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Rena C. v. Colonial School District

United States Court of Appeals, Third Circuit

May 14, 2018

RENA C., Appellant
v.
COLONIAL SCHOOL DISTRICT

          Argued October 23, 2017

          On Appeal from the United States District Court for the Eastern District of Pennsylvania (E.D. Pa. No. 2-15-cv-01914) District Judge: Honorable Timothy J. Savage

          David J. Berney, Esq. [ARGUED] Counsel for Appellant

          Ellen M. Saideman, Esq. Counsel for Amicus Appellant

          Karl A. Romberger, Jr., Esq. [ARGUED] Sweet Stevens Katz & Williams Counsel for Appellee

          Emily J. Leader, Esq. Pennsylvania School Boards Association, Sarah B. Dragotta, Esq. Kevin M. McKenna, Esq. Nicole D. Snyder, Esq. Latsha Davis & McKenna Counsel for Amicus Appellees

          Before: GREENAWAY JR., NYGAARD and FISHER, Circuit Judges.

          OPINION

          FISHER, CIRCUIT JUDGE.

         This case arises out of a dispute under the Individuals with Disabilities Education Act ("IDEA"). Under the IDEA, when parents and school districts dispute a child's educational placement, a parent may file an administrative due process complaint that can lead to an administrative hearing. At least ten days before the dispute reaches a hearing, the school district can extend a settlement offer to the parent, referred to herein as a "ten-day offer." If the matter proceeds to a hearing and the parent is the prevailing party, this ten-day offer becomes significant. A parent who is the prevailing party may be awarded reasonable attorney's fees under the IDEA, but the ten-day offer allows a school district to limit its exposure to such fees by limiting a parent's eligibility for attorney's fees to only those fees accrued before the time of the ten-day offer. If a parent rejects the ten-day offer, the parent may only receive attorney's fees for work done after the time of the offer if (1) the hearing leads to more favorable relief than the offer included, or (2) the parent was substantially justified in rejecting the offer.

         In the instant matter, Rena C., mother to student A.D., filed an administrative due process complaint against the Colonial School District to determine an appropriate placement for her daughter. In an effort to limit the accrual of owed attorney's fees, Colonial extended Rena C. what it contends was a ten-day offer. Rena C. rejected the offer. When the matter eventually proceeded to a hearing, an administrative officer entered an order in favor of Rena C., ordering a private school placement for the student. As the prevailing party, Rena C. then filed a claim for attorney's fees in the District Court. This appeal concerns whether or not Colonial successfully limited Rena C.'s eligibility for attorney's fees with its offer. Because Rena C. was the prevailing party, the District Court awarded her attorney's fees for work performed prior to the ten-day offer. However, the District Court held that because she did not receive more favorable relief and was not substantially justified in rejecting the offer, she was not entitled to fees accrued after Colonial's offer. We disagree and hold that Rena C. was substantially justified in rejecting Colonial School District's offer. We will reverse and remand to the District Court for recalculation of attorney's fees.

         I.

         Rena C.'s child, A.D., attended public school in the Colonial School District. The instant matter was not the first placement dispute between Rena C. and Colonial. Prior to this matter, when A.D. was entering seventh grade, Rena C. unilaterally pulled A.D. from the public school she had been attending and enrolled her at the Stratford Friends School. Rena C. claimed that Colonial had failed to provide a free, appropriate public education as required by the IDEA and sought reimbursement from Colonial. The matter went to an administrative hearing officer who found that A.D.'s Individualized Education Program (IEP) at Colonial was inappropriate and that the placement at Stratford was appropriate. The hearing officer awarded Rena C. two years of compensatory education, tuition reimbursement for the current school year, and ongoing tuition reimbursement until Colonial convened an appropriate IEP meeting.

         The following school year, for A.D.'s eighth grade year, Rena C. again enrolled her at Stratford. Colonial convened an IEP meeting at the end of that school year. Rena C. disputed the adequacy of the IEP and requested mediation, thus beginning the dispute underlying this appeal. At the end of the summer, Rena C. notified Colonial that she intended to enroll A.D. at Delaware Valley Friends School for the next school year and requested reimbursement for tuition and related expenses. Colonial responded that the new IEP placing A.D. at the public school was adequate and that it therefore was not required to further reimburse Rena C. for any educational expenses. Rena C. then cancelled the mediation she had requested and filed an administrative complaint challenging the adequacy of the IEP. She sought declaratory relief and "reimbursement for private tuition and associated costs ('tuition reimbursement') arising from [A.D.]'s private placements for the [previous] school year and the [upcoming] school year." App. 45. Rena C. received a tuition bill from Delaware Valley on the same day she filed her administrative complaint. The invoice shows two separate educational expenses: $36, 300 for tuition and $10, 800 for one-on-one educational support.

         On September 18, 2014, Colonial sent Rena C. what it contends was a ten-day offer pursuant to 20 U.S.C. § 1415(i)(3)(D)(i)(I)-(III). In this letter, Colonial offered "to pay private school tuition and transportation for Parent's unilateral placement at Delaware Valley Friends School." App. 49. Rena C. did not respond to this letter for over a month. She eventually claimed that it did not constitute a valid offer because it lacked school board approval, and that it was inadequate for failing to address attorney's fees or pendency.[1]

         The parties attempted negotiation, but eventually proceeded to an administrative hearing. After the first session of the hearing concluded, the parties participated in mediation with the assistance of a secondary administrative hearing officer. Subsequently, the parties stipulated to a consent order entered by an administrative hearing officer providing for tuition, one-on-one instructional support, transportation reimbursement, and pendency at Delaware Valley. The order did not include attorney's fees.

         Rena C. filed a complaint in the Eastern District of Pennsylvania seeking approximately $70, 000 in attorney's fees under the IDEA, the Americans with Disabilities Act (ADA), and § 504 of the Rehabilitation Act. Colonial counterclaimed for attorney's fees under 20 U.S.C. § 1415(i)(3)(B)(i)(II) and (III), alleging that Rena C. continued to litigate after the litigation had become frivolous, unreasonable, or without foundation, thereby needlessly increasing the cost of litigation.

         The District Court granted Rena C.'s motion for summary judgment on her claim for attorney's fees, but awarded her only $7, 438.00. This figure included only those attorney's fees accrued before the school district made its ten-day offer. She was not awarded any fees accrued after the school district made its ten-day offer because the court found that she did not receive more favorable relief during the subsequent proceedings, and that she was not substantially justified in rejecting the offer. The District Court granted in part and denied in part Colonial's motion for summary judgment, rejecting its argument that the school district was a prevailing party, but agreeing that Rena C. was not entitled to fees for post-offer work. The District Court rejected Colonial's counterclaim because Colonial was not the prevailing party.[2]

         II.

         The District Court exercised jurisdiction under 28 U.S.C. § 1331 and 1343. This Court exercises jurisdiction under 28 U.S.C. § 1291. We apply plenary review to legal questions related to the interpretation of ten-day offers and to questions of construction regarding such offers under the IDEA. This standard is consistent with this Court's standard of review for rulings on attorney's fees, and with its standard of review for Federal Rule of Civil Procedure 68 offers of judgment. See M.R. v. Ridley School District (Ridley II), 868 F.3d 218, 223 (3d Cir. 2017) ("Although ordinarily we review attorneys' fees rulings for abuse of discretion, our review is plenary where, as here, the district court based its denial on legal conclusions."); Le v. University of Pennsylvania, 321 F.3d 403, 406 (3d Cir. 2003) (exercising "plenary review over both legal questions regarding the interpretation of Rule 68 and the construction of the offer of judgment").

         III.

         Rena C. makes five alternative arguments on appeal as to why she is entitled to recover attorney's fees accrued after Colonial's September 18, 2014 offer. First, she argues that Colonial did not make a valid offer of settlement pursuant to 20 U.S.C. § 1415(i)(3)(D)(i). We conclude that it did. Second, she argues that she received more favorable relief in the administrative order than Colonial had included in the ten-day offer. We conclude that she did not. Third, she argues that she was substantially justified in rejecting the offer. We agree. Fourth, she argues that she was entitled to fees under the ADA and § 504 even if she was precluded under the IDEA, and fifth, she argues that she was separately entitled to fees for her defense of Colonial's counterclaim. We decline to reach these issues. Because the IDEA did not preclude fees, we need not address these alternative statutory arguments.

         A) Colonial School District made a valid offer of settlement pursuant to 20 U.S.C. § 1415.

         Rena C. argues that Colonial did not make a valid ten-day offer because the school board had not yet approved it. Neither Pennsylvania law nor the IDEA, however, required Colonial to secure school board approval prior to extending a ten-day offer of settlement under 20 U.S.C. § 1415. Pennsylvania law requires the affirmative vote of the majority of the members of a board of school directors to take any action, inter alia, "[c]reating or increasing any indebtedness" or "[e]ntering into contracts of any kind, including contracts for the purchase of fuel or any supplies, where the amount involved exceeds one hundred dollars ($100)." 24 P.S. § 5-508. This state statute might require school board approval before a completed settlement agreement for more than one hundred dollars can be enforced, but the text of the provision lacks any indication that it prohibits school boards from doing what Colonial did here: authorizing an agent, such as an attorney, to negotiate a contract on its behalf. And Rena C. points to no cases applying § 5-508 to IDEA ten-day offers. On its face, 20 U.S.C. § 1415(i)(3)(D)(i) requires only that the ten-day offer be a "written offer of settlement." Colonial's offer to Rena C. was exactly that-an offer of settlement in writing.

         The IDEA has been interpreted to promote the speedy resolution of disputes between parents and school districts. El Paso Independent Sch. Dist. v. Richard R., 591 F.3d 417, 426 (5th Cir. 2009) ("Early resolution through settlement is favored under the IDEA."). Interpreting § 5-508 to require school board approval before a ten-day offer could be valid under the IDEA would undermine the IDEA's goal of promoting speedy resolutions of placement disputes. The broad terms of the IDEA provide a framework that is flexible enough to apply to a multitude of different jurisdictions and school districts, each with its own policies and procedures. The clear wording of the IDEA requires only a "written offer of settlement" and § 5-508 does not provide a basis ...


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