September 2016 Newsletter – School Districts
The Ninth Circuit Clarifies the Standard for Limiting the Recovery of Attorney Fees to a Prevailing Parent Under the Individuals with Disabilities in Education Act
A school district can reduce its risk of liability for attorney fees in special education due process matters, by making a proper, good faith settlement offer prior to a due process hearing. In Beauchamp v. Anaheim Union High School Dist. (2016) 816 F.3d 1216, the Ninth Circuit provided guidance as to when a prevailing parent’s recovery of attorney fees can be limited under the Individuals with Disabilities in Education Act (“IDEA”) to deny the parent’s attorney fees incurred after receiving a settlement offer.
By way of background, in special education proceedings under the IDEA, a court or administrative hearing officer may award reasonable attorney’s fees as part of the costs to a prevailing parent of a disabled child. However, fees and costs for attorney services performed after a written settlement offer is made can be denied if: 1) the settlement offer is timely made (14 days before the date set for trial or; in the case of an administrative proceeding, at any time beyond 10 days before the proceeding begins); 2) the parents do not accept the settlement offer within 10 days; and 3) the court or administrative hearing officer finds that the parents failed to obtain more favorable relief than the settlement offer. As an exception to this rule, a court may award attorney fees and related costs to a prevailing parent if the parent was substantially justified in rejecting the settlement offer.
In Beauchamp, the appellate court denied attorney fees to a parent who prevailed in a due process hearing after it found that the parent failed to obtain more favorable relief than the school district’s settlement offer and the parent was not substantially justified in rejecting the offer. The school district’s settlement offer included more counseling and tutoring hours than an administrative law judge awarded. However, the parent argued that the ruling from the due process hearing was more favorable than the settlement offer because it included a finding that the district violated its obligation to identify and evaluate her son as a disabled student who needed special education services, which the parent claimed was critical to a pending appeal on another issue. The Ninth Circuit rejected the parent’s argument and found that the two proceedings were not dependent on one another because that ruling was not a prerequisite for a court to make a decision on the other proceeding. Moreover, the Ninth Circuit reasoned that a favorable ruling on either legal issue would have provided no practical relief to the parent at the time of the settlement offer, because the student was already receiving appropriate special education and related services. At that time, the only question that remained was whether the student was entitled to relief for the school district’s alleged delay in his evaluation process. In comparing the administrative ruling with the school district’s settlement offer, the Ninth Circuit concluded that the outcome of the administrative hearing was less favorable to the parent than the settlement offer.
The parent also argued that she was substantially justified in rejecting the settlement offer, because it was vague and ambiguous. The settlement offer stated that the terms would be incorporated into an industry standard agreement. The parent claimed that she could not have accepted the offer when those terms were unknown, including whether the terms included any waiver of rights. The Ninth Circuit rejected the parent’s claim finding that the terms were not vague and ambiguous as the offer explicitly stated the material terms, and recognized that it is customary in settlement negotiations to have the terms incorporated into a final document. Moreover, no provision of IDEA prevented the parent from seeking clarification as to what the industry standard terms would include or from making a counteroffer.
Beauchamp should emphasize to school districts the importance of making a good faith settlement offer prior to a due process hearing, and drafting proper language and terms in a settlement offer, so as to limit any potential award of attorney fees to a prevailing parent to only those fees incurred before a settlement offer is made.
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