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Stay-Put Shake-up: Third Circuit Holds Parents Entitled to Attorneys’ Fees for Non-Compliance with Stay-Put

By on August 30, 2017 in Special Education/504 with 0 Comments

By: Cameron R. Morgan, Esq.
Editor: Sanmathi (Sanu) Dev, Esq.

The Third Circuit Court of Appeals has issued an important decision finding that parents in special education litigation with school districts will be considered “prevailing parties” entitled to an award of attorneys’ fees in the event the district ignores or fails to comply with its obligations under the “stay-put” provision of the Individuals with Disabilities Education Act (“IDEA”).  M.R. & J.R. ex. E.R. v. Ridley Sch. Dist., No. 16-2465, 117 L.R.P. 34473 (3d Cir. 2017).  On August 22, 2017, the Third Circuit issued its decision substantially altering the landscape of fee-shifting in relation to stay-put compliance in special education cases.  In doing so, the Court drew an important distinction concerning the types of stay-put rulings that would give rise to prevailing party status and an award of fees.  While temporary rulings that determine the child’s stay-put placement and status on a prospective basis will not result in fee awards, rulings by a court or Administrative Law Judge (“ALJ”) awarding backward-looking reimbursement or compensatory relief as a result of a district’s non-compliance with its stay-put obligations will now render the parents prevailing parties and give rise to awards of potentially costly attorneys’ fees.

Under the “stay-put” provision of the IDEA, a child has a right to continuation of the “then-current educational placement” during the pendency of a dispute between the parents and the school district over their child’s educational services.  As special educators and practitioners know, it is not always an easy task to determine what placement, or set of supplemental or related services constitutes “stay-put” for purposes of continuation during the dispute.  However, the parents’ right to the stay-put placement and services continues unless and until the litigation is resolved in favor of the school district, including throughout the pendency of the appeal process, or the parties agree otherwise.  In cases where a district has sought to change the services in a child’s individualized education program (“IEP”), but the parents have initiated suit to maintain the prior services, this can mean that the parents effectively obtain the legal relief they are seeking for years on-end before a ruling on the merits is issued or the appeals are exhausted.

The holding in Ridley makes it clear that school districts must resist the temptation to simply stop paying for an out-of-district placement or for outside services that they may not believe to be in the child’s interests, if that placement or those services are part of the stay-put obligation.  To become a prevailing party entitled to fees under the IDEA’s fee-shifting provision, 20 U.S.C. § 1415(i)(3)(i), a party must obtain a “material alteration of the legal relationship between the parties” that is “judicially sanctioned.”  In cases of a district’s non-compliance with stay-put, parents will now be entitled to a potentially hefty fee award for the cost of enforcing their rights.

The point is highlighted by the fact that, under the unique facts of Ridley, the school district was ultimately successful on the merits of the case.  The child, E.R., had attended school in the district for kindergarten and first grade.  For second grade, however, the parents disagreed with the continuation of the in-district placement and opted to unilaterally place E.R. in a private school and seek tuition reimbursement through the administrative complaint process (in New Jersey, a “due process hearing”).  In 2009, the administrative hearing officer issued a decision in the parents’ favor, which, at that point, became the child’s “stay-put” placement.  The school district appealed that ruling to the federal district court, which issued a decision in 2011 reversing the hearing officer’s determination.  In 2012, the Third Circuit affirmed the decision in favor of the school district, bringing an end to the underlying case on the merits.

During the pendency of the underlying litigation, the school district had refused to continue to fund the out-of-district placement for the three years from the time of the hearing officer’s decision in 2009 through the conclusion of the appeal process in 2012.  The parents initiated a separate suit in the U.S. District Court seeking back-tuition and attorneys’ fees for their enforcement action.  The district court awarded the parents three years of full back-tuition, and the Third Circuit affirmed.  In May 2015, the U.S. Supreme Court denied the school district’s petition for certiorari.  Yet, in reliance on earlier Third Circuit precedent, the district court had held that the parents’ obtainment of stay-put reimbursement did not make them prevailing parties and declined to award then attorneys’ fees.

In this opinion, the Third Circuit reversed the denial of prevailing party status to the parents and remanded to the district court for an award of attorneys’ fees and costs expended in the enforcement litigation.  In its holding, the Court drew a critical distinction between an award by a court or ALJ of temporary “forward-looking injunctive relief” that does not involve a merits-based determination, such as determining what will constitute “stay-put” at the outset of a case, and “backward-looking compensatory relief” that requires an independent merits determination, such as monetary reimbursement or compensatory education awarded as a result of the district violating “stay-put” by refusing to fund the then-current placement during the pendency of the dispute.  The latter type of ruling will now give rise to prevailing party status for the parents.

The practicalities of the Court’s holding in Ridley makes this case one that every special education attorney and director of special services should be aware of in navigating the complicated landscape of special education litigation in New Jersey.  In the view of this practitioner, understanding and abiding by the distinction drawn by the Court is absolutely critical in an era of clogged administrative dockets and tactical maneuvering by attorneys.  In cases where stay-put is the parents’ desired placement, an administrative proceeding can often drag on for an entire school year in the Office of Administrative Law.  School district attorneys need to educate their clients early on to make sure that stay-put payments continue to be made and are not cut off during the pendency of the case, whether through frustration with the length of the proceeding, innocent clerical missteps in the district’s accounting office, or genuine belief that the child is not deriving educational benefit from the out-of-district placement.

If school districts fail to abide by their stay-put obligations and enforcement by the parents becomes necessary, the result could be a hefty award to the parents’ attorney for the fees expended in enforcing stay-put rights.  The Ridley School District will learn this lesson in reimbursing attorneys’ fees incurred between 2012 and 2015, in a case that changed the law.  It would be wise to consider your school district on notice.

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Cameron R. Morgan

About the Author

About the Author:

Mr. Morgan has served the public school districts of the State of New Jersey in the specialized area of school law, representing boards of education in all aspects of their legal needs, with a focus on general counsel services, civil litigation, special education, administrative law, collective negotiations, labor and employment, and appellate practice. He has served as Board Solicitor to dozens of school districts, guiding district administrators through the diverse range of issues affecting the public schools, from personnel matters, tenure cases, and the range of issues that frequently arise at public board meetings, to student disciplinary matters, residency disputes, and homelessness issues, to complex matters involving the budgetary process or First Amendment rights.

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