Supreme Court Holds Funding Entitlement Regulations Did Not Impose State Mandate

CATEGORY: Public Education Matters
CLIENT TYPE: Public Education
DATE: Aug 30, 2022

In Coast Community College District v. Commission on State Mandates, several California community college districts sought reimbursement for costs incurred in complying with regulations that specified various conditions the districts must satisfy to avoid the possibility of having their state aid withheld.  The conditions describe standards governing core areas of community college administration, including matriculation requirements, hiring procedures, and curriculum selection. The districts filed a claim with the Commission on State Mandates (Commission), a quasi-judicial body that adjudicates whether a state mandate exists.  The Commission rejected the districts’ claims, concluding that the districts failed to show they were legally compelled to comply with the regulations because there was no provision creating a mandatory duty that they do so.  Instead, noncompliance raised the possibility that some portion of the district’s funding would be withheld.

The trial court affirmed the Commission’s findings and found that there was no practical compulsion either because the districts cited no evidence establishing they were unable to function without state funding, or that they otherwise lacked any choice but to comply with the conditions.  The Court of Appeal reversed, concluding that the districts were legally compelled to comply with the regulations because those regulations “apply to the underlying core functions of the community colleges, functions compelled by state law.”  The Court of Appeal also found that the evidence in the record demonstrated that districts rely on state aid to function, leaving them no choice but to comply with the regulations.

The Supreme Court of California agreed with the Commission and reversed.  Contrary to the Court of Appeal’s interpretation, the California Supreme Court concluded that the districts were not legally compelled to comply with the regulations.  The fact that the standards set forth in the regulations relating to the districts’ core functions does not in itself establish that the districts have a mandatory legal obligation to adopt those standards.  The regulations also gave the chancellor the discretion on what remedial measures to impose on non-compliant districts, ranging from no action to reducing or withholding some or all of a district’s funding.  In light of this, the Court concluded the districts are not legally obligated to follow the regulations.  Rather, the districts faced the risk of potentially severe financial consequences if they chose not to do so.  The Court clarified that inducing compliance is not the same as obligating compliance.  The Court of Appeal did not address whether there was “practical” compulsion, meaning the districts had no “true choice” but to comply.  Therefore, the Court left the issue for the Court of Appeal to address whether the districts may be entitled to reimbursement under that theory.

Coast Community College Dist. v. Commission on State Mandates (2022) No. S262663, WL 3349232.


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