Special ed student was prevailing party but not entitled to attorney’s fees under IDEA beyond date of school district’s offer to settle for all relief requested

Gary G. v. El Paso Indep. Sch. District, No. 09-50965 (5th Cir. Jan. 31, 2011)

Abstract: A three-judge panel of the U.S. Court of Appeals for the Fifth Circuit (LA, TX, MS) has ruled that a special education student, who rejected a settlement offer for all relief requested which did not include attorney’s fees, was a prevailing party within the meaning of the Individuals with Disabilities Education Act (IDEA) eligible for attorney’s fees, even though the relief awarded was less than that requested. The panel concluded: (1) a party who rejects a settlement offer and obtains from either an administrative hearing officer or the district court no more educational relief than that offered by the settlement is a “prevailing party” under IDEA for  purposes of recovering attorney’s fees;  and (2) the prevailing party in this case, who was offered all requested educational relief but not attorney’s fees, was not substantially justified in rejecting that offer. It concluded that the district court had erred in awarding attorney’s fees for any work subsequent to the date the offer was made.

Facts/Issues: G.G. attended school in El Paso Independent School District (EPISD), where he received special education services. He was deprived of a number of hours of speech therapy that he was to receive under his individualized education plan (IEP). G.G.’s father, Gary G., brought a complaint against EPISD, alleging that it had failed to provide G.G. with a free appropriate public education (FAPE) as required by IDEA. The father requested and was granted an administrative due process hearing. Prior to the hearing, EPISD offered to settled the dispute for all the relief requested by G.G., but did not offer attorney’s fees. The father rejected the offer. The hearing officer (HO) rejected that part of G.G.’s claim for the 2004-05 school year based on the statute of limitations having run, but found in favor of G.G. on that part of the claim that involved 2005-06  school year.

G.G. brought an action in federal district court in Texas seeking attorney’s fees. The district court concluded that G.G. was a prevailing party “because he secured a procedural judgment and judicial imprimatur; he did not unreasonably protract the litigation because he was justified in rejecting EPISD’s settlement offer lacking attorney’s fees; but, an amount less than that requested was warranted because[G.G.] was only partially successful, due to his failed challenge for the 2004-05 school year.” As a result, the district court reduce the award by a third from the amount of $56,556 to $44,572.

Ruling/Rationale: The Fifth Circuit affirmed the lower court’s decision in part and vacated it in part. Specifically, it further reduced the amount of attorney’s fees that could be recovered to that work completed by the attorney up to the time EPISD made the offer to settle for all relief requested by G.G. The panel, therefore, awarded G.G. attorney’s fees of $3,243. The panel defined the issues in the case as: “whether a party who rejects a settlement offer and obtains from either an administrative hearing officer or the district court no more educational relief than that offered by the settlement is an IDEA “prevailing party” for attorney’s fees purposes; and, even if so, whether that prevailing party, if offered all requested educational relief, but not attorney’s fees, is not substantially justified in rejecting that offer or unreasonably protracts final resolution of the controversy, requiring part, or all, of the requested fees being denied.”

Before addressing those issues, the panel explained why it rejected EPISD’s contention that neither the HO nor the district court had jurisdiction to hear the case because EPISD offer to settle the dispute for all relief requested by G.G. It pointed out that the Fifth Circuit had previously held in El Paso Independent School District v. Richard R., 591 F.3d 417 (5th Cir. 2009), cert. denied, 130 S. Ct. 3467 (2010), and A.O. v. El Paso Independent School District, 368 F. App’x 539 (5th Cir. 2010), that a pre-hearing settlement offer did not deprive either the HO or the district court of jurisdiction to hear the case. It stated: “The IDEA itself therefore presumes that a controversy will remain justiciable even though a school district offers full relief in a settlement offer.”

Turning to the issue of “whether a party who rejects a settlement offer and obtains from an administrative hearing officer or the district court no more educational benefit than the settlement offered is technically a ‘prevailing party,’” the panel first pointed out that Richard R.had left that question unresolved. While it agreed with EPISD that G.G. obtained less from the order than he would have from the settlement, the HO’s decision still altered the legal relationship between the parties and, thus, did not preclude G.G. from being considered a “prevailing party” for purposes of IDEA. However, the panel stressed that “prevailing party” status merely made G.G. eligible to receive attorney’s fees under IDEA, but did not guarantee that he would automatically recover such fees for the full amount spent on representation.

The panel found that the crucial question was “whether a parent who rejects a settlement offer that includes all requested educational relief, but not attorney’s fees, is substantially justified in, or unreasonably protracts the final resolution of the controversy by, rejecting it.” It first found that the offer was not untimely under IDEA as characterized by G.G., but instead met IDEA ‘s requirements and, therefore, brought IDEA’s potential fee-bar provision into play. It concluded that G.G. was not  “substantially justified” in rejecting EPISD’s settlement offer based on claimed unenforceability.  It also found that, based on the record, G.G. was not “substantially justified” in rejecting the offer in order to obtain attorney’s fees.  It declined to hold, however,  “that every plaintiff rejecting a settlement offer because it does not include such fees is, per se, not substantially justified in rejecting it.”

Because G.G. was not substantially justified in rejecting the offer, the panel ruled, “the district court abused its discretion for attorney’s fees awarded for work performed subsequent to the date it was made.” However, the panel held that “the district court did not abuse its discretion in awarding [G.G.] fees incurred through the … offer-date because [G.G.]. was not alone in protracting this matter.” It found that EPISD also played a role in protracting the litigation as demonstrated by the school district’s failure to include reasonable attorney’s fees in its offer.  The panel, based on $235.00 per hour, with 13.8 hours having been spent on this matter through the offer-date, awarded attorney’s fees of $3,243.00.

Gary G. v. El Paso Indep. Sch. District, No. 09-50965 (5th Cir. Jan. 31, 2011)

[Editor's Note: The Fifth Circuit panel commented on the long and contentious relationship between EPISD and G.G.'s attorney, who also represented Richard R. "This litigation," it said, "most especially this matter’s not being resolved following Richard R.’s being rendered approximately a year ago and only a few months after the fees award at issue, is a classic example of wasted time, effort, and scarce financial and judicial resources. Perhaps most important, the manner in which this proceeding has been conducted, at different times by each party following the 12 September 2006 settlement offer, runs contrary to IDEA’s purposes."

A summary of the Richard R. opinion referenced by the panel is available at the first link below. NSBA joined the Texas Association of School Boards in filing an amicus brief written by COSA member Christopher Borreca.  The brief is available at the second link below.

In 2010, another Fifth Circuit panel ruled that a school district that had offered a student all requested relief under the Individuals with Disabilities Education Act (IDEA) was a prevailing party for purposes of recovering attorneys fees from the student’s attorney, and was entitled to such fees because the attorney “continued to litigate claims after they clearly became frivolous, unreasonable, and without foundation.” The panel concluded that because the attorney had conceded in the district court that the school district was a prevailing party under IDEA, it had waived this threshold issue on appeal. A summary of the opinion is available at the third link below.]

NSBA School Law Issues pages on EPISD v. Richard R.

NSBA Amicus Brief in EPISD v. Richard R.

NSBA Legal Clips archives on EPISD v. Berry

Tags: , , ,