Opinion ID: 6323841
Heading Depth: 3
Heading Rank: 2

Heading: Jurisdiction over the Complaint

Text: Appellants contend that the “Decision Approving Settlement” entered by the ALJ here is an appealable determination arising out of their due process complaint. We agree. 8 The Board submits that perfunctory approval of a settlement agreement does not give rise to a civil action pursuant to the IDEA. It insists that Appellants’ action is a request for judicial review of a settlement agreement and that such review is only available for settlement agreements reached in connection with a mediation, § 1415(e)(2)(F), or resolution session, § 1415(f)(1)(B). However, this mischaracterizes Appellants’ complaint.3 Appellants are challenging the ALJ’s order terminating their due process petition. Appellants claim that they did not enter into any settlement agreement purportedly resolving the issues they raised. Whatever the merits of that claim, it must be considered by the District Court. The appropriate inquiry is whether the ALJ correctly determined that the purported settlement agreement warranted entry of a final order in this case. It does not confound jurisdiction that Appellants contend that the ALJ’s determination was in error because the purported settlement agreement was invalid as a matter of contract law.4 3 The dissent also frames the issue as one of the validity of the settlement agreement under state-law contract principles. See Dissent at 1. This framing, however, disregards the ALJ’s determination that the purported agreement was “consistent” with the IDEA. 4 Our caselaw suggests that the substantive determination of whether a party validly waived their rights pursuant to the IDEA is not governed by ordinary contract principles but rather by a totality-of-the-circumstances analysis. See W.B. v. Matula, 67 F.3d 484, 497-98 (3d Cir. 1995), abrogated in part by A.W. v. Jersey City Pub. Schs., 486 F.3d 791, 803 (3d Cir. 9 The text and structure of the IDEA reflect Congressional intent to permit judicial review of ALJ determinations impacting a student with a disability’s substantive rights pursuant to the IDEA. Here, the order itself purports to resolve “all issues in controversy” between the parties on the grounds that “[t]he parties have voluntarily agreed” to resolve the claims in a manner “consistent with the law.” A50-51. Additionally, our determination squares with our caselaw permitting enforcement of the substantive terms of a settlement agreement as embodied in an administrative order.
Congress crafted the IDEA to provide a comprehensive remedial scheme through which district courts may review final administrative determinations. See A.W. v. Jersey City Pub. Schs., 486 F.3d 791, 803 (3d Cir. 2007) (en banc). The Board’s position, if adopted by this Court, would substantially limit this remedial scheme by shielding from judicial review a subset of determinations by an ALJ which affect a student’s rights under the IDEA. Because this would be contrary to both the text and purpose of the IDEA, we decline to introduce such tension. Section 1415(i)(2)(A) permits a civil action in state or federal court where the party is challenging a “findings and decision made under subsection (f).” Subsection (f), governing the “[i]mpartial due process hearing,” establishes the baseline procedures for due process hearings, including the time and manner in which a complaint may be brought. § 1415(f)(1)(A) 2007) (en banc). We need not resolve that issue now. We leave it to the District Court on remand to determine the appropriate test for determining the validity of the waiver. 10 and (f)(3)(C); see also § 1415(b)(6) and (b)(7). It limits who may preside over the hearing, what issues may be raised at the hearing, and the scope of the hearing officer’s decision. § 1415(f)(3). It directs that “a decision made by a hearing officer shall be made on substantive grounds based on a determination of whether the child received a [FAPE].” § 1415(f)(3)(E)(1). By its own terms, the order appealed to the District Court reflects the ALJ’s determination: (1) of what the issues raised in the due process complaint are; (2) that there is an agreement whose terms resolve the issues raised; (3) that the parties mutually assented to that settlement agreement; and (4) that the agreement’s material terms comply with the IDEA’s mandate that participating school districts provide students with disabilities a FAPE. Clearly, these terms fall within the scope of a decision made on substantive grounds, as required by subsection (f). 20 U.S.C. § 1415(f)(3)(E)(1). The order also explicitly incorporates the terms of the agreement, which undoubtedly address M.W.’s rights pursuant to the IDEA, namely, the provision of a FAPE. It purports to be “final” and informs the parties that they may appeal pursuant to § 1415(i), demonstrating an understanding that the ALJ’s duty to hear Appellants’ complaint was discharged. These factors likewise compel a conclusion that the decision approving settlement is an appealable order.5 5 The dissent argues that we seek to enlarge Appellants’ rights into a netherworld with which we are unfamiliar. See generally Dissent. We highlight the characteristics of the order at issue here because they compel a conclusion that the ALJ issued a substantive decision on the matter at hand. 11 Adopting the Board’s position would require holding that, to be appealable, any administrative order disposing of an IDEA dispute must be premised on an explicit determination of whether a student received a FAPE from the school district. That ignores that subsection (f) contemplates a range of findings by the ALJ and establishes a procedural baseline for how the hearing is to be conducted.6 Such an interpretation would preclude, for example, federal judicial review of an ALJ’s determination that a complaint was filed out of time, § 1415(f)(1)(A), or that notice was lacking, § 1415(f)(3)(B). It would also remove from federal jurisdiction a party’s claim that the hearing officer is neither impartial nor qualified, a procedural defect presumably undermining the entirety of the officer’s determination. § 1415(f)(3)(A). We do not construe § 1415 so narrowly. We consider a party to be “aggrieved by the findings and decision” of an ALJ when they articulate a challenge to the ALJ’s basis for entry of a final administrative order.
Construing § 1415 to preclude jurisdiction in this case would also call into question our holdings in P.N., 442 F.3d at 848 and D.E. v. Cent. Dauphin Sch. Dist., 765 F.3d 260 (3d Cir. 2014). Instead, we take this opportunity to clarify implicit premises latent in our IDEA jurisprudence. While neither case 6 The dissent protests that Section 1415 only confers jurisdiction where an ALJ issues a “due-process-hearing decision.” Dissent at 4. Section 1415(i), however, does not refer to a “due-process-hearing decision,” but rather to the “findings and decision made under subsection(f),” which go beyond the due process hearing itself. 12 squarely addresses the jurisdictional question presented in this case, they jointly suggest that jurisdiction arises under § 1415 when an administrative order disposing of an IDEA claim is the subject of a complaint. In P.N., we considered whether prevailing party status could attach to plaintiffs whose administrative proceedings in an IDEA dispute were terminated by a settlement agreement embodied in a consent order. See 442 F.3d at 850-52. The parties in that case entered into two separate settlement agreements addressing plaintiffs’ complaint after P.N. was suspended from school following an outburst. See id. at 85051. Each agreement was reflected in a consent order, the second indicating that the order was a final decision of the ALJ. See id. at 851. Before the district court, plaintiffs sought attorney’s fees as a prevailing party pursuant to the IDEA. See id. The district court entered judgment in favor of the school district and denied attorney’s fees. See id. at 852. We concluded that an administrative consent order could satisfy the requirements imposed by Buckhannon Bd. and Home Care, Inc. v. West Va. Dept. of Health and Hum. Res., 532 U.S. 598 (2001), for the recovery of attorney’s fees in a federally created action. See id. at 854-55.7 We reasoned that 7 A “stipulated settlement” confers prevailing party status when it “(1) contain[s] mandatory language, (2) [is] entitled ‘Order,’ (3) [bears] the signature of the District Court judge, not the parties’ counsel, and (4) provide[s] for judicial enforcement.” John T. ex rel. Paul T. v. Del. Cnty. Intermediate Unit, 318 F.3d 545, 558 (3d Cir. 2003) (citing Truesdell v. Phila. Hous. Auth., 290 F.3d 159, 165 (3d Cir. 2002)). While administrative orders incorporating settlements do not bear a District Court judge’s signature, we explained in 13 “settlement of an administrative proceeding is the equivalent of an administrative decree on the merits where, as here, the parties’ obligation to comply with the terms of the settlement agreement has been made part of the order of dismissal.” Id. at 854. We recognized that the settlement agreement in that case was accordingly “judicially enforceable” because the “consent orders entered . . . were enforceable through an action under 42 U.S.C. § 1983 . . . .” Id. Our statement that there was an avenue for judicial enforcement pursuant to § 1983 confirmed the district court’s conclusion in that case that the consent order was enforceable under § 1983, and comported with our then-existing caselaw. See W.B. v. Matula, 67 F.3d 484, 494 (3d Cir. 1995). Subsequently, in A.W. v. Jersey City Pub. Schs., 486 F.3d 791, 803 (3d Cir. 2007) (en banc), we held that § 1983 was not an appropriate vehicle for vindicating rights guaranteed by the IDEA, partially abrogating W.B. Then, in D.E., we considered a federal court’s ability to hear an IDEA appeal from a party that received a favorable administrative determination ignored by the school district. 765 F.3d at 274. Plaintiffs in that case obtained an administrative order following a due process hearing directing the school district to remediate its failure to provide D.E. a FAPE. See id. at 266-67. No administrative appeal was taken and the district’s failure to comply with the ALJ’s final order was the basis for plaintiffs’ action for compensatory damages in the district court. See id. at 267. The district court dismissed P.N. that “administrative imprimatur” was sufficient to confer prevailing party status under Buckhannon. 442 F.3d at 854 (citing A.R. ex rel R.V. v. New York City Dept. of Educ., 407 F.3d 65, 76 (2d Cir. 2005)). 14 the IDEA claims on the grounds that, among other things, there was a failure of the parents to administratively exhaust those claims. See id. We held that parties in plaintiffs’ position “may properly pursue such claims in [federal] court.” Id. at 278. Our holding was premised on our determination that plaintiffs in that case, though victorious below, were “‘aggrieved by the findings and decision’ of the administrative proceedings,” and accordingly were entitled to “bring a civil action in state or federal court” to challenge the determination pursuant to § 1415(i)(2), because no other options for enforcement of the order were available to them. Id. at 276. D.E. acknowledges a right to enforce administrative orders in IDEA cases in a district court. P.N. acknowledges that an administrative consent order may satisfy the IDEA’s attorney fees’ shifting provision if it is judicially enforceable. While our holding in P.N. reflected that such orders were judicially enforceable pursuant to § 1983, our subsequent case law clarifies that the appropriate statute under which enforcement should be sought by a victorious party in an administrative proceeding is § 1415. See D.E., 765 F.3d at 278; A.W., 486 F.3d at 803. Unlike D.E., where the jurisdictional inquiry was complicated by whether a party was “aggrieved” within the meaning of § 1415(i)(2) when they, for lack of a better term, won below, the facts here present no such quandary. If a party that prevailed before an ALJ may enforce a settlement agreement embodied in an administrative consent order as an “aggrieved party” under § 1415(i)(2), then a party seeking to challenge such an order as improperly entered must likewise be able to bring their challenge in federal court. 15 To the extent that Appellants’ complaint challenges the basis for the ALJ’s final order, we hold that it is an appealable order from which jurisdiction is properly taken in the District Court pursuant to 20 U.S.C § 1415(i) and 28 U.S.C. § 1331. To the extent that the remainder of Appellants’ claims address the validity of the settlement agreement on the basis of New Jersey contract law, we leave it to the District Court in the exercise of its discretion to consider in the first instance whether supplemental jurisdiction is appropriately taken to resolve that matter pursuant to 28 U.S.C. § 1367.