One of the Superior Court's main reasons for rejecting the school districts' definition of adequacy was that Cornerstone 2 of the school district's definition of adequacy incorporated the concept of "vertical equity". The Court mischaracterized the concept of vertical equity. It compared the concept of vertical equity to individualized educational plans required for disabled students under RSA Ch. 186-C, labeling the concept "expansive and subjective."

The Superior Court expressed its concern that if adopted, Cornerstone 2 would have the effect of raising vertical equity to a constitutional mandate. According to the Court, vertical equity would require the state to provide special services to children with, for example, "socioeconomic or emotional problems."

Dr. Fried explained how vertical equity could be applied. He used as an example a wide divergence in third grade assessment test scores between two elementary schools in Concord. He said the state would review the test scores and, if needed, strengthen the facilities and programs of support in the school where the students did not perform as well, in order to help the students get themselves up to a level where they can take advantage of the curriculum and improve their test scores.

The Superior Court also ignored the advocacy of the concept of vertical equity by the 1990 Governor's Task Force Report on Education. Their report stated that schools are faced with students whose needs are extraordinarily heterogeneous: academic, social, developmental, ethical and physical. Schools can not just impart knowledge, but must focus, motivate, and nurture students as well.

The Report stated, "We must direct our attention to providing a system of education that produces results by adjusting to individual learning styles and that focuses on the students accomplishments."

The Superior Court acknowledged that the Supreme Court's Claremont I decision stated that for an education to be considered adequate, it must "be adopted to the various crisis of human affairs". As evidence that the state is meeting that requirement, the Superior Court cited to the fact that under the Foundation Aid formula "students living in districts that are economically depressed receive more state money and services than those living in wealthier communities" .

While the petitioner school districts in some instances do receive more state aid, the Superior Court heard witnesses from the school districts testify that the state aid they receive is not enough to enable them to provide the programs necessary to address the more numerous needs of their students.

The Superior Court held that, "the wording of Claremont is an insufficient basis for this Court to incorporate the sweeping policy change of vertical equity advanced by petitioners into the definition of education for purposes of this litigation. Rather, the determination of such policy issues properly rests with the legislative and/or executive branches of government."