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The college system was beneath a desegregation order administered by the federal court docket. The federal district judge had ordered that available funds be used just for faculty operations and that funds could not be expended to retire the notes.
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In a mandamus action, we represented National City Bank and The Cleveland Trust Company looking for a delineation of the appropriate steadiness between state and federal judicial authorities. Our purchasers had issued tax anticipation notes to the Cleveland Public Schools. These notes could only be repaid with tax revenues collected earlier than the top of the present yr.
We sought a writ of mandamus to require the varsity board to comply with its authorized duty to pay tax revenues into the retirement fund to retire the notes. The Ohio Supreme Court granted the writ, but the federal courtroom promptly renewed its order to the college board without a listening to and enjoined the banks from additional litigation. That order was stayed by a single judge of the 6th circuit of that court docket and a panel remanded the case with instructions to carry a listening to. The panel held that only if there were a purposeful intent to evade desegregation required by the federal constitution could a federal district decide intervene with state and local faculty financing.