An attorney for the St. Louis County School District had a rough outing before a three-judge panel of the Minnesota Court of Appeals last Thursday, May 12, as she tried to defend the school board against allegations that it violated the law when it spent tax dollars to promote a yes vote in the Dec. 9, 2009, referendum and failed to report it.

Members of the court panel were openly dubious about several of the claims made by Michelle Kenney, of the Twin Cities-based Knutson Flynn & Deans law firm as she urged the judges to affirm an earlier ruling that had dismissed the case.

The judges appeared far more receptive to the arguments of attorney Erick Kaardal, of the Mohrman & Kaardal law firm, who was representing Tim Kotzian, Steve Abrahamson and the Coalition for Community Schools, a citizens group that has opposed the school district’s plan to close community schools and build new, consolidated facilities.

Legal issues

Kaardal and his clients alleged in a complaint filed with the Office of Administrative Hearings last November that school board members violated the law when they spent public dollars on one-sided publications that argued for a yes vote in the 2009 referendum that narrowly approved a $78.8 million facilities plan.

Kaardal argued that the school board constituted a campaign committee when it took sides and spent money on the ballot question, and because of that, it had a legal obligation to report its promotional spending. Kaardal also argued that some of the claims made by the school board were false, further violating state campaign laws.

“What we’re asking is that the court require the school district to follow the law,” Kaardal told the appeals panel.

The complaint was originally dismissed by an OAH judge who pointed to past OAH determinations that suggested school boards were exempt from campaign disclosure rules. The judge also found that while some of the school district’s claims may have been misleading, they did not meet the definition of false under state campaign law.

While the OAH has determined that school boards are exempt from reporting requirements even if they spend money to campaign for a ballot measure, the Court of Appeals signaled in a case last year (see Barry v. St. Anthony-New Brighton Independent School District 282), brought by Kaardal, that school boards may not be exempt after all.

And the three-judge panel picked up on that theme during the oral arguments last week, noting that the law does not specifically exempt any group, and can apply broadly to any “association of persons working together.”

“How can you avoid the definition of an “association of persons working together?” asked Judge Heidi Schellhas in reference to the school board’s actions. Judge Randolph Peterson, who wrote the Barry opinion, agreed, honing in on the issue. Kenney struggled during Peterson’s questioning, and at one point stood speechless for at least thirty seconds while she tried to formulate a response, ultimately without much success.

Kenney took fire as well on the substance of the publications distributed to voters by the school district. The judges noted that the even the OAH judge, while dismissing the case, had agreed that the complaint included substantive allegations that the school board did attempt to promote a yes vote in the referendum.

Kenney argued that because the OAH dismissed the case, it was never established that the publications were biased or one-sided. Judge Schellhas wasn’t buying it, however.

“Can you point to something in the [school district] newsletters that portrays two sides?” she asked.

Kenney responded, arguing that the school district didn’t have an obligation to state both sides.

Chief Judge David Minge noted that the factual dispute would be best handled through an evidentiary hearing at the OAH. “Maybe it should be remanded for a hearing,” he suggested.

Peterson appeared to concur. “How can we avoid an evidentiary hearing?” he asked.

Broader implications

The judges made clear they see broader implications to this particular case. Minge asked whether the law would apply to all levels of government, beyond just school districts. “Shouldn’t this apply equally across the board?” he asked.

Kaardal agreed that the disclosure requirements would apply to all levels of government, if government agencies or officials expended resources to affect a ballot measure.

Kaardal also noted that attorney generals’ opinions have previously stated that it is improper for elected officials, and specifically school districts, to expend public dollars for promotion of one position or another on a ballot question.

“So, don’t we have several levels of discomfort with what the school district has done?” asked Judge Minge. He further questioned how best to enforce the law if school districts cross the line, wondering whether it should be the job of county attorneys or whether it should be up to citizens groups to police the process.

What’s next?

The three judges now have 90 days to issue a ruling. While the panel appeared to have significant questions for the school district attorney, John Gryzbek, an attorney who works with Kaardal, said judges’ questions don’t always signal their final opinions. Still, both Kaardal and Gryzbek were hopeful that, at a minimum, the judges would remand the case back to the OAH for an evidentiary hearing on whether the school district publications were neutral and strictly informational, or whether they constituted political promotion that may have to be disclosed.