Charleston Day School Motion To Dismiss Austin Lawsuit & Exhibits

2:23-cv-02899-RMG Date Filed 08/18/23 Entry Number 8 Page 1 of 1
UNITED STATES DISTRICT COURT

DISTRICT OF SOUTH CAROLINA
CHARLESTON DIVISION
Marshall Austin,
Plaintiff, Case No. 2:23-cv-2899-RMG
v. DEFENDANTS’ MOTION TO DISMISS

PURSUANT TO FEDERAL RULE OF
Charleston Day School (“CDS”), Emmie CIVIL PROCEDURE 12(b)(6)
G. Hershey, Judith Foley Arnstein,
Defendants.
Defendants Charleston Day School, Emmie G. Hershey, and Judith Foley Arnstein hereby
move to dismiss the Complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state
a claim. This motion is based on the accompanying Memorandum in Support of Defendants’
Motion to Dismiss and the exhibits attached thereto. Defendants respectfully ask that the Court
schedule oral argument on this Motion.
For the reasons set forth in the Memorandum and supporting material, Defendants ask this
Court to dismiss Plaintiff Marshall Austin’s Complaint and to take such further action as this Court
deems just and proper. This motion is dispositive and is therefore excluded from those requiring
conference of counsel pursuant to Local Civil Rule 7.02.
By: /s/ Alice F. Paylor

Alice F. Paylor
Saxton & Stump, LLC
151 Meeting Street, Suite 400
Charleston, SC 29401
(843) 414-5080
afp@saxtonstump.com
ATTORNEYS FOR DEFENDANTS

August 18, 2023
2:23-cv-02899-RMG Date Filed 08/18/23 Entry Number 8-1 Page 1 of 22
UNITED STATES DISTRICT COURT

DISTRICT OF SOUTH CAROLINA
CHARLESTON DIVISION
Marshall Austin,
Plaintiff, Case No. 2:23-cv-2899-RMG
v. DEFENDANTS’ MEMORANDUM IN
SUPPORT OF THEIR MOTION TO
Charleston Day School (“CDS”), Emmie DISMISS PURSUANT TO FEDERAL
G. Hershey, Judith Foley Arnstein, RULE OF CIVIL PROCEDURE 12(b)(6)
Defendants.
INTRODUCTION
Defendants Charleston Day School (the “Day School” or “CDS”), Emmie G. Hershey, and
Judith Foley Arnstein move to dismiss the Complaint under Federal Rule of Civil Procedure
12(b)(6) for failure to state a claim. The Complaint alleges that Defendants engaged in retaliatory
actions against Plaintiff Marshall Austin and his family after he attempted to “ascertain the scope
of” and “curtail” what he alleges to be misappropriation and misuse of federal funds. 1 Plaintiff
asserts one claim, on his own behalf, for retaliation in violation of the False Claims Act (“FCA”),
31 U.S.C. § 3730(h). Plaintiff fails outright to state a claim because he did not have the requisite
statutory relationship with the Day School and the FCA does not provide for individual supervisor
liability. Furthermore, Plaintiff identifies allegedly adverse actions that simply do not qualify as
retaliation under § 3730(h). For these reasons, Defendants respectfully request that the Court
1
Defendants vehemently deny that there was any misappropriation or misuse of any of the COVID
relief funds received by the School and affirmatively assert that Defendant Day School followed
all laws and regulations required for a recipient of these funds.
dismiss the Complaint in its entirety with prejudice. Defendants also respectfully ask that the Court
hold oral argument on this Motion.
BACKGROUND2
The Complaint’s timeline begins in June of 2021, when Mr. Austin became a member of
the Day School Board of Trustees, and, omitting critically relevant information, jumps to February
of 2022, when the Board of Trustees moved and adopted the motion, without a single dissenting
vote, to remove him as a member of that Board. To provide a complete contextual picture,
Defendants will discuss the background leading up to the prime events set forth in the Complaint.
In spring of 2020, COVID took over the world and forced unexpected changes on every
business and educational institution, including the Defendant Day School. The pandemic was
without precedent and without a roadmap, creating a global crisis that left no community
untouched and that created healthcare and economic uncertainty, which persisted for the better
part of two years. In that uncertain environment, the Day School proceeded with two primary
objectives: 1) maintain the safety of the Day School students, faculty, and families, and 2) provide
the most effective educational experience possible given the circumstances, with a strong bias to
in-person learning.
The Day School, through its Board of Trustees, chaired by Defendant Hershey and Head
of School, Defendant Arnstein, worked closely with the Medical University of South Carolina to
ensure that it was seeking appropriate medical advice, and followed the CDC Guidelines and those
health recommendations adopted by the State of South Carolina. Every educational institution had
2
The background information provided herein is not set forth in the Complaint and is not relied
on by Defendants in this Motion to Dismiss, which assumes that the only facts are those set forth
in the Complaint, even though most of the allegations are not true and have no basis in fact. This
motion sets forth the legal argument that, even if the Court assumes that every statement made in
the Complaint is true, the Defendants are still entitled to judgment as a matter of law.
2
to move carefully to adhere to evolving healthcare guidelines, to adjust to ever changing conditions
on the ground as infection rates cycled through spikes and troughs, and to tailor mitigation plans
that addressed factors unique to each school, including classroom size, age of the children, campus
configuration, availability and timing of vaccinations, and myriad other considerations, all while
working each day to keep a healthy faculty in place to deliver on its educational mission.
Except for a brief period of state-wide imposed school closures, the Day School delivered
in-person learning throughout the entirety of the pandemic. This result was achieved in the best
spirit of the Day School ethos by students, faculty, caregivers, and families coming together
tirelessly, often at personal risk, and each willing to accept a measure of sacrifice and compromise
to keep the Day School doors open.
Matt and Francie Austin were the antithesis of this ethos; they worked collectively to
undermine the board, head of school, teachers, and health care providers, and they willfully and
callously jeopardized the education of every Day School student in the pursuit of personal
objectives stemming from their objections to masking protocols. The Austins’ personal conduct,
which included deeply personal, gratuitous, and wholly unconstructive attacks on the head of
school, board chair, and others, incessant threats of litigation, and the fomenting of fear,
intimidation, and uncertainty across the Day School community, repeatedly failed the standards of
baseline common decency and fell well short of the standards expected of a board member charged
with acting in good faith on behalf of the Day School rather than in service to his own interests. It
should be noted that their conduct, including their attempts to undermine the school and to
jeopardize the education of the students, the livelihood of the faculty, and the collective work of
students, faculty, parents, grandparents, and friends of the Day School over its greater than 85-
year history, has continued unabated to this day.
3
To be clear, the Board did not remove Mr. Austin to avoid scrutiny; rather, the Board
removed Mr. Austin, and elected not to offer re-enrollment to the family, to protect the Day School
and all those associated with it, knowing full well that these actions would likely trigger the
response that Mr. Austin, as a “former federal prosecutor,” had threatened—investigations, media
attention, and litigation. The Day School is better served, however, defending a lawsuit than
defending a decision to allow Mr. Austin to remain on the Board.
In Mr. Austin’s brief tenure on the Board, he was approached regarding concerns about the
sharing and custody of confidential information, as well as concerns regarding certain of his
communications (his and Mrs. Austin’s names were signed on an email to their children’s
classroom teachers in direct contradiction to Board guidance on COVID protocols, stoking fear,
anxiety, and confusion among the faculty and attempting to supersede the authority of the Board
and head of school). Mr. Austin texted the Board chair and head of school stating they should
resign and hire a criminal attorney. He facilitated the actions of Mrs. Austin to cause disruption
to school operations and, as a Board member, repeatedly failed to act in the best interest of the
school. Members of the Board spoke with Mr. Austin on multiple occasions, first in an attempt to
enlist constructive engagement and, when it became apparent he was working in concert with Mrs.
Austin to undermine the school, to offer him openings to step down from the Board on his own
terms, which he elected not to do.
As the COVID vaccine became widely available and the cases diminished, the Board
looked at lifting the masking requirement and did so briefly toward the end of 2021. When COVID
cases spiked again in January of 2022, the Day School again imposed a mask mandate along with
virtually every other school in Charleston. During that time, Mrs. Austin began to harass the
school administration, including Defendants Hershey and Arnstein, with repeated texts, emails,
4
and other communications concerning her opinions that (a) there were “health problems”
associated with masking, and (b) the administration and leadership’s decisions to continue to
require masking were misguided and harmful to students and had to be stopped. Mrs. Austin called
for the removal of both Defendant Hershey and Defendant Arnstein from their respective positions.
On one occasion, Mrs. Austin sent an inflammatory text by accident to Defendant Hershey. She
then followed with a second text to Defendant Hershey saying, “I shouldn’t day-drink and text…
Clearly meant that for someone else.” Mrs. Austin stirred up the Day School community and
created havoc with the parents, faculty, and students, telling many adults that they needed to get a
lawyer. She even went so far as to text the school nurse at the very height of the pandemic saying,
“I’d be careful because parents are getting attorneys involved and blaming you, Judith and Emmie.
I’m worried you’ll get blamed and possibly get in trouble with the Board, nursing board or
whomever . . . .” Further, Mrs. Austin shared with the school nurse a screen shot of a text Mrs.
Austin sent to Mr. Austin saying: “People are getting attorneys and plan to sue;” “The board will
get sued;” “Put in writing to Emmie and email that you do not agree with these decisions and you
as a board member did not vote to involve yourself in medical decisions;” and “These people are
rich, angry and make me look sane!”3
At a time when every resource was required to keep the Day School open and safe, the
Austins elected to actively undermine the interests of the school, to cause a diversion of resources
and disruption to school operations, to directly undermine the leadership of the school, and to
threaten legal action against Board members and school employees.
3
Mrs. Austin is a licensed attorney who practices law in South Carolina. A copy of a portion of
her and her husband’s communications, etc., from December, 2021, to February, 2022, are
attached hereto as Exhibit A.
5
It is for these reasons that Mr. Austin was removed from the Board and why the Day School
elected not to offer re-enrollment contracts to the Austin family at the conclusion of the 2022
school year.4
As it relates to Mr. Austin’s claims about the use of the Payroll Protection Plan (PPP) and
Emergency Assistance to Non-Public School (EANS) funding, he manufactured these concerns
only after it became obvious that his position on the Board was tenuous. His offer of “help” as a
former federal prosecutor, “having prosecuted PPP fraud cases,” was delivered and received as a
very thinly veiled threat to tread carefully with him.
The Board is a volunteer body, with no personal financial incentives or rewards
whatsoever. The Board and its Trustees have everything to lose and nothing to gain from fiduciary
mismanagement. Quite the contrary to Mr. Austin’s claims, in appropriately discharging its
fiduciary duties, the Board and the Day School actively monitored all resources, both healthcare
and financial, that were available to private schools to help them manage through the pandemic
and to provide for a secure financial backstop. When the United States Congress enacted funding
measures to help businesses, including public and nonpublic schools, the Day School, at the
direction of its Board, along with most (if not all) nonpublic schools in South Carolina, applied
4
Mr. Austin was removed as a Trustee of the Board of the Day School pursuant to Article XVI
of the School’s Bylaws due to Mr. Austin’s repeated failure to act in the best interest of the
school and his repeated efforts to disrupt school operations, question the authority of the head of
school and the Executive Committee of the Board, and threaten legal action against Board
members and school employees. Article XVI states: “Any officer or Trustee of the Corporation
may at any time be removed by a two-thirds (2/3) vote of the entire membership of the Board of
Trustees, at a specially called meeting of the Board of Trustees held after five (5) days prior
notice thereof.” The Board voted to remove Mr. Austin with no dissenting votes. The Austins’
behavior was in clear violation of the enrollment contract they both signed and which states:
“Any parent/guardian who engages in behavior, communications, or interaction that are
disruptive, intimidating, or otherwise seriously interfere with the School’s accomplishment of its
educational purpose, as determined by the school in its sole discretion, may be excluded from the
school community and school property.” As a result of their behavior, the Board declined to
offer re-enrollment contracts to them.
6
for, and was granted, financial relief for which it qualified.5 The Day School, with the guidance
of its external auditors, completed the applications for PPP funding and EANS funding in
accordance with the requirements of the federal laws providing for these funding opportunities,
segregated these funds in a separate bank account, and used the PPP funds solely for faculty payroll
as required by the law. In the fall of 2020, when the pandemic was still in full force globally,
before vaccines and a path to normalcy was visible, and while significant uncertainty remained,
the Day School, at the direction of its board, sought and received forgiveness of the PPP loan. It
was a prescient decision as the worst of the pandemic was yet to arrive. Over 20 non-public
schools in Charleston and over 300 non-public schools statewide also sought and received PPP
loan forgiveness.
The Day School also applied for and received EANS funding along with close to 20 private
schools in the Charleston area and more than 100 private schools in South Carolina. This federally
funded and state administered program was established specifically for private schools to cover
COVID-related expenses, including for example, personal protective equipment, cleaning
supplies, hand sanitizers, and other expenditures associated with maintaining the incremental
health and safety protocols of schools as required during the COVID pandemic. Funds were not
allocated as block grants, rather all expenditures had to be for approved purposes under the
program. In completing the application, the Day School sought and received advice and counsel
from the Palmetto Association of Independent Schools (PAIS), which was working as a liaison
between the South Carolina Department of Education and PAIS member schools, and specifically
sought advice on how to respond to a question about students from “low-income families.” The
5
Attached as Exhibit B are lists of non-public schools, which applied for and received federal
funds as grants under the EANS program, and which were granted and then forgiven loans under
the PPP program.
7
Day School does not solicit or maintain personal financial information from the parents whose
children are enrolled in the school. With no access to this data, the Day School was required to
select from one of several approved options listed in the application, and the option the school
selected (“Proportionality Data”) reported the demographic make-up of the school based on the
low-income student ratio in the School Attendance Area in which the applicant school students
reside. This data is supplied by the State of South Carolina. The Day School was completely
transparent in doing so as the form requires the respondent to indicate which option it has chosen
in responding to the question.
Finally, Mr. Austin notes the transfer of a surplus to the school’s endowment and the
associated transactions that followed. At the end of every fiscal year, the Board evaluates the
financial results of the school to determine how to apply any surplus or how to fund any deficit.
In the year Mr. Austin notes, the Board elected to transfer the operating surplus remaining at the
end of the school’s fiscal year into the endowment where the funds could be managed by the
Investment Oversight Committee and the school’s external investment advisor, rather than to
simply hold the funds as excess cash in a checking account earning a near zero percent return.
Those funds were then invested in keeping with the endowment’s established asset allocation
targets. Given the ever-present concerns about market volatility, rather than putting the dollars
into the market all at one time and risk investing at a peak point, the investments were made in
three tranches to “dollar cost average” into the market. The element of market timing is something
that every prudent investor considers when entering and exiting the market. Finally, every
investment transaction in the endowment is executed by a third-party (the School’s external
investment advisor) and all associated records of those transactions are fully transparent and are
maintained by that investment advisor.
8
The facts cited above were not included in the Complaint and cannot be considered in
ruling on a Motion to Dismiss. However, the Defendants want the entire story to be told
because, even assuming that every “fact” alleged by Plaintiff is true, he has still failed to state a
claim for relief under the FCA, as set forth below.
FACTS ALLEGED IN COMPLAINT6
Plaintiff is the parent of minor students who previously attended the Day School and, for a
short time, between June 2021 and February 2022, he served on the Day School’s Board of
Trustees. The Day School applied for federal financial assistance during the COVID-19 pandemic
and received funds under both EANS and PPP (collectively, “Federal COVID Funds”), in a total
amount of more than $600,000. Compl., ¶¶ 2, 3. Plaintiff was elected to the Board of Trustees
“[a] short time after [the Day School] applied for and obtained these funds,” and he “soon began
receiving complaints from CDS parents who were concerned about CDS’s leadership, CDS’s
response to the pandemic, CDS’s receipt and use of Federal COVID Funds, and potential self-
dealing by individuals on CDS’s Board of Trustees.” Compl., ¶¶ 4, 5.
On December 15, 2021, Plaintiff “voiced his concerns about CDS’s lack of transparency
to the Defendant Hershey and CDS’s Board of Trustees,” and, on or about December 20, 2022,
“CDS removed Plaintiff’s access to prior Board of Trustees meeting minutes.” Compl., ¶¶ 160,
161. “In January 2022, [he] noticed that more and more parents were frustrated by CDS’s handling
of the COVID-19 pandemic and were concerned that Federal COVID Funds were impacting
CDS’s policy decisions.” Id. at ¶ 163. Plaintiff sought to “investigate CDS’s acquisition and use
of Federal COVID Funds.” He subsequently “learned of several irregularities, including potential
misrepresentations on CDS’s EANS application and misuse of PPP funds.” On January 24, 2022,
6
For the sole purpose of this Motion to Dismiss, Defendants assume that all allegations in the
Complaint are true, even though most are not.
9
“in an effort to stop this potential fraud,” Plaintiff “raised concerns about CDS’s eligibility for,
and use of, Federal COVID Funds to CDS Trustee Jamie Hood.” Id. at ¶¶ 11-13. Plaintiff “offered
to initiate and oversee an audit of CDS’s acquisition and use of Federal COVID Funds.” The Day
School refused this offer. Id. at ¶¶ 15, 168.
On February 3, 2022, Plaintiff learned from Trustee Jamie Hood that the school “planned
to call a Special Board Meeting (“Special Meeting”) to ensure that Plaintiff’s children would not
be able to reenroll at CDS.” Compl., ¶ 22. On February 5, 2022, Plaintiff raised his concerns
about the Day School’s acquisition and use of Federal COVID Funds to a federal prosecutor, and
he informed Alice Paylor, the Day School’s counsel, of his conversation. Id. at ¶¶ 23, 24. Plaintiff
received notice of the Special Meeting the following night. Id. at ¶ 25. Plaintiff alleges that
“[w]ithout prior notice and in contravention of CDS’ Bylaws, Defendant Hershey immediately
moved on behalf of the Executive Committee for the Board of Trustees to enter Executive Session
to consider the first agenda item: Removing Plaintiff from CDS’ Board of Trustees.” Id. at ¶ 29.
The Board of Trustees removed Plaintiff from his position as a Board member. The remaining
Trustees then voted not to renew the contracts for Plaintiff’s children for the 2022-23 school year.
Id. at ¶¶ 33, 34.
After these actions, Plaintiff applied to enroll his children at another private school, Mason
Preparatory School (“Mason Prep”). Compl., ¶ 195. On March 10, 2022, his wife’s aunt
“informed [him] that she had learned from individuals associated with Mason Prep that CDS was
attempting to prevent Plaintiff’s children from being admitted to Mason Prep.” Id. at ¶ 196. On
March 11, 2022, Mason Prep’s Director of Enrollment, Jake Petty, “separately informed both
Plaintiff and his wife that the Children were being denied admission due to pressure from CDS.”
10
“Four other families that had publicly supported Plaintiff at CDS were also denied admission to
Mason Prep.” Id. at ¶¶ 198, 199.
Plaintiff alleges that he “was an agent of CDS during his tenure on the Board of Trustees,”
that he engaged in protected activity, and that Defendants retaliated against him by removing him
from the Board of Trustees, declining to renew his children’s contracts, and interfering with his
efforts to enroll his children at a different private school. See Compl., ¶¶ 202-222. Plaintiff seeks
actual and special damages resulting from his “lawful acts in furtherance of a potential action under
the FCA and to stop one or more violations of the FCA. See Compl., ¶ 216.
LEGAL STANDARD
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) challenges the legal
sufficiency of the facts alleged in the complaint. Edwards v. City of Goldsboro, 178 F.3d 231, 243
(4th Cir. 1999). To survive a motion to dismiss, the complaint must plead “enough facts to state
a claim to relief that is plausible on its face,” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570,
127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), and must “allow[ ] the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged,” Ashcroft v. Iqbal, 556 U.S. 662,
678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). When considering a motion to dismiss, the court
must accept as true all the factual allegations contained in the complaint. Erickson v. Pardus, 551
U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007). However, “when the allegations in a
complaint, however true, could not raise a claim of entitlement to relief, this basic deficiency
should . . . be exposed at the point of minimum expenditure of time and money by the parties and
the court. Twombly, 550 U.S. at 558 (quotation marks and citation omitted).
11
ARGUMENT
The FCA is an anti-fraud statute that imposes liability for those who make false statements
and submit false claims to the Government. 31 U.S.C. § 3729. The FCA contains a retaliation
provision, also known as the “whistleblower” statute, intended to protect individuals who seek to
expose violations of § 3729. The retaliation provision states:
Any employee, contractor, or agent shall be entitled to all relief necessary to make
that [individual] . . . whole . . . if that [individual] . . . is discharged, demoted,
suspended, threatened, harassed, or in any other manner discriminated against in
the terms and conditions of employment because of lawful acts done by the
[individual] . . . in furtherance of . . . efforts to stop [one] or more violations of this
subchapter.
31 U.S.C. § 3730(h)(1).
Section 3730(h)(2) sets forth the remedies associated with a violation of § 3730(h)(1). In
pertinent part, § 3730(h)(2) provides:
Relief under [this section] shall include reinstatement with the same seniority
status that employee, contractor, or agent would have had but for the discrimination,
2 times the amount of back pay, interest on the back pay, and compensation for any
special damages sustained as a result of the discrimination, including litigation
costs and reasonable attorneys’ fees.
31 U.S.C. § 3730(h)(2) (emphasis added). These remedies are mandatory. Brach v. Conflict
Kinetics Corporation, 221 F. Supp. 3d 743, 749 & n.12 (E.D. Va. 2016) (citing Eberhardt v.
Integrated Design & Constr., Inc., 167 F.3d 861, 872 (4th Cir. 1999) (holding that relief under §
3730(h) is mandatory)).
To survive a motion to dismiss, a plaintiff alleging injury under § 3730(h)(1) must show
(1) he engaged in protected activity, (2) his employer, or the entity with which he has contracted
or serves as an agent, knew about the protected activity, and (3) the employer, or the entity with
which he has contracted or serves as an agent, took adverse action against him as a result. See
Smith v. Clark/Smoot/Russell, 796 F.3d 424, 433 (4th Cir. 2015) (citation omitted). See
12
also United States ex rel. Chorches for Bankr. Est. of Fabula v. Am. Med. Response, Inc., 865 F.3d
71, 95 (2d Cir. 2017).
I. Plaintiff Fails to Allege the Necessary Statutory Relationship
In 2009, Congress amended the FCA retaliation provision by omitting the word “employer”
as the only potentially culpable party and adding “contractor” or “agent” to “employee,” as
identifiers of a possible aggrieved party. Fraud Enforcement and Recovery Act of 2009, Pub.L.
No. 111–21, § 4, 123 Stat. 1617, 1624.7 The predominance of federal courts to consider the
question have found that the amendment expanded the range of plaintiffs in FCA retaliation actions
while still requiring that a defendant have an employment-type of relationship with the
plaintiff. See, e.g., United States ex rel. Abu-Hussein v. Science Applications Int’l Corp., No.
2:09–cv–1858–RMG, 2012 WL 6892716, at *2 (D.S C. May 3, 2012) (collecting cases) aff'd 475
Fed. Appx. 851 (4th Cir. 2012) (per curiam); Vander Boegh v. EnergySolutions, Inc., 772 F.3d
1056, 1063 (6th Cir. 2014) (citing 155 Cong. Rec. E1295–03, 2009 WL 1544226 (June 3, 2009)
(statement of Rep. Howard L. Berman) (stating, as the House sponsor of the amendment, that the
purpose of the amendment was to “cover[ ] . . . retaliation against contractors and agents of the
discriminating party who have been denied relief by some courts because they are not technically
‘employees’” and to “protect persons who seek to stop [FCA violations] regardless of whether the
person is a salaried employee, an employee hired as an independent contractor, or
an employee hired in an agency relationship”) (emphasis included in citation).
While the legislative history of the FCA is clear that its central purpose is to enlist private
citizens in combating fraud against the United States, and § 3730(h) is designed to protect
7
The previous version of the statute read: “Any employee who is discharged, [etc.] . . . , or in any
other manner discriminated against in the terms and conditions of employment by his or her
employer . . . shall be entitled to all relief necessary to make the employee whole.” 31 U.S.C. §
3730(h) (2006), amended by 31 U.S.C. § 3730(h)(1).
13
individuals who expose such fraud, Congress just as clearly “did not intend to grant a federal right
of action against anyone and everyone.” United States ex rel. Bias v. Tangipahoa Parish School
Board, 816 F.3d 315, 324 (5th Cir. 2016). Indeed, as this Court has noted, “[t]here is no indication
in the revised statutory language of the 2009 amendments or in the legislative history that indicate
a Congressional intent to broaden the scope of § 3730(h) to include potential defendants who have
no employer type relationship with plaintiffs.” Abu-Hussein, 2012 WL 6892716, at *3 n.4
Accordingly, district courts still “require[] some employment relationship acts as a
continuing limiting principle,” in assessing liability under § 3730(h). Bias, 816 F.3d at 324
(determining that the 2009 amendment requires that courts expand the class of defendants beyond
just employers but that courts should not interpret the amendment as a license to sue just anyone).
“Defendants [] must be those by whom plaintiffs are employed, with whom they contract, or for
whom they are agents”; and “the retaliatory action must be related to ‘terms and conditions
of employment,’ or the contract or agency relationship.” Id. (emphasis in original) (citing 31
U.S.C. § 3730(h)(1)).
Therefore, to state a claim under § 3730(h), Plaintiff must have served the Day School as
an employee, contractor, or agent, which terms the FCA does not define. Plaintiff alleges merely
that in serving on the Board of Trustees he acted as the Day School’s “agent,” Compl., ¶¶ 52, 202;
he does not allege that he served as an employee or contractor. 8 Courts examining whether an
8
Nor could he. In the absence of any definition for “employee,” courts must look to the
“conventional master-servant relationship as understood by common-law agency doctrine.”
Community for Creative Non–Violence v. Reid, 490 U.S. 730, 739–40, 109 S.Ct. 2166, 104
L.Ed.2d 811 (1989). Under the common law, the primary indication of a master-servant
relationship is a master’s “right to control the manner and means” by which production is
accomplished. Reid, 490 U.S. at 751. As for “contractor,” that status “requires the existence of
some form of contract between parties.” Bias, 816 F.3d at 325. Plaintiff’s position as a member
of the Board of Trustees does not satisfy either definition, nor does he allege otherwise. And, as
discussed infra, this law applies equally to the agency relationship Plaintiff alleges.
14
agency relationship exists within the context of the FCA look to common law agency principles.
See Reid, 490 U.S. at 740-41 (instructing courts to rely on “the general common law of agency,
rather than on the law of any particular state,” when attempting to give meaning to terms used in
a federal statute”). See also Bias, 816 F.3d at 325 (applying common law agency doctrine).
“Agency is the fiduciary relationship that arises when one person (a ‘principal’) manifests
assent to another person (an ‘agent’) that the agent shall act on the principal’s behalf and subject
to the principal’s control, and the agent manifests assent or otherwise consents so to act.”
Restatement (Third) of Agency § 1.01 (2006). Put another way, “[a] relationship is not one of
agency within the common-law definition unless the agent consents to act on behalf of the
principal, and the principal has the right throughout the duration of the relationship to control the
agent’s acts.” Id., comment c. “The chief justifications for the principal’s accountability for the
agent’s acts are the principal’s ability to select and control the agent and to terminate the agency
relationship, together with the fact that the agent has agreed expressly or implicitly to act on the
principal’s behalf.” Id. A necessary element of agency is one person’s “power to affect the legal
rights and duties of the other person.” Id.
An agent may act through “actual authority” or “apparent authority.” “Actual authority is
an agent’s power to affect the principal’s legal relations in accord with the agent’s reasonable
understanding, at the time the agent acts, of the principal’s manifestations to the agent.”
Restatement (Third) of Agency at § 2.02, comment c. “Apparent authority holds a principal
accountable for the results of third-party beliefs about an actor’s authority to act as an agent when
the belief is reasonable and is traceable to a manifestation of the principal.” Id. at § 2.03, comment
c.9
9
The law of agency in South Carolina is consistent with common law agency principles. See
Roberson v. Southern Finance of S. C., Inc., 365 S.C. 6, 615 S.E.2d 112, 115 (2005) (“An agent’s
15
While the existence of an agency relationship is typically a question of fact, the court can
decide the issue as a matter of law where the facts are not in dispute. Cf. Allen v. Greenville Hotel
Partners, Inc., 409 F. Supp. 2d 672, 678 (D.S.C. 2006) (stating that where the facts concerning
degree of control are not in dispute, “the court finds that whether there was sufficient control for
an actual agency relationship to result and the alleged principal to owe a duty to the Plaintiffs is a
question of law for the court”).
The Complaint summarily states that Plaintiff acted as an agent of the Day School during
his tenure on the Board of Trustees. However, Plaintiff offers no factual allegations to support
that contention and the School’s Bylaws, which comprise the only written document pertinent to
the parties’ relationship, demonstrates otherwise. See Jamison, 684 S.E.2d at 172 (starting its
agency analysis by “looking at the three documents which govern the parties’ relationships”). The
Bylaws state in relevant part as follows:
Section 3.1. The direction and control of the Corporation shall vest in a Board of
Trustees, consisting of not more than fifteen (15) members. Trustees shall be
natural persons of full age.
Section 3.2. The Board of Trustees may exercise all such powers of the
Corporation and do all such lawful acts and things as are not proscribed by statute,
by the articles of incorporation, or by these By-Laws. The Board of Trustees may
delegate to the Executive Committee, Head of School, or such
other officer or employee, such authority as shall from time to time be necessary or
desirable in the determination of the Board of Trustees.
....
Section 3.9. A majority of the existing Board being present shall constitute a
quorum for the transaction of business at any meeting of the Board of Trustees.
Each member of the Board of Trustees shall have one vote on any motion
presented to the Board of Trustees and, unless otherwise stated herein, the
authority is composed of his or her actual authority, whether express or implied, together with the
apparent authority which the principal by his or her conduct is precluded from denying”) (citing
2A CJS Agency § 132 (2004)). See id. (“[A]ctual authority is expressly conferred upon the agent
by the principal”).
16
vote of a majority of the Board of Trustees members present at the time of the
vote, if a quorum is present, shall be an act of the Board of Trustees. The Board
of Trustees shall have the authority to act without a duly called meeting of the Board
of Trustees upon the affirmative unanimous action of the Board, duly noted in
minutes contained in the corporate records of the Corporation. Members of the
Board of Trustees shall abstain from any vote of the Board in which the member
has a direct financial conflict of interest in the outcome of such vote.
Section 3.11. Any action which may be taken at a meeting of the Board of Trustees
may be taken without a meeting if consent or consents in writing setting forth the
action so taken shall be signed by all of the Trustees and shall be filed with the
Secretary of the Corporation.
Section 4.1. The officers of the Corporation shall consist of a Chair, Vice Chair,
Treasurer and Secretary, all of whom shall be elected by the Board of Trustees from
its membership for a term not to exceed two (2) years. Any vacancy or vacancies
in any of the offices of the Corporation, arising from whatever cause, excepting
expiration of a term of office, shall be filled by the Board of Trustees at a Special
Meeting of the Board of Trustees called for that purpose or at a Regular Meeting of
the Board of Trustees. An officer shall be eligible to be reelected to his or her office
for one additional term, but shall not serve more than two (2) successive terms.
Section 5.1. The Board of Trustees shall elect a Chair from its membership, who
shall serve for a term of two (2) years and until his or her successor is elected. The
Chair shall preside at all meetings of the Board of Trustees and the Executive
Committee and shall be the executive head of the Corporation. She or he shall be
charged with the general conduct and control of the operations of the Corporation
under the supervision of the Board of Trustees, except such duties in the
management and conduct of the Corporation's operations as may be devolved by
the Board of Trustees to any other officer or employee.
Section 6.1. The Board of Trustees shall elect a Vice Chair from its membership,
who shall serve for a term of two (2) years and until his or her successor is elected.
The Vice Chair of the Board of Trustees shall preside at meetings of the Board of
Trustees and of the Executive Committee in the absence of the Chair and shall, in
general, perform all the duties of the Chair in the absence or disability of the Chair.
Section 7.1. The Board of Trustees shall elect a Treasurer from its membership,
who shall serve for a term of up to two (2) years and until his or her successor is
elected. The Treasurer of the Corporation shall be its fiscal agent. All of the records
dealing with the finances of the Corporation shall be kept by the Treasurer under
his or her supervision. The Treasurer shall give such security as shall be required
by the Board of Trustees for the faithful performance of his or her duties.
Section 8.1. The Board of Trustees shall elect a Secretary from its membership,
who shall serve for a term of up to two (2) years and until his or her successor is
17
elected. The Secretary of the Corporation shall keep a current record of the
proceedings of all meetings of the Corporation and of the Board of Trustees and
shall maintain them in a permanent record book.
Section 9.1. The Board of Trustees may delegate to an Executive Committee such
of its powers, duties, and obligations as determined by the Board of Trustees from
time to time. The Executive Committee shall consist of the Chair, Vice-Chair,
Treasurer, Secretary and the immediate past Chair, if she or he is a member of the
Board. The Head of School employed by the school shall participate, ex officio, in
all meetings of the Executive Committee, but shall have no vote. The Executive
Committee shall keep a complete record of all its proceedings and make a full report
of the same to the Board of Trustees at its Regular Meetings.
Section 10.1 The Committee on Trustees shall consist of the Chair of the Board of
Trustees and not less than two (2) or more than four (4) other members of the Board
of Trustees, all of whom shall serve for a period of one (l) year upon appointment.
The Head of School employed by the school shall participate, ex officio, in all
meetings of the Committee on Trustees, but shall have no vote. From those
appointed to the Committee on Trustees, the Chair of the Committee shall be
appointed by the Chair of the Board of Trustees. At the Board of Trustees' April
meeting, the Committee on Trustees shall submit to the Board of Trustees a list of
names of proposed individuals to serve as members of the Board of Trustees and a
list of names of individuals who have agreed to serve, if elected, as officers of the
Corporation. Nothing contained herein shall prevent additional nominations from
being made by any member of the Board of Trustees. At the Board of Trustees' May
meeting, the Committee on Trustees shall vote to approve the new Board members
and officers.
Bylaws, attached hereto as Exhibit C (emphasis added).
Significantly, these excerpts, along with their companion provisions, demonstrate that the
Board of Trustees acts independent of the Day School’s control; and the Complaint does not allege
a contrary pattern or practice. The Bylaws further demonstrate that the Board of Trustees is
authorized to act only as a whole and by vote of the majority. To the extent the Bylaws authorize
any of the four officers to act individually, Plaintiff was not elected to an officer position and does
not allege otherwise.
In short, Plaintiff, as an individual member of the Board of Trustees and holding no officer
position, was not vested with authority to act on the Day School’s behalf, nor was he subject to the
18
School’s direction and control. Accordingly, there is no agency relationship that could give rise
to liability under § 3730(h). On this basis, the Court should dismiss the Complaint in its entirety
with prejudice.
II. The Statute Does Not Provide for Individual Liability
Furthermore, § 3730(h) does not extend liability to supervisors sued in their individual
capacity. According to the Complaint, Defendant Hershey is a member of the Day School’s Board
of Trustees and was the Chair of the Board during the relevant time period. Compl., ¶¶ 65, 66.
Defendant Arnstein served as the Head of School and was an ex-officio member of the Board of
Trustees. Id. at ¶¶ 69, 70.10 The Complaint asserts that Defendant Arnstein was somehow involved
in the alleged fraud and that Defendant Hershey took actions to retaliate against Plaintiff.
However, “the overwhelming majority of courts, including the Fifth Circuit, have held that the
current version of § 3730(h) does not create a cause of action against supervisors sued in their
individual capacities.” Brach, 221 F. Supp. 3d at 748 & nn.8, 9.
As explained by Judge Ellis in Brach:
To state the obvious, the 2009 amendment to § 3730(h) expanded the class of
potential plaintiffs, but is silent on the question whether a plaintiff may bring a
cause of action against a supervisor sued in his individual capacity. Importantly,
however, Congress is presumed to have known that courts had unanimously ruled
that the pre–2009 version of § 3730 did not allow for individual supervisor liability.
Thus, to accept [plaintiff’s] argument—that Congress's amendment silently
expanded § 3730(h) to include supervisor liability—is to assume that Congress
overturned unanimous, pre-amendment judicial authority by negative
implication. See, e.g., [Howell v. Town of Ball, 827 F.3d 515, 530 (5th Cir.
2016)] (“Adopting [plaintiff's] argument means concluding that Congress
overturned [unanimous] precedent, not by the insertion of express language
expanding liability, but only by mere implication.”); [Aryai v. Forfeiture Support
Associates, 25 F.Supp.3d 376, 386 (S.D.N.Y. 2012)] (noting same). Such an
10
The Complaint asserts no allegations that either Hershey or Arnstein “supervised” the Plaintiff,
who was a member of the governing body of the School, so they could have no liability as
“supervisors.” In fact, Plaintiff makes no allegations in the Complaint that he informed either of
these individuals of his concerns about the federal funding, or that either of them took any actions
to retaliate against Plaintiff.
19
assumption is unwarranted because Congress, had it intended to overturn

unanimous case law, could have simply replaced the term, “employer,” with “any
person” in order to expand the class of potential defendants. As the Fifth Circuit
has stated in addressing this precise issue, “[I]t is clear that the reference to an
‘employer’ [in § 3730(h) ] was deleted to account for the broadening of the class of
FCA plaintiffs to include ‘contractors’ and ‘agents,’ not to provide liability for
individual, non-employer defendants.” Howell, 827 F.3d at 530.
Brach, 221 F. Supp. 3d at 749.
To further elucidate that the text of § 3730(h) “forecloses the argument that a supervisor
may be sued in his individual capacity,” Judge Ellis noted the mandatory remedies that §
3730(h)(2) prescribes, such as reinstatement, which “a mere supervisor could not possibly grant .
. . in his individual capacity.” Brach, 221 F. Supp. 3d at 749-50 (quoting Yesudian ex rel. United
States v. Howard Univ., 270 F.3d 969, 972 (D.C. Cir. 2001)). See Aryai v. Forfeiture Support
Associates, 25 F. Supp. 3d 376, 387 (S.D.N.Y. 2012 ) (“The same logic [in Yesudian, 270 F.3d at
972] remains sound even after the 2009 amendment [because] interpreting amended section
3730(h) to provide for individual liability is inconsistent with the mandatory remedy of
reinstatement”). Indeed, the Bylaws make clear that neither Defendant Hershey nor Defendant
Arnstein could authorize reinstating Plaintiff to his former position on the Board of Trustees. See
Exhibit C, Section 3.3.
In addition, SC Code § 33-31-834 provides that “[a]ll directors, trustees, or members of
the governing bodies of not-for-profit . . . corporations . . . are immune from suit arising from the
conduct of the affairs of these . . . corporations . . . . This immunity from suit is removed when the
conduct amounts to wilful, wanton, or gross negligence . . . .” There is no allegation that either of
the individual Defendants conducted herself in a willful, wanton, or grossly negligent manner.
In sum, Plaintiff cannot maintain this lawsuit as to Defendants Hershey and Arnstein, and
the Court should dismiss them with prejudice.
20
III. The Predominance of the Alleged Retaliatory Acts Are Not Actionable
Finally, none of Defendants’ alleged conduct post-dating Plaintiff’s removal from the
Board of Trustees is actionable under § 3730. Plaintiff alleges in turn that after he was removed
from the Board of Trustees, the Day School did not renew his children’s contracts and the school,
along with “its Trustees, employees, and agents,” continued to retaliate against him. Compl., ¶
193. But, as discussed, § 3730(h) provides a cause of action for retaliation only against an
“employee, contractor, or agent.” To the extent Plaintiff could be considered an agent of the Day
School during his tenure on the Board of Trustees—which contention Defendants assert fails as a
matter of law—he ceased to be an agent once he was removed from the Board. Any conduct that
occurred after that removal, including but not limited to the Day School’s decision not to renew
the children’s contracts and the alleged interference in enrolling the children elsewhere, is simply
not actionable retaliation under § 3730(h). See, e.g., Potts v. Ctr. for Excellence in Higher Educ.,
Inc., 244 F. Supp. 3d 1138, 1143 (D. Colo. 2017) (“The overwhelming majority of courts that have
considered the issue have found that § 3730(h)(1) does not apply to post-employment
retaliation[.]”) (collecting cases), aff'd, 908 F.3d 610 (10th Cir. 2018). Cf. Knight v. Standard
Chartered Bank, 531 F. Supp. 3d 755, 769-70 (S.D.N.Y. 2021) (concluding that post-termination
conduct could not provide the necessary forum connection for personal jurisdiction in a retaliation
action) (collecting cases).
In a similar vein, the substantive relief available to Plaintiff under his agency theory applies
only for protected actions he took during his tenure as a purported agent. Potts, 244 F. Supp. 3d
at 1142. As the Potts court reasoned:
Someone who took action and faced retaliation after leaving a company cannot
enjoy reinstatement or back pay, since there is no missing job or compensation that
she “would have had but for the [retaliatory] discrimination.” That leaves only
reimbursement for “special damages” like emotional distress, see Neal v.
21
Honeywell, Inc., 191 F.3d 827, 832 (7th Cir. 1999), as well as litigation costs and
attorneys' fees. Yet Ms. Potts primarily seeks an injunction here, even though the
FCA does not authorize such relief. See 31 U.S.C. § 3730(h)(2). She also seeks
“special damages,” but does not identify what damages she may be entitled to
collect other than “attorneys’ fees and costs.” [] It strains credulity to suggest that
Ms. Potts could be made whole by leaving the alleged retaliation unabated and
restoring only her litigation expenses for this action. [] Thus, the only reasonable
interpretation is that the FCA’s anti-retaliation provision covers current employees
to the exclusion of former employees.
Id. at 1142-43.
Thus, Plaintiff’s purported entitlement to damages cannot extend beyond whatever alleged
damages he incurred for any protected actions he took leading up to his removal from the Board
of Trustees. And while Plaintiff seeks “damages as a result of Defendants’ retaliation pursuant to
31 U.S.C. § 3730(h),” he has not alleged incurring any damages because of protected activity
engaged in prior to his removal. See Compl., ¶ 204. Not unlike the plaintiff in Potts, Plaintiff’s
request to be made whole is limited strictly to recovering the fees incurred in bringing this lawsuit
should he prevail.
CONCLUSION
For the foregoing reasons, Defendants ask that this Court grant their Motion to Dismiss
and dismiss the Complaint in its entirety with prejudice.
By: /s/ Alice F. Paylor

Alice F. Paylor, Fed. ID #3017
Saxton & Stump, LLC
151 Meeting Street, Suite 400
Charleston, SC 29401
(843) 414-5080
afp@saxtonstump.com
ATTORNEYS FOR DEFENDANTS
Charleston, SC
August 18, 2023
22
Exhibit A
Francie and Matt Austin’s emails and texts to Day School leadership and
administration from 12/21 to 2/22
[All names of children and non-essential persons have been redacted]
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From
Subject: wd: LMS BOT Group Access
Date: December 20, 2021 at 7:05 PM
To: Emm e Hershey eghershey@att.net
Beg n forwarded message:
From: Matt Aust n <matt.aust n@ne sonmu ns.com>

Date: December 20, 2021 at 3:07:37 PM EST
To:
Subject: LMS BOT Group Access
Hey
I just tried to access the BOT group page through LMS and it’s no longer listed in my
“Groups.” Can you point me in the right direction? I had access to it about an hour ago.
Thanks,
Matt

MATT AUSTI N OF C O U N S E L
matt.austin@nelsonmullins.com
LIBERTY CENTER | SUITE 600

1 5 1 M E E T I N G S T R E E T | C H A R L E S TO N , S C 2 9 4 0 1
T 843.534.4301 F 843.722.8700
NELSONMULLINS.COM VCARD VI E W B I O

Confidentiality Notice
Th s message s ntended exc us ve y for the nd v dua or ent ty to wh ch t s addressed. Th s commun cat on may conta n
nformat on that s propr etary, pr v eged, confident a or otherw se ega y exempt from d sc osure. If you are not the named
addressee, you are not author zed to read, pr nt, reta n, copy or d ssem nate th s message or any part of t. If you have rece ved th s
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Exhibit B
Non-Public Schools in SC that received Covid Relief Funds

?~?
Borrower Loan a mou Amount forgiven
ADDLESTONE HEBREW ACADEMY 271420 274543.19
ADDLESTONE HEBREW ACADEMY 271400 274513.56
ASHLEY HALL FOUNDATION 2208777 2260376.48
ASHLEY HALL FOUNDATION 2000000 2030222.22
CAROLINA VOYAGER CHARTER SCHOOL 371385 376635.26
CHARLES TOWNE MONTESSORI SCHOOL 147400 149119.67
CHARLES TOWNE MONTESSORI SCHOOL 141485 142188.49
CHARLESTON CATHOLIC SCHOOL 223987.4 226768.53
CHARLESTON CHRISTIAN SCHOOL 109593 110977.17
CHARLESTON COLLEGIATE SCHOOL 728557 722509.06
CHARLESTON COLLEGIATE SCHOOL 454895 457321.11
CHARLESTON DAY SCHOOL, INC. 570200 573732.07
CHARLESTON DEVELOPMENT ACADEMY 252700 255451.62
CHARLESTON SAILING SCHOOL LLC 52500 52950.21
CHRIST OUR KING STELLA MARIS CATHOLIC SCHOOL 649731.3 658105.64
CLAPHAM EDUCATION GROUP 113778 114370.27
CROWN LEADERSHIP ACADEMY, INC. 155187.3 156488.34
EAST COOPER MONTESSORI CHARTER SCHOOL 619800 624035.3
FIRST BAPTIST SCHOOL 582984 586913.15
FIRST BAPTIST SCHOOL 502782.5 508485.29
GREG MATHIS CHARTER HIGH SCHOOL 126647 127227.47
JAMES ISLAND CHRISTIAN SCHOOL 147200 148050.94
JANICE MEYERS 24827 24955.96
KIDS ON POINT, INC. 48500 49056.4
LOWCOUNTRY LEADERSHIP CHARTER SCHOOL 645400 651712.54
LOWCOUNTRY LEARNERS, LLC 52500 52830.82
MASON PREPARATORY SCHOOL 511200 515133.4
MONTESSORI LEARNING COLLECTIVE LLC 47200 47422.42
MONTESSORI LEARNING COLLECTIVE, LLC 47200 37429.32
MONTESSORI SCHOOL OF MT PLEASANT INC 118900 119662.94
MONTESSORI SCHOOL OF MT. PLEASANT INC. 120800 121491.7
NATIVITY SCHOOL 133522 134987.03
OCEANSIDE COLLEGIATE ACADEMY 272697.5 274076.14
OWENS CHRISTIAN ACADEMY 67372.55 67793.63
PALMETTO SCHOLORS ACADEMY 525982 529693.1
PALMETTO SCHOOL OF CAREER DEVELOPMENT LLC 64436 64803.2
RUBY'S ACADEMY 55492 56240
SAINT JAMES DAY SCHOOL 85710 86398.06
SEA ISLAND PRESCHOOL LLC 146421.4 137338.48
ST. JOHN'S CATHOLIC SCHOOL 98297 99356.42
SUNDROPS GROUP LLC 666200 671029.95
SUNDROPS GROUP LLC 641700 647439.65
SUNRISE CHILDREN SCHOOL-SBA SMALL 7A TERM 18247 18471.54
THE ACORN SCHOOL OF CHARLESTON 18615 18753.72
THE COOPER SCHOOL 156000 146788
THE OAKS CHILDREN'S ACADEMY LLC 160000 162073.42
THE PORTER ACADEMY DBA PORTER GAUD 3658800 3700266.4

TRIDENT ACADEMY INC 271000 274086.39
TRINITY MONTESSORI CHRISTIAN SCHOOL INC. 120607 121682.41
TRINITY MONTESSORI CHRISTIAN SCHOOL, INC 120600 121933.3
UNIVERSITY SCHOOL OF THE LOWCOUNTRY 129325 130093.86
·EANS
School Name Address City/State/Zip Total Assistance
Abundant Life Christian School 630 Farr's Bridge Road Greenville, SC 29611 $29,843.70
Anderson Christian School 3902 Liberty Hwy Anderson, SC 29621 $364,571.84
Bishop England High School 363 Seven Farms Drive Charleston, SC 29492 $666,456.19
Blessed Sacrament Catholic School 7 St. Teresa Drive Charleston, SC 29407 $603,472.07
Bob Jones Academy 1700 Wade Hampton Blvd. Greenville, SC 29614 $593,417.21
Calvary Christian School 4511 Dick Pond Road Myrtle Beach, SC 29588 $210,237.00
Cambridge Academy 103 Eastman Street Greenwood, SC 29649 $480,651.76
Camden Military Academy 520 Highway 1 N Camden, SC 29020 $214,477.19
Camperdown Academy 65 Verdale Commons Dr Greenville, SC 29607 $215,969.00
Cardinal Newman School 2945 Alpine Rd Columbia, SC 29223 $880,802.49
Carolina Christian Academy 1850 Kershaw Camden Hwy Lancaster, SC 29720 $1,686,047.66
Chabad Jewish Academy 2803 N Oak Street Myrtle Beach, SC 29577 $288,513.00
Charleston Day School, Inc. 15 Archdale Street Charleston, SC 29401 $79,777.82
Christ Church Episcopal School 245 Cavalier Drive Greenville, SC 29334 $224,321.10
Christ Our King - Stella Maris School 1183 Russell Drive Mt. Pleasant, SC 29464 $583,240.30
Christian Academy of Myrtle Beach 291 Ronald McNair Blvd Myrtle Beach, SC 29579 $207,410.60
Clarendon Hall 1140 South Duke St Summerton, SC 29148 $90,045.44
Coastal Christian Preparatory School 681 Mccants Drive Mt. Pleasant, SC 29464 $4,845.88
Colleton Prep Academy 165 Academy Road Walterboro, SC 29488 $780,869.17
Conway Christian School 1200 Medlen Parkway Conway, SC 29526 $186,400.00
14855 CR Koon Hwy, P.O. Box
Cornerstone Community Academy 634 Newberry, SC 29108 $3,512.52
Crown Leadership Academy 1455 Wakendaw Rd Mt. Pleasant, SC 29464 $24,580.94
Dillon Christian School 1325 Commerce Drive Dillon, SC 29536 $59,356.39
Divine Redeemer School 1104 Fort Drive Hanahan, SC 29410 $335,879.86
Dorchester Academy 234 Academy Rd. St George, SC 294 77 $303,860.46
Easley Christian School 461 Saco Lowell Rd Easley, SC 29640 $630,435.89
Ebenezer Weekday Ministry 524 S Ebenezer Rd Florence, SC 29501 $2,347.98
Faith Christian School 337 Farmington Road Summerville, SC 29486 $91,594.72
First Presbyterian Church Day School 302 W Whitner St. Anderson, SC 29624 $10,000.00
Foothills Christian School 126 Robin Rd Westminster, SC 29693 $341,655.28
Fountain Inn Christian School 3597 Abercrombie Rd Fountain Inn, SC 29644 $2,000.00
Francis Hugh Wardlaw Academy 1296 Columbia Road Johnston, SC 29832 $56,651.91
Glenforest School 1041 Harbor Drive West Columbia, SC 29169 $14,880.79
Grace Christian School 416 Denham Avenue West columbia, SC 29169 $470,263.92
Hammond School 854 Galway Lane Columbia, SC 29209 $167,732.38
Hampton Park Christian School 875 State Park Rd Greenville, SC 29609 $118,160.86
Harmony School 3737 Covenant Rd Columbia, SC 29204 $4,206.16
Harvest Community School 10 S Duke St Summerton, SC 29148 $629,993.61
Harvest Time International Academy 227 Huger Street Charleston, SC 29403 $24,059.57
Hawthorne Christian Academy 790 Hawthorne Road Chester, SC 29706 $415,022.25
Heathwood Hall Episcopal School 3000 S Beltline Blvd Columbia, SC 29201 $151,374.83
Hilton Head Christian Academy 3088 Bluffton Parkway Bluffton, SC 29910 $506,481.47
Hilton Head Preparatory School 8 Fox Grape Road Hilton Head Island, SC 29928 $216,982.98
Holly Hill Academy 142 Bunch Ford Rd Holly Hill, SC 29059 $222,237.62
Holy Angels Academy 11 South Magnolia Street Sumter, SC 29150 $316,237.96
Holy Trinity Catholic School 1100 8th Avenue N North Myrtle Beach, SC 29582 $503,409.82
Holy Trinity Classical Christian School 302 Burroughs Ave Beaufort, SC 29902 $129,889.45
John Paul II Catholic School 4211 N Okatie Highway Ridgeland, SC 29936 $850,683.00
Laurence Manning Academy 1154 Academy Drive Manning, SC 29102 $380,125.06

Lee Academy of Bishopville, Inc. 630 Cousar St. Bishopville, SC 29010 $230,320.25
Little School at Grace Church 98 Wentworth Street Charleston, SC 29401 $6,643.89
Lowcountry Preparatory School 300 Blue Stem Drive Pawleys Island, SC 29585 $417,836.25
Mauldin Christian Academy 150 S. Main Street Mauldin, SC 29662 $10,000.00
Mead Hall School Episcopal School 129 Pendelton Street SW Aiken, SC 29801 $530,875.97
Midland Valley Christian Academy 3526 Jefferson Davis Highway Graniteville, SC 29829 $110,665.13
Mitchell Road Christian Academy 207 Mitchell Road Greenville, SC 29615 $148,107.27
Mountain View Christian Academy 650 Battleground Rd Cowpens, SC 29330 $69,300.71
Nativity School 1125 Pittsford Circle Charleston, SC 29412 $515,123.01
New Covenant School 303 Simpson Rd Anderson, SC 29621 $10,000.00
Newberry Academy 2055 Smith Rd Newberry, SC 29108 $319,805.88
North Myrtle Beach Christian School 9535 Highway 90 Longs, SC 29568 $448,551.00
Oakbrook Preparatory School 190 Lincoln School Road Spartanburg, SC 29301 $755,459.35
Oakwood Christian School 304 Pearman Dairy R Anderson, SC 29625 $872,734.58
Our Lady of Peace Catholic School 137 Way of Peace North Augusta, SC 29841 $450,140.57
Our Lady of the Rosary Catholic School 2 James Drive Greenville, SC 29605 $1,058.13
Patrick Henry Academy 8766 Savannah Highway Estill, SC 29918 $161,857.93
Pee Dee Academy 2903 E. Hwy. 76 Mullins, SC 29574 $104,802.67
Pinewood Preparatory School 1114 Orangeburg Road Summerville, SC 29483 $1,225,151.10
Porter-Gaud School 300 Albemarle Road Charleston, SC 29407 $418,922.30
Prince of Peace Catholic School 1209 Brushy Creek Rd Taylors, SC 29687 $589,418.49
Providence Classical School 318 N. Jones Ave. Rock Hill, SC 29730 $232,582.00
Saint John Catholic School 3921 St. John's Avenue North Charleston, SC 29405 $472,629.88
Saint Mary Help of Christians Catholic
School 118 York Street SE Aiken, SC 29801 $515,531.28
Shiloh Christian School 2604 Hwy 184 W Due West, SC 29638 $3,150.00
Southside Christian School 2211 Woodruff Rd Simpsonville, SC 29681 $597,985.78
Spartanburg Christian Academy 8740 Asheville Hwy Spartanburg, SC 29316 $49,839.00
Spartanburg Day School 1701 Skylyn Drive Spartanburg, SC 29307 $832,071.93
St. Andrew Catholic School 3601 N. Kings Highway Myrtle Beach, SC 29577 $1,290,884.48
St. Anne Catholic School 1698 Bird Street Rock Hill, SC 29730 $1,273,117.15
St. Anthony Catholic School 2536 West Hoffmeyer Rd Florence, SC 29501 $642,724.18
St. Anthony of Padua Catholic School 311 Gower St Greenville, SC 29611 $579,551.63
St. Elizabeth Ann Seton Catholic School 1300 Carolina Forest Blvd Myrtle Beach, SC 29579 $299,034.00
St. Francis Catholic School 45 Beach City Rd Hilton Head Island, SC 29926 $502,349.85
St. Gregory the Great Catholic School 38 St. Gregory Drive Bluffton, SC 29909 $836,276.09
St. John Neumann Catholic School 721 Polo Road Columbia, SC 29223 $746,334.28
St. Joseph Catholic School 1200 Cornelia Rd Anderson, SC 29621 $455,572.84
St. Joseph School 3700 Devine Street Columbia, SC 29205 $494,941.79
St. Joseph's Catholic School 100 St. Joseph's Drive Greenville, SC 29607 $1,272,390.24
St. Martin de Porres Catholic School 2225 Hampton Street Columbia, SC 29204 $574,027.38
St. Michael Catholic School 542 Cypress Ave. Murrells Inlet, SC 29576 $379,216.99
St. Paul The Apostle Catholic School 152 Alabama Street Spartanburg, SC 29302 $274,670.25
St. Peter's Catholic School 70 Ladys Island Dr. Beaufort, SC 29907 $308,666.40
St. Peter's Catholic School 1035 Hampton St Columbia, SC 29201 $170,487.85
Summerville Catholic School 226 Black Oak Boulevard Summerville, SC 29485 $280,068.94
Sumter Christian School 420 South Pike West Sumter, SC 29150 $53,674.12
Tabernacle Christian School 3931 White Horse Rd. Greenville, SC 29611 $164,822.99
Temple Christian Academy 2905 Stanridge Road Anderson, SC 29625 $10,186.21
The Charleston Catholic School 888A King St. Charleston, SC 29403 $971,791.28
The Complete Student 2204 Southside Blvd Port Royal, SC 29935 $28,994.35
The King's Academy 1015 S Ebenezer Rd Florence, SC 29501 $166,130.00
Thomas Heyward Academy 1727 Malphrus Rd Ridgeland, SC 29936 $80,194.60
Town Creek Christian Academy 250 Town Creek Rd Aiken, SC 29803 $129,671.69
Trident Academy 1455 Wakendaw Road Mount Pleasant, SC 29464 $86,673.72
Trinity Collegiate School 5001 Hoffmeyer Road Darlington, SC 29532 $176,433.00
Union Christian Day School 331 Meansville Rd Union, SC 29379 $69,520.00
University School of the Lowcountry 690 Coleman Boulevard Mount Pleasant, SC 29464 $72,067.99
Walnut Grove Christian School 1036 Maxwell Mill Rd Fort Mill, SC 29708 $598,067.20
Westminster Catawba Christian School 2650 India Hook Rd Rock Hill, SC 29732 $106,752.63
Westside Christian Academy 554 Pinewood Road Sumter, SC 29154 $41,212.36
Williamsburg Academy 1000 Sandy Bay Rd. Kingstree, SC 29556 $41,685.12
Wyman King Academy 1046 Sardis Road Batesburg, SC 29006 $48,768.29
Total $38,702,511.34
Exhibit C
By-Laws Charleston Day School

Amended and Restated

By-Laws
Charleston Day School
Article I
Purpose of the
Corporation
Section 1.1. Charleston Day School, Inc. (the "Corporation") is a nonprofit educational
organization incorporated under the South Carolina Nonprofit Corporation Act of ]1994 (SC Code
Section 33-31-101 et seq.) and formed and operated solely for educational, scientific, literary, and
charitable purposes under Section 501(c)(3) of the Internal Revenue Code of 1986, asamended, or
the corresponding provisions of any subsequent tax laws of the United States (the "Code") afíd is
incorporated specifically to operate a co-educational grade school to be known as Charleston Day
School, Inc.; for such purposes, and only as allowed by state and federal law, it may solicit and
receive funds and other property, real, personal and mixed, and interest therein, by gift, transfer,
devise, or bequest, and invest, reinvest, hold, manage, administer, expend, and apply such funds and
property, subject to such conditions and limitations, if any, as may be expressed in any instrument
evidencing such gift, transfer, devise or bequest. The mission of Charleston Day School is to foster
scholarship, integrity, respect and responsibility in our students.
Section 1.2. No part of the income or principal of the Corporation shall inure to the benefit of or be
distributed to any member, director, or officer of the Corporation or any other private individual, but
reimbursement for expenditures or the payment of a reasonable compensation for services rendered
shall not be deemed violative of the purpose of the Corporation, these By-Laws. The Corporation
shall not carry on propaganda, or otherwise attempt to influence legislation, nor shall it engage in any
political campaign, relating to the candidacy of any person, or otherwise.
Article II
Principal Office
Section 2.1. The office for the transaction of the business of the Corporation and general direction
of its affairs shall be located at 15 Archdale Street, Charleston, South Carolina, or such other place as
determined by the Corporation from time to time.
Article III
Board of Trustees
Section 3.1. The direction and control of the Corporation shall vest in a Board of Trustees,
consisting of not more than fifteen (15) members. Trustees shall be natural persons of full age.
Section 3.2. The Board of Trustees may exercise all such powers of the Corporation and do all such
lawful acts and things as are not proscribed by statute, by the articles of incorporation, or by these
By-Laws. The Board of Trustees may delegate to the Executive Committee, Head of School, or such
other officer or employee, such authority as shall from time to time be necessary or desirable in the
determination of the Board of Trustees.
Section 3.3. Each Member of the Board shall be elected for a three-year term. Any vacancy or
vacancies in the Board of Trustees arising from any cause, excepting expiration of terms of office,
may be filled by the remaining members of the Board of Trustees upon recommendation from the
Committee on Trustees at a Special Meeting called for that purpose or at a Regular Meeting of the
Board of Trustees. Except as provided below regarding vacancies, members of the Board of
Trustees shall be eligible for a new three-year term of office on the Board of Trustees. Any Board
member who has served two consecutive terms shall be eligible for reappointment after an absence
of at least one three-year term therefrom; provided, however, that members of the Board of Trustees
elected to an office of the Corporation may continue to serve on the Board of Trustees for the full
term of the office. Any Member of the Board who is elected to fill a vacant seat on the Board may
be re-elected to serve up to two new full terms as a Trustee if the remaining term of the vacating
Member is less than two (2) years; provided further, that if the remaining term of the vacating
Member is two (2) years or longer, the Member elected to serve such remaining term shall be
eligible for only one additional three-year term, as provided above. The foregoing notwithstanding,
the outgoing Chair shall remain as a member of the Board of Trustees for one (1) year, regardless of
tenure, and in addition to his or her service as a Trustee, shall act as an advisor to the new Chair.
Section 3.4. Regular meetings ("Regular Meetings") of the Board of Trustees shall be held at least
four ( 4) times per year and shall include an annual meeting on the first Tuesday of June of each year
(the "Annual Meeting"), or at such other time as determined by the Chair or the Board of Trustees
from time to time.
Section 3.5. Special meetings ("Special Meetings") of the Board of Trustees may also be called by
the Chair or at the request of any four ( 4) members upon not less than five (5) days prior written
notice.
Section 3.6. Notice of each meeting of the Board of Trustees shall specify the date, place and hour
of the meeting and shall be given to each Trustee at least five (5) days before the meeting either
personally, by mail, facsimile transmission, or electronic mail. Whenever any notice of any meeting
is required as aforesaid, a waiver thereof in writing signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of
such notice.
Section 3.7. The Board of Trustees may meet within or without the State of South Carolina.
Section 3.8. One or more Trustees may participate in a meeting of the Board by means of
conference telephone or sim ilar communications equipment, whereby all persons participating in
the call can hear each other. Providing all notice requirements for holding the meeting involved
have been met, action may be taken at such telephone meeting to the same extent and in the same
manner as if all persons participating were physically present at the same location.
Section 3.9. A majority of the existing Board being present shall constitute a quorum for the
transaction of business at any meeting of the Board of Trustees. Each member of the Board of
Trustees shall have one vote on any motion presented to the Board of Trustees and, unless otherwise
stated herein, the vote of a majority of the Board of Trustees members present at the time of the
vote, if a quorum is present, shall be an act of the Board of Trustees. The Board of Trustees shall
have the authority to act without a duly called meeting of the Board of Trustees upon the affirmative
unanimous action of the Board, duly noted in minutes contained in the corporate records of the
Corporation. Members of the Board of Trustees shall abstain from any vote of the Board in which
the member has a direct financial conflict of interest in the outcome of such vote.
Section 3. I O. Members of the Board of Trustees may vote only in person and not by proxy.
Section 3 .11. Any action which may be taken at a meeting of the Board of Trustees may be taken without
a meeting if consent or consents in writing setting forth the action so taken shall be signed by all of the
Trustees and shall be filed with the Secretary of the Corporation.
2
Article IV
Officers
Section 4.1. The officers of the Corporation shall consist of a Chair, Vice Chair, Treasurer and
Secretary, all of whom shall be elected by the Board of Trustees from its membership for a term not to
exceed two (2) years. Any vacancy or vacancies in any of the offices of the Corporation, arising from
whatever cause, excepting expiration of a term of office, shall be filled by the Board of Trustees at a
Special Meeting of the Board of Trustees called for that purpose or at a Regular Meeting of the Board
of Trustees. An officer shall be eligible to be reelected to his or her office for one additional term, but
shall not serve more than two (2) successive terms.
Article V
Chair
Section 5.1. The Board of Trustees shall elect a Chair from its membership, who shall serve for a
term of two (2) years and until his or her successor is elected. The Chair shall preside at all meetings
of the Board of Trustees and the Executive Committee and shall be the executive head of the
Corporation. She or he shall be charged with the general conduct and control of the operations of the
Corporation under the supervision of the Board of Trustees, except such duties in the management
and conduct of the Corporation's operations as may be devolved by the Board of Trustees to any
other officer or employee.
Article VI
Vice Chair
Section 6.1. The Board of Trustees shall elect a Vice Chair from its membership, who shall serve
for a term of two (2) years and until his or her successor is elected. The Vice Chair of the Board of
Trustees shall preside at meetings of the Board of Trustees and of the Executive Committee in the
absence of the Chair and shall, in general, perform all the duties of the Chair in the absence or
disability of the Chair.
Article VII
Treasurer
Section 7.1. The Board of Trustees shall elect a Treasurer from its membership, who shall serve for a
term of up to two (2) years and until his or her successor is elected. The Treasurer of the Corporation
shall be its fiscal agent. All of the records dealing with the finances of the Corporation shall be kept by
the Treasurer under his or her supervision. The Treasurer shall give such security as shall be required
by the Board of Trustees for the faithful performance of his or her duties.
Article VIII
Secretary
Section 8.1. The Board of Trustees shall elect a Secretary from its membership, who shall serve for a
term of up to two (2) years and until his or her successor is elected. The Secretary of the Corporation
shall keep a current record of the proceedings of all meetings of the Corporation and of the Board of
Trustees and shall maintain them in a permanent record book.
Article IX
Executive Committee
Section 9 .1. The Board of Trustees may delegate to an Executive Committee such of its powers,
duties, and obligations as determined by the Board of Trustees from time to time. The Executive
3
Committee shall consist of the Chair, Vice-Chair, Treasurer, Secretary and the immediate past Chair,
if she or he is a member of the Board. The Head of School employed by the school shall participate,
ex officio, in all meetings of the Executive Committee, but shall have no vote. The Executive
Committee shall keep a complete record of all its proceedings and make a full report of the same to the
Board of Trustees at its Regular Meetings.
Article X
Committee on Trustees
Section 10.1 The Committee on Trustees shall consist of the Chair of the Board of Trustees and not
less than two (2) or more than four ( 4) other members of the Board of Trustees, all of whom shall
serve for a period of one (I) year upon appointment. The Head of School employed by the school shall
participate, ex officio, in all meetings of the Committee on Trustees, but shall have no vote. From
those appointed to the Committee on Trustees, the Chair of the Committee shall be appointed by the
Chair of the Board of Trustees. At the Board of Trustees' April meeting, the Committee on Trustees
shall submit to the Board of Trustees a list of names of proposed individuals to serve as members of
the Board of Trustees and a list of names of individuals who have agreed to serve, if elected, as
officers of the Corporation. Nothing contained herein shall prevent additional nominations from being
made by any member of the Board of Trustees. At the Board of Trustees' May meeting, the
Committee on Trustees shall vote to approve the new Board members and officers.
Article XI
Elections
Section 11.1. Vacancies on the Board of Trustees occurring by reason of expiration of terms may be
filled by election by the Board of Trustees at their May meeting. Individuals elected to the Board of
Trustees shall assume the position as a Trustee of the Corporation immediately following the Annual
Meeting and shall hold that position for a term of three (3) years. The term of a Trustee shall expire
immediately after the Annual Meeting on the third (3rd) anniversary of his or her appointment,
unless the Trustee is appointed to a second three-year term. Vacancies in the offices of the
Corporation occurring by reason of expiration of terms of office shall also be filled by election by the
Board of Trustees at the May meeting of the Trustees; provided, however, (a) the election shall be
conducted prior to the installation of the newly elected members of the Board of Trustees, who shall
not be entitled to vote but who shall be entitled to hold office, and (b) those members of the Board of
Trustees whose terms expire on the date of the Annual Meeting shall be entitled to vote on matters
considered by this Article XI, as well as be elected to office. In the event that a Trustee whose term
has expired is elected as an officer of the Corporation, his or her election shall be considered prior to
the election of new Trustees by the Board at the May meeting.
Article XII
Obligations and
Documents
Section 12.1. All notes, bonds, deeds, mortgages, and all other documents or obligations of the
Corporation shall be signed by any two (2) officers as authorized by the Board of Trustees. The
funds of the Corporation shall be deposited in its name in a depository or depositories designated by the
Board of Trustees. Checks and drafts shall be signed by such person or persons as shall from time to
time be designated by the Board of Trustees.
4
Article XIII
Head of School
Section 13.1. The Board of Trustees shall be authorized to employ a person to be known as the Head
of School to perform such duties as the Board of Trustees may direct. The Head of School shall hold
office at the pleasure of the Board of Trustees, shall be formally evaluated by the Board of Trustees
on a periodic basis, and shall be subject only to the Board of Trustees.
Section 13.2. The Head of School shall be the administrative head of the school, and shall be
charged with the general conduct and control of the operation of the School under the supervision of
the Board of Trustees.
Section 13.3. The Head of School is to have sole responsibility for employing and discharging
teachers and all other members of the staff, deciding on the curriculum and qualifications of students,
and administering the school in accordance with its budget.
Section 13 .4. All employees shall be under the direction and control of the Head of School, who
shall have the discretionary powers sufficient in scope to enable her or him to meet emergencies that
may arise between the meetings of the Board of Trustees. She or he may employ extra personnel in
any department, reporting the fact to the Board of Trustees at the next meeting. She or he shall have
the authority to accept resignations, grant temporary leaves of absence to employees, and suspend or
dismiss any employee for conduct detrimental to the school, and such action shall be reported in
writing to the Board of Trustees.
Article XIV
Standing Committees
Section 14.1. The Chair shall appoint all standing committees ("Standing Committees"), and the
Chair of each Standing Committee, and such other committee ("Other Committee") or ad-hoc
committee ("Ad-hoc Committee") as it may from time to time deem necessary or expedient for the
purpose of carrying out these By-Laws. The Chair may appoint to these committees individuals,
including faculty, who are not currently serving as elected members of the board.
Section 14.2. In making recommendations to the Board of Trustees, each Committee should seek out
potential members from the community with the broadest possible skills and interests while
maintaining, first and foremost, the mission of the Corporation to foster Scholarship, Integrity,
Respect and Responsibility in the student body.
Section 14.3. In addition to the Executive Committee and the Committee on Trustees, Standing
Committees shall include a Finance Committee, Retirement Plan Committee, Development
Committee, Property Committee, Compensation Committee, and an Investment Oversight
Committee. Such Committees shall be appointed by the Chair for a period of one year. The Chair of
the Finance Committee shall be the Treasurer. Each Committee established by the By-Laws shall
have the specific powers delegated herein in addition to those delegated to them from time to time
by the Board of Trustees. The Head of School, and such other members of the administration as
shall be determined by the Board of Trustees, shall serve as a liaison to all Standing Committees
and Other Committees. In addition to the following, committees may further define a more detailed
scope of duties in a Statement of Purpose to be retained with the Corporation's records, as amended
from time to time upon approval of the Board of Trustees.
Property Committee. The Property Committee shall oversee the Corporation's physical plant
and facilities. Specifically, the Property Committee shall: (i) review and make
recommendations to the Board of Trustees with prior consultation with the Finance Committee
5
for (a) all projects requiring approval regarding all maintenance or capital improvements in
excess of Ten Thousand ($10,000.00) to the Corporation's facilities, and
(b) all opportunities of the Corporation to acquire new real property; (ii) monitor on-going
maintenance projects to the Corporation's facilities; (iii) review and assess all plans to
reallocate space within existing Corporation facilities; and (iv) perform any and all other
services as requested by the Board of Trustees, from time to time.
Finance Committee. The Finance Committee shall oversee the Corporation's financial
operations in accordance with the school's mission and objectives. Specifically, the Finance
Committee shall review and approve the Corporation's annual operational budgets as
developed by the school's administration and, upon approval, present final operational
budgets to the entire Board of Trustees for formal approval. The Finance Committee shall also
make long range financial plans for the Corporation, monitor implementation of the budget
and the annual financial operations of the school, ensure completion of the annual audit of
the Corporation's finances as conducted by an independent accounting firm, and perform any
and all services as requested by the Board of Trustees from time to time. The members of
the Finance Committee shall also serve on the Retirement Plan Committee.
Retirement Plan Committee. The Retirement Plan Committee shall oversee the Charleston Day
School Defined Contribution Retirement Plan ("Savings Plan"). Specifically, the Retirement Plan
Committee shall carry out the responsibilities under the Savings Plan and Ensure the Savings Plan
is administered in a manner which meets all applicable standards under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") and other applicable laws. The Retirement
Plan Committee shall be comprised of the members of the Finance Committee plus a member of
the Charleston Day School faculty.
Development Committee. The Development Committee shall oversee the Corporation's

development program in accordance with the school's mission and objectives. Specifically, the
Development Committee shall direct and support the school's short and long-term development
objectives, lead and support fundraising efforts ( e.g. the annual fund, endowment, capital
campaigns, events, etc.),, enhance constituent relationships (e.g. corporate, community, board,
staff, parent, alumni, friends, etc.), ensure financial accountability and stewardship of donors'
dollars, and perform any and all other services as requested by the Board of Trustees from time
to time.
Compensation Committee. The Compensation Committee shall determine the Head of

School's compensation and shall develop, implement, and administer a formal performance
evaluation program for the Head of School on behalf of the Board of Trustees. The
Compensation Committee shall perform any and all other services as requested by the Board
of Trustees from time to time. The Compensation Committee shall consist of the Chair,
Vice-chair, Treasurer and Secretary of the Board of Trustees.
Investment Oversight Committee. The Investment Oversight Committee shall oversee the
Corporation's investments. Specifically, the Investment Oversight Committee shall review and
analyze the performance of the Corporation's endowment portfolio, report to the Board of
Trustees on the performance of the Corporation's investments, make recommendations for
changes in the investment manager, and make recommendations for changes to investment
policies.
Section 14.5. Other Committees may include, but shall not be limited to, a Strategic Planning
Committee and a Marketing Committee.
6
Section 14.6. Committees shall hold meetings as necessary or desirable for the purposes of transacting
such business as may properly come before the committee. The Committee Chair shall keep minutes at
all meetings of the Committee and report to the Board of Trustees at its next Regular Meeting or when
required.
Section 14.7. Notice of each Committee meeting shall specify the date, place and hour of the meeting
and shall be given to each Committee member at least five (5) days before the meeting either
personally, by mail, facsimile transmission, or electronic mail. Whenever any notice of a meeting is
required as aforesaid, a waiver thereof in writing signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.
Section 14.8. One or more Committee members may participate in a Committee meeting by means of
conference telephone or similar communications equipment, whereby all persons participating in the
call can hear each other. Providing all notice requirements for holding the meeting involved have been
met, action may be taken at such telephone meeting to the same extent and in the same manner as if all
persons participating were physically present at the same location.
Section 14.9. A majority of the persons entitled to vote at meetings of the Committees shall constitute a
quorum for the transaction of business, and the acts of a majority of the members present at meetings at
which a quorum is present shall be acts of the Committees.
Article XV
Board Policies
Section 15 .1. From time to time, the Board of Trustees may approve operational policies for the
Corporation. Any such policies shall serve as an on-going charge of the Board within the scope of its
specific terms, and may be amended or revoked at any time upon a recommendation of the Executive
Committee and a majority vote of the Board. All Board policies shall be kept in original form along
with the corporate records of the Corporation.
Article XVI
Removal of Officers
Section 16.1. Any officer or Trustee of the Corporation may at any time be removed by a two-thirds
(2/3) vote of the entire membership of the Board of Trustees, at a specially called meeting of the
Board of Trustees held after five (5) days prior notice thereof.
Article XVII
Indemnification
Section 17.1. Third-Party Actions. The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed action or proceeding,
whether civil, criminal, administrative or investigative ( other than an action by the Corporation), by
reason of the fact that he/she is or was a member of the Board of Trustees, Officer, or representative of
the Corporation against expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him/her in connection with the action or proceeding if
he/she acted in good faith and in a manner he/she reasonably believed to be in, or not opposed to, the
best interests of the Corporation and, with respect to any criminal proceeding, had no reasonable cause
to believe her or his conduct was unlawful. The termination of any action or proceeding by judgment,
order, settlement or conviction or upon a plea of nolo contendere or its equivalent shall not in and of
itself create a presumption that the person did not act in good faith and in a manner that he/she
7
reasonably believed to be in, or not opposed to, the best interests of the Corporation and, with respect
to any criminal proceeding, had reasonable cause to believe that her or his conduct was unlawful.
Section 17.2 Derivative and Corporate Actions. The Corporation shall indemnify any person who was
or is a party, or is threatened to be made a party, to any threatened, pending or completed action by or
in the right of the Corporation to procure a judgment in its favor by reason of the fact that he/she is or
was a member of the Board of Trustees, Officer or representative of the Corporation against expenses
(including attorneys' fees) actually and reasonably incurred by him/her in connection with the defense
or settlement of the action if he/she acted in good faith and in a manner he/she reasonably believed to
be in, or not opposed to, the best interests of the Corporation. Indemnification shall not be made under
this section with respect to any claim, issue or matter as to which the person has been adjudged to be
liable to the Corporation unless and only to the extent that a court of competent jurisdiction determines
upon application that, despite the adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnify for such expenses that the court shall
deem proper.
Article XVIII
By-Laws
Section 18.1 These By-Laws may be repealed, added to, or altered or amended in any manner not
inconsistent with law, at any Regular Meeting called or Special Meeting of the Board of Trustees,
by a vote of two-thirds (2/3) of the entire membership of the Board of Trustees. These By-Laws
shall be readily available to the Board of Trustees, shall be provided to newly appointed members of
the Board of Trustees in conjunction with the orientation process for new members, and shall be
reviewed at appropriate intervals by the Board of Trustees to consider and assess any revisions to
the By-Laws that may be warranted from time to time.
Article XIX
Antidiscrimination
Provision
Section 19.1 It is the policy of Charleston Day School, Inc. not to discriminate on the basis of race,
color, religion, national origin, ethnic origin, physical handicap, sexual orientation, or gender
expression in the administration of its educational policies, admissions policies, scholarship and loan
programs, and athletic and other school-administered programs.
Article XX
Endowment Fund
Section 20.1. The Board of Trustees shall be authorized to establish an endowment fund for the
Corporation. The fund shall be designated as the Charleston Day School, lnc. Endowment Fund,
administered by the Board of Trustees, and shall be used solely for the furthering of academic
excellence at the Corporation; provided, however, that no part of the endowment fund of the
Corporation shall at any time be used or pledged for the current expenses of the Corporation, except
upon recommendation of the Head of School and the Executive Committee and by prior specific
appropriation by the Board of Trustees of funds not restricted by the grant or thereof.
Article XXI
General Provisions
Section 21. l. Notices to the Board of Trustees, Officers, and Committee members may be given
personally, by mail, facsimile transmission, or electronic mail. Notice by mail shall be deemed to be
given at the time deposited in the Post Office, in a post-paid sealed wrapper, and addressed to
8
members of the Board of Trustees and/or Officers at their addresses appearing on the records of the
Corporation. Whenever a notice is required to be given by any statute, the Certificate of
Incorporation or these By- Laws, a waiver thereof, in writing, signed by the person or persons
entitled to such notice, whether before or after the time stated herein, shall be deemed equivalent to
such notice.
Section 21.2. The fiscal year of the Corporation shall end on June 30.
Section 21.3 The use of any gender herein shall be deemed to be or include the other genders and
the use of the singular herein shall be deemed to be or include the plural (and vice versa), wherever
appropriate.
Section 21.4. In the event of a dispute or disagreement on matters being considered by the Board of
Trustees, issues of procedure shall be' determined by Robert's Rules of Order, unless specifically
addressed otherwise in these By-Laws. Failure to strictly adhere to Robert's Rules of Order,
however, shall not nullify the validity of actions taken by the Board of Trustees.
Article XXII
Dissolution
Section 22.1 If for any reason it becomes necessary to dissolve this Corporation: (a) assets held by
it in trust for specified purposes shall be applied so far as is feasible in accordance with the terms of
the trust; (b) the remaining assets not held in trust shall be applied so far as is feasible towards
carrying out the purposes stated in these By-Laws and in the Charter of the Corporation; (c) in the
event and to the extent that, in the judgment of the Board of Trustees, it is not feasible to apply the
assets as provided in the above clauses ( a) and (b ), the assets shall be applied to and for the use of
such charities qualifying for tax exemption under the Internal Revenue laws of the United States as
may be directed by the Court of Common Pleas of the county in this State in which the principal
office of the Corporation is located in an action brought for that purpose by the Corporation or by the
Board of Trustees, to which action the Attorney General of the State shall be a party.
Date: June 4, 2019

Charleston Day School Motion To Dismiss Austin Lawsuit & Exhibits

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Charleston Day School Motion To Dismiss Austin Lawsuit & Exhibits

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2:23-cv-02899-RMG Date Filed 08/18/23 Entry Number 8 Page 1 of 1

UNITED STATES DISTRICT COURT

Plaintiff, Case No. 2:23-cv-2899-RMG

v. DEFENDANTS’ MOTION TO DISMISS

a claim. This motion is based on the accompanying Memorandum in Support of Defendants’

schedule oral argument on this Motion.

conference of counsel pursuant to Local Civil Rule 7.02.

By: /s/ Alice F. Paylor

ATTORNEYS FOR DEFENDANTS

UNITED STATES DISTRICT COURT

Plaintiff, Case No. 2:23-cv-2899-RMG

hold oral argument on this Motion.

to keep the Day School doors open.

year history, has continued unabated to this day.

defending a decision to allow Mr. Austin to remain on the Board.

terms, which he elected not to do.

rich, angry and make me look sane!”3

threaten legal action against Board members and school employees.

Emergency Assistance to Non-Public School (EANS) funding, he manufactured these concerns

very thinly veiled threat to tread carefully with him.

The Board is a volunteer body, with no personal financial incentives or rewards

COVID-related expenses, including for example, personal protective equipment, cleaning

in responding to the question.

investment transaction in the endowment is executed by a third-party (the School’s external

maintained by that investment advisor.

claim for relief under the FCA, as set forth below.

FACTS ALLEGED IN COMPLAINT6

dealing by individuals on CDS’s Board of Trustees.” Compl., ¶¶ 4, 5.

of Federal COVID Funds.” He subsequently “learned of several irregularities, including potential

School refused this offer. Id. at ¶¶ 15, 168.

Id. at ¶¶ 33, 34.

Mason Prep.” Id. at ¶¶ 198, 199.

expose violations of § 3729. The retaliation provision states:

pertinent part, § 3730(h)(2) provides:

71, 95 (2d Cir. 2017).

I. Plaintiff Fails to Allege the Necessary Statutory Relationship

person is a salaried employee, an employee hired as an independent contractor, or

an employee hired in an agency relationship”) (emphasis included in citation).

no employer type relationship with plaintiffs.” Abu-Hussein, 2012 WL 6892716, at *3 n.4

Accordingly, district courts still “require[] some employment relationship acts as a

of employment,’ or the contract or agency relationship.” Id. (emphasis in original) (citing 31

rights and duties of the other person.” Id.

Restatement (Third) of Agency at § 2.02, comment c. “Apparent authority holds a principal

question of law for the court”).

Bylaws state in relevant part as follows:

Bylaws, attached hereto as Exhibit C (emphasis added).

not allege otherwise.

II. The Statute Does Not Provide for Individual Liability

individual capacities.” Brach, 221 F. Supp. 3d at 748 & nn.8, 9.

As explained by Judge Ellis in Brach:

assumption is unwarranted because Congress, had it intended to overturn

Brach, 221 F. Supp. 3d at 749.

Exhibit C, Section 3.3.

In addition, SC Code § 33-31-834 provides that “[a]ll directors, trustees, or members of

the Court should dismiss them with prejudice.

action) (collecting cases).

at 1142. As the Potts court reasoned:

and dismiss the Complaint in its entirety with prejudice.

By: /s/ Alice F. Paylor

ATTORNEYS FOR DEFENDANTS

[All names of children and non-essential persons have been redacted]

Beg n forwarded message:

From: Matt Aust n <matt.aust n@ne sonmu ns.com>