IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN ...

Case 2:11-cv-02101-SHM-cgc Document 243 Filed 08/08/11 Page 1 of 146 PageID 7046

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TENNESSEE

WESTERN DIVISION

BOARD OF EDUCATION OF SHELBY )

COUNTY, TENNESSEE, et al.,

)

)

Plaintiffs,

)

)

v.

)

)

MEMPHIS CITY BOARD OF

)

EDUCATION, et al.,

)

)

Defendants.

)

No. 11-2101

ORDER

Plaintiff Board of Education of Shelby County, Tennessee ("Shelby County Board of Education") filed a complaint for a declaratory judgment on February 11, 2011. (ECF No. 1.) It filed an amended complaint on March 3, 2011. (ECF No. 22.) Defendant City of Memphis filed an answer and counterclaims on March 17, 2011. (ECF No. 49.) Defendant Memphis City Council filed an answer, counterclaim, and cross-claim on March 17, 2011. (ECF No. 50.) Defendant Memphis City Board of Education (the "Memphis City Board of Education" or the "Board of Education of the Memphis City Schools") filed an answer, counterclaim, and cross-claim on March 18, 2011. (ECF No. 52.) Defendant Board of County Commissioners of Shelby County, Tennessee ("Shelby County Commission") filed an answer and

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counterclaim on March 22, 2011. (ECF No. 62.) Defendants Tennessee Department of Education and Patrick Smith, in his then official capacity as Acting Commissioner of the Tennessee Department of Education, filed an answer on March 23, 2011. (ECF No. 64.) On April 2, 2011, intervening plaintiffs Snowden Carruthers, Michael Wissman, David Reaves, Joseph Clayton, and David Pickler ("Intervening Plaintiffs") filed a verified intervening complaint. (ECF No. 103.)

The Tennessee Department of Education and Kevin Huffman, in his Official Capacity as Commissioner of the Tennessee Department of Education, answered the Memphis City Council's cross-claim and the Memphis City Board of Education's crossclaim on April 12, 2011. (ECF No. 113; ECF No. 114.) The Shelby County Board of Education answered the counterclaims filed by the City of Memphis, the Memphis City Council, the Memphis City Board of Education, and the Shelby County Commission on April 12, 2011. (ECF No. 115; ECF No. 116; ECF No. 117; ECF No. 118.) The City of Memphis answered the Memphis City Board of Education's cross-claim on April 12, 2011. (ECF No. 119.) The Memphis City Council answered the Memphis City Board of Education's cross-claim and filed a counterclaim on April 12, 2011. (ECF No. 121.) Intervening defendants Memphis Education Association, Keith O. Williams, and Karl Thomas Emens

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filed an answer and counterclaim on May 11, 2011. (ECF No. 176.)

The Court held a hearing on May 12, 2011, and May 13, 2011, at which it received proof in the form of testimony and exhibits and heard oral arguments. (See ECF No. 177; ECF No. 178.) The parties agreed that the Court would decide this matter based on the testimony, the written record, and the affidavits before it after the submission of final briefs on June 30, 2011. (ECF No. 182.) Based on that record, the Court makes the following findings of fact and conclusions of law and orders the following declaratory relief.

I. Background The parties do not dispute the material facts in this case. The public school system in Memphis (the "Memphis City Schools") is the largest school system in Tennessee and the twenty-third largest public school system in the United States. (See District Budget 20, ECF No. 200-2; ECF No. 199-7.) It has approximately 105,000 students and 209 schools. (See District Budget 20, ECF No. 200-2; ECF No. 199-7.) The student demographics are 85.7% African-American, 7.0% Caucasian, 5.9% Hispanic, and 1.4% other races and nationalities. (See District Budget 20, ECF No. 200-2; ECF No. 199-7.) Memphis City Schools anticipates enrolling 108,461 students during the 2011-2012 school year. (See District Budget 388, ECF No. 201-1.)

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According to its financial report for the fiscal year ending June 30, 2010, Memphis City Schools owns land valued at $34,699,701, buildings and improvements valued at $802,832,197, and machinery and equipment valued at $54,694,705. (See Report 93, ECF No. 201-2.) Memphis City Schools has 16,081 full-time and part-time staff, including more than 7,000 teachers. (See District Budget 20, ECF No. 200-2; District Budget 392, ECF No. 201-1.)

Although the City of Memphis is located in Shelby County, the Shelby County Board of Education operates the Shelby County Schools, a separate school system that includes all public schools in Shelby County outside Memphis. (See, e.g., ECF No. 204-9.) Shelby County Schools has more than 48,000 students and is the fourth largest school system in Tennessee. (See id.; see also ECF No. 204-4; ECF No. 204-5; Budget 4, ECF No. 205-2.) The student demographics are approximately 55.2% Caucasian, 36.1% African-American, 4.0% Hispanic, 0.4% Native American, and 4.3% Asian/Pacific Islander. (See Report 16, ECF No. 205-3.) Shelby County Schools has 51 schools and more than 5,200 employees. (See ECF No. 204-3; ECF No. 204-5; ECF No. 204-8.) In 2010, it had total net assets valued at more than $320 million. (See Audited Financial Statements 10, ECF No. 204-7.)

In 1869, the State of Tennessee granted the Memphis City Board of Education a charter to operate a public school system

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in Memphis. (See Resolution 1, ECF No. 22-1; Answer ? 16, ECF No. 52; Ex. A, at 1, ECF No. 132-2; Act, ECF No. 153-5.) On December 20, 2010, the Memphis City Board of Education voted to surrender its charter to operate the Memphis City Schools and to transfer administration of the Memphis City Schools to the Shelby County Board of Education. (See Resolution 1-3, ECF No. 22-1; Br. 2-3, ECF No. 234; Preliminary Injunction Hr'g Ex. 13, at 4-5.) The Board's resolution states in part:

THEREFORE BE IT RESOLVED THAT, the Board of Commissioners of the Board of Education of Memphis City Schools surrenders its charter as authorized by 1961 Tennessee Private Acts Chapter 375. BE IT FURTHER RESOLVED THAT, the Memphis City Schools Board of Commissioners hereby request that the Shelby County Commissioners of Elections conduct a referendum that transfers the administration of Memphis City Schools to the Shelby County Board of Education as required by Tennessee Code Annotated Section 49-2-502 to take place at the same time as any future election is conducted by the Shelby County Election Commission or as provided by state law, whichever occurs sooner. (Resolution 1-2, ECF No. 22-1; Preliminary Injunction Hr'g Ex. 13, at 4-5.) Chapter 375 of the 1961 Private Acts of the State of Tennessee (the "1961 Private Act") amends the Memphis City Board of Education's charter "so as to authorize the Board of Education of the Memphis City Schools to dissolve the charter of the Memphis City Schools and to surrender the same to the Secretary of State, at such time as the said Board of Education

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