Nevada ESA Litigation: What You Need to Know

Nevada created an education model for the nation in 2015 when it passed into law an education savings account (ESA) program under which more than 96 percent of all K–12 students are eligible for ESA funding (90–100 percent of the state’s average education funding for each child).

This currently is the most sustainable, inclusive, equitable educational choice program in the country. Nevada’s ESA maximizes the opportunity for parents to choose the education options, public and private, they believe serve the best interests of their children.

As we have come to expect whenever the status quo is challenged in favor of empowering parents, those who oppose this freedom sued to stop it. Twice.

Both cases will be presented, separately, to the Nevada Supreme Court in oral argument on Friday, July 29. The Friedman Foundation for Educational Choice filed amicus briefs in both cases—Duncan v. State of Nevada and Lopez v. Schwartz—with the latest brief filed in the Duncan case.

The following is a summary of the two cases, as well as up-to-date information about the status of the litigation and the status of the thousands of parents waiting to access Nevada’s model education program for their children. We encourage you to check back on this post frequently; we will provide timely updates as we know more about the outcome of these cases.

Who Is Doing This, and Why

Duncan v. State of Nevada

In August 2015, the American Civil Liberties Union of Nevada (ACLUNV) filed a lawsuit—Duncan vs Nevada, Case No. A-15-723703-C—on behalf of five citizen plaintiffs to deny students in Nevada their new opportunity to access educational services through an ESA. They were joined by Americans United for Separation of Church and State, a Washington, D.C.-based nonprofit that seeks to block educational choice because parents may choose religious schools for their children’s education, notwithstanding the fact that more than 14 years ago the U.S. Supreme Court in Zelman v. Simmons-Harris ruled decisively, as several state courts have since then, that there is no constitutional violation when parents, not the state, use educational choice scholarships to choose a religious school for the education of their children.

Plaintiffs alleged that the ESA violates the following sections of Nevada’s constitution:

• allows parents to use ESA funds to pay tuition and fees for classes at religious elementary and secondary schools in violation of Article XI, Section 10 (the No-Aid Clause, commonly known as a Blaine Amendment), and
• creates a non-uniform system of education and accountability standards in violation of Article XI, Section 2 (Uniformity Clause).

On May 18, 2016, the trial court ruled against the plaintiffs and upheld Nevada’s ESA. In a thorough, highly detailed and thoughtfully written opinion, the district court judge of the Eighth Judicial District Court in Clark County, Nevada, ruled that

• ESA funding has a secular purpose to educate children and that purpose does not change merely because a religiously affiliated entity is providing that service—the beneficiaries are families and students not private schools or the state; and
• that Article XI, Section 1, which states that the legislature must use “all suitable means” to advance education, clearly allows the legislature to create alternative educational options in addition to a uniform public school system as required in Article XI, Section 2.

Lopez v. Schwartz

In September 2015, New Jersey-based Education Law Center, a group of public interest lawyers who sue states hoping to force state legislatures to spend more taxpayer dollars on public schools brought suit on behalf of seven plaintiffs. They were joined in this litigation by Educate Nevada Now, a campaign run by the Las Vegas-based Rogers Foundation, to deny funding for Nevada’s new educational opportunity for students and families.

Plaintiffs alleged that Nevada’s ESA violates the Nevada constitution in three ways:

• by diverting funding from public schools to private schools in violation of Article II, Section 3 and Sections 6.1 and 6.2;
• by reducing funding of public schools to levels that are inadequate in violation of Article II, Section 6.2, and
• by creating a non-uniform system of education and accountability standards in violation of Article II, Section 2.

On January 11, 2016, the judge of the First Judicial District Court of the State of Nevada in and for Carson City upheld the plaintiff motion for a preliminary injunction against implementation of Nevada’s ESA. The court ruled that:

• although ESA funding is in the same Distributive School Account fund (DSA), because the ESA law does not require the ESA to be funded in this way there is no violation of Article II, Section 3;
• because ESA funding was nonetheless appropriated to the same fund (DSA), the ESA law diverts money from a fund dedicated exclusively to public schools in violation of Article II, Sections 6.1 and 6.2; and
• that because Article XI, Section 1, states that the legislature must use “all suitable means” to advance education, clearly allowing the legislature to create alternative educational options in addition to a uniform public school system, there is no violation of Article XI, Section 2.

What’s At Risk

Despite the litigation, thousands of Nevada families have applied for ESAs hoping the court will overturn the Lopez decision and uphold the Duncan decision, which would allow parents to access this new form of education funding in the 2016–2017 school year.

As reported throughout court documents, data show Nevada’s education system is the worst, or nearly the worst, in the country. Seventy-one percent of Nevada’s fourth graders are not proficient in reading.

By enacting a way for parents to access educational options that may help their children learn and succeed, leaders in Nevada took the first step to correct a very grave injustice. The children of Nevada need all the help they can get to improve their academic outcomes.

Why This Lawsuit Matters to Nevadans and the Rest of the Country

Nevada is not the only state seeking to improve academic outcomes. This year, 18 states, inspired by Nevada’s efforts, put forth ESA legislation. As research has repeatedly shown, when parents have a choice in education, it is possible for children to succeed and schools to improve.

It’s clear that ESAs, which currently are in place in five states, are the future of the educational choice movement, and Nevada has blazed a trail with its program. With thousands of parents waiting to find out whether they will be able to access ESAs in the coming school year, all eyes are on the Silver State and its legal system.

What Will Happen Next

After the Nevada Supreme Court hears oral arguments for and against the Nevada ESA, the court will decide whether Nevada’s ESA law violates the Nevada constitution. Possible outcomes include the following:

1. Overturn the lower court preliminary injunction in Lopez, dismiss the case, and affirm the lower court decision in Duncan—finding that Nevada’s ESA does NOT violate their constitution.
   If this is the result, families who have already applied for ESAs will be able to access funding shortly after the court’s decision. Nevada State Treasurer Dan Schwartz has assured families that his office, which administers the program, will be ready to act within about three weeks after the court rules. Another open enrollment period for ESAs will begin August
2. Either or both cases could be dismissed on standing. Standing, a legal term, simply means that a person must show that they have been, or will be, harmed in some way if the law is allowed to continue. If you cannot demonstrate harm, you do not have standing to bring a lawsuit. This is a rather complex legal issue, but the most important thing to know is that the court could say that none of the plaintiffs have the right to sue to stop ESAs in Nevada.
3. The court could rule in favor of one case and reject the other one. If the court finds ESAs to be unconstitutional in either case, the ESA program will not survive—unless . . .
4. If the court finds a particular section of the ESA law to be unconstitutional, but it’s something that could be changed without negatively affecting the program, then the ESA law would be unconstitutional unless and until the legislature fixes the problem identified by the court.

There is a lot at stake on July 29. Families in Nevada and in states across the country are watching to see whether the Nevada Supreme Court will give a green light to ESAs or whether the Court will shut down the best, most promising education advancement Nevada and the rest of the country have ever seen.

Nevada’s attorney general made the case clearly in his reply brief in Duncan, in which he argues that the real controversy is whether Nevada will be forced to continue the status quo in education, which finds children woefully under-educated, or whether Nevada will be free to offer children a real, meaningful, opportunity to learn and succeed.

Nevada children deserve this opportunity. Educational choice is both constitutional and effective, as other courts and states have shown us. We’re cheering for you, Nevada.

UPDATE – Sept. 6, 2016

The Nevada Supreme Court heard this case on July 29, 2016. The court has yet to issue a ruling in this case.

UPDATE – Sept. 29, 2016

The Nevada Supreme Court issued its consolidated ruling in the Duncan v. State of Nevada and Lopez v. Schwartz cases today. The court upheld the constitutionality of the state’s nearly universal ESA program, but called for a new funding source. The program is still unable to operate for the thousands of student applicants.

EdChoice President and CEO Robert Enlow issued this statement in response to the ruling:

“This is a big win for thousands of Nevada families who are clamoring for schooling options to make sure their kids have an opportunity to succeed in life. The Nevada Supreme Court ruled the state’s nearly universal ESA program constitutional on almost every front. This landmark ruling affirms the legality of the program and denies challenges based on the type of schooling families might choose for their students. 

“The Court also ruled that the Legislature must find an alternate funding source for the program, which means these families, who have been waiting for more than nine months, will have to wait a little longer before they can use these accounts to help their children.

“We encourage the Nevada Legislature and Governor to move quickly to consider an alternate funding stream for the ESA program so that the more than 8,000 Nevada students waiting to use these accounts can do so as soon as possible.”

Read a copy of the court’s official opinion here.

UPDATE – Nov. 8, 2016

In light of the Nevada Supreme Court’s Sept. 29 ruling that the legislature did not adequately appropriate funding for their best-in-the-nation education savings account (ESA) program, Attorney General Adam Laxalt, State Treasurer Dan Schwartz, Sen. Scott Hammond, state legislators, numerous state and community leaders and hundreds of parents urged Gov. Brian Sandoval to include ESA funding in the October special session called to enable the building of an NFL stadium and expansive convention center in Las Vegas. Gov. Sandoval declined their request citing uncertainties with the constitutionality of funding alternatives. However, the governor did ask Sen. Hammond to lead a small working group dedicated to creating a new funding solution for Nevada’s ESA. The ESA funding solution the committee develops will be presented for inclusion in Gov. Sandoval’s final budget recommendations for the legislature’s 2017 general session.”

Check back to this post regularly, or follow us on Twitter @edchoice for updates in real time.