of equal protection. For the reasons explained below, we conclude that Plaintiffs have stated a claim upon which relief could be granted against the Wake County Board of Elections and that the district court therefore erred in dismissing their suit.

We’ll be updating this post shortly, but you can read the decision here.

News

From the New York Times:

A federal appeals court on Tuesday denied the Obama administration’s request to lift a hold on the president’s executive actions on immigration, which would have granted protection from deportation as well as work permits to millions of immigrants in the country illegally.

Two of three judges on a panel of the United States Court of Appeals for the Fifth Circuit, in New Orleans, left in place an injunction by a federal district judge in Brownsville, Tex. The ruling comes in a lawsuit by 26 states against actions President Obama took in November. Many of the initiatives were scheduled to take effect this month.

The appeals court found that Texas and the other states did have sufficient legal grounds to bring the lawsuit and that the administration had not shown it would be harmed if the injunction remained in the place and the programs were further delayed.