Filed: May 27, 1998
Latest Update: Mar. 02, 2020
Summary: UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT _ Nos. 97-30949 and 98-30088 _ ST. TAMMANY PARISH SCHOOL BOARD, Plaintiff-Appellee, versus STATE OF LOUISIANA; THE STATE BOARD OF ELEMENTARY AND SECONDARY EDUCATION; LOUISIANA DEPARTMENT OF EDUCATION; THE LOUISIANA DEPARTMENT OF HEALTH AND HOSPITALS, Defendants-Appellants, versus DONNA SLOCUM, Individually and on behalf of her minor child Daniel Slocum; DOUGLAS SLOCUM, Individually and on behalf of his minor child Daniel Slocum, Defendants-App
Summary: UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT _ Nos. 97-30949 and 98-30088 _ ST. TAMMANY PARISH SCHOOL BOARD, Plaintiff-Appellee, versus STATE OF LOUISIANA; THE STATE BOARD OF ELEMENTARY AND SECONDARY EDUCATION; LOUISIANA DEPARTMENT OF EDUCATION; THE LOUISIANA DEPARTMENT OF HEALTH AND HOSPITALS, Defendants-Appellants, versus DONNA SLOCUM, Individually and on behalf of her minor child Daniel Slocum; DOUGLAS SLOCUM, Individually and on behalf of his minor child Daniel Slocum, Defendants-Appe..
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UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
Nos. 97-30949
and 98-30088
_____________________
ST. TAMMANY PARISH SCHOOL BOARD,
Plaintiff-Appellee,
versus
STATE OF LOUISIANA; THE STATE BOARD OF
ELEMENTARY AND SECONDARY EDUCATION;
LOUISIANA DEPARTMENT OF EDUCATION;
THE LOUISIANA DEPARTMENT OF HEALTH AND HOSPITALS,
Defendants-Appellants,
versus
DONNA SLOCUM, Individually and on behalf
of her minor child Daniel Slocum;
DOUGLAS SLOCUM, Individually and on
behalf of his minor child Daniel Slocum,
Defendants-Appellees.
_________________________________________________________________
Appeals from the United States District Court
for the Eastern District of Louisiana
_________________________________________________________________
May 27, 1998
Before KING, BARKSDALE, and PARKER, Circuit Judges.
RHESA HAWKINS BARKSDALE, Circuit Judge:
In these two interlocutory appeals, concerning the Individuals
with Disabilities Education Act (IDEA), 20 U.S.C. § 1400, et seq.,
the primary issue is, pending a ruling on the merits, payment of
costs for a disabled student placed at an out-of-state facility.
The State of Louisiana, the State Board of Elementary and Secondary
Education, the Louisiana Department of Education, and the Louisiana
Department of Health and Hospitals (collectively, the State
defendants) appeal from four orders regarding the placement of
Daniel Slocum at a private residential facility in Kansas, at the
expense of the Louisiana Department of Education, during the
pendency of this IDEA litigation. We AFFIRM, and REMAND for
further proceedings.
I.
Daniel Slocum is an autistic child, eligible for IDEA special
education and related services. Until April 1996, he was educated
in a self-contained classroom in the public schools of St. Tammany
Parish, Louisiana. On 3 April 1996, his parents and the School
Board staff met to prepare an individualized education program
(IEP) for him.
At the IEP meeting, it was agreed that, because of the
recently-increased severity of Daniel Slocum’s self-injurious
behavior, he could no longer be educated in the self-contained
classroom. Accordingly, the IEP, agreed to by the Slocums and the
Board, provided that Daniel Slocum’s placement was “Hospital or
Homebound Services or other institution providing assessment and
training and treatment”. The IEP stated further that the
“[s]election of the site will be made in accordance with the
provisions of [State] Bulletin 1706, Section 451(B)”; and that
“[r]eferral will also be made to [the Louisiana Department of
Health and Hospitals] and any other appropriate State agency”.
The Bulletin referenced in the IEP states: “School systems
must apply to the [Louisiana] Department [of Education] when a
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student is referred to or is to be placed in an approved public or
nonpublic day or residential school outside the geographic area of
the school system, unless the placement is in an approved
cooperative operated by school systems”. Regulations for
Implementation of the Exceptional Children’s Act, Bulletin 1706, §
451B (Office of Special Educational Services, Louisiana Dept. of
Educ. 7/1/94) (emphasis added).
On 4 April, the day after the IEP meeting, the Slocums’
attorney informed the School Board by letter that the Slocums had
enrolled Daniel Slocum in Heartspring School, a private residential
facility in Wichita, Kansas, pending selection of a site by the
School Board. That same day, 4 April, the School Board formally
requested the Louisiana Department of Education to assist it and
the Slocums in locating a residential facility for Daniel Slocum,
and also requested guidance on how the placement was to be funded.
A week later, on 11 April, the Department of Education
responded that, because the IEP did not indicate that a specific
placement decision had been made, the Department was unable to
carry out its responsibilities under Bulletin 1706, § 451B; but
that, once the IEP committee had made a specific placement decision
and the site selected was determined to be outside the geographic
area of the School Board, the Department would then review the
School Board’s request.
In early May, the Superintendent of the School Board requested
assistance from the State Superintendent of Education in
determining a placement and program for Daniel Slocum.
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That June, the Slocums requested a due process hearing,
seeking to have the School Board pay for Daniel Slocum’s education
and related services at Heartspring. By letter to the Department
of Education, the School Board demanded in late July that the State
assume those costs and advised that “the Department of Education
should participate in the due process hearing if the possibility
exists that the State of Louisiana might be held responsible for
the cost of the residential placement”.
The Department of Education’s Office of Special Educational
Services responded in early August that the School Board’s request
for State participation at the due process hearing had been
referred to the legal staff for review and recommendation. In mid-
August, the Department declined the School Board’s request for
Department participation in the hearing.
Later that month, despite this refusal, the School Board
advised the Commissioner of Administration, the Governor, and the
Secretary of the Louisiana Department of Health and Hospitals
that, based on the circumstances of the case,
... the State of Louisiana, the Department of
Education, and/or the Department of Health and
Hospitals need to be made parties to these
proceedings.
The due process hearing was conducted on 18-20 September and
13-15 November 1996, without the participation of any of the State
defendants. In January 1997, the Independent Hearing Officer ruled
in favor of the School Board, finding that the placement
recommended for Daniel Slocum in the April 1996 IEP was designed to
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address primarily medical concerns and was not required for
educational purposes.
The Slocums appealed to the Louisiana Department of Education,
which assigned a three-member State Level Review Panel. In April
1997, a majority of the Panel reversed the decision of the
Independent Hearing Officer, concluding that residential placement
at Heartspring was appropriate; and that the School Board was
obligated to reimburse the Slocums for the costs of Daniel Slocum’s
education and related services there. The Panel stated, however,
that the School Board was “not precluded from asking for a sharing
of cost, expenses or reimbursement from the State Educational
Authority, the State Department of Education, Department of Health
and Human Resources, or any other Louisiana entity or Federal
agency that they may apply to”.
A week later, the Slocums filed an action in federal court
against the State of Louisiana and the School Board, seeking
damages and attorneys’ fees. That action has been stayed pending
resolution of the underlying action for the interlocutory appeals
in issue (the hereinafter described action filed in district court,
under IDEA, for review of the Review Panel’s decision).
As noted, later in April 1997, pursuant to the IDEA, 20 U.S.C.
§ 1415(e)(2), the School Board filed in federal court the action
which spawned these interlocutory appeals. The action is for
judicial review of the State Level Review Panel’s decision.
Section 1415(e)(2) provides, inter alia, that “[a]ny party
aggrieved by the findings and decision” of the state educational
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agency “shall have the right to bring a civil action ... in any
State court of competent jurisdiction or in a district court of the
United States”. 20 U.S.C. § 1415(e)(2). Named as defendants, in
addition to the Slocums, were the State of Louisiana, the State
Board of Elementary and Secondary Education, the Louisiana
Department of Education, and the Louisiana Department of Health and
Hospitals.
On 30 June, the Slocums moved, pending resolution on the
merits, for keeping the placement at Heartspring, pursuant to 20
U.S.C. § 1415(e)(3), referred to as the “stay-put” provision. The
section provides:
During the pendency of any proceedings
conducted pursuant to this section, unless the
State or local educational agency and the
parents or guardian otherwise agree, the child
shall remain in the then current educational
placement of such child....
20 U.S.C. § 1415(e)(3) (emphasis added).
In that motion, and also pursuant to § 1415(e)(3), the Slocums
also requested that, during the pendency of the litigation, the
School Board pay the costs of Daniel Slocum’s education and related
services at Heartspring. They did not seek relief from the State
of Louisiana or its Department of Education. But, the School Board
countered that the State should share in any assessment of such
stay-put costs.
In mid-August 1997, the district court granted the Slocums’
motion. It concluded that, from the 3 April 1997 date of the State
Level Review Panel’s decision (rendered a year after the initial
placement at Heartspring) until the resolution of these
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proceedings, Heartspring was Daniel Slocum’s § 1415(e)(3) “current
educational placement”. (The court decided that it would be
premature for it to determine Daniel Slocum’s “current educational
placement” at the time of the earlier 3 April 1996 IEP, because
that “would essentially be deciding the merits of the school
board’s” challenge to the Review Panel decision.) And, it ordered
the Department of Education, not the School Board, to pay the cost
of Daniel Slocum’s education and related services during this
“current educational placement”. On 25 September, the district
court denied the State defendants’ motion for rehearing.
The State has appealed both orders. The district court denied
the State defendants’ motion for a stay pending appeal, and ordered
immediate enforcement of the stay-put order. Likewise, our court
and the Supreme Court denied a stay pending appeal.
In early October 1997, the State defendants moved in the
district court for authority to manage or participate in Daniel
Slocum’s IEP conference at Heartspring, then scheduled for mid-
November. That motion was denied as moot, because the November
conference was postponed.
Next, the State defendants moved in early November 1997 for an
order requiring scheduling and state management of an IEP for
Daniel Slocum, asserting, on the basis of a Heartspring
advertisement, that his condition had dramatically improved and
warranted reevaluation. The State defendants maintained that the
administration of Prozac to Daniel Slocum in February 1996
triggered the increase in his self-injurious behavior that March,
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when the St. Tammany IEP evaluation was conducted; and that Daniel
Slocum’s condition improved when he was taken off Prozac, just
prior to his enrollment at Heartspring in April 1996. The State
defendants also asserted that the stay-put order was ineffective
while it was on appeal to our court.
The district court denied the motion in late December. And,
at the end of January 1998, it denied a motion for reconsideration.
The State defendants have also appealed both orders.
Trial is set for 15 June 1998.
II.
The State defendants’ motion to consolidate these two
interlocutory appeals is GRANTED. For each appeal, based on the
facts and circumstances of this case, we conclude, dubitante, that
we have jurisdiction under the collateral order doctrine.
Concerning the appeal from the stay-put order, see Susquenita
School Dist. v. Raelee S., 96 F.3d 78, 81 n.4 (3d Cir. 1996) (stay-
put order qualifies as a collateral order because it conclusively
determines student’s pendent placement and tuition reimbursement
rights associated with such placement; resolution of those
questions is completely separate from the merits issues which focus
on adequacy of the proposed IEP; and the propriety of the pendent
placement and the concomitant financial responsibility are not
effectively reviewable on appeal of a decision on the merits).
Similarly, as for the appeal concerning the denial of the
State defendants’ motion for scheduling and state management of an
IEP for Daniel Slocum, the orders in issue conclusively deny the
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State defendants a right to schedule and manage an IEP pending a
merits-decision; resolution of that question is separate from the
merits-decision, which focuses on the adequacy of the April 1996
IEP; and the interlocutory order is not effectively reviewable on
appeal of the merits-decision.
In the first appeal, the State defendants raise the following
issues: (1) whether the district court erred by imposing liability
on the Department of Education for interim costs pending a merits-
decision; (2) whether those costs are reasonable; (3) whether the
Department can obtain reimbursement from the Slocums if the State
defendants prevail on the merits; (4) whether IDEA, as interpreted
by the district court, is unconstitutional; and (5) whether the
Slocums violated IDEA by unilaterally placing Daniel Slocum at
Heartspring, without giving the School Board and/or the State
defendants an opportunity to make a site determination in
accordance with the IEP. At issue in the second appeal are whether
the district court erred (1) by concluding that the stay-put order
remains in effect while it is on appeal; and (2) by refusing to
allow the State defendants to manage or participate in the
formulation of Daniel Slocum’s IEP.
Regarding our standard of review, the State defendants assert
that their challenges to the orders raise only legal questions,
reviewed de novo; the Slocums respond that, because the orders were
entered pursuant to the IDEA stay-put provision, which functions as
an automatic injunction, our review is only for abuse of
discretion. Of course, we, not the parties, determine the proper
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standard of review. See, e.g., United States v. Vontsteen, 950
F.2d 1086, 1091 (5th Cir.) (en banc) (“no party has the power to
control our standard of review”), cert. denied,
505 U.S. 1223
(1992).
Our court has not considered the appropriate standard of
review for such IDEA interlocutory orders. The Act provides that
“the court shall receive the records of the [state] administrative
proceedings, shall hear additional evidence at the request of a
party, and, basing its decision on the preponderance of the
evidence, shall grant such relief as the court determines is
appropriate”. 20 U.S.C. § 1415(e)(2). Accordingly, we have
described the district court’s § 1415(e)(2) review as “virtually de
novo”. Cypress-Fairbanks Indep. Sch. Dist. v. Michael F., 118 F.3d
245, 252 (5th Cir. 1997), cert. denied, ___ U.S. ___,
118 S. Ct.
690 (1998). And, our court will “review de novo, as a mixed
question of law and fact, a district court’s [merits-]decision that
a local school district’s IEP was or was not appropriate and that
an alternative placement was or was not inappropriate under the
IDEA”.
Id.
For these interlocutory appeals, however, we are not reviewing
the merits of Daniel Slocum’s IEP or his placement at Heartspring.
Instead, we are reviewing interlocutory orders relating to Daniel
Slocum’s interim placement, to include the costs of such placement,
during the pendency of this litigation. Under such circumstances,
we will review for abuse of discretion. See 20 U.S.C. § 1415(e)(2)
(authorizing court to “grant such relief as the court determines is
- 10 -
appropriate”); School Committee of Town of Burlington, Mass. v.
Department of Educ. of Mass., 471 U.S. 359, 369-70 (1985)
(interpreting IDEA as conferring “broad discretion on the court” to
order “appropriate” relief, including “retroactive reimbursement to
parents” for the earlier costs of placement in a private school);
Susquenita, 96 F.3d at 86-87 (interpreting IDEA to permit district
court to award costs pending a merits-decision and reviewing such
assessment for abuse of discretion).
In addition, our court has not considered whether IDEA permits
a district court to order payment of the costs of an interim
placement, prior to a merits-decision. Because the State
defendants do not challenge the district court’s authority to award
such costs, we assume, without deciding, that such an award is
authorized under IDEA, as interpreted by the Third Circuit in
Susquenita.
A.
Concerning the district court’s holding the Department of
Education solely responsible for payment of the costs of Daniel
Slocum’s education and related services at Heartspring from 3 April
1997 (the date of the Review Panel decision) through the pendency
of this litigation, the State defendants maintain that (1) the
Department is not vicariously liable for the School Board’s IDEA
violations; (2) imposition of liability on the Department violates
due process, because the State defendants were not parties to the
administrative hearings; (3) the district court excluded evidence
relevant to the validity of the administrative decision; (4) the
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procedure for determining interim liability was improper; and (5)
the district court erred by concluding that the Review Panel
decision constituted an agreement between the State and the Slocums
that Heartspring was an appropriate educational placement for
Daniel Slocum.
1.
As noted, § 1415(e)(2) gives the district court authority to
“grant such relief as [it] determines is appropriate”. 20 U.S.C.
§ 1415(e). In Burlington, the Supreme Court construed this
language as authorizing a district court to “order school
authorities to reimburse parents for their expenditures on private
special education for a child if the court ultimately determines
that such placement, rather than a proposed IEP, is proper under
the Act”. Burlington, 471 U.S. at 369 (emphasis added).
Burlington dealt with retroactive reimbursement, rather than, as
here, reimbursement pending a merits-decision. But, in Susquenita,
the Third Circuit extended Burlington to include awarding stay-put
costs pending a merits-decision, concluding that “the concerns
cited by the Court in support of retroactive reimbursement favor
including the interim assessment of financial responsibility in the
range of relief available under the IDEA”.
Susquenita, 96 F.3d at
86. Other than Burlington, which dealt with retroactive
reimbursement after a merits-decision, the Susquenita court did not
cite authority for its decision to impose financial responsibility
on the school district prior to a merits-decision.
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IDEA does not contain an express provision for reimbursement,
or for the allocation between local and state educational agencies
of financial responsibility for such reimbursement. Reimbursement
to parents for private school tuition (whether retroactive or
pending a merits-decision) is an equitable remedy, which may be
imposed in the discretion of the district court. Accordingly, we
must examine the language and structure of IDEA as a whole, in the
light of its purpose, to determine whether, pending a merits-
decision, it permits allocation of financial responsibility to the
Department for interim placement costs. See Gadsby by Gadsby v.
Grasmick, 109 F.3d 940, 952 (4th Cir. 1997). (Gadsby considered
the cost-allocation issue in a different procedural posture — after
a merits-decision.)
The purpose of IDEA
is principally to provide handicapped children
with a free appropriate public education which
emphasizes special education and related
services designed to meet their unique needs.
The Act contemplates that such education will
be provided where possible in regular public
schools, with the child participating as much
as possible in the same activities as
nonhandicapped children, but the Act also
provides for placement in private schools at
public expense where this is not possible.
Burlington, 471 U.S. at 369 (internal quotation marks and citations
omitted).
We agree with Gadsby that “[t]here is nothing in either the
language or the structure of IDEA that limits the district court’s
authority to award reimbursement costs against the [state
educational agency], the [local educational agency], or both in any
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particular case.” Gadsby, 109 F.3d at 955. We also agree that
“both the language and the structure of IDEA suggest that either or
both entities may be held liable for the failure to provide a free
appropriate public education, as the district court deems
appropriate after considering all relevant factors”.
Id.
First, IDEA places primary responsibility on the state
educational agency, by providing that it “shall be responsible for
assuring that the requirements of this subchapter are carried out”.
20 U.S.C. § 1412(6).
This language suggests that, ultimately, it is
the [state educational agency]’s
responsibility to ensure that each child
within its jurisdiction is provided a free
appropriate public education. Therefore, it
seems clear that [a state educational agency]
may be held responsible if it fails to comply
with its duty to assure that IDEA’s
substantive requirements are implemented.
Gadsby, 109 F.3d at 952. In Gadsby, the Fourth Circuit found
support in the legislative history of § 1412(6), which indicates
that the provision was included in the statute to “assure a single
line of responsibility with regard to the education of handicapped
children”.
Gadsby, 109 F.3d at 953 (quoting S. REP. NO. 94-168, at
24 (1975)).
That the district court did not err by interpreting IDEA to
allow it to impose liability upon the Department, rather than the
School Board, for the costs pending a merits-decision is further
supported by § 1414(d)(1):
Whenever a State educational agency determines
that a local educational agency ... is unable
or unwilling to establish and maintain
programs of free appropriate public education
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which meet the requirements [for the provision
of a free appropriate public education], ...
the State educational agency shall use the
payments which would have been available to
such local educational agency to provide
special education and related services
directly to handicapped children residing in
the area served by such local educational
agency.
20 U.S.C. § 1414(d)(1).
“Under this provision, once [a local educational agency] is
either unable or unwilling to establish and maintain programs in
compliance with IDEA, the [state educational agency] is responsible
for directly providing the services to disabled children in the
area.” Gadsby, 109 F.3d at 953. See also Todd D. by Robert D. v.
Andrews,
933 F.2d 1576, 1583 (11th Cir. 1991) (state educational
agency must take responsibility for providing free appropriate
public education where disabled student is better served by
regional or state facility than local one); Kruelle v. New Castle
County Sch. Dist.,
642 F.2d 687, 696-98 (3d Cir. 1981) (affirming
district court’s order requiring state educational agency to
provide student with full-time residential program where local
educational agency failed to provide adequate program).
In this regard, IDEA requires state educational agencies to
establish policies and procedures for the administration of funds
to local educational agencies and to ensure that those funds are
expended in accordance with IDEA’s provisions. See 20 U.S.C. §§
1413(a)(1), 1413(a)(2). And, § 1413(a)(13) directs state
educational agencies to establish “policies and procedures for
developing and implementing interagency agreements between the
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State educational agency and other appropriate State and local
agencies to ... define the financial responsibility of each agency
... and [to] resolve interagency disputes”. 20 U.S.C. §
1413(a)(13). But, although the Department has established
regulations and procedures for the development of interagency
agreements, there is no applicable interagency agreement covering
the dispute at hand.
Florence County School Dist. Four v. Carter, 510 U.S. 7, 16
(1993), directs that “[c]ourts fashioning equitable relief under
IDEA must consider all relevant factors”. In Gadsby, the Fourth
Circuit stated that district courts, in determining whether to
allocate reimbursement costs against the state, or the local,
educational agency, should consider “the relative responsibility of
each agency for the ultimate failure to provide a child with a free
appropriate public education”.
Gadsby, 109 F.3d at 955. As the
Fourth Circuit noted, “in some instances it would be unfair to hold
the [state educational agency] liable for reimbursement costs of
private school tuition, where the [local educational agency] was
primarily responsible for the failure”.
Id. On the other hand,
“there may be cases in which it would be unfair to hold the [local
educational agency] liable for costs, where, for example, there was
no appropriate facility within the [local educational agency]’s
jurisdiction for the child and the [state educational agency]
failed to provide an alternative.”
Id.
In determining that the Department, rather than the School
Board, should be liable for the placement costs pending a merits-
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decision, the district court, noting its broad equitable powers to
fashion appropriate relief, considered the following factors: (1)
the School Board had requested that the State participate in the
administrative hearings, but it refused; (2) the State defendants
had a full opportunity to brief and orally argue the cost
allocation issue; (3) pursuant to § 1412(6), the Department is
ultimately responsible for implementing IDEA’s provisions; and (4)
Congress’ goal of ensuring consistency and stability in a disabled
child’s education would be thwarted if interagency budgetary
disputes were allowed to disrupt the financing of that child’s
educational placement. We note also that, the day after the IEP
meeting, the School Board’s Supervisor of Special Education wrote
to the Department’s Office of Special Educational Services,
requesting that the Department assist the family and the School
Board to locate, evaluate, and ultimately approve a residential
facility for Daniel Slocum.
We conclude that, pending a merits-decision, the district
court did not abuse its discretion by allocating financial
responsibility to the Department, rather than the School Board, for
the costs of Daniel Slocum’s education and related services at
Heartspring from the date of the Review Panel’s decision through
the balance of this litigation. The court considered the relevant
factors, and its decision is supported by the record, as well as by
IDEA’s structure and purpose.
Along this line, we reject the State defendants’ contention
that the imposition of such interim liability on the Department
- 17 -
violates the intent of the 1997 amendments to IDEA which, according
to the State defendants, reflect congressional intent to require
state supervision while continuing local responsibility. Even
assuming that those amendments apply, they do not support this
contention. Nothing in them prohibits a district court from
exercising its discretion to allocate interim liability to the
Department, rather than the School Board.
2.
Next, the State defendants contend that imposition of
liability on the Department violated due process, because it was
based on administrative proceedings to which they were not parties.
The State defendants assert that, although LA. REV. STAT.
17:1952 (West Supp. 1997) permits a claim against the State in the
administrative process, neither the Slocums nor the School Board
took the necessary steps to make the State defendants parties.
That Louisiana statute requires the Department to prepare
regulations and establish procedures to ensure parental
participation in the determination of appropriate special education
for children with disabilities. It does not contain an express
provision establishing a procedural mechanism for making the State
a party to IDEA administrative proceedings.
Along this line, the regulations promulgated by the Department
for due process hearings and state level administrative review are
found in Bulletin 1706, §§ 507-513. With respect to due process
hearings, they provide:
A parent initiates a [due process] hearing by
sending written notice to the LEA [local
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educational agency]. The LEA initiates a
hearing by sending written notice to the
parent and the SDE [State Department of
Education].
Regulations for Implementation of the Exceptional Children’s Act,
Bulletin 1706, § 507 (Office of Special Educational Services,
Louisiana Dept. of Educ. 7/1/94). Those regulations do not contain
provisions or a procedural mechanism for making the State a party
to IDEA administrative proceedings.
Despite the absence of any Louisiana statute or regulation
establishing such a procedure, and as described supra, the School
Board attempted to obtain the State defendants’ participation in
the administrative proceedings; but, the State defendants declined.
They were, however, made parties to this federal court action — the
School Board’s challenge to the administrative decision — and had
the opportunity to participate in the proceeding to award placement
costs pending a merits-decision.
In sum, the State defendants had notice and an opportunity to
be heard prior to the imposition of the interim cost liability at
issue. There was no due process violation.
3.
The State defendants summarily assert that the district court
erred by refusing to consider any “merits” issues challenging the
validity of the administrative rulings. Moreover, they do not
state what issues should have been considered; they state merely
that “the defenses set forth herein, as well as others, should have
been considered by the district court before assessing interim cost
liability”. We assume that the referenced issues include the
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reasonableness of the costs, and whether they are subject to IDEA’s
exclusion for medical services, see 20 U.S.C. § 1401(17), discussed
infra.
In Susquenita, the Third Circuit stressed that the issues to
be reviewed in a stay-put proceeding “are narrow, involving
practical questions of where [the student] should attend school
while the review process proceeds, who must pay for [the]
placement, and when that payment must be made”; and that “merits”
issues, such as the adequacy of the IEP, were not properly before
it on the interlocutory appeal. Susquenita, 96 F.3d at 81.
In ruling on the stay-put placement, the district court
considered the narrow issues that were properly before it. To the
extent that the State defendants sought consideration of issues
related to the merits, such as the adequacy and meaning of the IEP,
and the propriety of the placement at Heartspring prior to the date
of the State Level Review Panel decision in favor of the Slocums,
the district court properly refused to consider such issues in
ruling on stay-put placement. As stated, the nature and
reasonableness of the interim costs are discussed infra.
4.
The State defendants contend further that the interim cost
issue should not have been determined through ordinary motion
practice, because (1) the ruling was based solely on the
administrative proceedings, to which they were not parties; and (2)
the documents submitted by the Slocums did not provide a factual
basis for determining whether Heartspring’s charges were for
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special education and related services or were, instead, subject to
the medical services exclusion. See 20 U.S.C. § 1401(17)
(excluding from definition of “related services” medical services
other than for diagnosis or evaluation). The State defendants
assert that the district court should have conducted an evidentiary
hearing in which they would have had the opportunity to submit
evidence and to cross-examine witnesses regarding Heartspring’s
charges.
But again, with respect to the first contention, the State
defendants had the opportunity to participate in the administrative
hearings; they declined to do so. Accordingly, the fact that they
were not parties to those proceedings is not a basis for requiring
an evidentiary hearing in district court. The State defendants’
second contention, concerning the costs documentation submitted by
the Slocums, is discussed in part II.B., infra.
5.
The district court’s imposition of interim liability upon the
Department is based, in part, on its conclusion that, for purposes
of the stay-put determination, the State Level Review Panel’s
decision constituted an “agreement” between the Slocums and the
State that Heartspring is the appropriate placement for Daniel
Slocum. The State defendants challenge this conclusion, claiming
the Independent Hearing Officer and Review Panel members are
completely independent of the Department.
As discussed, IDEA’s “stay-put” provision states, in pertinent
part:
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During the pendency of any proceedings
conducted pursuant to this section, unless the
state or local educational agency and the
parents or guardian otherwise agree, the child
shall remain in the then current educational
placement of such child....
20 U.S.C. § 1415(e)(3) (emphasis added). In Burlington, the
Supreme Court stated that the state administrative agency’s
decision in favor of the parents, who had unilaterally placed their
child in a private school after rejecting the IEP proposed by the
school district, “would seem to constitute agreement by the State
to the change of placement”, and that the parents “were no longer
in violation of § 1415(e)(3)” after the date of the administrative
agency’s decision in their favor. 471 U.S. at 372.
Consistent with Burlington, the district court did not abuse
its discretion by concluding that, for purposes of § 1415(e)(3),
the Review Panel decision constituted an “agreement” between the
State and the Slocums that, during the pendency of this action,
Heartspring was the appropriate educational placement.
B.
The State defendants note that the State receives only about
$400 per year per student for special education, so that the
unfunded liability greatly exceeds the IDEA federal funding. Along
this line, they contest the district court’s not making findings
that the Heartspring costs (ranging from $12,000 to $20,000 per
month) were primarily for educational, rather than medical,
purposes. Likewise, they assert that the court either rejected or
ignored questions concerning the reasonableness of the costs, by
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apparently taking the position that, for stay-put purposes, they
are not subject to review.
In denying the State defendants’ motion for rehearing, the
district court stated that the “determination of educational or
medical expenses focus[es] squarely on the substantive question of
liability” and, thus, was not properly before it in ruling on the
stay-put motion. This implies that, at trial on the merits, the
State defendants will be given an opportunity to challenge the
interim costs (i.e., whether they are subject to IDEA’s medical
services exclusion). See 20 U.S.C. § 1401(17) (excluding from
definition of “related services” medical services, other than for
diagnosis or evaluation).
With respect to the reasonableness of the interim costs, the
district court stated: “Whether Daniel [Slocum’s] interim expenses
are excessive as a matter of law is not at issue; IDEA makes clear
that during these proceedings, Daniel is to stay at Heartspring at
public expense as long as those expenses are properly documented”.
This implies that properly documented expenses, no matter whether
unreasonable or excessive, must be paid by the State during the
stay-put period. The Slocums maintain that the reasonableness of
interim costs is not properly considered during the stay-put
period; but, they acknowledge that reasonableness may become an
issue during the merits portion of the litigation.
Although the district court stated that it would “retain
oversight for the purpose of resolving disputes over reimbursement
requests, which must be properly documented”, it is unclear whether
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such oversight includes review for reasonableness or excessiveness.
For example, in a footnote to its order denying reconsideration of
the order denying the State defendants’ motion to manage an IEP (as
discussed in part II.G., infra), the district court indicated that
reasonableness of the interim costs was reviewable, and that, if
they succeed on the merits, the State defendants might be able to
recover funds paid to Heartspring:
The state defendants complain that the
reimbursement requests submitted by the
Slocums have recently increased, justifying
defendants’ access to Heartspring records and
greater involvement in the IEP process. If
these requests are reasonable and properly
documented, however, the state defendants are
obligated to pay, with success on the merits
the remaining avenue for recovery of these
funds.
On the other hand, as discussed in part II.C., infra, the
district court also stated that, even if the State defendants
ultimately prevail on the merits and the State Level Review Panel
decision is held to be erroneous, they are not entitled to be
reimbursed by the Slocums for the interim costs of Daniel Slocum’s
education and related services at Heartspring.
It is not clear whether the State defendants have requested
the district court to rule on any disputes over specific
reimbursement requests. The Slocums assert that they have not; but
the record reflects that the State defendants apparently believe
that they lack sufficient data upon which to base a specific
challenge. For example, in their motion for rehearing of the order
denying their motion to conduct and manage an IEP conference, the
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State defendants requested that the court order the Slocums to
produce documentation to support Heartspring’s invoices.
Accordingly, it is unclear whether the district court intends
to allow the State defendants to be reimbursed by the Slocums for
any of the Heartspring costs during the stay-put period, regardless
of whether such costs are unreasonable, excessive, or covered by
IDEA’s medical services exclusion, and irrespective of whether the
State defendants prevail on the merits. In any event, at some
point in these proceedings, the State defendants must be given a
meaningful opportunity to challenge both the nature and the
reasonableness of the Heartspring costs. The timing of such an
opportunity is, of course, a matter to be determined by the
district court, in the exercise of its sound discretion. But, in
so ruling, we do not reach, nor do we express an opinion on,
whether the State defendants are entitled under IDEA to
reimbursement for any such challenged stay-put costs.
C.
The most troubling issue is whether the district court abused
its discretion by concluding that the Slocums will not be required
to reimburse the Department for at least some of the stay-put
costs, even if the State defendants prevail on the merits. (In
this regard, the State defendants contend that the district court
should have required the Slocums to post a bond as security for
such potential reimbursement.) This discussion overlaps with that
in part II.B., because it does not seem possible — and certainly
not advisable — at this stage of the litigation to attempt to
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distinguish between unreasonable or excessive costs that pertain to
discrete or episodic events or incidents, as opposed to
unreasonable or excessive costs that are ongoing and fundamental to
the stay-put facility. It is for the district court, in the first
instance, to make that call.
In ruling that the Department is not entitled to be reimbursed
by the Slocums for stay-put costs, even if the State defendants
prevail — in other words, even if the Review Panel decision, which
is the basis for the stay-put order and the award of interim costs,
is reversed — the court reasoned as follows:
By virtue of the State Level Review Panel’s
decision, the state has agreed as a matter of
law with the child’s placement. Even if the
Court were to eventually decide that the
panel’s decision was in error, an agreement
still exists for the period of time leading up
to this Court’s decision [on the merits] and
the parents would not be deemed in violation
of the law during that time frame. The
parents, therefore, should not be made to
reimburse the state or school board for a
placement with which the state agreed and for
which no violation of law took place. In this
interim period, the parents are deemed in
compliance with IDEA and Daniel is entitled to
a free, appropriate public education....
A primary purpose of the stay-put
provision is to protect a child from being put
in an unsuitable placement and possibly
incurring harm while awaiting the lengthy
outcome of the litigation. If parents who are
in compliance with the IDEA are required to
reimburse the school district or the state,
parents without substantial means could be
forced to leave a child in the less suitable
placement because they cannot afford to pay
for the private interim placement.
Additionally, parents may be forced to
withdraw their child from a placement which
they and the state agree is appropriate
because the parents might not have the
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financial resources to repay the educational
costs which accumulate during the litigation.
This is directly contrary to the purpose of
IDEA.
(Emphasis added.)
Obviously, because a merits-decision lies in the future, we do
not now address whether, should the State defendants prevail, the
Department can recover some, if not all, of the stay-put costs.
See Susquenita, 96 F.3d at 87 n.10. Restated, this issue is
premature. Should it be presented to our court following a merits-
decision, it will be subject to review then.
D.
Next, the State defendants claim that, as interpreted by the
district court, IDEA unconstitutionally creates an unfunded
liability exceeding federal authority, in violation of the Tenth
and Eleventh Amendments. They concede, however, that the existing
record is inadequate for determining such significant
constitutional issues as the scope of federal authority for
imposing absolute and unfunded liability on the States, whether the
States are being forced to provide services beyond their
competence, and the legitimacy of federal regulation of state
education resulting in federal redirection of state budgeting
decisions.
Because the State defendants have not had a fair opportunity
to develop the record on these issues, we do not address them.
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E.
For the appeal from the stay-put order, the final issue raised
is whether the Slocums’ unilateral placement of Daniel Slocum at
Heartspring violated IDEA and constitutes a waiver of their right
to seek payment of stay-put costs. This issue is not properly
before us on interlocutory appeal. The Slocums enrolled Daniel
Slocum at Heartspring on 4 April 1996. The stay-put order at issue
deals only with the time period commencing a year later, on 3 April
1997, when the State Level Review Panel ruled in favor of the
Slocums. The district court expressly noted that it was not
determining whether the Slocums were in compliance with IDEA before
that date, 3 April 1997.
The State defendants assert further that the Slocums cannot
expect the State to pay for the costs of Heartspring, because there
has never been a determination that the State defendants do not
have an appropriate program or facility to meet Daniel Slocum’s
needs. Again, such a determination goes to the merits of the
appropriateness of Daniel Slocum’s IEP, and is, therefore, not
properly before us. We note, however, that the State defendants
acknowledged in their post-argument brief in our court that “there
is no state operated facility specifically designated for children
with autism” and “[t]here also is no specific interagency agreement
whereby a state educational agency provides educational services to
children with autism”.
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F.
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In their second interlocutory appeal (State management of an
IEP), the State defendants raise two issues. The first claim is
that IDEA limits the duration of the stay-put determination to
three specific proceedings: due process hearings; state
administrative review proceedings; and, for reviewing such
decisions, civil actions brought in state or federal court. 20
U.S.C. § 1415(b), (c), and (e). Under IDEA, according to the State
defendants, the term “civil action” does not include appeals to
circuit courts of appeals. Therefore, the State defendants assert
that interim placement or “stay-put” judgments entered pursuant to
20 U.S.C. § 1415(e)(3) by a district court dissolve once such a
judgment is appealed. (Of course, it is the State that is
appealing.)
In support of that contention, the State defendants rely on
Kari H. v. Franklin Special School Dist., 125 F.3d 855 (table),
1997 WL 468326 (6th Cir. 1997) (unpublished). At issue in Kari H.
was whether the stay-put provision continued to apply after the
district court had ruled on the merits and after the parents had
appealed that decision. For starters, pursuant to the Sixth
Circuit’s Rules, citation to such unpublished opinions is
disfavored. In any event, in contrast to that case, we are
reviewing a stay-put order prior to trial on the merits.
Restated, the district court has not yet ruled on the
appropriate placement for Daniel Slocum. We note, also, that this
contention is inconsistent with our court’s (and the Supreme
- 30 -
Court’s) denial of the State defendants’ motion to stay the stay-
put order pending appeal.
Whether the stay-put order remains in effect pending an appeal
of a merits-decision is not properly before us. At issue can only
be whether an interlocutory appeal of that stay-put order dissolves
it. Needless to say, it does not. Otherwise, a party unhappy with
the stay-put ruling, in this instance the State defendants, could
simply seek to frustrate the purpose for stay-put orders by taking
interlocutory appeals.
G.
The second, and last, issue raised by the second interlocutory
appeal concerns the district court characterizing the State
defendants’ right to conduct an IEP meeting as a discovery issue
for the merits proceeding. They contend that the ruling, which
bars them from any meaningful participation in the IEP process
until resolution of the merits, is highly prejudicial because it
prohibits the State defendants, non-parties during the
administrative process, from having any access or involvement in
any IEP or placement decisions, despite the fact that the entire
stay-put financial burden is being borne by the Department.
The State defendants assert that IDEA grants them authority to
convene and manage the IEP, and, if necessary, to initiate a
reevaluation of Daniel Slocum. They maintain that a dramatic
improvement in his condition warrants such a reevaluation; that §§
1401(20) and 1414(a)(5) provide that the IEP process involves
continuous procedures that are not fixed as of any date, and
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contemplate the need for periodic review and assessment of a
child’s progress; and that, because the Department is paying for
the Heartspring educational services, it should supplant the local
educational agency with respect to the performance of IEP-related
functions.
The State also relies on regulations promulgated by the United
States Department of Education, which provide:
After a child with a disability enters a
private school or facility, any meetings to
review and revise the child’s IEP may be
initiated and conducted by the private school
or facility at the discretion of the public
agency.
34 C.F.R. § 300.348(b)(1).
The Slocums respond that the State defendants are not entitled
to such relief because (1) Daniel Slocum is current on his IEP and
there is no need for an evaluation; (2) the fact that the
Department is responsible for costs during the stay-put period does
not support the type of assessment sought by the State defendants;
and (3) there is no legal support for such an evaluation. They
contend further that the stay-put injunction protects Daniel Slocum
from unwarranted assessment by the State defendants, and that, to
permit them to convene an IEP conference would void the entire
stay-put concept.
The Act and the regulations require that IEPs be reviewed at
least annually, 20 U.S.C. § 1401(20); and that regular
reevaluations be conducted every three years, or more frequently
when conditions warrant, or when a parent or teacher requests such
reevaluation. 34 C.F.R. § 300.534. Daniel Slocum’s last St.
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Tammany IEP was developed on 3 April 1996. According to the
Slocums, another IEP was developed in May 1996 at Heartspring, and
the most recent IEP was developed in May 1997 at Heartspring, with
the School Board’s participation. The Slocums assert that Daniel
Slocum was last reevaluated in April 1996, and is not due for
another reevaluation until April 1999.
In the words of the district court, it was “not persuaded that
IDEA permits the relief the defendants seek”. For the two reasons
given below, we do not decide whether the district court may grant
such relief, either pursuant to the authority cited by the State
defendants, or to § 1415(e)(2), which, as stated, grants the
district court “broad discretion” to “grant such relief as [it]
determines is appropriate”. 20 U.S.C. § 1415(e)(2); Burlington,
471 U.S. at 369.
First, a review and, if necessary, revision, of Daniel
Slocum’s IEP is to take place in May 1998; the parties have agreed
that the School Board and the State defendants will be allowed to
participate in this process. 34 C.F.R. § 300.344 (1997). Second,
the parties apparently have commenced discovery in anticipation of
the 15 June trial. It is, therefore, likely that, during such
discovery, the State defendants can discover much of the
information they seek.
III.
For the foregoing reasons, and subject to the concerns
expressed in this opinion, the orders appealed from are AFFIRMED,
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and the case is REMANDED to the district court for further
proceedings consistent with this opinion.
AFFIRMED and REMANDED
ENDRECORD
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KING, Circuit Judge, specially concurring:
I concur in the judgment and in the opinion, except for Parts
II.B and II.C, which contain dicta implying that the Louisiana
Department of Education may be entitled to recoup from the Slocums
all or part of the expenses that it incurred in paying for the
Heartspring placement during the stay-put period. Resolution of
these interlocutory appeals does not require us to address the
issue of whether and under what circumstances the IDEA may
authorize the Department’s recoupment of costs incurred during the
stay-put period.
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