Springfield City School District is among eight Ohio school districts that are suing Facebook for allegedly selling ads to the Electronic Classroom of Tomorrow despite knowing the school was facing “significant problems.”
The lawsuit, which was filed on April 9, claims Facebook committed a “fraudulent transfer,” and is seeking around $250,000.
“Facebook received more than $200,000 in payments from a community school at the same time the school was experiencing several financial problems,” the lawsuit says. “Not only did Facebook not provide reasonably equivalent value in exchange for these payments, it knew about the significant problems the community school was facing at the time it accepted the payments.”
The lawsuit alleges ECOT paid Facebook $92,903.61 in 2016 and $150,000 in 2017 for advertising in order to help boost its enrollment.
“At the time that these payments to Facebook were made, ECOT was insolvent. Consequently, Plaintiffs seek avoidance of the payments made to Facebook in 2016 and 2017,” the lawsuit says.
If the eight school districts win the lawsuit, they will share the money.
The sticking point of the lawsuit, Springfield City Schools Superintendent Bob Hill said, is that ECOT was using public dollars for the advertisements.
“It boils down to the fact that public dollars were flowing into ECOT, were being paid to ECOT, to advertise on Facebook,” Hill said.
Facebook did not respond to request for comment on the lawsuit.
Other school districts in the lawsuit along with Springfield include Cuyahoga Falls, Woodbridge, Dayton, Toledo, Logan Hocking, Lake Local and Northern Local.
ECOT opened in 2000 as an alternative, online school where students - some of whom weren’t successful in a traditional classroom or homeschooling - could get an education using the internet. Families using ECOT ranged from those with young students looking for a new school, to high school students left in limbo on the verge of graduation.
But, an investigation by the Ohio Department of Education, found ECOT claimed an enrollment of more than 15,000 students for 2015-16, but actually had an enrollment closer to 6,000 full-time students.
This meant that millions of tax dollars, that previously would have gone into Ohio Public Schools, was being sent to ECOT as if 15,000 students were attending classes full time.
The Ohio Department of Education’s enrollment reviews of ECOT found the school overbilled the state by $60.35 million in 2015-16 and by $19.3 million in 2017. Because of this, Springfield City School leaders believe students were deprived of more than $3.5 million in funding.
“Between 2012 and ECOT’s January of 2018 suspension of operations, more than $3,655,897.98 in monies that otherwise should have gone to the Springfield Public Schools were sent to ECOT,” the lawsuit says.
ECOT closed for good in 2018.
The Springfield Board of Education passed a resolution last September giving its administration permission to seek legal remedies to get money back. The district joined then Ohio Attorney General, now Governor, Mike DeWine lawsuit against ECOT shortly after.
The lawsuit is currently in its early stages.