Fifth Circuit panel rules that parents are entitled to reimbursement for IEE if they show “substantial compliance” with state and local district criteria

Seth B. v. Orleans Parish Sch. Bd., No. 15-30164 (5th Cir. Jan. 19, 2016)

Abstract: In a 2-1 split, a U.S. Court of Appeals for the Fifth Circuit panel has ruled that parents are entitled to reimbursement for an independent educational evaluation (IEE) under the Individuals with Disabilities Education Act (IDEA), subject to a state monetary cap on the amount, if they demonstrate that the IEE is in substantial compliance with state and local school district criteria applicable to school-conducted evaluations. The majority opinion rejected the parents’ argument that the school board had waived its right to refuse reimbursement because it failed to initiate a hearing to contest the student’s IEE and because it unnecessarily delayed complying with its duties under IDEA’s implementing regulations.

In concluding that the parents’ IEE was subject to a “substantial compliance” standard, the majority rejected the parents’ argument that school boards “may only apply criteria ‘employed at the initiation of an evaluation,’ and not ‘content-based’ criteria.” It also rejected the parents’ contention that state/district “criteria, including those that require a multidisciplinary team, are generally inapplicable to an IEE because that document is oriented toward schools and does not address IEEs in detail.” In addition, the majority found unpersuasive the parents’ claim that only the portions of the IEE relating to their areas of disagreement with the board had to comply with the criteria.

The majority also rejected the parents’ claim that Seth’s IEE was a reevaluation, not an initial evaluation, and that initial evaluation criteria are therefore inapplicable. Finally, it found untenable the parents underlying contention that Bulletin 1508 is so onerous as to cumulatively and inherently violate parents’ right to an IEE.

The dissent characterized the majority’s creation of a substantial compliance standard as “a usurpation of regulatory authority and an invitation for courts to engage in arbitrary decisionmaking.” It found that because federal regulations require school conducted evaluations to meet federal criteria, IEEs not meeting that same standard would be of scant assistance to schools. The dissent said, “Requiring a school to pay for an evaluation that it need not consider drains scarce resources from other programs.”

Facts/Issues: The parents of a student, identified as Seth B., with autism and suspected learning disabilities requested an IEE, a right provided under the federal Individuals with Disabilities Education Act (IDEA) to parents who disagree with the school district’s evaluation of their child’s special education needs. The Orleans Parish School District (OPSD) informed the parents that the IEE must meet the standards for special education evaluations established by the Louisiana Board of Elementary and Secondary Education (BESE), along with cost limitations for the proposed evaluation. Because the completed evaluation failed to meet BESE criteria (Bulletin 1508), the school district denied reimbursement for the IEE.

The parents requested an administrative due process hearing. An Administrative Law Judge (ALJ) ruled against the parents, finding that their counsel had stipulated to the IEE’s noncompliance with Bulletin 1508 and that he therefore lacked jurisdiction to award reimbursement. Seth and his parents sought review in federal district court pursuant to the IDEA.

The district court granted summary judgment for Orleans Parish School Board (OPSB). The court found that OPSB had not waived its right to challenge Seth’s IEE, that the IEE did not comply with Bulletin 1508, and that reimbursement was therefore disallowed.

Ruling/Rationale: The Fifth Circuit panel, in a 2-1 decision, vacated the district court’s decision and remanded the case to the district court for further proceedings. The first half of the majority’s opinion was devoted to determining whether OPSB had waived its right to refuse reimbursement because it failed to initiate a hearing to contest the student’s IEE and because it unnecessarily delayed complying with its duties under IDEA’s implementing regulations.

The majority, rejecting the parents’ arguments, held that OPSB had preserved its right to deny reimbursement for the IEE. It turned to the issue of whether the parents’ “IEE failed to ‘meet agency criteria,’ precluding reimbursement.”

First, the majority rejected the parents’ argument that a school board “may only apply criteria ‘employed at the initiation of an evaluation,’ and not ‘content-based’ criteria.” Second, it rejected the parents’ contention that state/district “criteria, including those that require a multidisciplinary team, are generally inapplicable to an IEE because that document is oriented toward schools and does not address IEEs in detail.” Third, the majority found unpersuasive the parents’ claim that only the portions of the IEE relating to their areas of disagreement with the board had to comply with the criteria.

The majority also rejected the parents’ claim that Seth’s IEE was a reevaluation, not an initial evaluation, and that initial evaluation criteria are therefore inapplicable. Finally, it found untenable the parents underlying contention that Bulletin 1508 is so onerous as to cumulatively and inherently violate parents’ right to an IEE.

Turning to the question of compliance with the criteria, the majority pointed out that the district court had addressed the parents’ argument that the IEE was substantially compliant. It also noted: “The degree of compliance necessary for an IEE to ‘meet agency criteria’  under 34 C.F.R. § 300.502 is not explicitly defined in IDEA, its implementing  regulations, or the case law, nor is there any directly relevant agency guidance.”

The majority stated:

We are persuaded that substantial compliance also suffices in the IEE context. 34 C.F.R. § 300.502 nowhere demands perfect adherence to agency criteria. Indeed, such a requirement is in tension with core purposes of the right to an IEE and of the IDEA generally.

It found that a substantial compliance standard served the Congress’s purpose in providing the right to an IEE because “Congress sought to ‘giv[e] parents and guardians a large measure of participation at every stage of the administrative process,’ and to ensure that the process produced substantively sound results.”

The majority stressed that the substantial compliance standard “safeguards parents’ ability to participate in the IDEA process through IEEs by preserving a realistic possibility of reimbursement.” It concluded that “by ensuring reimbursement for generally sound IEEs that may happen to be deficient in isolated or trivial ways, a substantial compliance standard will encourage parents who might not otherwise have obtained and submitted IEEs to do so, leading to better-informed IDEA outcomes.”

Mindful of the “slippery slope” argument, the majority acknowledged it is a legitimate concern “when the law accepts less than-perfect compliance.” Nonetheless, it found “the risk acceptable here, given the strong statutory interests favoring a substantial compliance standard and the use of such standards elsewhere in the IDEA case law.”

According to the majority: “Substantial compliance, allowing reimbursement in this context, means that insignificant or trivial deviations from the letter of agency criteria may be acceptable as long as there is substantive compliance with all material provisions of the agency criteria and the IEE provides detailed, rigorously produced and accessibly presented data.”

Because the district court did not address the specific question of whether the parents’ IEE was substantially compliant, the majority remanded the case for analysis under a substantial compliance standard. It said, “If the court below (or, upon further remand, the administrative hearing officer) finds the IEE substantially compliant, it should award reimbursement.” It also noted that any reimbursement would be subject to state’s $3,000 cap on IEEs.

The dissent characterized the majority’s creation of a substantial compliance standard as “a usurpation of regulatory authority and an invitation for courts to engage in arbitrary decisionmaking.” It found that because federal regulations require school conducted evaluations to meet federal criteria, IEEs not meeting that same standard would be of scant assistance to schools. The dissent said, “Requiring a school to pay for an evaluation that it need not consider drains scarce resources from other programs.”

The dissent asked: “Yet, if parents can ignore some of the criteria, to what extent do they need to comply with Bulletin 1508 at all?” It also criticized the majority’s failure to provide guidance to the district courts on what “substantial compliance” looks like in the context of IEE reimbursement.

The dissent pointed out that the majority’s concern that school districts will employ arcane, exacting standards in order to avoid having to pay IEEs is meritless because 34 C.F.R. § 300.502(e)(1) “requires an IEE to follow the same criteria that the school uses to conduct its evaluations ‘to the extent those criteria are consistent with the parent’s right to an [IEE].’”

The dissent in conclusion stated:

The majority’s decision to impose a judge-made standard on IEE reimbursements is deeply flawed. The majority cites not one single word in the IDEA or its accompanying regulations that points to the existence of a substantial-compliance standard for IEE reimbursement. Instead, the majority looks broadly to the purported purposes of the IDEA to discover a heretofore hidden substantial-compliance standard. Such purposivism is but another name for license to refashion a statute or regulation to suit the judge’s personal whims.

Seth B. v. Orleans Parish Sch. Bd., No. 15-30164 (5th Cir. Jan. 19, 2016)

[Editor’s Note: In June 2015, Legal Clips published a Sua Sponte item announcing that The National School Boards Association (NSBA), along with the Louisiana School Boards Association (LSBA), the Mississippi School Boards Association (MSBA), the Texas Association of School Boards (TASB) Legal Assistance Fund, and the National Association of State Directors of Special Education (NASDSE), had filed an amicus curiae (friend of the court) brief with the U.S. Court of Appeals for the Fifth Circuit in Seth B. v. Orleans Parish School BoardThe brief urged the Fifth Circuit to affirm the federal district court in Louisiana’s holding requiring publicly-funded independent educational evaluations (“IEEs”) to meet state and local school district evaluation criteria.]

 

 

 

 

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