In Electronic Classroom of Tomorrow v. Ohio Department of Education, the Ohio Supreme Court held that public funding of Ohio’s public charter “e-schools” is based on each e-school student’s actual participation in the e-school’s curriculum, rather than based solely on the e-school’s enrollment count.

The Court split 4-2 in the August 8, 2018 decision.

Ohio’s e-school students do not attend a “brick-and-mortar” building for classes, but rather have a computer, usually in their homes, which they use to log into the school’s online platform.

Ohio statutes provide that the Ohio Department of Education (“the Department”) must fund all charter schools (Ohio law calls them “community schools”), including e-schools, “on a full-time equivalency basis, for each student enrolled.”  R.C. 3314.08(C)(1).  Another section of that statute—the key section at issue in the case—explains what full-time equivalency, or “FTE,” means:

The department shall determine each community school student’s percentage of full-time equivalency based on the percentage of learning opportunities offered by the community school to that student, reported either as number of hours or number of days, is of the total learning opportunities offered by the community school to a student who attends for the school’s entire school year.  However, no [e-school] shall be credited for any time a student spends participating in learning opportunities beyond ten hours within any period of twenty-four consecutive hours.

R.C. 3314.08(H)(3).

The Electronic Classroom of Tomorrow (known as “ECOT”) was Ohio’s largest e-school.  In the 2015-2016 school year, more than 15,000 students were enrolled at ECOT, causing ECOT to claim more than $100 million in public funds.

The Department routinely reviews charter schools’ (including e-schools) funding, and when it finds that a school has been overfunded, it exercises its right to reduce funding on a going-forward basis in order to “claw back” any monies due the department.  Prior to 2016, the Department did not consistently check documentation regarding student participation at online schools as part of the funding review process.  In 2016, the Department started looking at participation records based on concerns that had arisen regarding participation at certain other community schools that operated using a correspondence model (i.e., mailing school work to the students) and online model.  Funding reviews for community schools typically occur on a five-year schedule, and in 2016, the Department was scheduled to review ECOT’s public funding for the 2015-2016 school year.

Before that review occurred, ECOT filed suit, seeking injunctive relief prohibiting the Department from considering student participation data in determining funding.  The trial court denied injunctive relief, and ultimately the Ohio Supreme Court affirmed.

By the plain language of the funding statute, “[a]n e-school cannot be credited for any time a student spends participating in learning opportunities beyond 10 hours within a 24-consecutive-hour period,” Justice Patrick Fischer wrote for the Court.  “By stating that the maximum daily credit for each student is ten hours, it is apparent that the legislature intended that an e-school will be credited for a student’s participation for less than ten hours in a day. This calculation can be made only by referring to records that contain evidence of the duration of a student’s participation in learning opportunities.”

Justice Fischer added that another statute confirms this result.  R.C. 3314.27 provides that e-schools “shall keep an accurate record of each student’s participation in learning opportunities each day,” and the record must be kept in a manner that can easily be submitted to the Department.

Justices Terrence O’Donnell and Sharon Kennedy wrote separate dissents.

Justice O’Donnell focused on the funding statute’s use of the phrase “learning opportunities offered by the community school,” which he interpreted to mean that funding should be based on enrollment, not participation.

“If the legislature had intended to condition funding on the duration of a student’s participation in the learning opportunities offered by a community school, it could have expressed that intent by using a phrase such as ‘based on the percentage of learning opportunities participated in by that student,’ but it did not do so,” Justice O’Donnell wrote.

Justice Kennedy added that the majority’s analysis, based on the ten-hour-per-day cap that the majority found indicative of the relevance of actual participation, was “dubious at best.”

“It is true that an e-school will not receive credit for any time that a student participates in learning activities for more than ten hours a day, but that does not mean that an e-school will be funded only for the amount of time that the student chooses to participate in the e-school’s online educational platform,” Justice Kennedy wrote.

But the majority rejected these arguments, noting that interpreting the funding statute to ignore student participation would render portions of the statute meaningless.



Douglas R. Cole, Erik J. Clark, and Carrie M. Lymanstall, of Organ Cole LLP, were appointed as special counsel to the Ohio Attorney General to represent the Ohio Department of Education in this case.  Organ Cole is a litigation boutique focusing on business litigation, with significant experience in the United States Supreme Court, the Ohio Supreme Court, and several federal circuit courts, as well as in trial courts across the country.