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Istation dispute left unresolved by superior court decision, full hearing next week

North Carolina’s K-3 students are without a reading diagnostic tool after a judge decided Tuesday to leave the legal battle on who will assess those readers with the state’s Department of Information Technology (DIT). 

“I’m not convinced that I have jurisdiction in this matter,” Superior Court Judge Mary Ann Tally said after a hearing Tuesday.

The state Department of Public Instruction (DPI), along with Istation — the company awarded a contract by DPI last summer to assess K-3 readers — had petitioned the Superior Court in December to lift stays that DIT had put on that contract.

Special Assistant Attorney General Tiffany Lucas, representing DPI at the hearing Tuesday, argued that the department, schools, teachers, and students would suffer if Tally did not lift the stays and allow the Istation contract to take effect. 

“We’re asking the court to continue the lift of the stay so that DPI can continue to perform its constitutional and statutory obligations to make sure that kindergarten to third grade students are being assessed,” Lucas said.

Lucas said that lack of action by Tally would leave the state without an assessment tool until DIT decides whether Istation should have been awarded the contract. The DIT hearing starts next Monday, but Lucas said the decision process might be lengthy.

Istation had been providing its tool to the state for free in an agreement the company made with DPI after the DIT stay stalled the contract. But that agreement ended December 31.

Istation President Ossa Fisher said the company is waiting for a decision on what comes next from DPI.

“While the judge’s decision is disappointing, we eagerly await the decision on next steps by the Department of Public Instruction and remain undeterred in our ongoing mission to work cooperatively with DPI, students and families across the state,” Fisher said in a statement.

The state’s Read to Achieve program, which aims to increase third-grade reading proficiency but has had little measurable impact so far, requires the state to contract with a vendor to assess students’ reading abilities.

Superintendent of Public Instruction Mark Johnson said in a statement that the state is looking for ways to make sure an assessment tool is in place following Tuesday’s result.

“Today, a superior court said it shouldn’t consider the concerns raised by the handling of this protest until after NC DIT’s final decision. Now, with both the courts and our schools held up, we are exploring other options to ensure that students, teachers, and parents continue to have access to a reading diagnostic tool this year.”

Amplify, the company the state has used to do those assessments in recent years, lost the bidding process to renew its contract last year. 

Amplify CEO Larry Berger said the company is satisfied with Tally’s decision.

“We are pleased that the Superior Court judge made a decision that keeps the focus on due process and a swift resolution on the merits of our case,” Berger said in a statement.

Amplify protested the Istation choice in July, claiming that the procurement process was unfair and that Istation does not meet the state’s needs. 

At about the same time, Amplify requested that DIT issue a stay on the contract between DPI and Istation until a full hearing could occur. DIT issued that stay. DPI then filed for reconsideration of the stay. 

In October, DIT General Counsel Jonathan Shaw heard arguments regarding the stay and the likelihood of Amplify’s success in a hearing. 

Shaw upheld the stay in December. His order also included evidence that DPI unfairly influenced the procurement process in favor of Istation.

Shaw’s December ruling also said Istation could continue to be used in classrooms in the meantime, at no charge to the state, under the agreement between Istation and DPI.

DPI’s petition to the state Superior Court in December aimed to have the DIT stay lifted so that the state could continue to test K-3 readers in the absence of the agreement. 

On December 30, Superior Court Judge Graham Shirley placed a temporary restraining order on DIT’s original stay and on its decision to uphold that stay, to last until the Superior Court could hold a hearing.

Kieran Shanahan, who is representing Istation, said in a statement that Tally’s decision goes against Shirley’s.

“The Judge, we believe, is simply wrong on the issue of jurisdiction, and in direct contradiction to her judicial counterpart just last month,” Shanahan said. “This contract protest is winding through unchartered territory not of Istation’s making-Istation was legally and appropriately awarded the assessment contract by the Department of Public Instruction in June.”

Andrew Brown, an attorney for Istation, argued at Tuesday’s hearing that DIT’s decision to uphold the stay left Istation and DPI with no other appeal. Brown said that meant the Superior Court did indeed have jurisdiction in the matter.

Mitch Armbruster, who represented Amplify, argued that the Superior Court did not have jurisdiction in an ongoing matter that still lacks a final agency decision by DIT. Ultimately, Tally agreed.

“If DPI wants to ensure that the children get the constitutional education to which they are entitled, then that’s DPI’s responsibility, it’s not mine,” Tally said.

Liz Bell

Liz Bell is the early childhood reporter for EducationNC.