No.

304P14 TENTH DISTRICT

SUPREME COURT OF NORTH CAROLINA
*************************************************

ALICE HART, et al.

Plaintiffs-Appellees,

v.

STATE OF NORTH CAROLINA, et al.

Defendants-Appellants, and

CYNTHIA PERRY, et al.

Defendants-Intervenors-Appellants.
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From Wake County
No. 13-CVS-16771


REV. ROBERT RICHARDSON, III, et al.

Plaintiffs-Appellees,

v.

STATE OF NORTH CAROLINA, et al.

Defendants-Appellants, and

CYNTHIA PERRY, et al.

Defendants-Intervenors-Appellants.
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From Wake County
No. 13-CVS-16484


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PAINTIFFS OINT ESPONSE TO INTEENOS
OTION FO TEPOA STA
*************************************************


- i -

INDEX
TABLE OF CASES AND AUTHORITIES ............................. ii
STATEMENT OF THE FACTS ............................................... 2
ARGUMENT ............................................................................. 7
CONCLUSION ....................................................................... 12
VERIFICATION ..................................................................... 14
CERTIFICATE OF SERVICE ................................................ 15
APPENDIX:
Letter from Kelley to Tillis and Berger,
31 March 2014 ............................................... App. pp. 1-2

Exhibit 1 to Affidavit of J oanna King ............... App. pp. 3

Exhibit 3 to Affidavit of Michael Ward ............ App. pp. 4

Affidavit of Elizabeth V. McDuffie ............... App. pp. 5-8

Exhibit 3 to J oint Motion by Richardson
and Hart Plaintiffs for Modification of
Scheduling Order .............................................. App. pp. 9



- ii -


TAE OF CASES AND ATOITIES


C P

N.C. Const. Art. IX, 6 ............................................................ 11

1868 Const. Art. IX, 4 ........................................................... 11



S

Current Operations and Capital Improvements Appropriations
Act of 2013, 2013 Session Law 360, 8.29 .............................. 2

N.C. Gen. Stat. 115C-562.7(a) .............................................. 10

Session Law 2014-100, 8.25(e) ............................................. 10




N.C. R. App. P. 23 ...................................................................... 8

N.C. R. Civ. P. 58 ....................................................................... 8




No. 304P14 TENTH DISTRICT

SUPREME COURT OF NORTH CAROLINA
*************************************************

ALICE HART, et al.

Plaintiffs-Appellees,

v.

STATE OF NORTH CAROLINA, et al.

Defendants-Appellants, and

CYNTHIA PERRY, et al.

Defendants-Intervenors-Appellants.
)
)
)
)
)
)
)
)
)
)
)
)
)




From Wake County
No. 13-CVS-16771


REV. ROBERT RICHARDSON, III, et al.

Plaintiffs-Appellees,

v.

STATE OF NORTH CAROLINA, et al.

Defendants-Appellants, and

CYNTHIA PERRY, et al.

Defendants-Intervenors-Appellants.
)
)
)
)
)
)
)
)
)
)
)
)
)
)




From Wake County
No. 13-CVS-16484


*************************************************
PAINTIFFS OINT ESPONSE TO INTEENOS
OTION FO TEPOA STA
*************************************************

- 2 -

The Hart plaintiffs and the Richardson plaintiffs (collectively, the
plaintiffs) submit the following joint response to defendant-intervenors
Emergency Motion for Temporary Stay, filed on 25 August 2014. Plaintiffs will
file a response to intervenors Petition for Supersedeas by no later than 5:00 p.m.
on 28 August 2014.

STATEENT OF TE FACTS
In 2013, the General Assembly enacted legislation providing taxpayer-
funded vouchers for students to attend private elementary and secondary schools.
Current Operations and Capital Improvements Appropriations Act of 2013, 2013
Session Law 360, 8.29 (the Voucher Legislation). In December 2013, the Hart
plaintiffs and the Richardson plaintiffs filed separate actions in Wake County
Superior Court asserting that the Voucher Legislation violates several provisions of
the North Carolina Constitution (Hart v. State, 13-CVS-16771, and Richardson v.
State, 13-CVS-16484, respectively).
On 13 J anuary 2014, plaintiffs filed motions for preliminary injunction. On
21 J anuary 2014, in response to a joint request by all parties, Senior Resident
Superior Court J udge Donald W. Stephens appointed J udge Robert H. Hobgood to
preside over all proceedings in both cases, pursuant to Local Rule 2.2. On 30
J anuary 2014, two parents applying for vouchers, Cynthia Perry and Gennell Curry
- 3 -

(the parent intervenors), filed a motion to intervene as defendants, which the trial
court granted.
On 28 February 2014, after full briefing and argument by all parties, J udge
Hobgood entered orders granting plaintiffs motions for preliminary injunction and
enjoined all implementation of the voucher program. At this point, the applicant
lottery had not yet been conducted and no voucher recipients had been selected.
On 3 March 2014, the parent intervenors but not defendants State of North
Carolina, State Education Assistance Authority, and State Board of Education (the
State defendants) filed a motion to stay the preliminary injunction pending
appeal. J udge Hobgood denied the motion to stay on 12 March 2014. On 17
March 2014, the parent intervenors but not the State defendants filed a notice
of appeal of the orders granting the preliminary injunction.
In a letter to Speaker of the House of Representatives Thom Tillis and
President Pro Tempore of the Senate Phil Berger dated March 31, 2014, Chief
Deputy Attorney General Grayson G. Kelley explained why the Attorney
Generals Office elected not to appeal the preliminary injunction orders that the
trial court issued on 28 February 2014:
There are reporting and information exchange requirements that
impose responsibilities on the Authority, the Department of Public
Instruction and schools accepting students receiving scholarship
grants. These are substantial responsibilities involving personnel time
- 4 -

and costs that may be wasted should the courts ultimately determine
the legislation to be unconstitutional.







For these reasons, we concluded that the more prudent course would
be to forgo challenging the preliminary injunctions and move forward
to defend the lawsuits on the merits.

Letter from Kelley to Tillis and Berger, 31 March 2014 (emphasis added)
(Appendix (App.) pp. 1-2).
On appeal, the parent intervenors moved the Court of Appeals for a
temporary stay of the preliminary injunction and petitioned for a writ of
supersedeas. The Court of Appeals denied the motion on 19 March 2014 and
denied the petition on 2 April 2014.
The parent intervenors filed a petition for writ of supersedeas in this Court
and a motion for temporary stay of the preliminary injunction. Six weeks later, the
Court granted the intervenors requests on 14 May 2014 in one-line orders without
addressing the merits of the case.
The parties continued proceedings in the trial court. In response to a joint
request from all parties, J udge Hobgood entered a Scheduling Order on 9 J une
2014, setting a 22 August 2014 date for hearing cross motions for summary
- 5 -

judgment.
1
All parties requested a compressed briefing schedule for the express
purpose of facilitating consideration of the motions before the beginning of the
school year. On 23 J une 2014, Speaker Tillis and President Pro Tempore Berger
moved to intervene as defendants, which the trial court granted.
From the date these actions were filed in December 2013 through the date
the trial court entered the Scheduling Order on 9 J une 2014, the website of
defendant State Education Assistance Authority (SEAA) consistently stated that
S was the date on which Funds disbursed to nonpublic schools
for the fall semester. Exhibit 1 to Affidavit of J oanna King (App. p. 3); Exhibit 3
to Affidavit of Michael Ward (App. p. 4). On 20 February 2014, the State
defendants filed the affidavit of Elizabeth V. McDuffie, the SEAA director
responsible for implementation of the voucher program. McDuffie attested: The
Authority anticipates that it will begin disbursing funds for the Opportunity
Scholarship Grants Program on S . Affidavit of Elizabeth V.
McDuffie, 12 (App. p. 7).
After the trial court entered its scheduling order, on 20 J une 2014, the SEAA
amended the timeline on its website, changing the first date for funds delivered to
nonpublic schools to A , one week before the date set for the

1
To accommodate his schedule, the court later changed the hearing date to 19
August 2014.
- 6 -

summary judgment hearing. Exhibit 3 to Plaintiffs J oint Motion for Modification
of Scheduling Order (App. p. 9). The State defendants have never explained why
it was necessary to accelerate the date for disbursement of voucher funds.
After engaging in discovery, all parties filed motions for summary judgment
on 7 J uly 2014. In open court on 21 August 2014, J udge Hobgood orally granted
plaintiffs motions for summary judgment, denied defendants summary judgment
motions, and entered a permanent injunction barring the State defendants from any
further implementation of the voucher program, effective 10:23 a.m. As of the
issuance of the trial courts ruling, no State funds for vouchers had been disbursed.
No parent or private school has received any voucher funds.
At the conclusion of the hearing on August 21, J udge Hobgood directed
plaintiffs counsel to submit a proposed order. On 25 August 2014 at 3:00 p.m.,
plaintiffs counsel sent a 4-page proposed order to defendants counsel, requesting
their comments by noon today (August 26). Plaintiffs will submit a proposed
order to J udge Hobgood this afternoon..
Immediately after the trial court issued its ruling, parent intervenors moved
the court to stay the injunction pending appeal. The court denied that motion. On
22 August 2014, defendants filed a notice of appeal from the order and final
judgment rendered on 21 August 2014.
- 7 -

On August 22, defendants also moved the Court of Appeals for a temporary
stay of the permanent injunction and petitioned for a writ of supersedeas. Because
the appeal was premature before the entry of a written order, the Court of Appeals
denied the requests on 25 August 2014 without prejudice to re-filing upon entry of
the trial courts order. Rather than re-file with the Court of Appeals, intervenors
but not the State defendants requested from this Court a temporary stay and writ
of supersedeas.
AENT

This response is limited to intervenors Motion for Temporary Stay, in
which they request an order temporarily staying enforcement of the permanent
injunction until this Court determines whether it will issue a writ of supersedeas.
(Defs. Mot. at 9.) Plaintiffs will file a response to intervenors Petition for
Supersedeas by no later than 5:00 p.m. on 28 August 2014. In that response,
plaintiffs will explain why they will succeed on appeal and why they will be
irreparably harmed if taxpayer funds are expended pursuant to the Voucher
Legislation during the appeal.
Intervenors ask this Court to enter a temporary stay even before they have
filed a proper notice of appeal,
2
before the Court of Appeals has ruled on their

2
Defendants improperly filed a notice of appeal before a final judgment was
- 8 -

supersedeas petition,
3
and before plaintiffs have had the opportunity to address
their petition for supersedeas. They implore the Court to put millions of taxpayer
dollars at risk by turning on the spigot of public funds almost a month before the
SEAAs long-planned disbursement schedule, nullifying a decision by a senior trial
judge entered after months of discovery and consideration of hundreds of pages of
evidence and briefs. Given the extraordinary relief requested by intervenors, they
bear the burden of producing clear, unequivocal evidence that they will suffer
imminent harm if the trial courts injunction is not immediately stayed.
Intervenors have not and cannot meet this burden.
Intervenors have produced no evidence of any prejudice that would result if
this Court waits until plaintiffs response to the supersedeas petition before
deciding whether to grant the motion. They have failed to produce evidence of a
single student who would be required to withdraw from a private school if voucher
funds are not disbursed immediately. Moreover, even if some prospective voucher
recipients would be unable to attend a private school now, continued attendance at

entered by the trial court. See N.C. R. Civ. P. 58 (requiring entry of judgment to be
a document signed by the judge and filed with the clerk of court). No order has
been filed in the trial court.

3
Intervenors have not complied with Appellate Rule 23(a)(2) because the Court of
Appeals is required to decide a supersedeas petition before a party may bring the
petition before this Court. The Court of Appeals has not so decided here; it simply
deferred ruling until the trial court enters its order.
- 9 -

a free public school and receipt of an equal opportunity to obtain a sound basic
education, as required by the Constitution, is not a recognized form of harm.
No prejudice would result from following the ordinary appellate process.
The SEAA originally intended to disburse voucher funds in mid-September 2014.
All private schools enrolling voucher recipients presumably found the SEAAs
original disbursement schedule acceptable, and thus would have no reason to
remove a voucher recipient from its program if the trial courts injunction remains
in place for several more days. And all private schools have been aware that the
Voucher Legislation faces a constitutional challenge that could result in a halt to
the disbursement of voucher funds. Intervenors have produced no evidence
demonstrating why allowing the normal appellate process to proceed which
would permit a decision on the supersedeas petition well before the original
disbursement date would now result in imminent harm sufficient to justify the
extraordinary relief they seek from this Court.
Any possible prejudice from the timing of the trial courts injunction is due
to the parent intervenors decision to seek a stay of the preliminary injunction. The
trial court entered a preliminary injunction on 28 February 2014. While the
Attorney Generals Office was properly concerned about the consequences for
students, parents, schools, and taxpayers if the OSP were implemented before a
- 10 -

final judgment on the merits, and thus did not appeal the interlocutory order, the
intervenors had no such concerns. Any uncertainty due to imposition of the
permanent injunction on 21 August 2014 would have been avoided if the
preliminary injunction had been left in place.
Intervenors contend that the Courts prior ruling granting the request to stay
the preliminary injunction somehow determines the merits of these cases. (Defs.
Mot. at 5.) The Courts orders, however, did not decide the merits of the
constitutional claims or the propriety of staying the permanent injunction. Issuing
a stay of the preliminary injunction was simply a determination that the voucher
program should proceed until a final judgment on the merits, based on the evidence
obtained in discovery.
4
Now that the trial court has considered the evidence and
granted plaintiffs motions for summary judgment on all their constitutional
claims, a permanent injunction is necessary and proper.
This case raises profoundly important questions of constitutional law. Since
1868, when our Constitution first declared that state funds for education shall be

4
Plaintiffs lawsuits are based on multiple provisions of the State Constitution
Article I, Sections 15 and 19; Article V, Section 2; and Article IX, Sections 2, 5,
and 6. The trial courts preliminary injunction order was based solely on plaintiffs
claims under Article IX, Section 6. The General Assembly itself recognized that
the original legislation was constitutionally suspect and recently repealed the
provision (N.C. Gen. Stat. 115C-562.7(a)) that required deductions from public
school district funding to account for voucher awards, mooting one of plaintiffs
claims under Article IX, Section 6. Session Law 2014-100, 8.25(e).
- 11 -

faithfully appropriated to support a system of Free Public Schools and for no
other purposes or uses whatsoever, 1868 Const. Art. IX, 4,
5
the State has abided
by that command and prohibition. From 1868 until it enacted the Voucher
Legislation in 2013, the General Assembly complied with the public purpose
clause, and never appropriated taxpayer funds to unaccountable private schools.
J udge Hobgood, one of the most experienced and respected judges in North
Carolina, considered hundreds of pages of evidence and briefs, followed by three
and a half hours of oral argument. The only court to have fully explored and
decided these issues concluded that the Voucher Legislation violates the North
Carolina Constitution beyond a reasonable doubt. This Court should not nullify
the trial courts injunction without allowing the Court of Appeals to first consider
the issues. At the very least, this Court should not stay the injunction until it fully
considers the issues after receipt of plaintiffs prompt response to the supersedeas
petition.



5
Carrying forward the same prohibition, current Article IX, Section 6
provides that such funds shall be faithfully appropriated and used
exclusively for establishing and maintaining a uniform system of free public
schools.

- 12 -

CONCSION
For the foregoing reasons, plaintiffs respectfully request that defendants
motion for temporary stay be denied.

Respectfully submitted, this 26th day of August, 2014.


PATTERSON HARKAVY LLP

Electronically submitted
Burton Craige
NC Bar No. 9180
1312 Annapolis Dr., Suite 103
Raleigh, NC 27607
Tel: 919-755-1812
Fax: 919-942-5256
Email: bcraige@pathlaw.com

N.C. R. App. P. 33(b) Certification: I certify that all of the attorneys listed below
have authorized me to list their names on this document as if they had personally
signed it.

Narendra K. Ghosh
NC Bar No. 37649
PATTERSON HARKAVY LLP
100 Europa Dr., Suite 250
Chapel Hill, NC 27517
Tel: 919-942-5200
Fax: 919-942-5256
Email: nghosh@pathlaw.com

Christine Bischoff
NC Bar No. 41792
Carlene McNulty
Robert F. Orr
N.C. State Bar No. 6798
rorr@poyners.com
Edwin M. Speas, J r.
N.C. State Bar No. 4112
espeas@poynerspruill.com
Carrie V. McMillan
N.C. State Bar No. 46257
cmcmillan@poynerspruill.com
POYNER SPRUILL LLP
P.O. Box 1801
Raleigh, NC 27602-1801
- 13 -

NC Bar No. 12488
NORTH CAROLINA J USTICE CENTER
224 South Dawson Street
Raleigh, NC 27601
Tel: 919.856.3195
Tel: 919.856.2161
Fax: 919.856.2175
Email: christine@ncjustice.org
Email: carlene@ncjustice.org

Counsel for Hart Plaintiffs

Telephone: 919.783.6400
Facsimile: 919.783.1075

Counsel for all Richardson
Plaintiffs, except Chatham County
Board of Education, Nash-Rocky
Mount Board of Education, Board
of Trustees for Roanoke Rapids
Graded School District, and
Granville County Board of
Education

Deborah R. Stagner
N.C. State Bar No. 24543
dstagner@tharringtonsmith.com
Kenneth A. Soo
N.C. State Bar No. 16270
ksoo@tharringtonsmith.com
P.O. Box 1151
Raleigh, NC 27602
Telephone: 919.821.4711
Facsimile: 919.829.1583
Counsel for Chatham County
Board of Education, Nash-Rocky
Mount Board of Education, Board
of Trustees for Roanoke Rapids
Graded School District, and
Granville County Board of
Education





- 14 -
- 15 -

CETIFICATE OF SEICE

The undersigned counsel for the plaintiffs hereby certifies that a copy of
Plaintiffs Response to Motion for Temporary Stay was sent via first class mail,
postage prepaid, addressed as follows:

Lauren M. Clemmons
Special Deputy Attorney General
NORTH CAROLINA DEPARTMENT OF
J USTICE
P.O. Box 629
Raleigh, NC 27602-0629
Laura Crumpler
Special Deputy Attorney General
NORTH CAROLINA DEPARTMENT OF
J USTICE
114 W. Edenton Street
P.O. Box 629
Raleigh, NC 27602-0629
Melissa L. Trippe
Special Deputy Attorney General
NORTH CAROLINA DEPARTMENT OF
J USTICE
P.O. Box 629
Raleigh, NC 27602-0629
Tiffany Y. Lucas
Assistant Attorney General
NORTH CAROLINA DEPARTMENT OF
J USTICE
P.O. Box 629
Raleigh, NC 27602-0629
Attorneys for all State Defendants Attorneys for the North Carolina.
State Board of Education
Robert T. Numbers, II
WOMBLE CARLYLE SANDRIDGE & RICE
P.O. Box 831
Raleigh, NC 27602
Noah H. Huffstetler III
Stephen D. Martin
Nelson Mulls Riley & Scarborough
4140 Parklake Ave., Suite 200
Raleigh, NC 27612
Richard D. Komer
Rene Flaherty
INSTITUTE FOR J USTICE
901 N. Glebe Road, Suite 900
Arlington, VA 22203

Attorneys for Officer Intervenors
Attorneys for Parent Intervenors


This the 26th day of August, 2014.
Electronically submitted
Burton Craige
CONTENTS OF APPENDIX

Letter from Kelley to Tillis and Berger, 31 March 2014....App. pp. 1-2
Exhibit 1 to Affidavit of Joanna King..........App. p. 3
Exhibit 3 to Affidavit of Michael Ward...... App. p. 4
Affidavit of Elizabeth V. McDuffie ...App. pp. 5-8
Exhibit 3 to Joint Motion by Richardson and Hart
Plaintiffs for Modification of Scheduling Order...........App p. 9

















HC)Y C(J()PEH
i\TTC)RNEY GENEfV\L
VIA HAND DELIVERY
The Honorable Thom Tillis
Speaker of the House
State of North Carolina
Department of Justice
PO Box 629
Raleigh, Nortl1 Carolina
27602
March 31, 2014
North Carolina House of Representatives
16 W. Jones Street, Room 2304
Raleigh, North Carolina 27601-1096
The Honorable Phil Berger
President Pro Tempore
North Carolina Senate
16 W. Jones Street, Room 2008
Raleigh, North Carolina 27601-2808
Re: Richardson, et al. v. North Carolina
Hart, et al. v. North Carolina
Dear Speaker Tillis and President Pro Tempore Berger:
REPLY TO: Grayson G. Kelley
(919) 716-6400
FAX: (919) 716-0135
The Attorney General has asked me to respond to your letter dated March 28, 2014
expressing your views that an appeal should be taken from the preliminary injunctions
entered in the above referenced cases. We are mindful of the General Assembly's
interests and the importance of our duty to defend the constitutionality of enacted
legislation. For these reasons, litigation decisions in these cases have been made only
after careful consideration.
As you are aware, the Opportunity Scholarships established by Section 18.29(a) of
Session Law 2013-360 are required to be administered by the State Educational
Assistance Authority which is authorized to spend up to $400,000 annually for
administrative costs. The Authority is directed to award $1 O million in scholarships for the
2014-15 fiscal year through an application and lottery process. Rules and regulations are
required to be established for the lottery and for verification of applicant information. There
are reporting and information exchange requirements that impose responsibilities on the
Authority, the Department of Public Instruction and schools accepting students receiving
scholarship grants. These are substantial responsibilities involving personnel time and
Appendix Page 1
Honorable Thom Tillis
Honorable Phil Berger
March 31, 2014
Page 2
costs that may be wasted should the courts ultimately determine the legislation to be
unconstitutional.
We are also concerned about the potential ramifications for parents, students and
schools ifthe legislation is struck down. $10 million expended through an unconstitutional
program could raise significant issues, including whether scholarship funds should be
repaid.
For these reasons, we concluded the more prudent course to follow in this litigation
would be to forgo challenging the preliminary injunctions and move forward to defend the
lawsuits on the merits. If the courts ultimately uphold the legislation the program can move
forward. While your concern about delay is understandable, we believe the consequences
if the law is not upheld should be considered.
Our attorneys will continue to defend these lawsuits to the best of their ability
through our Special Litigation Division and will keep you advised as the cases move
through the courts.
Appendix Page 2
Appendix Page 3
Opportunity Scholarship Program Timeline (subject to change) 1/13/2014
January 10, 2014
January 21, 2014
February 1, 2014
February 25, 2014
March 3, 2014
March 10, 2014
March 18, 2014
May 1, 2014
March-June
July 15, 2014
July 22, 2014
Nonpublic school registration opens
Nonpublic school training webinar (recorded for future viewing)
Student application opens
Student application priority deadline
Selection notifi cations to applicants
Notification of lottery results to nonpublic schools
Program Rules published on the Scholarship webpage
Target date for all participating schools to complete registration
Verification of information for selected applicants
Deadline for applicants to inform SEAA of the nonpublic school in which
students will enroll (if unknown at time of application)
Nonpublic schools must report the annual tuition/fees expense for each
recipient attending their schools
August 1, 2014 Fall Semester parent endorsement forms provided to each school
August 21, 2014 Parent endorsement forms returned to SEAA for September disbursement
September 19, 2014 Funds disbursed to nonpublic schools for the fall semester
December 1, 2014 Spring semester parent endorsement forms provided to each school
December 19, 2014 Spring semester parent endorsement forms returned to SEAA
January 16, 2015 Funds disbursed to the nonpublic schools for the spring semester
!f
. . ->t.. .
Appendix Page 4
Appendix Page 5
Appendix Page 6
Appendix Page 7
Appendix Page 8
Appendix Page 9