Monarch Acad. Balt. Campus, Inc. v. Balt. City Bd. of Sch. Comm'rs
Getty, J. This Court has twice addressed appeals in which public charter schools alleged that a local school board failed to meet the requirement in Maryland Code, Education Article ("ED") § 9-109 to provide the charter schools with funding that is "commensurate with the amount disbursed to other public schools in the local jurisdiction." See Frederick Classical Charter Sch., Inc. v. Frederick Cty. Bd. of Educ. , 454 Md. 330 , 164 A.3d 285 (2017), reconsideration denied (Aug. 24, 2017); Balt. City Bd. of Sch. Comm'rs v. City Neighbors Charter Sch. , 400 Md. 324 , 929 A.2d 113 (2007).
However, in both of those cases, charter schools initially challenged a local school board's proposed annual funding allocation in an administrative adjudicatory proceeding before the State Board of Education ("the State Board"), and the dispute came before the courts only when one of the parties subsequently filed a petition for judicial review of the State Board's decision. In contrast, the Petitioners in the instant case, thirteen operators of charter schools in Baltimore City (the "Charter School Operators"), 1 sought to obtain relief in a similar commensurate funding dispute by filing breach of contract complaints against the Respondent, the Baltimore City Board of School Commissioners (the "City Board"), directly in the Circuit Court for Baltimore City without first seeking review before the State Board. The contracts at issue all contained a provision in which the City Board agreed to "allocate Commensurate Funding to the [Charter] School Operator," and to provide information as to its own finances and how it had reached a specific per-pupil commensurate funding figure for the charter school. The Charter School Operators contended that the City Board breached those contractual requirements by not providing information as to its finances and commensurate funding calculations and by failing to provide the correct amount of commensurate funding for the 2015-16 school year.
After the cases were consolidated before the circuit court, the City Board moved to dismiss the case or stay the proceedings on the grounds that the State Board had primary jurisdiction over commensurate funding determinations. After holding a hearing, Judge Julie Rubin concluded that the State Board had "provided sufficient guidance" regarding the meaning of commensurate funding so that the circuit court was "no longer obliged to punt the issue to the expertise of the administrative body." Therefore, she declined to invoke the primary jurisdiction doctrine and denied the motion to dismiss. On the same day as it filed its motion to dismiss before the circuit court, the City Board filed a petition for declaratory relief before the State Board, requesting that the State Board declare that its funding formula complies with ED § 9-109 and has resulted in commensurate funding. After Judge Rubin's order, the State Board dismissed the petition, noting that the circuit court had "asserted its jurisdiction." Thereafter, the City Board filed a counterclaim against the Charter School Operators before the circuit court.
The Charter School Operators moved to dismiss the counterclaim, and a hearing on their motion to dismiss was scheduled before the circuit court. At that hearing, Judge Alfred Nance questioned counsel as to the procedural background of the case, instructing them to "[t]ell me what happened that causes you to rightfully be in my courtroom." After a brief recess and off-the-record discussion in chambers, counsel for the City Board made an oral motion to dismiss the Charter School Operators' complaints. Judge Nance, after hearing arguments for and against the motion, determined that "in lieu of" granting the motion he would issue an order staying proceedings in the circuit court "pending administrative review of the parties' dispute by the State Board of Education." After the Stay Order ruling, the parties moved to proceed on separate procedural tracks. The Charter School Operators appealed from the circuit court's Stay Order to the Court of Special Appeals, while the City Board once again filed a petition for declaratory relief before the State Board.
The State Board once again dismissed the City Board's petition, stating that "the case remain[ed] within the jurisdictional purview of the courts." Subsequently, in a reported opinion, the Court of Special Appeals dismissed the Charter School Operators' appeal after concluding that the circuit court's Stay Order was not an appealable order. Monarch Acad. Balt. Campus, Inc. v. Balt.
City Bd. of Sch. Commissioners , 231 Md. App. 594 , 619, 153 A.3d 859 (2017). The Charter School Operators filed a petition for writ of certiorari from that dismissal, which we granted on April 4, 2017. Monarch Acad.
Balt. Campus v. Balt. City Bd. of Sch. Comm'rs. , 452 Md. 523 , 157 A.3d 809 (2017).
On appeal to this Court, the Charter School Operators contend that the circuit court's Stay Order was a final and appealable judgment, and therefore urge us to hold that the Court of Special Appeals erred in dismissing the appeal. The Charter School Operators further assert that the State Board does not have primary jurisdiction over their breach of contract claims, and therefore the circuit court erred in entering the Stay Order. When a court determines that a party's claim is within the authority of an administrative agency under the doctrine of primary jurisdiction, it is ordinarily entirely appropriate under the primary jurisdiction doctrine to enter a stay to permit that party to bring his or her claim before the appropriate agency. Then, after the agency has had the opportunity to evaluate and rule on the claim, a party may ordinarily seek judicial review before the circuit court.
In this appeal, however, we are confronted with a rare and unique set of circumstances in which there is a strong likelihood that the Charter School Operators would not be able to obtain an administrative ruling on their breach of contract claim. Here, the State Board is the only agency to which the Charter School Operators can bring their claim at the juncture at which the Stay Order was entered, and they can only do so in the form of a petition for declaratory relief. However, the agency has twice denied petitions for declaratory relief in this case, citing in the first denial the lack of any factual record upon which it could review and issue a declaratory judgment. Despite the arguments raised by the City Board in this appeal, there is no guarantee that the State Board would grant a third petition for declaratory relief under the circumstances present here.
The State Board's prior declaratory rulings and this Court's precedent set forth a detailed and highly fact specific inquiry for charter school funding disputes. Of great significance to our decision, the contract between parties requires certain financial information to be disclosed by the City Board to the Charter School Operators. However, the Charter School Operators allege that they did not receive that information. If true, the Charter School Operators simply may not have enough information to successfully frame a declaratory petition to the State Board, or to obtain a declaratory order from the State Board that fully resolves the charter school funding issues raised in their Complaint.
And, although there is the potential for a limited discovery process before the State Board, it is discretionary and even if employed may not be sufficient to address this concern. Finally, the Stay Order was entered in a rushed and improper manner, before there was any opportunity for discovery as to the information necessary for the resolution of the charter school funding claims, and without clear guidance to the State Board as to exactly what issues needed to be resolved before the matter could resume before the circuit court. Thus, the rushed and non-specific Stay Order at issue here further exacerbated the difficulties facing the Charter School Operators in pursuing an administrative remedy and eventually being able to return to court for a judicial resolution of their claim. Therefore, under the above-described unique circumstances of this case, we shall hold that the Stay Order was a final and appealable judgment and therefore shall reverse the judgment of the Court of Special Appeals dismissing the appeal.
We shall also hold that the circuit court abused its discretion in staying the proceeding in order for the parties to seek administrative review because the court did not first allow for discovery and did not provide guidance as to how and when the case would resume in circuit court. However, we shall also hold that the State Board retains primary jurisdiction as to the underlying commensurate funding issues in dispute and that, after discovery before the circuit court is concluded, it will be appropriate for the circuit court to enter a more definite order staying proceedings for review of those issues before the State Board. BACKGROUND A. Primary Jurisdiction The doctrine of primary jurisdiction derives from "the relationship between legislatively created administrative remedies and alternative statutory, common law or equitable judicial remedies." Prince George's Cty. v. Ray's Used Cars , 398 Md. 632 , 644, 922 A.2d 495 (2007). We have explained the relationship between those remedies as follows: [W]henever the [General Assembly] provides an administrative and judicial review remedy to resolve a particular matter or matters, the relationship between that administrative remedy and a possible alternative judicial remedy will ordinarily fall into one of three categories: [T]he administrative remedy may be exclusive , thus precluding any resort to an alternative remedy.
Under this scenario, there simply is no alternative cause of action for matters covered by the statutory administrative remedy. [T]he administrative remedy may be primary but not exclusive. In this situation, a claimant must invoke and exhaust the administrative remedy, and seek judicial review of an adverse administrative decision, before a court can properly adjudicate the merits of the alternative judicial remedy. [T]he administrative remedy and the alternative judicial remedy may be fully concurrent , with neither remedy being primary, and the plaintiff at his or her option may pursue the judicial remedy without the necessity of invoking and exhausting the administrative remedy. United Ins. Co. of Am. v. Maryland Ins.
Admin. , 450 Md. 1 , 14-15, 144 A.3d 1230 (2016) (quoting Ray's Used Cars , 398 Md. at 644 , 922 A.2d 495 (quoting Zappone v. Liberty Life Ins. Co. , 349 Md. 45 , 60-61, 706 A.2d 1060 (1998) )) (emphasis in original) (footnote omitted). When a party's claim(s) could properly be brought before either a court or an administrative agency, the agency remedy will generally be deemed primary "whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body[.]" Arroyo v. Bd. of Educ. of Howard Cty. , 381 Md. 646 , 658, 851 A.2d 576 (2004) (quoting United States v. Western Pacific R.R. Co. , 352 U.S. 59 , 63-64, 77 S.Ct. 161 , 1 L.Ed.2d 126 (1956) ). This Court has held that "[n]o fixed formula exists for applying the doctrine of primary jurisdiction[,]" and that "[i]n every case the question is whether the reasons for the existence of the doctrine are present and whether the purposes it serves will be aided by its application in the particular litigation." Id. at 658-59, 851 A.2d 576 (quoting Western Pacific R.R. Co. , 352 U.S. at 63 -64 , 77 S.Ct. 161 ).
However, the Court has recognized that "[i]n the absence of specific statutory language indicating the type of administrative remedy, there is a rebuttable presumption that an administrative remedy was intended to be primary." United Ins. , 450 Md. at 15 , 144 A.3d 1230 (citing Zappone , 349 Md. at 63 , 706 A.2d 1060 ). Of significance to this appeal, even when a court ultimately determines that one or more claims filed before it are properly within the primary jurisdiction of an administrative agency, that does not mean that the circuit court is divested of jurisdiction over the claim(s), or necessitates the dismissal of the action before the court. Instead, the doctrine only applies to preclude the court from adjudicating the claim(s) "until a final administrative determination is made ." Arroyo , 381 Md. at 660 , 851 A.2d 576 (emphasis in original). Thus, the appropriate action for a trial court in such an instance is generally not to dismiss the claim(s), but rather to "stay further proceedings regarding the judicial complaint" until the party can obtain a final administrative determination as to the issue in dispute.
Carter v. Huntington Title & Escrow, LLC , 420 Md. 605 , 24 A.3d 722 (2011) ; see also Maryland Reclamation Assocs., Inc. v. Harford Cty., Maryland , 382 Md. 348 , 367, 855 A.2d 351 (2004). B. Authority of the State Board of Education The General Assembly has vested the State Board of Education with expansive authority to interpret the provisions of the Education Article. Pursuant to ED § 2-205, the State Board has the authority to: "[d]etermine the elementary and secondary educational policies of this State," ED § 2-205(b) ; "[a]dopt bylaws, rules, and regulations for the administration of the public schools" which "have the force of law when adopted and published," ED § 2-205(c) ; "explain the true intent and meaning" of the Education Article and its own regulations and "decide all controversies and disputes" regarding those provisions, ED § 2-205(e) ; and, "exercise general control and supervision over the public schools and educational interests of this State," ED § 2-205(g). We have explained that the State Board's authority under section 2-205"constitutes a visitatorial power of such comprehensive character as to invest the State Board with the last word on any matter concerning education policy or the administration of the system of public education." Frederick Classical , 454 Md. at 370 , 164 A.3d 285 (quoting City Neighbors , 400 Md. at 342 -43 , 929 A.2d 113 ).
We have held that the State Board's visitatorial power "is not unlimited," and it is the courts that ultimately must decide purely legal questions. Id. at 371 , 164 A.3d 285 (quoting City Neighbors , 400 Md. at 343 , 929 A.2d 113 ). But, " 'the broad statutory mandate given to [the State Board] requires that special deference be given to its interpretation of statutes that it administers,' ... over and above that generally afforded to other administrative agencies[.]" Id. at 370 , 164 A.3d 285 (quoting City Neighbors , 400 Md. at 343 , 929 A.2d 113 ). C. Administrative Remedies Before the State Board At the local level, the twenty-three Maryland counties and Baltimore City each have a school board that has oversight and control of education matters in its jurisdiction.
Each local school system also has a superintendent-or, in Baltimore City, a Chief Executive Officer-who is the administrator of that system and is responsible for enforcing the rules and policies of both the local school board and the State Board, and for implementing State law. See ED §§ 4-101, 4-102, 4-108. A county superintendent's decision may be appealed to a local school board within thirty days. ED § 4-205(3).
And, if a party is dissatisfied with the local school board's decision, that party may appeal to the State Board within thirty days from the decision of the local school board. Id. ; see also Md. Code Regs. ("COMAR") 13A.01.05.02(A)-(C) (describing the required contents of an appeal to the State Board, and a deadline to file the appeal "within 30 calendar days of the decision of the local board"). However, and of great significance to the present dispute, there is also another process through which parties may ask the State Board to resolve a dispute as to the meaning and proper application of State educational law or State Board rules, regulations, or policies.
If there is an "existing case or controversy" between an aggrieved party and a local school board, either party-the aggrieved party or the local school board-may at any time file "a petition for declaratory ruling by the State Board on the interpretation of a public school law or regulation of the State Board that is material to [that] existing case or controversy." COMAR 13A.01.05.02(D). D. Charter Schools and Commensurate Funding Charter schools are a statutorily created alternative to traditional public schools that are "in the nature of semi-autonomous public schools," operating "under a contract with a State or local school board." City Neighbors , 400 Md. at 328 , 929 A.2d 113 . "The contract, or charter [agreement], defines how the school will be structured, staffed, managed, and funded, what programs will be offered, and how the school will operate and account for its activities." Id. In Maryland, charter schools are governed by the Maryland Public Charter School Program ("Charter School Program"), ED §§ 9-101 et seq. , which "sets forth a process for establishing new charter schools as well as monitoring, oversight, and accountability standards for charter schools once they are established." Frederick Classical , 454 Md. at 344 , 164 A.3d 285 .
The purpose of the Charter School Program is to "establish an alternative means within the existing public school system in order to provide innovative learning opportunities and creative educational approaches to improve the education of students." ED § 9-101(b). Charter schools operate under the supervision of the local school board of the county or local jurisdiction in which they are located. See ED § 9-103 (stating that local school boards are the "public chartering authority" for the granting of a charter agreement); ED § 9-102(11) (mandating that charter schools operate "under the supervision of the public chartering authority from which its charter is granted and in accordance with its charter" and, with limited exceptions, "the provisions of law and regulation governing other public schools"). Charter schools also receive funding from their local school board.
ED § 9-109 provides a mandate for public funding of public charter schools: A county board shall disburse to a public charter school an amount of county, State, and federal money for elementary, middle, and secondary students that is commensurate with the amount disbursed to other public schools in the local jurisdiction. (Emphasis added.) As we noted in Frederick Classical , "[t]he statutory interpretation of [ ED § 9-109 ] and deciphering the meaning of 'commensurate' in this context has required extensive administrative deliberations" by the State Board. 454 Md. at 345 , 164 A.3d 285 . a. City Neighbors Declaratory Rulings In 2005, the State Board issued a set of three declaratory rulings, which constituted its first definitive statements interpreting the meaning of ED § 9-109 and the commensurate funding requirement. We have previously referred to these rulings, which ultimately came before this Court in our decision in City Neighbors , as the " City Neighbors declaratory rulings." See Frederick Classical , 454 Md. at 346 , 164 A.3d 285 .
In the City Neighbors declaratory rulings, the State Board set forth a detailed, multi-step formula for calculating a charter school's per-pupil funding that the State Board would deem to be "commensurate" with funding provided to other public school students: The State Board concluded that ED § 9-109(a)"expressed a legislative intent that a charter school 'receive federal, State, and local funding in an amount proportionate to the amount of funds expended for elementary, middle, and secondary level students in the other public schools in the same system.' " [ City Neighbors , 400 Md. at 336 , 929 A.2d 113 .] Furthermore, the State Board determined that the calculation of commensurate funds must include " 'funding for services for which students in the public charter schools are eligible such as free and reduced price meals, pre-kindergarten, special education, English-language learners, Perkins, Title I, and transportation.' " 2 [ Id. ] The Board further specified that the commensurate funding was to be calculated by starting with the local school system's total annual operating budget that includes all federal, State, and local funding, 3 and dividing by enrollment for the previous year 4 to reach an average per-pupil figure, overall and for each major category of spending. Id. at 336-37 , 929 A.2d 113 . Then, after deducting two percent for central office administrative costs, the State Board directed that local boards multiply the average per-pupil figure "by the student enrollment of the charter school to determine the total funding amount for the charter school." Id. at 337 , 929 A.2d 113 . The State Board determined that "[b]ecause the total school system operating budget encompassed all funds," including funds for specific services, "the average per[-]pupil amount derived from [the total operating budget] figure would be sufficient for the charter school to deliver the services for which its students were eligible." Id.
The State Board noted, however, that charter schools "would have to make budgetary allocations in light of the students' eligibility requirements" under federal or state law "and in doing so must comply with all applicable Federal and State requirements." Id. "For the special services that must be provided to eligible students," the State Board determined that "[a] charter school could elect either to provide the services directly or have them provided by the school system, but if it opted for the latter, it would be required to reimburse the school system for the proportionate cost of those services." Id. at 337-38 , 929 A.2d 113 . A charter school would also need to reimburse the local school board " 'for salary, local retirement, and other fringe benefit costs for the public school employees working in the charter school as well as for regular services and supplies that the charter school requests the local school system to provide.' " Id. at 338 , 929 A.2d 113 . Frederick Classical , 454 Md. at 347 -48 , 164 A.3d 285 (footnotes in original) (bracketed text added).
Of significance to this appeal, the State Board also stated that the detailed formula it had set forth "should be used as 'guidance and direction' to [ ] other charter school applicants and local school systems 'for the refinement of their working relationships on behalf of the public school children throughout this State.' " Id. at 349 , 164 A.3d 285 (quoting City Neighbors , 400 Md. at 339 , 929 A.2d 113 ). b. This Court's City Neighbors Opinion Several local school boards, including the City Board, took issue with the State Board's formula and filed petitions for judicial review of the State Board's decision. Those petitions ultimately came before this Court on appeal in City Neighbors , 400 Md. 324 , 929 A.2d 113 (2007). We began our analysis in City Neighbors by considering the local school boards' claim that the declaratory rulings were in effect a binding "regulation" and must be deemed invalid because they were not issued in conformance with the requirements of Maryland Code, State Government Article ("SG") § 10-101 et seq. for formal rulemaking through regulations. 400 Md. at 344 , 929 A.2d 113 .
We rejected that claim, noting that declaratory rulings are generally treated by courts "more in the nature of contested case adjudications than the adoption of a regulation." Id. at 345 , 929 A.2d 113 . And, we held that declaratory rulings as "a permissible mechanism by which [the State Board] may exercise its statutory authority to 'explain the true intent and meaning' of the public school laws and decide 'controversies and disputes' under those laws." Id. at 346 , 929 A.2d 113 . We therefore concluded that the State Board "was well within its discretion to proceed in the manner it did-adjudicating the cases before it and offering 'guidance' to other applicants, rather than proceeding with more formal and binding regulations." Id. Turning to the principal question of whether the State Board "had properly construed and applied ED § 9-109(a)," we concluded that the statute was "patently ambiguous." Id. at 346-47 , 929 A.2d 113 .
We reviewed the statute's legislative history and concluded that the General Assembly had clearly intended "that the determination of commensurate funding would necessarily be on a per[-]pupil basis." Id. at 355 , 929 A.2d 113 . However, we also determined that the General Assembly had not specified "what was commensurate and how [ ] the amount disbursed to other public schools [was] to be determined," and that it "must have envisioned" that the State Board, "the body [the General Assembly] has consistently vested with the ultimate administrative authority to interpret, explain, and apply the public education laws," would interpret the meaning of those terms. Id. Finally, we addressed the city and county boards' specific complaints about the State Board's formula: "the requirement that the funding be disbursed in cash, rather than in services, inclusion of Title I and special education expenses, and the limitation of the deduction for administration expenses to 2% in the calculation of commensurate funding." Id. at 356 , 929 A.2d 113 .
We found no legal error in any of those claims. Noting that the statute calls for the disbursement of "money," the Court concluded that while charter schools may "negotiate for the provision of services" such services "cannot be forced on the charter schools at the whim of the county boards." Id. The Court also held that the State Board was "clearly entitled" to conclude that "commensurate" funding to charter schools must include funding for Title I and special education funds "to the extent that students in the charter school are eligible for those services." Id. And the Court held that with respect to the 2% cap in central administrative costs, the State Board reasonably determined that "charter schools, being somewhat autonomous, would not need and should not be subject to the full range of control exercised by the central administration over the regular public schools, and that they therefore should not be charged with a share of that total expense." Id. at 356-57 , 929 A.2d 113 . c.
Frederick Classical In Frederick Classical , our most recent case to examine charter school funding, the Frederick County Board of Education withheld transportation funding from the calculation of its annual per-pupil commensurate funding allocation to Frederick Classical, a charter school, because the school did not provide transportation services to its students. 454 Md. at 341 , 164 A.3d 285 . Frederick Classical contested the withholding of the transportation funds before the local school board and, when it summarily refused to amend the allocation, appealed to the State Board. Id. The State Board held that, as a matter of law, "a charter school is not automatically entitled to funds for services it does not provide." Id. at 363 , 164 A.3d 285 .
It therefore concluded that the local school board's withholding of transportation funds from Frederick Classical's per-pupil allocation "was not contrary to state law" and was "consistent with [its] past rulings." 5 Id. This Court, however, reversed the decision of the State Board. We determined that the State Board's ruling was contrary to its own precedent in the City Neighbors declaratory rulings. We held that under the formula set forth in those rulings a local school board calculating a charter school's annual per-pupil allocation "generally must include in that calculation funds budgeted for any of the services expressly identified in the declaratory rulings-including funds for transportation services." Id. at 392 , 164 A.3d 285 .
Although local school boards are not required to include in the calculation "funds for services that have detailed eligibility requirements under state and federal law when the charter school does not meet those eligibility requirements," we established that "there are no such eligibility requirements" for transportation services for the general student population. 6 Id. Consequently, we concluded that, under the City Neighbors declaratory rulings formula, "a local school board must [ ] include the funds budgeted for [transportation] when calculating a charter school's per-pupil allocation, regardless of whether a charter school provides transportation services to its general student population." Id. As the State Board had incorrectly ruled that withholding transportation funding when Frederick Classical did not provide transportation services was "consistent with [its] prior rulings," when in fact it was not, we held that its ruling was an abuse of discretion. Id. at 405-406 , 164 A.3d 285 .
We then considered whether, on remand, the State Board was required to adhere to its own City Neighbors declaratory formula for calculating a charter school's commensurate funding, or if it had the discretion to modify that formula. Id. at 406 , 164 A.3d 285 . We recognized that administrative agencies are generally accorded "ample latitude to adapt their rules and policies to the demands of changing circumstances," and may generally proceed either through adjudications or through more formal notice-and-comment rulemaking. Id. at 406-07 , 164 A.3d 285 (quoting Montgomery Cty. v. Anastasi , 77 Md. App. 126 , 137, 549 A.2d 753 (1988) ).
However, we also determined that courts have imposed some limits on agency discretion to change policies or rules, and highlighted two of those limits. First, if the policy that is being changed is "a policy of general application, embodied in or represented by a rule" then "the change must be accomplished by rulemaking." Id. at 408, 164 A.3d 285 (quoting CBS Inc. v. Comptroller of the Treasury , 319 Md. 687 , 696, 575 A.2d 324 (1990) ). Second, an agency's discretion may be circumscribed "when there is substantial reliance on the agency's settled standard or interpretation and a change would have a detrimental impact." Id. at 409, 164 A.3d 285 . We concluded that the first limitation that an existing rule may only be changed through new rulemaking did not apply because the guidance set forth in the City Neighbors declaratory rulings was not a formal "rule of widespread application." Id.
However, we also noted that over a decade had passed since the State Board issued the City Neighbors declaratory rulings, but that the State Board "has never adopted a formal rule or regulation of general application interpreting the 'commensurate' funding requirement of ED § 9-109." Id. at 410 , 164 A.3d 285 . Accordingly, we concluded that "charter schools and their staff and student population have substantial reliance interests in the current State Board approach to determine a commensurate allocation of funds to their charter school in the City Neighbors declaratory rulings." Id. at 411 , 164 A.3d 285 . In light of those reliance interests, we held that "if the State Board proceeds through an adjudicatory approach, it must offer a rational explanation for such a change in its written decision." Id. at 412 , 164 A.3d 285 . "That rational explanation," we emphasized, "must include how its new interpretation or approach is in keeping with the plain language and, where ambiguous, the legislative history and statutory purpose of ED § 9-109 and the Charter Schools Program statute as a whole, and account for the substantial reliance interests of charter school operators, staff and students, prospective charter school applicants, and local school boards." Id.
We therefore remanded the case to the State Board "to render a decision as to the claims raised by Frederick Classical consistent with our holdings ...." Id. at 422 , 164 A.3d 285 . And, we specifically stated that if the State Board determined "that Frederick Classical is entitled to additional funds" then the State Board "shall issue an order calculating the exact amount of additional funds owed based upon Frederick Classical's enrollment during the relevant years, and directing the [local school board] to pay that amount." Id. E. Facts and Procedural History of the Instant Appeal a. The Charter School Operators Complaints In the fall of 2015, the Charter School Operators filed individual breach of contract complaints against the City Board in the Baltimore City Circuit Court.
The complaints, which raised "substantively similar" breach of contract claims stemming from charter agreement contracts entered into between each charter school and the City Board, were subsequently consolidated by the circuit court. 7 In the complaints, the Charter School Operators alleged that they entered into similar contracts with the City Board to operate one or more charter schools in Baltimore City (collectively, the "Contract"). The complaints quoted a provision of the contract regarding funding of the Charter Schools and financial transparency in the funding process, and provided annotations for terms defined elsewhere in the Contract. Including relevant annotations, the provision as quoted in the complaints reads as follows: 6.1 OPERATING FUNDS . The parties agree that Title 9 8 requires funding of the charter school that is commensurate with the amount disbursed to other public schools in the local jurisdiction, and that Commensurate Funding 9 is integral to this contractual relationship and essential to the School Operator's ability to operate the School hereunder and that all funds provided by the [City Board] to the school are to be used solely for the benefit of the school and its students.
Accordingly, during each school year during the Term, the School Board shall allocate Commensurate Funding to the School Operator for the following school year pursuant to Applicable Requirements. 10 Any financial commitment on the part of the [Baltimore City] School System contained in this Agreement is subject to the annual appropriation by the [City Board]. The [City Board's] staff shall deliver to the School Operator a draft of the funding formula including the amount of the estimated per pupil allocation for the applicable school year (determined in accordance with the [City Board's] "approved funding formula" and Applicable Requirements) and will make a good faith effort to deliver these materials in no less than two weeks prior to the budget (distinct from the Budget of the School Operator covered in Section 6.2) submission deadline for the School, such deadline to be consistent with the deadline for all School System schools. The draft document will include: (i) the School System's budget and line item amounts necessary to calculate the per pupil allocation, and (ii) copies of any materials or documentation related thereto that is delivered to the [City Board] for public presentation. Additionally, the [City Board] agrees to make reasonable efforts to provide to the School Operator background information on the methodology and assumptions behind the calculations as soon as such materials are available.
(Emphasis and bracketed text added, additional footnotes omitted). The complaints raised a single count for breach of contract. Specifically, the Charter School Operators asserted that the City Board breached the provision quoted above by failing to provide the Charter School Operators with commensurate funding, and also by failing to provide them with the budget and financial information specified in the provision. The Charter School Operators claimed that the City Board had "never" provided commensurate funding in line with the City Neighbors declaratory rulings formula, 11 and that the City Board has instead repeatedly "unilaterally changed their methodology in developing the amount to be disbursed to charter schools." And, they more specifically asserted that the City Board failed to provide the Charter School Operators with commensurate funding for Fiscal Year 2016, i.e., the 2015-16 school year.
According to the Charter School Operators, the Baltimore School System's Chief Financial Officer provided charter schools with a "Revised Per Pupil" allocation for the 2015-16 school year of $9387. The Charter School Operators maintained that per-pupil figure "reflected an expectation that the State of Maryland ... would cut State funding to the System by approximately $35 million." However, the City Board ultimately adopted a budget for the 2015-16 school year that "reflected the restoration of over $27 million in State funding and increases of $3 million dollars in City funding and $3 million from 'other revenue sources' as compared to the earlier projections." Nonetheless, the Charter School Operators claimed that the City Board, "without explanation, kept the charter school per pupil at the previously stated [$9387]." That figure is, according to the Charter School Operators, 1.77% less than that provided for charter schools in the 2014-15 school year budget. At the same time, the Charter School Operators asserted that the City Board adopted a budget for traditional (non-charter) public schools that was roughly the same as provided in the 2014-15 school year budget. 12 The Charter School Operators also claimed that the City Board had not met its contractual requirement to provide detailed information as to its finances and the basis of its calculations of the annual per-pupil commensurate funding allocation. Instead, the Charter School Operators alleged that the City Board "from year to year, arbitrarily presented charter school operators with take-it-or-leave-it charter school per pupil figures derived using varying (or no) calculation methodology, inflated estimates of overall System enrollment, and unsupported and dubious financial and budget figures." Specifically, they claimed that for the 2015-16 school year, the City Board provided only two single page documents in support of the $9387 "Revised Per Pupil" allocation. b.
Initial Motions to Dismiss or Stay the Action The City Board filed motions "to dismiss, or in the alternative, motion to stay" the complaints. In an accompanying memorandum, the City Board contended that "at the heart" of the Charter School Operators complaints were the alleged failure of the City Board to provide commensurate funding for charter school students as required under ED § 9-109. The City Board insisted that under the primary jurisdiction doctrine the commensurate funding dispute is "for the State Board to decide in the first instance." 13 The Charter School Operators opposed the City Board's motions, asserting that the circuit court, and not the State Board, "has proper jurisdiction over this breach of contract action." They also noted that the relief they were seeking included "monetary damages," which they contended was not available in a declaratory action before the State Board. In the alternative, the Charter School Operators insisted that "[e]ven if the State Board had jurisdiction and [was] able to provide the [Charter School Operators] with relief," the State Board had already issued a "comprehensive" interpretation of commensurate funding under ED § 9-109, which was "litigated through final affirmance by the Court of Appeals." Thus, they claimed that " 'primary jurisdiction' has already been satisfied." Finally, they requested that even if the court determined that the commensurate funding dispute needed to first be resolved by the State Board, the court should permit the matter to proceed through the discovery phase of litigation in circuit court and merely stay any ruling on a motion for summary judgment or beginning a trial on the breach of contract claim pending the decision of the State Board. 14 On January 8, 2016, Judge Rubin held a hearing on the City Board's motion to dismiss, at which both parties offered extensive arguments as to whether the State Board had primary jurisdiction over the parties' dispute.
The City Board argued that, although the case was a breach of contract action, the claim that the City Board did not provide funding for charter schools that was commensurate with funding provided to traditional public schools "boils down to whether there has been compliance with [ ED § 9-109 ]." The City Board argued that, under this Court's holding in City Neighbors , ED § 9-109 was ambiguous and the State Board had the primary authority to interpret it. The City Board acknowledged that the State Board had previously set forth a working definition of commensurate funding and a formula for calculating that funding in the City Neighbors declaratory rulings, but insisted that neither the State Board nor this Court has ever said "that is the only formula that can be used." The circuit court questioned the City Board's counsel on that point, resulting in the following exchange: Judge Rubin: So the question that really I think where the rubber meets the road in this instance is has the issue of commensurate funding already been determined and so to send it back [to the State Board] is not only unnecessary, but, arguably, inefficient and potentially unfair[.] ... [T]he flip side is that every single time a charter school takes issue or challenges that proper commensurate funding has been placed, at least the way I see the logical extension of your arguments is that ... the State Board of Education will always be entitled to make that a moving target. City Board Counsel: But that's what [the State Board has] said in their opinions. I agree with that.
If they came out with-if the statute said this is what you need to do and here are the details or if [the State Board] came up with a regulation that said this is exactly how it needs to be done ... then I would say no[.] [B]ut in a situation where you have this guidance ...then I think the State Board of Education should weigh in on these issues and has to weigh in on these issues .... In response, the Charter School Operators argued that under some circumstances, a party may elect to proceed before the circuit court for its breach of contract claim even if that claim implicated provisions of the Education Article. Specifically, they contended that "once the State Board has had the opportunity to have a crack at interpreting its statutes," parties may file a claim dependent on that interpretation before the circuit court. And, they disputed the City Board's contention that the State Board would have discretion to depart from its previous interpretation and formula for calculating commensurate funding if the parties' dispute proceeded to adjudication before the State Board.
The Charter School Operators also opposed the City Board's alternative request that the case be stayed. They pointed out that their claim that the City Board had breached its contractual obligations to provide information as to its budget and finances did not depend on the interpretation of a statute or regulations by the State Board and was "squarely before only the [c]ircuit [c]ourt." They also argued that if the case proceeded before the State Board, discovery to obtain that information would be restricted compared to the discovery available in circuit court. The Charter School Operators therefore contended that even if the court found that the commensurate funding dispute was in the primary jurisdiction of the State Board, rather than grant a stay, the court should permit the case to proceed through discovery in the circuit court. Finally, they requested that if any issue in the case needed to go before the State Board, that the court issue "very specific instructions as to what exactly the State Board would need to accomplish or could accomplish on any proceeding that would be appropriate," and also explain how to "bring this [matter] back to [the circuit court] for actual resolution and remedies." During the hearing, Judge Rubin noted that the City Board's reluctance to disclose the facts supporting the commensurate funding calculations left the Charter School Operators in a disadvantaged position considering the "illusory" nature of commensurate funding: Judge Rubin: [T]o the extent that the concept of commensurate funding or what it means in each charter school contract could be different from the next charter school contract because there are different things in play, as [City Board has] argued, on some level does this not raise an issue that in essence when the charter school contracts for, among other things, its commensurate funding, that its entitlement to whatever commensurate funding is ... somewhat illusory?
In other words, we'll tell you what it is once you complain that we haven't given it to you. Judge Rubin thereafter issued a comprehensive oral ruling from the bench, in which she ultimately determined that the State Board had "provided sufficient guidance" regarding the meaning of commensurate funding, including the "requisite factors to be considered, the data to be considered." She therefore concluded that the circuit court was "no longer obliged to punt the issue to the expertise of the administrative body," but rather, it was entitled "to decline to invoke primary jurisdiction." 15 Accordingly, she denied the motion to dismiss. c. The City Board's Initial Petition for Declaratory Ruling On November 9, 2015, the same day that the City Board filed its motions to dismiss the complaints in the circuit court, it also filed a petition with the State Board, requesting that the State Board declare that its funding formula complied with ED § 9-109 and resulted in commensurate funding. The Charter School Operators thereafter moved to dismiss the declaratory petition.
After Judge Rubin denied the City Board's motions to dismiss before the circuit court, the State Board dismissed the City Board's petition for declaratory ruling. In a written order, the State Board noted that the circuit court had "asserted its jurisdiction" on the issue, and it did not serve the interests of conserving judicial (and quasi-judicial) resources to have parallel proceedings. The State Board also addressed whether it should stay or dismiss the declaratory petition, and explained that the City Board had failed to present it with sufficient facts from which it could declare the law: Having reviewed the Petition, we find that it fails to present any facts concerning the funding formula that the Baltimore City Public School System (BCPSS) actually used to fund the charter schools .... The Petition is, in essence, a request for an evidentiary hearing at which time BCPSS states that it will present the facts and the formula it used.
A request for a declaratory judgment must present a "justiciable controversy, rather than abstract, hypothetical, or contingent questions." Miller v. Augusta Mut. Ins. Co. , 157 Fed.Appx. 632 , 637 (4th Cir. 2005). The Petition here presents no concrete facts from which we could declare the law.
(Emphasis added). The Charter School Operators requested that the State Board compel the City Board to disclose its commensurate funding information. In a request for an appeal in front of the State Board, a party must provide "a statement of the facts necessary to an understanding of the appeal." COMAR 13A.01.05.02(A)(3). While an appellant may request to "present additional evidence on the issues in an appeal," the State Board must first deem the additional evidence as "material" and "that there were good reasons for the failure to offer the evidence in the proceedings before the local board." COMAR 13A.01.05.04(C).
After satisfying these factors, the State Board may, but is not required to: (a) "[r]emand the appeal to the local board for the limited purpose of receiving the additional evidence," or (b) "[r]eceive the additional evidence." COMAR 13A.01.05.04(C). Here, the Charter School Operators did not possess the "additional evidence" of commensurate funding information and thus did not have the ability to present "additional evidence" in its petition to the State Board. Adhering to the confines of COMAR, the State Board was unwilling, and statutorily unable, to conduct evidentiary hearings regarding the disputed commensurate funding information. d. Further Proceedings Before the Circuit Court Subsequently, the City Board filed a counterclaim against the Charter School Operators before the circuit court.
In the counterclaim, the City Board contended that it had provided the Charter School Operators with administrative services whose value were significantly greater than 2% of the charter schools' commensurate funding allocation, and that the 2% cap on administrative services stated in the City Neighbors declaratory rulings should only apply to mandatory functions "that may only be performed by the central office of a local school system." The City Board therefore requested that the circuit court issue a declaratory ruling stating which services provided to charter schools were "mandatory" and subject to the 2% deduction. And, the City Board requested that either the value of the additional, non-mandatory services provided be counted as commensurate funding received from the City Board, or in the alternative, that the Charter School Operators be required to reimburse the City Board for the cost of those services to prevent unjust enrichment. 16 The Charter School Operators moved to dismiss the City Board's counterclaim for failure to state a claim upon which relief can be granted. 17 On April 18, 2016, the circuit court held a hearing on the Charter School Operators' motion to dismiss. At that hearing, Judge Nance questioned counsel about the procedural history of the case: May I beg a question of both parties-or both sides, if you would, please? Tell me procedurally what happened in this case, procedurally in terms of what [the Charter School Operators] did before it got to being a litigation in the Circuit Court for Baltimore City. ...
My understanding is, is that if there is a dispute, the dispute is raised with the local board. If there is a problem in the resolution by the local board there is an administrative process. That is the reason for my question. ... Tell me what happened that causes you to rightfully be in my courtroom.
(Emphasis added). Counsel for the City Board responded to the judge's question: I wish I were in front of you I think in January we had a hearing on a motion to dismiss where we argued exactly what Your Honor is stating, the doctrine of primary jurisdiction that this case should be stayed in favor of the State Board ... making a determination of these issues and our motion was denied. Counsel for the City Board also informed the judge that there had been an administrative proceeding pending before the State Board, but that it had been dismissed after Judge Rubin's order directing that the case proceed to trial. Judge Nance thereafter took a brief recess during which he "had an opportunity to review ... part of the matters procedurally in chambers." Upon returning to the bench, the judge noted that the City Board "would like to make an oral motion at this time." The City Board then moved to dismiss "on the basis that the appropriate tribunal or court or body to hear this matter is the State Board of Education." Citing City Neighbors , counsel for the City Board stated that the "case law is very clear that [the State Board] should be the first one to take up matters such as the ones that have been raised by the Plaintiff here relating to intricate, detailed, and important issues of public policy relating to education and educational funding." Counsel for the Charter School Operators responded that the claim raised in their complaints was for breach of contract, and the resolution of such disputes is for the courts and did not need to first be resolved by the State Board.
He also argued that proceeding before the State Board would provide no remedy in the form of monetary damages. And, he argued that the issue of commensurate funding had already been settled and affirmed by the courts, thus "satisfying the requirements of primary jurisdiction of letting the administrative agency have a crack at setting out the interpretation." At one point in the hearing, Judge Nance questioned counsel for the Charter School Operators as to what proceedings had taken place before the City Board. Counsel responded that the Charter School Operators had not sought a hearing or opinion from the City Board. Later in the hearing, Judge Nance stated the following: I want to make sure that this [c]ourt says specifically that it believes that [the Charter School Operators] have a duty to seek administrative review of a local [school] board and if not [then the State] Board as to that which is asserted and claimed by [the Charter School Operators] in this case for there to be an administrative review as to your claims before it comes to the [c]ircuit [c]ourt.
(Emphasis added). At the conclusion of the hearing, Judge Nance granted the Charter School Operators' motion to dismiss the City Board's counterclaims without prejudice. The judge also determined that, while granting the City Board's verbal motion to dismiss was not appropriate, "in lieu of [the City Board's] motion to dismiss, this [c]ourt is granting an order to stay as to these matters pending administrative review and appeal." The following day, Judge Nance entered a written order to that effect, which in pertinent part ordered that the consolidated action was stayed "pending administrative review of the parties' dispute by the State Board of Education" (the "Stay Order"). e. The City Board's Second Petition for Declaratory Ruling After the Stay Order was issued, the City Board filed a second petition for declaratory ruling before the State Board. 18 Unlike in its initial petition for declaratory relief filed before the State Board, the City Board provided a partial explanation of its charter school funding formula for the 2015-16 school year.
The City Board stated that the City School System's "Total Operating Budget, for the 2015-16 school year was $1,322,461,846." The City Board explained that in calculating charter schools funding, it began by excluding numerous categories of funds from that figure, including: "restricted funds," 19 funds for debt servicing, adult education, retiree health benefits, pre-kindergarten, 20 and "non-public education," 21 contributions from the City School System's annual fund balance 22 and "non-state/local revenue," 23 funding for special education students, funding for students with limited English language proficiency ("ESOL" funds), and funding for specialized transportation services, primarily for special education students. The excluded funds amount to $572,978,187, or slightly over 43% of the City Board's total operating budget for the 2015-16 school year. The City Board stated that its total budget after "adjusting" for the restricted funds was $749,483,659. The City Board explained that it divided that figure by the population of students enrolled in kindergarten through the twelfth grade in the City School System from the previous year, 78,631, to reach a per-pupil figure of $9532.
The City Board explained that it then deducted 2% from that figure for central administrative costs, as permitted by prior State Board precedent. And, the City Board stated that it added an additional $46 to the per-pupil total as part of a "negotiated adjustment," 24 to reach a "base cash charter per pupil allocation" of $9387. Finally, the City Board then added to the $9387 proposed allocation the cost of various "needs-based" services that it provides "in-kind" to charter schools, which it valued at $3496, to reach a total figure of both cash and in-kind services of $12,883. It contended that figure was slightly higher than would have been reached under the approved State Board methodology, and thus was "commensurate" funding under ED § 9-109 and State Board guidance. 25 Furthermore, the City Board contended that its funding formula, including all of the exclusions and its insistence on providing certain services "in-kind" instead of as a cash allocation, was consistent with State Board precedent.
Therefore, the City Board requested that the State Board declare that it had provided commensurate funding for the 2015-16 school year. However, the City Board also asked that the State Board reconsider some of the guidance it had provided in the City Neighbors declaratory rulings. Specifically, the City Board contended that the limitation that it can only deduct up to 2% of a charter school's funding allocation for the cost of central administrative services "does not remotely cover the true cost of those services, resulting in an unfair subsidy for charter schools." The City Board therefore requested that the State Board entirely "eliminate the 2% cap or lift it to cover the actual cost of all services" that the City Board provides centrally. In the alternative, the City Board requested that if the State Board reaffirms the 2% cap, that it "clarify that the 2% cap covers only a limited number of services and that City Schools can require reimbursement from charter schools for [additional services.]" 26 The Charter School Operators filed a motion to dismiss the State Board's petition, contending that it was "outside of the State Board's jurisdiction because it asks for extensive fact finding instead of interpretation of laws," and because they had appealed the circuit court's Stay Order to the Court of Special Appeals.
In the State Board's order, the State Board considered the disposition of the "ongoing dispute." The State Board specifically referenced Judge Rubin's holding that "the Circuit Court had proper jurisdiction" when the circuit court denied the petition to dismiss Charter School Operators' complaint. The State Board then stated that "the Circuit Court case is stayed and that [the Charter School Operators] have appealed the stay to the Court of Special Appeals." As a result, the State Board held that the "case remains pending in the judicial system" and entered an order dismissing the petition "because the case remains within the jurisdictional purview of the courts." f. Appeal to the Court of Special Appeals The Court of Special Appeals stated that the Charter School Operators had presented a single issue before it on appeal, which it had rephrased: Did the circuit court err in staying the proceedings pending administrative review on the ground that the State Board has primary jurisdiction over the issues raised in the complaint? Monarch Acad. , 231 Md. App. 594 , 600, 153 A.3d 859 (2017).
However, the court declined to resolve that issue. Instead, it determined sua sponte 27 that "the circuit court's order is not an appealable order," because it was neither a final judgment nor an appealable order under the collateral order doctrine, and therefore dismissed the appeal. Id. at 600, 619 , 153 A.3d 859 . The Court of Special Appeals noted that "to constitute a final judgment, a trial court's ruling 'must either decide and conclude the rights of the parties involved or deny a party the means to prosecute or defend rights and interests in the subject matter of the proceeding.' " Id. at 613 , 153 A.3d 859 (quoting Md. Bd. of Physicians v. Geier , 451 Md. 526 , 545, 154 A.3d 1211 (2017) ).
The intermediate appellate court determined that the Stay Order "did not conclude the rights of the parties or adjudicate all of the claims in the action." Id. at 613-14 , 153 A.3d 859 . And, relying on federal case law, the court concluded that the Stay Order did not have the effect of putting the Charter School Operators out of court, "because it merely directed that the parties first go to the State Board[.]" Id. at 613-15 , 153 A.3d 859 (discussing Crystal Clear Commc'ns, Inc. v. SW Bell Tel. Co. , 415 F.3d 1171 , 1175-78 (10th Cir. 2005) and Occidental Chem. Corp. v. Louisiana Pub.
Serv. Comm'n , 810 F.3d 299 , 305-307 (5th Cir. 2016) ). The court also held that the Stay Order was not appealable under the collateral order doctrine. Id. at 615-19, 153 A.3d 859 .
F. Appeal to this Court and Questions Presented The Charter School Operators filed a petition for writ of certiorari to this Court from the decision of the Court of Special Appeals, which we granted on April 4, 2017. Monarch Acad. , 452 Md. 523 , 157 A.3d 809 (2017). In the petition, the Charter School Operators presented several issues for our review, which we have rephrased and reordered: 1. Is the circuit court's Stay Order an appealable order? 2.
Did the circuit court abuse its discretion in entering the Stay Order prior to the conclusion of discovery and without providing guidance to the parties? 3. Does the doctrine of primary jurisdiction require that proceedings before the circuit court be stayed in order to permit the State Board to resolve the issue of whether the City Board has provided the Charter School Operators with commensurate funding? 28 STANDARD OF REVIEW The issue of whether the circuit court's Stay Order is a final and appealable judgment, or is appealable even if not a final judgment under the collateral order doctrine, is a question of law that an appellate court reviews de novo . Balt. Home All., LLC v. Geesing , 218 Md. App. 375 , 381, 97 A.3d 220 (2014).
Likewise, whether the State Board has primary jurisdiction over some or all of the issues raised by the Charter School Operators, so that they "must exhaust administrative remedies" before the State Board prior to seeking review in circuit court is "a legal issue which the Court of Appeals reviews de novo ." United Ins. Co. of Am. v. Maryland Ins. Admin. , 450 Md. 1 , 14, 144 A.3d 1230 (2016) ; see also Falls Road Community Ass'n, Inc. v. Balt. Cty. , 437 Md. 115 , 134, 85 A.3d 185 (2014).
As to the circuit court's sua sponte entry of the Stay Order "in lieu" of dismissing the Charter School Operators' complaints, a court's decision to grant or deny a stay order is generally within its discretion, and is reviewed for an abuse of discretion. Fishman v. Murphy ex rel. Estate of Urban , 433 Md. 534 , 546, 72 A.3d 185 (2013) ; see also Geier v. Maryland State Bd. of Physicians , 223 Md. App. 404 , 450, 116 A.3d 1026 (2015), reconsideration denied (July 31, 2015); Bechamps v. 1190 Augustine Herman, LC , 202 Md. App. 455 , 460, 32 A.3d 542 (2011). There is an abuse of discretion when the trial court ruling was "clearly against the logic and effect of facts and inferences before the court[ ] ... or when the ruling is violative of fact and logic." Fishman , 433 Md. at 546 , 72 A.3d 185 (quoting Aventis Pasteur, Inc. v. Skevofilax , 396 Md. 405 , 419, 914 A.2d 113 (2007) ).
In order to be reversed a circuit court's decision generally must be "well removed from any center mark imagined by the reviewing court and beyond the fringe of what that courts deems minimally acceptable." Skevofilax , 396 Md. at 418 -19 , 914 A.2d 113 (quoting Wilson v. John Crane, Inc. , 385 Md. 185 , 198-99, 867 A.2d 1077 (2005) ). DISCUSSION "In Maryland, appellate jurisdiction, except as constitutionally created, is statutorily granted." Schuele v. Case Handyman & Remodeling Servs., LLC , 412 Md. 555 , 565, 989 A.2d 210 (2010). And, "[w]here appellate jurisdiction is lacking, the appellate court will dismiss the appeal on its own motion." Id. (quoting Gruber v. Gruber , 369 Md. 540 , 546, 801 A.2d 1013 (2002) ).
Therefore, we must first decide whether the Stay Order is appealable before turning to whether the Stay Order was an abuse of discretion, and whether the underlying commensurate funding issue must be referred to the State Board under the doctrine of primary jurisdiction. A. Appealability of the Stay Order a. Finality of Judgment Pursuant to Maryland Code, Courts & Judicial Proceedings Article ("CJ") § 12-301, a party may generally appeal only from "a final judgment entered in a civil or criminal case by a circuit court." 29 However, as the Court noted in Metro Maintenance Systems South, Inc. v. Milburn , CJ § 12-301"does not define finality, but instead leaves it to this Court to determine what makes a judgment 'final.' " 442 Md. 289 , 297, 112 A.3d 429 (2015). This Court has "often stated that the purpose of the final judgment rule is to avoid piecemeal appeals ... and [that] the reason for avoiding piecemeal appeals is the promotion of judicial efficiency." Brewster v. Woodhaven Bldg. & Dev., Inc. , 360 Md. 602 , 616, 759 A.2d 738 (2000).
One important aspect of judicial efficiency is avoiding the "interruption of the trial court process by repeated application to appellate courts." Id. Specifically: Postponing review until the final judgment, or minimizing the number of occasions for interlocutory appeal, also is important to avoid interference with the trial process. ... Repeated interruptions of the trial court process ... may require wasteful losses of familiarity with the case by court and perhaps counsel as well. Id.
(quoting Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, 15A Fed. Practice & Proc. § 3906, 277 (2d ed. 1991) ). The Court has emphasized that such an invidious interruption of the trial process "cannot occur" when there is a grant of a motion to transfer a case to another venue or court, explaining that "[i]n the transferring court, there are no longer any proceedings to interrupt, for the proceedings have been terminated [,]" while "[i]n the receiving court, the proceedings cannot be interrupted, because they have not yet begun." Id. The Court has also provided guidance as to when a judgment is "final" and appealable. We have held that "[i]n order to be an unqualified, final disposition, an order of a circuit court must be 'so final as either to determine and conclude the rights involved or to deny the appellant the means of further prosecuting or defending his or her rights and interests in the subject matter of the proceeding.' " Metro Maintenance , 442 Md. at 299 , 112 A.3d 429 (quoting Rohrbeck v. Rohrbeck , 318 Md. 28 , 41, 566 A.2d 767 (1989) ) (italicized emphasis in original) (additional emphasis added).
Thus, "[e]ven if the order does not decide and conclude the rights of the parties, it nevertheless will be a final judgment if it terminates the proceedings in that court and denies a party the ability to further prosecute or defend the party's rights concerning the subject matter of the proceeding." Id. Such an order has been described as one that " has the effect of 'put[ting] the [party] out of court .' " 30 Id. (quoting McCormick v. St. Francis de Sales Church , 219 Md. 422 , 426-27, 149 A.2d 768 (1959) ) (emphasis added). We have held that the "key question" as to whether an order that terminates proceedings in a particular court has the effect of putting a party out of court is "whether the order contemplates that the parties will no longer litigate their rights in that court." Id.
In Metro Maintenance , we referenced our holding in Moore v. Pomory , 329 Md. 428 , 431, 620 A.2d 323 (1993) as providing an "illustration" of the distinction between "an order that terminates the proceedings in a particular court and one that does not": In [ Moore ], the Court held that an order dismissing a complaint in its entirety "without prejudice" was a final judgment because it terminated the proceeding in the particular court. By contrast, the Court stated, an order of dismissal that expressly allows a plaintiff to file an amended complaint does not terminate the proceedings, as it anticipates further proceedings in the same court . Although a party has no obligation to file an amended complaint and there may be no further proceedings, the case remains pending in the event an amended complaint is filed. Once an amended complaint is filed, the parties may continue to litigate their interests in the same proceeding before the same court .
Thus, when an order anticipates additional proceedings in the same court during which the parties may continue to litigate their rights in the particular matter, the order does not terminate the proceedings in that court, and is not a final judgment. Metro Maintenance , 442 Md. at 300 -301 , 112 A.3d 429 (emphasis added). We have consistently recognized that any order that contemplates parties will no longer litigate their rights in that court is a final judgment. See e.g. , Brewster , 360 Md. at 615 -16 , 759 A.2d 738 (holding that an order of the circuit court transferring a case to another circuit court under venue or forum non conveniens grounds is an appealable final judgment because no further proceedings will occur in the court of original jurisdiction); Ferrell v. Benson , 352 Md. 2 , 7, 720 A.2d 583 (1998) (holding that an order transferring a case from circuit court to District Court is a final judgment because it terminates the proceedings in the circuit court, even though proceedings continue in the District Court); Horsey v. Horsey , 329 Md. 392 , 402, 620 A.2d 305 (1993) (holding that an order compelling arbitration is a final judgment because it terminates the proceedings in that court, even if proceedings continue before the arbitrator).
The issue before the Court in Metro Maintenance was whether a circuit court's remand of a case to an administrative agency for further proceedings, prior to the circuit court conducting any review of the agency's decision, was a final judgment. 442 Md. at 293 -94 , 112 A.3d 429 . In that case, a truck driver quit his job, claiming racially motivated mistreatment, and applied for unemployment benefits to the Department of Labor, Licensing, and Regulation ("DLLR"). Id. at 294 , 112 A.3d 429 . A DLLR claim examiner denied him benefits on the grounds that he had quit his job "without good cause ." Id.
Mr. Milburn appealed within the agency, but the claim examiner's ruling was upheld by a hearing examiner, and then adopted by the DLLR Board of Appeals. Id. at 295 , 112 A.3d 429 . Mr. Milburn thereafter appealed to the circuit court. Id.
However, before the circuit court, the DLLR filed a motion requesting that the court remand the case to the agency before the court conducted its judicial review so that the Board could review the hearing examiner's decision. Id. at 296 , 112 A.3d 429 . The circuit court granted the remand request, without reaching the merits of the claims on appeal. Id.
In evaluating whether the remand order was a final and appealable judgment, we noted that many remands by a circuit court to an agency, which by their nature contemplate additional proceedings before the agency, "may appear to be non-final in nature[.]" Id. at 301 , 112 A.3d 429 . However, we stated that under "principles of finality" in Maryland administrative law, "many such remands are appealable final judgments." Id. at 301 , 112 A.3d 429 . 31 Applying those principles, we considered whether the remand order at issue put the parties effectively out of court. Id. at 308 , 112 A.3d 429 . We concluded that it did not, and that "the work of the [c]ircuit [c]ourt here is not done" and explained: Unlike an order transferring a case to another circuit court, to the District Court, or to an arbitration panel, the remand order here contemplates that judicial review awaits the return of the case following the remand.
Specifically, once the Board has an opportunity to review its decision, and possibly correct what it perceives as an omission or defect, the [c]ircuit [c]ourt would then ... determine whether the decision reflects a correct understanding of the law and whether there is "competent, material, and substantial" evidence to support it. This type of remand is thus nothing more than a brief delay in the ongoing review of the agency decision ... that did not divest [the circuit court] of its continuing jurisdiction over the case. It is not a termination of the proceedings in that court. Id. at 308-09 , 112 A.3d 429 (internal quotation marks and citations omitted).
We also concluded that the remand at issue was "akin to the example that the Court offered in Moore of a non-final order-dismissal of a complaint with leave to amend." Id. at 309 , 112 A.3d 429 . We explained that while, in both instances, "the parties have, in a sense, been 'put out of court,' ... in both cases there is a strong potential, bordering on certainty, that the issue at hand ... will be back for determination by the circuit court." Id. b. The Court of Special Appeals Opinion The parties have not presented, and we have not found, any Maryland cases in which courts have had occasion to apply the final judgment principles elucidated in Metro Maintenance and the other cases discussed above to the specific circumstances presented in this case-where a circuit court determines under the doctrine of primary jurisdiction that a party must exhaust his remedy before an administrative agency prior to the court ruling on an issue in the case before it, and stays proceedings to permit that party to exhaust the administrative remedy. However, the Court of Special Appeals relied on two federal cases which addressed the appealability of a stay in factually similar situations: [I]n Crystal Clear Commc'ns, Inc. v. SW Bell Tel.
Co. , 415 F.3d 1171 , 1173 (10th Cir. 2005), a federal trial court issued an order similar to the one here, staying a lawsuit filed by several payphone providers against Southwestern Bell Telephone Company, pending the resolution of certain issues by federal and state agencies. The United States Court of Appeals for the Tenth Circuit noted that, although a decision to stay litigation ordinarily does not constitute a final judgment, there is an exception for a stay order that puts a party "effectively out of court." Id. at 1175 (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp. , 460 U.S. 1 , 10 n.11, 103 S.Ct. 927 , 74 L.Ed.2d 765 (1983) ). The [c]ourt held, however, that the order in that case, staying the proceedings in court pending resolution of certain issues by the agencies pursuant to the primary jurisdiction doctrine, with contemplation of return to court, was not a final decision.
Id. at 1176-78. That is not to say that a stay order pending administrative review can never qualify as a final judgment. In Occidental Chem. Corp. v. Louisiana Pub.
Serv. Comm'n , 810 F.3d 299 , 305, 307 (5th Cir. 2016), the United States Court of Appeals for the Fifth Circuit addressed whether an order by a federal court indefinitely staying proceedings to allow the Federal Energy Regulatory Commission to act on an administrative complaint was a final judgment when the court retained jurisdiction for a later determination on the merits. The Fifth Circuit held that the order in that case "functioned as a final decision" because it resulted in Occidental being "effectively out of court" for a protracted and indefinite period, and therefore, the order was appealable. Monarch Acad. , 231 Md. App. at 614 -15 , 153 A.3d 859 (italicized emphasis in original).
The Court of Special Appeals concluded that the facts of this case are more in line with the Tenth Circuit's holding in Crystal Clear , 415 F.3d 1171 (10th Cir. 2005). In a footnote, the court noted that the Charter School Operators would appear to be able to file a petition for declaratory review to the State Board under COMAR 13A.01.05.02(D). Id. at 615 n.12, 153 A.3d 859 . Although the court noted that the State Board had "declined to weigh in on the issue while the matter was simultaneously being pursued in court," it determined that justification for declining to take up a declaratory petition "no longer is applicable." Id. at 615 , 153 A.3d 859 .
The court therefore concluded that "there is no indication that there will be a substantial delay in obtaining an administrative ruling" and that "the Stay Order does not place the Charter School[ ] [Operators] 'effectively out of court.' " Id. We agree with the intermediate appellate court that both federal cases-which, like Maryland law, recognize that an order that puts a party effectively out of court is a final judgment-are persuasive authority. However, as we shall explain, we believe that the more apt decision under the circumstances is the Fifth Circuit's holding in Occidental Chemical Corp. that a stay order that places a party effectively out of court for a "protracted and indefinite period" is a final and appealable judgment. c. Analysis Generally, a stay order to permit a party to bring a claim before an administrative agency will only temporarily put a party "out of court" and will carry with it the "strong potential, bordering on certainty, that the issue at hand ... will be back for determination by the circuit court" if either of the parties is dissatisfied with the agency's decision and seeks judicial review before the circuit court.
See Metro Maintenance , 442 Md. at 309 , 112 A.3d 429 . However, under the unique circumstances of this case, the Stay Order issued by the circuit court was a final and appealable order that had the effect of putting the Charter School Operators entirely out of court with no clear procedural path they could follow to return to court within a reasonable period of time. First, the Stay Order suspended all claims before the circuit court, and no proceeding was pending before the State Board at the time the order was entered. Thus, similar to the transfer of cases between courts discussed in Brewster , 360 Md. at 602 , 613-19 , 759 A.2d 738 , appellate review of the Stay Order would not interrupt any ongoing trial process or administrative process before the State Board.
Therefore, appellate review of the Stay Order does not conflict with the underlying purpose of the final judgment rule of avoiding piecemeal appeals that interrupt the trial court and erode judicial efficiency. In this case, there is simply no pending proceeding before any judicial or quasi-judicial body that would be interrupted by appellate review. Second, unlike the dismissal without prejudice in Moore , 329 Md. at 433 , 620 A.2d 323 , or the remand order in Metro Maintenance , 442 Md. at 310 , 112 A.3d 429 , the Stay Order does not specify what, precisely, the Charter School Operators need to do in order for proceedings to resume before the circuit court. The Stay Order merely states that proceedings in the consolidated breach of contract action are stayed "pending administrative review of the parties' dispute by the State Board of Education." It does not specify which issues in the case need to be resolved by the State Board in order for the breach of contract action to resume before the circuit court, or how the Charter School Operators should bring those issues before the State Board for administrative review.
The lack of clarity in the Stay Order might be of no moment if there were a clear procedural mechanism through which the Charter School Operators could bring their breach of contract claim before the State Board and obtain a ruling or decision as to all aspects of that claim. However, the only procedural route available to the Charter School Operators at this juncture-filing a petition to the State Board for a declaratory ruling under COMAR 13A.01.05.02(D) -would not lead to a full resolution by the State Board of their breach of contract claim. Initially, the State Board may decline to issue a declaratory ruling for issues that do not involve public educational laws or its own regulations. See COMAR 13A.01.05.02(D) (stating that a party may file a petition for declaratory ruling by the State Board only as to "the interpretation of a public school law or regulation of the State Board that is material to an existing case or controversy.").
Thus, the Charter School Operators will be unable to obtain a declaratory ruling as to the first part of their breach of contract claim, their allegation that the City Board failed to provide them with the budget and financial information specified in the Contract. That allegation does not involve any public school law or State Board regulation; it is a pure contract law claim. The State Board does not have the discretion to refuse to decide an issue involving the interpretation of a public education law or State Board regulation that is material to a live controversy or dispute when such an issue is properly put before it in a declaratory petition. See e.g. , Bd. of Educ. for Dorchester Cty. v. Hubbard , 305 Md. 774 , 788-90, 506 A.2d 625 (1986) (citing Bd. of Educ. of Garrett Cty. v. Lendo , 295 Md. 55 , 65-66, 453 A.2d 1185 (1982) ) (holding that in the instance of a case requiring an explanation of the 'true intent and meaning' of a provision of the Education Article or a State Board bylaw, a litigant has the choice of either going first to the county superintendent under [ED] § 4-205 and then on up the appellate ladder, or going directly to the State Board under [ED] § 2-205" and that "the State Board is required to hear appeals taken under either section 2-205 or 4-205.").
Here, it does appear that the Charter School Operators could file a petition with the State Board seeking a declaratory ruling as to a key issue underlying their breach of contract claim, namely, whether the City Board's proposed charter school funding allocation for the 2015-16 school year is commensurate funding under ED § 9-109 and State Board precedent. That petition would certainly present the State Board with the interpretation of a matter of State public educational law. However, a declaratory ruling issued by the State Board, like any State agency declaratory ruling, generally is based solely "on the facts set forth in the petition." SG § 10-305(b). Accordingly, even when a petition for declaratory ruling raises an issue involving the interpretation of a public educational law or State Board regulation material to an existing case or controversy, the petition must set forth sufficient facts to enable the State Board to declare the meaning of the law.
In this case, the State Board has already denied two similar petitions for a declaratory ruling filed by the City Board, stating that it was denying the first petition in part because it lacked "concrete facts from which [it] could declare the law." Since that denial, the City Board ultimately divulged some details of its funding formula for charter schools for the 2015-16 school year in its second petition for declaratory ruling filed before the State Board. But, that information is incomplete and one-sided, and may not be sufficient for the State Board to determine whether the City Board's proposed funding allocation is commensurate under the complex, multi-step formula and approach developed by the State Board. For instance, the City Board did not fully explain why certain funds were "restricted" and excluded from the calculation of commensurate funding. Nor did the City Board describe which, if any, of the "in-kind" services that it was providing to charter schools instead of cash funding had been affirmatively requested by charter schools.
And, the Charter School Operators note in their brief to this Court that they "believe the City Board has not, as a factual matter, used correct, accurate numbers to perform the funding calculation." Thus, the Charter School Operators may still lack sufficient concrete facts and information about the City Board's finances and commensurate funding formula to successfully petition the State Board to declare whether the City Board's proposed funding allocation is commensurate funding. The State Board does have a procedural option available to it to develop a more detailed factual record as to the City Board's finances and charter school funding formula. As counsel for the Charter School Operators and the City Board discussed in oral arguments before this Court, the State Board does not have dedicated administrative law judges ("ALJs"). However, the State Board can refer a case to the Office of Administrative Hearings ("OAH") for a fact-finding hearing before an ALJ.
See COMAR 13A.01.05.06(C) (providing that, in an appeal or declaratory ruling action before the State Board, "[u]pon review of the record, the State Board may transfer the case to the Office of Administrative hearings for the scheduling of a hearing before an administrative law judge.") (Emphasis added). But the decision of whether to transfer a case to the OAH is generally a discretionary matter. 32 And, as a recent State Board decision indicates, the State Board generally declines to transfer petitions for declaratory rulings to the OAH: The superintendent [of the Board of Education of Howard County], alleging a host of factual disputes, requests that this case be transferred to OAH. That request is inappropriate in this proceeding. Specifically, in cases in which the parties petition for declaratory rulings, the State Board's legal obligation is to issue an "interpretation of a public school law or regulation of the State Board that is material to an existing [case or] controversy." COMAR 13A.01.05.02(D).
Neither that regulation nor the statute giving the State Board authority to interpret the true intent and meaning of State education law, [ED] § 2-205(e), envision that a declaratory ruling proceeding before this Board is one in which the underlying factual controversy between the parties was intended to be resolved.... In re Bd. of Educ. of Howard Cty. v. Foose , MSBE Op. No. 17-13 (2017). Thus, if the State Board follows the same policy it stated in Foose , the Charter School Operators will have no further opportunity to obtain information as to the City Board's finances and budget figures before the State Board.
In light of the highly uncertain path forward for the Charter School Operators if they were to file a petition for declaratory ruling before the State Board at the present juncture of the litigation, we are not confident that there is "a strong potential, bordering on certainty" that they would obtain a declaratory ruling from the State Board sufficient to lift the stay and resume proceedings on their breach of contract claim before the circuit court. See Metro Maintenance , 442 Md. at 309 , 112 A.3d 429 . Finally, even assuming arguendo that the State Board did elect to grant a declaratory petition and use the administrative procedures available to it to develop a more detailed factual record as to the commensurate funding issue, the proceedings that would follow would likely be indefinite and protracted. If the State Board referred the case to the OAH, the parties would have the opportunity to conduct limited discovery and a fact-finding hearing before an ALJ.
COMAR 28.02.01.01 et seq. (describing the rules of procedure for discovery and hearings before an OAH administrative law judge). 33 The ALJ designated by OAH could then proceed to make findings, conclusions of law and recommended rulings, which would be referred to the State Board. See COMAR 13A.01.05.07(E). The State Board would then need to make a final ruling based on those findings and recommendations.
See COMAR 13A.01.05.09. Presumably, given the financial stakes for the parties, the losing party would then start an appeals process before the courts by filing a petition for judicial review of the State Board's decision before the circuit court. See COMAR 13A.01.05.11 (summarizing procedures for appealing final decision of State Board to the circuit court). If that appeals process was followed to its full extent, with additional appeals to the Court of Special Appeals and this Court-as occurred recently in Frederick Classical -the process could drag on for years before the Charter School Operators could obtain a final decision as to the appropriate commensurate funding for the 2015-16 school year, from which it could then move to reopen its breach of contract action.
Therefore, under the persuasive authority stated in Occidental Chemical Corp. , 810 F.3d 299 (5th Cir. 2016), the Stay Order would most likely place the Charter School Operators out of court for a protracted and indefinite period and is akin to a final judgment. In sum, we conclude that: appellate review of the Stay Order would not result in piecemeal appeals or undermine judicial efficiency; the Stay Order is unclear as to what issues need to be resolved by the State Board, and how and when the Charter School Operators would be able to resume proceedings in the circuit court; and there is a substantial likelihood that the Stay Order will result in the Charter School Operators being effectively out of court for a prolonged and indefinite period. For those reasons, we hold that the Stay Order is an appealable final judgment under these narrow circumstances. B. Whether the Stay Order is an Abuse of Discretion As we have held that the Stay Order is a final and appealable judgment, the issue of whether the circuit court's issuance of the Stay Order was an abuse of its discretion is properly before us.
For the following reasons, we conclude that the Stay Order was an abuse of discretion. Judge Nance interrupted counsel during the motions hearing as to the counterclaims filed by the City Board to raise sua sponte the issue of whether the Charter School Operators' complaints were properly before the circuit court, instructing counsel to "[t]ell me what happened that causes you to rightfully be in my courtroom." Then, after a brief recess, Judge Nance invited the City Board's counsel to make an oral motion to dismiss the complaints. During subsequent oral arguments as to that motion to dismiss, the City Board argued that the issue of commensurate funding must be referred to the State Board under the doctrine of primary jurisdiction. Judge Nance seems to have agreed with the City Board, stating "[the Charter School Operators] have a duty to seek administrative review of a local [school] board and if not [then the State] Board." Ultimately, Judge Nance entered the Stay Order "in lieu of" granting the motion to dismiss.
Initially, contrary to Judge Nance's statements, the Charter School Operators were not required to seek administrative review before the City Board or State Board prior to filing their breach of contract action before the circuit court, and appear to have had a good reason for not doing so. The Charter School Operators allege that they could not have appealed to the City Board the proposed charter school funding allocation for the 2015-16 school year that they received from the Baltimore School System staff. If we assume that the Charter Operators are correct, without deciding that issue, then the only available path to bring their dispute before the State Board would be to file a petition for declaratory review before the State Board. However, there is no statutory or regulatory basis for the State Board to award damages in a declaratory ruling.
COMAR 13A.01.05.05 et seq. 34 And, as the Charter School Operators correctly point out, prior declaratory rulings in which the State Board decided that local school boards failed to provide commensurate funding to charter schools resulted in those charter schools not receiving
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