PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 20

- 2083

_____________

HATIKVAH INTERNATIONAL ACADEMY CHARTER

SCHOOL, Appellant

v.

EAST BRUNSWICK TOWNSHIP BOARD OF

EDUCATION;

A.K. & R.K. on behalf of H.K.

____________

On Appeal from the United States District Court

for the District of New Jersey

(D.C. No. 3:20

- cv

- 2382)

District Judge: Honorable Anne E. Thompson

_____________

Argued: April 12 , 2021

Before: CHAGARES

, JORDAN, and SCIRICA, Circuit

Judges

(Filed August 19, 2021 )2 Thomas O. Johnston [ARGUED]

Johnston Law Firm LLC

151 Forest Street

Suite A

Montclair, NJ 07042

Counsel for Hatikvah International Academy Charter

School

Jodi S. Howlett [ARGUED]

Cleary Giacobbe Alfieri & Jacobs , LLC

955 State Route 34

Suite 200

Matawan, NJ 07747

Counsel for East Brunswick Township Board of

Education

Michael I. Inzelbuch

555 Madison Avenue

S.I. Bank & Trust Building

Lakewood, NJ 08701

Counsel for A.K. & R.K. on b ehalf of H.K.

_____________

OPINION OF THE COURT

_____________3 CHAGARES, Circuit Judge

.

H.K. was a student at Hatikvah International Academy

Charter School (“Hatikvah”)

, a public charter school located in

East Brunswick, New Jersey

. After H.K.’s parents unilaterally

moved H.K. from Hatikvah to a private school, Hatikvah and

H.K.’s parents agreed on an individualized education program

(“IEP”) that kept H.K. at the private school. The East

Brunswick Township Boa rd of Education (“East Brunswick”),

H.K.’s resident school district, challenged this IEP in state

administrative proceedings.

The parties dispute whether the financial responsibility

for a student’s pendent placement costs rests with the resident

school district or the student’s former charter school under the

Individuals with Disabilities Education Act (“ IDEA ”) and N.J.

Stat. Ann. § 18A:36A

- 11

, when the student’s former charter

school implemented the IEP that placed the student at a private

school. The District Court concluded that financial

responsibility for H.K.’s tuition costs rested with Hatikvah but

ordered East Brunswick to pay for his transportation costs. We

hold that financial responsibility for all pendent placement

costs rests entirely with the resident school district. We

therefore will reverse in part and remand.

I.

H.K. is a fifth grader who has been diagnosed with

attention deficit hyperactivity disorder, oppositional

tendencies, and developmental delays. He lives with his

parents within East Brunswick’s geographic boundaries. H.K.

was previously enrolled at Hatikvah

, a local educational

agency

. See 34 C.F.R. § 300.28(a) (defining a “[l]ocal4 educational agency” as a “public authority legally constituted

within a State” to direct or serve public schools)

. Although

both East Brunswick and Hatikvah are funded by taxpayers,

East Brunswick’s annual budget is approximately twenty

- five

times greater than Hatikvah’s budget.

In September 2018, Hatikvah proposed an IEP under

which H.K. would attend the Bridge Academy School, a private school. H.K.’s parents instead unilaterally enrolled

H.K. in a different private school, the Laurel School of

Princeton (the “Laurel School”). H.K.’s parents subsequently

filed a due process petition under the IDEA against Hatikvah

and East Brunswick, seeking reimbursement for H.K.’s costs

of attendance at the Laurel School. East Brunswick did not

object at the time to H.K.’s placement at the La urel School.

Hatikvah and H.K.’s parents settled on the record before

the Administrative Law Judge (“ALJ”)

, and Hatikvah agreed,

inter alia

, to implement a new IEP that kept H.K. at the Laurel

School. East Brunswick did not participate in the proceedin gs

and was not party to the agreement. Counsel for East

Brunswick, however, was present when the settlement

agreement was placed on the record. The ALJ approved the

settlement. East Brunswick subsequently filed a separate due

process petition with the N ew Jersey Department of

Education’s Office of Special Education Programs in which it

challenged H.K.’s placement at the Laurel School and argued

that East Brunswick could provide H.K. with a free,

appropriate public education in a less restrictive environm ent.

The ALJ concluded in June 202 1 that East Brunswick failed to5 show that it could provide H.K. with the education provided

for in his IEP. 1

In response to East Brunswick’s due process petition,

H.K.’s parents filed an emergency motion to compel East

Brunswick to pay for H.K.’s costs of attending the Laurel

School while East Brunswick’s due process petition was

litigated. Hatikvah supported the motion. The parties agree d

that H.K. should remain at the Laurel School while East

Brunswick’s petition was pending, meaning that the parties

agree d that the Laurel School is H.K.’s pendent placement for

purposes of the IDEA

. They dispute only whether Hatikvah or

East Brunswick should bear the cost of H.K.’s pendent

placement. The ALJ concluded tha t East B runswick w ould

transport H.K. to and from the Laurel School but that Hatikvah

would be responsible for both tuition and transportation costs.

H atikvah sought an automatic injunction under the

IDEA and a preliminary injunction from the District Court and

asked the court to vacate the ALJ’s order to the extent that it

required Hatikvah to pay for H.K.’s costs. The District Court

granted in part Hatikvah’s motion and vacated the portion of

the ALJ’s order requiring Hatikvah to reimburse East

1 The ALJ ordered East Brunswick to reimburse Hatikvah

for H.K.’s costs from the date of his IEP

— October 28, 2019.

H.K. has attended the Laurel School, however, since

September 2018. Because the ALJ’s order did not address

reimbursements for the 2018

– 19 school year and beca use Hatikvah has represented that it will appeal the ALJ’s decision,

absent relief from this Court, we conclude that this case is not

moot. See United Steel Workers Int’l Union v. Gov’t of V.I.

, 842 F.3d 201, 208 (3d Cir. 2016).6 Brunswick for its transportation costs. East Brunswick does

not appeal from this decision. The court otherwise denied

Hatikvah’s motion, so Hatikvah is currently required to pay for

the tuition costs of H.K.’s pendent placement. Hatikvah timely

appealed to challenge the District Court’s decision with respect

to tuition

. H.K.’s parents support Hatikvah’s position in these

proceedings.

II.

We have jurisdiction under 28 U.S.C. § § 1291 and

1292(a)(1)

. The District Court had jurisdiction under 20

U.S.C. § 1415(i)(3) and 28 U.S.C. § 1331. We review de novo

the application of the stay

- put rule to a given set o f facts. D.M.

v. N.J. Dep’t of Educ.

, 801 F.3d 205, 211 (3d Cir. 2015).

III.

Hatikvah contends that East Brunswick is responsible

for H.K.’s pendent placement costs under the IDEA’s stay

- put

rule and N.J. Stat. Ann. § 18A:36A

- 11

. We agree. The stay

put rule requires that, “during the pendency of any proceedings

conducted pursuant to this section, unless the State or local

educational agency and the parents otherwise agree, the child

shall remain in the then

- current educational placement of the

child.” 20 U.S.C. § 1415(j). This rule is protective in nature

and reflects Congress’s policy c hoice that all children with

disabilities remain in their current educational placement until

the dispute about their placement is resolved, “regardless of

whether their case is meritorious or not.” Susquenita Sch. Dist.

v. Raelee S.

, 96 F.3d 78, 83 (3d C ir. 1996) (quoting Drinker v.

Colonial Sch. Dist.

, 78 F.3d 859, 864

– 65 (3d Cir. 1996)). The

stay

- put rule consequently functions as an “automatic7 preliminary injunction,” and the “usual prerequisites to

injunctive relief are not required.” D.M.

, 801 F.3d at 211

(quoting Drinker

, 78 F.3d at 864) (quotation marks omitted).

The primary factor in determining a child’s current

educational placement is the IEP that was “ actually

functioning ” when the stay

- put rule was invoked. Raelee S.

, 96 F.3d at 83 (quoting Drinker

, 78 F.3d at 867)

. The stay

- put

rule does not immediately ta ke effect if the parents

“unilaterally move their child from an IEP

- specified program

to their desired alternative setting.” M.R. v. Ridley Sch. Dist.

, 744 F.3d 112, 118 (3d Cir. 2014). The rule protects the new

placement, however, “ if the parents and th e S tate or local

educational agency agree to the change. ” Id

. at 118

– 19

(quoting 20 U.S.C. § 1415(j)) (quotation marks omitted)

.

We have previously explained in disputes between

parents and school districts that the financial responsibility for

a student’s pendent placement costs lies with the resident

school district. See, e.g.

, id

. ; Raelee S.

, 96 F.3d at 84

. T he

IDEA itself does not specify which party must pay for the

student’s stay

- put costs

. See 20 U.S.C. § 1415(j)

. But it is

“ well established ” that the resident school district must fund a

student’s private placement if it is the educational setting the

student’s current IEP prescribes. M.R.

, 744 F.3d at 119. This

financial obligation “arises automatically” when the private

school is the student’s pendent placement. See id

. at 123

(“[T]he obligation arises automatical ly from a determination

that the private school is the protected status quo during the

period in which the dispute resolution process is ongoing.”).

Consequently, “financing goes hand

- in

- hand with pendent

private

- school placement.” Id

. A party therefore does not need

to request separately reimbursement for the student’s stay

- put8 costs. See id. (rejecting the school district’s argument that “the

IDEA does not auto matically provide for reimbursement”); see

also Raelee S.

, 96 F.3d at 84 (“[W]e conclude that a school

district may be required to pay for tuition and expenses

associated with a pendent placement prior to the conclusion of

litigation.”). Although our prio r cases interpreting the IDEA

have not addressed disputes involving charter schools, we see

no reason why their reasoning and interpretation of the IDEA

should not extend to this case to require East Brunswick to pay

for H.K.’s pendent placement costs

. Se e, e.g.

, M.R.

, 744 F.3d

at 119; Raelee S.

, 96 F.3d at 84.

To the extent the IDEA and our case law are not

dispositive of cost allocation in this situation, New Jersey law

is. New Jersey law explicitly extends the resident school

district’s financial obligations to costs associated with an IEP

that a charter scho ol impl e ments

. N.J. Stat. Ann. § 18A:36A

11 br oadly requires charter schools that provide services to

students with disabilities to comply with state laws

. But it also

explicitly provides that “the fiscal responsibility for any

student currently enrolled in or determined to require a private

day or residential school shall remain with the district of

residence

, ” not with the charter school. Id. § 18A:36A

- 11(b).

The statute, however, does allow the resident school district to

challenge the studen t’s placement within thirty days of

receiving notice of the IEP. Id. Although the statute does not

specifically refer to pendent placement costs

, it can be read in

harmony with the IDEA to require that a resident school

district that challenges a student ’s private placement must still

fund the student’s pendent placement costs, even in cases

where the charter school created and implemented the

student’s IEP. Raelee S.

, 96 F.3d at 84 ; see N.J. Stat. Ann.

§ 18A:36A

- 11(b); see also Dig. Equip. Corp. v. Desktop9 Direct, Inc.

, 511 U.S. 863, 879 (1994) (“[C]ourts should

construe statutes

. . . to foster harmony with other statutory

and constitutional law.”).

In this case, H.K.’s parents unilaterally moved him to

the Laurel School. H.K.’s parents, however, and Hatikvah, the

local educational agency, subsequently agreed to a new IEP

that kept H.K. at the Laurel School. Because Hatikvah agreed

to the IEP that prescribes the Laurel School as H.K.’s

educational setting and because H.K. was already a student at

the Laurel School when the stay

- put rule was invoked

— points

that the parties do not dispute

— the stay

- put rule protects

H.K.’s pendent placement at the Laurel School. East

Brunswick therefore must fund H.K.’s pendent placement at

the Laurel School, including tuition and transportation costs.

See M.R.

, 744 F.3d at 119. Hatikvah’s status as a public

charter school does not change East Brunswick’s financial

responsibilities. See N.J. Stat. Ann. § 18A:36A

- 11(b).

East Brunswick argues that Hatikvah is not entitled to

relief under the stay

- put rule because its claim concerns only

monetary damages, not H.K.’s stay

- put placement. But we

have made clear that “financing goes hand

- in

- h and with

pendent private

- school placement.” M.R. , 744 F.3d at 123.

East Brunswick’s financial responsibility began under the stay

put rule once there was an agreement with respect to H.K.’s

pendent placement. See Raelee S. , 96 F.3d at 84. The IDEA

does not require Hatikvah to request separately reimbursement

for H.K.’s pendent placement costs. See M.R. , 744 F.3d at

123; Raelee S. , 96 F.3d at 84

– 85 . Hatikvah is thus entitled to

relief under the stay

- put rule.10 Our conclusion also does not render illuso ry East

Brunswick’s right to object to H.K.’s placement. N.J. Stat.

Ann. § 18A:36A

- 11(b) gives resident districts the right to

challenge a student’s placement within thirty days

— a right

that East Brunswick has already exercised . Requiring East

Brunswic k to fulfill its financial obligations does not interfere

with this right. The resident school district’s responsibility to

pay for the student’s stay

- put costs while challenging the

student’s placement “remain[s] intact” until the final resolution

of the dispute , regardless of whether the school district’s “case

is meritorious or not

. ” See M.R. , 744 F.3d at 125 (quoting

Drinker , 78 F.3d at 864) (emphasis omitted) ; see also Drinker

, 78 F.3d at 865 (“[I]mplicit in the maintenance of the status quo

is the requirement that a school district continue to finance an

educational placement made by the agency and consented to

by the parent before the parent requested a due process

hearing.” (quoting Zvi D. ex rel. Shirl ey D. v. Ambach , 694

F.2d 904, 906 (2d Cir. 1982)) (alteration in original) ). New

Jersey law similarly imposes this requirement on resident

school districts and does not exempt resident school districts

from this financial responsibility when they challen ge the

student’s placement. See N.J. Stat. Ann. § 18A:36A

- 11(b).

East Brunswick is therefore permitted to object to H.K.’s

placement

, but it nonetheless must fund his pendent placement

costs. 2

2 East Brunswick relies on our non

- precedential opinion

in L.Y. ex rel. J.Y. v. Bayonne Board of Education , 384 F.

App’x 58 (3d Cir. 2010). East Brunswick’s reliance on L.Y. is

misguided . The Court in L.Y. was not only faced with

distinguishable and non

- an alogous facts, but also the Court

explicitly recognized that the school district “bears fiscal

responsibility for a child’s special education services when the11 We recognize that our conclusion today may raise

concerns that a public charter school unnecessarily will send

students to a private school to shift fiscal responsibility to the

resident school district. But reaching the opposite result and

requiring char ter schools

— whose budgets are frequently

much smaller than those of school districts

— to bear the

financial burden in turn could lead to charter schools refraining

from placing students in private schools, thus depriving

students that require private pl acement of an appropriate

education. See M.R.

, 744 F.3d at 126 (discussing how stay

put protection is necessary to prevent parents from facing “the

untenable choice” of removing their child from the child’s

private pendent placement or bearing the costs o f this

placement themselves); Raelee S.

, 96 F.3d at 87 (discussing

how the IDEA requires that school districts bear the financial

burden). New Jersey has explicitly rejected this alternative in

favor of requiring resident school districts to bear the financial

burden

. N.J. Stat. Ann. § 18A:36A

- 11(b). In other words,

New Jersey’s decision to give charter schools the authority to

implement IEPs while leaving financial responsibility with the

resident school district means that any tension stemming from

the separation of financial responsibility and decision

- making

authority is an apparently deliberate policy choice. See id. Just

as “Congress has imposed a significant financial burden on

States and school districts that participate in [the] IDEA,”

Flor ence Cty. Sch. Dist. Four v. Carter

, 510 U.S. 7, 15 (1993),

New Jersey too has placed this burden on resident school

districts. See N.J. Stat. Ann. § 18A:36A

- 11(b). A lthough “we

are mindful of the financial burden which will, in some

IEP requires placement at a private school.” Id. at 61.

Moreover, our non

- precedential opinion s are not binding

, and

we do not rely on them as authority. 3d Cir. I.O.P. 5.7.12 instances, be borne by local school districts,” Raelee S.

, 96

F.3d at 87, our IDEA case law and the language of N.J. Stat.

Ann. § 18A:36A

- 11(b) require that the resident school district

pay for the student’s pendent placement costs

, even if the

student’s former charter school created and implemented the

current IEP

. 3 S ee

, e.g.

, M.R.

, 744 F.3d at 119.

IV.

Because we conclude that East Brunswick bears the

burden of H.K.’s pendent placement costs under the stay

- put

rule , we will reverse the District Court’s Order with respect to

H.K.’s tuition costs and remand for further proceedings. 4

3 Our recent decision in Y.B. v. Howell Township Board

of Education

, 4 F.4th 196 (3d Cir. 2021), does not alter our

conclusio n, given that the stay

- put provision did not apply in

Y.B. , whereas it does in this case

. Id. at 201

.

4 Because we conclude that Hatikvah is entitled to an

automatic injunction, we do not reach whether Hatikvah is

entitled to a “traditional” preliminary injunction.