2015 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

6-25-2015

Community Country Day School v. Erie School

District

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Recommended Citation

"Community Country Day School v. Erie School District" (2015). 2015 Decisions. Paper 666.

http://digitalcommons.law.villanova.edu/thirdcircuit_2015/666
NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

________________

No. 14-3608

________________

COMMUNITY COUNTRY DAY SCHOOL, A Pennsylvania Non-Profit Corporation;

FANANDA CLINTON, Parent and Natural Guardian of D.C.;

JUANITA CORREA, Parent and Natural Guardian of S.C and A. M.,

 Appellants

v.

ERIE SCHOOL DISTRICT

________________

Appeal from the United States District Court

for the Western District of Pennsylvania

(D. C. No.1-14-cv-00019)

District Judge: Honorable J. Frederick Motz 

________________

Submitted under Third Circuit LAR 34.1(a)

on April 30, 2015

Before: FISHER, HARDIMAN and ROTH, Circuit Judges

(Filed: June 25, 2015)

________________

OPINION*

________________

ROTH, Circuit Judge

 

* This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not 

constitute binding precedent.
2

Community Country Day School (CCDS), Fananda Clinton, and Juanita Correa, 

appeal the District Court’s dismissal of their complaint alleging that the Erie School 

District refused to pay the tuition costs of CCDS students in violation of the Medicaid 

Act’s freedom-of-choice provision,1and the Due Process Clause of the Constitution. The 

District Court dismissed the complaint for lack of standing and failure to state a claim. 

The District Court also denied leave to amend the complaint. We will affirm for the 

reasons stated in the Magistrate Judge’s well-crafted opinion.

I.2

Clinton and Correa are parents and natural guardians of children enrolled at 

CCDS, a private school providing educational and medical services for children with 

moderate to severe mental and emotional disorders. CCDS provides medical services 

through its partial hospitalization program, which is federally subsidized under the 

Medicaid Act. The medical services are integrated into CCDS’ academic program 

throughout the school day. 

Pursuant to a settlement agreement, the School District paid CCDS to educate 

Medicaid-eligible students receiving partial hospitalization services at CCDS from 2003 

to 2007. The District voluntarily extended the payments, albeit in lesser amounts, 

through 2011, but discontinued all payments thereafter. Despite CCDS’ repeated 

 

1 42 U.S.C. § 1396a(a)(23).

2 Because the District Court dismissed Appellants’ claims pursuant to Federal Rules of 

Civil Procedure 12(b)(1) and 12(b)(6), we accept as true all well-pleaded allegations and 

construe the complaint in the light most favorable to the non-moving party. See Lewis v. 

Atlas Van Lines, Inc., 542 F.3d 403, 405 (3d Cir. 2008).
3

requests for tuition subsidies, the School District refused to pay on the basis that it did not 

refer or place any of the students in CCDS. 

On January 23, 2014, CCDS filed a suit in “its representative capacity” on behalf 

of students who were enrolled at CCDS by their parents and/or guardians for the purpose 

of receiving medical services in CCDS’ Partial Hospitalization Program. CCDS alleged 

that the School District’s refusal to reimburse CCDS for the educational services 

provided by CCDS to its students violated (1) the parents’ right to choose CCDS as a 

partial hospitalization provider under the Medicaid Act’s freedom-of-choice provision, 

and (2) CCDS students’ right to free public education. The District moved to dismiss the 

complaint for failure to state a claim because Appellants had not alleged a violation of 

any right guaranteed by the Constitution or laws of the United States enforceable under 

§ 1983. The Magistrate Judge filed a Report and Recommendation, recommending 

dismissal of Appellants’ federal claims for lack of standing and failure to state a claim. 

Appellants filed objections to the R&R along with a motion to amend the complaint, 

seeking to add a cause of action under the Due Process Clause for discontinuing tuition 

payments without a hearing. The District Court dismissed the federal claims, declined to 

exercise supplemental jurisdiction over the state law claim, and denied leave to amend 

the complaint. This appeal followed.
4

II.3

A.

“Absent Article III standing, a federal court does not have subject matter 

jurisdiction to address a plaintiff’s claims, and they must be dismissed.”4 The Supreme 

Court has established that “the irreducible constitutional minimum of standing contains 

three elements[,]” injury in fact, causation and redressability.5 The party invoking federal 

jurisdiction bears the burden of proving standing.6

As to the alleged violation of the Medicaid Act’s freedom-of-choice provision, we 

agree with the Magistrate Judge that the parents and CCDS lack standing to pursue the 

claim. Clinton and Correa allege that the School District “violated the[ir] civil rights . . . 

by requiring them to waive their right under law to choose the provider of Medicaid 

partial hospitalization services . . . as a condition of receiving from the Erie School 

District an education legally required to be paid by it.” But, according to the complaint, 

Clinton and Correa did choose CCDS as their children’s partial hospitalization services 

 

3 The District Court had subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and 

1367. We have jurisdiction pursuant to 28 U.S.C. § 1291. We exercise plenary review 

over a district court’s jurisdictional determinations and grant of a motion to dismiss for 

failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). See Reilly v. 

Ceridian Corp., 664 F.3d 38, 41 (3d Cir. 2011). We review the denial of a motion for 

leave to amend the complaint for abuse of discretion. See Hudson United Bank v. 

LiTenda Mortg. Corp., 142 F.3d 151, 160 (3d Cir. 1998).

4 Taliaferro v. Darby Twp. Zoning Bd., 458 F.3d 181, 188 (3d Cir. 2006).

5 Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992).

6

Id. at 561
5

provider.7 Significantly, the parents do not allege that their children were turned away 

from CCDS or that they are contemplating withdrawing their children from CCDS in 

favor of free public education. Nor do they allege that their decision to choose CCDS 

burdens them financially. Because Clinton and Correa successfully exercised their right 

to choose CCDS as a provider of partial hospitalization medical services, they have not 

alleged an injury in fact. 

The parents’ lack of standing is fatal to CCDS’ representational standing.8 

Moreover, CCDS cannot assert third party standing relative to the parents’ claim under 

the Medicaid Act because it has not shown that the third parties face obstacles that 

prevent them from pursuing their claims.9

Even if Appellants were to have standing, their Medicaid Act claim would fail on 

the merits for the reasons stated in the Magistrate Judge’s opinion.

10

 

7 See J.A. 89-90, 95; see also J.A. 94 (“Each plaintiff Parent and each parent and 

guardian of the Represented Students has chosen CCDS to provide partial hospitalization 

medical services for his or her Student or Represented Students.”).

8 See Natural Res. Def. Council, Inc. v. Texaco Ref. & Mktg., Inc., 2 F.3d 493, 504-05 (3d 

Cir. 1993) (holding that representational standing is established when 1) the members 

would have individual standing to sue; 2) the interests the organization seeks to protect 

are related to its goals; and 3) the claims do not require individual participation by the 

members).

9 See Taliaferro, 458 F.3d at 189 n.4 (noting that a litigant may bring a case on behalf of 

a third party when: (1) the litigant has suffered an injury in fact, giving him a sufficiently 

concrete interest in the outcome of the issue; (2) the litigant has a close relation to the 

third party; and (3) there exists some hindrance to the third party’s ability to protect his 

own interest).

10 We also agree with the Magistrate Judge that Appellants cannot assert an IDEA claim 

because they failed to exhaust their administrative remedies.
6

B.

Appellants also challenge the District Court’s denial of their motion for leave to 

file an amended complaint adding a Due Process claim.

Federal Rule of Civil Procedure 15(a) provides that a party may amend a pleading 

once as a matter of course before a responsive pleading is served. Because a Rule 12(b) 

motion to dismiss is not considered a responsive pleading, Appellants were entitled to 

amend their complaint once as a matter of course without leave of the District Court.11

Nevertheless, we need not address whether the District Court erred in denying 

Appellants’ motion for leave to amend because the amended complaint fails to state a 

claim. No federal law requires the School District to subsidize private education 

provided in conjunction with a medical program at CCDS.12 Because Appellants have 

not pled deprivation of a property right, they do not have a cognizable § 1983 claim 

based on the Fourteenth Amendment.13 To the extent CCDS argues that it has a property 

right to tuition reimbursement based on the School District’s past payments pursuant to 

 

11 See Shane v. Fauver, 213 F.3d 113, 115 (3d Cir. 2000).

12 See 55 Pa. Code § 5210.37 (“The education program may be provided at the same site 

as the partial hospitalization program, but is considered a separate, though 

complimentary, program and shall not be included as part of the partial hospitalization 

program for reimbursement purposes.”); accord 20 U.S.C. § 1412(a)(10)(C)(I) (“This 

[IDEA] subchapter does not require a local educational agency to pay for the cost of 

education . . . of a child with a disability at a private school or facility if that agency made 

a free appropriate public education available to the child and the parents elected to place 

the child in such private school or facility.”). See Wise v. Ohio Dep’t of Educ., 80 F.3d 

177, 185 (6th Cir. 1996) (“[T]he parents were not entitled unilaterally to place their child 

in the facility of their choice and expect that their children would receive a free public 

education. Whatever its virtue as social policy, IDEA only requires states to provide 

children with disabilities an appropriate education, not the very best possible special 

education services.”).

13 See Chambers v. Sch. Dist. of Phila. Bd. of Educ., 587 F.3d 176, 194 (3d Cir. 2009).
7

an expired settlement agreement, we disagree. Even if the District’s failure to continue 

payments constitutes a breach of the settlement agreement, it does not implicate the 

Fourteenth Amendment.

We will not consider CCDS’ claim, raised for the first time on appeal, that the 

District violated the Equal Protection Clause by paying for the public education of 

students at Sarah Reed while refusing to pay for the education of similarly situated 

students at CCDS.14 

III.

For the foregoing reasons, we will affirm the judgment of the District Court.

 

14 See Smith v. Comm’r of Soc. Sec., 631 F.3d 632, 637 (3d Cir. 2010) (“This court has 

consistently held that it will not consider issues that are raised for the first time on 

appeal.” (quoting Harris v. City of Phila., 35 F.3d 840, 845 (3d Cir. 1994)).