Court Opinion

ID: 9838217
Source: CourtListenerOpinion
Date Created: 2023-09-05 18:00:37.881101+00
Date Added: 2024-06-11T18:01:36.561001
License: Public Domain

In the

    United States Court of Appeals
                For the Seventh Circuit
                    ____________________
No. 22-1277
A.B. and D.B., individually and as parents of C.B.,
a disabled minor,
                                         Plaintiffs-Appellants,

                                v.

BROWNSBURG COMMUNITY SCHOOL CORPORATION,
                                  Defendant-Appellee.
                    ____________________

         Appeal from the United States District Court for the
         Southern District of Indiana, Indianapolis Division.
     No. 1:20-cv-02487-JMS-MJD — Jane Magnus-Stinson, Judge.
                    ____________________

 ARGUED SEPTEMBER 29, 2022 — DECIDED SEPTEMBER 5, 2023
               ____________________

   Before SYKES, Chief Judge, and ROVNER and JACKSON-
AKIWUMI, Circuit Judges.
   JACKSON-AKIWUMI, Circuit Judge. When a protracted ad-
ministrative proceeding concerning their child’s eligibility for
special education services came to an end, parents A.B. and
D.B. filed this lawsuit seeking recovery of their attorney’s fees
from their opponent, the Brownsburg Community School
Corporation. The district court concluded that it did not have
2                                                  No. 22-1277

the discretion to award the parents attorney’s fees under the
Individuals with Disabilities Education Act because, although
the parents received a favorable outcome, they were not the
“prevailing party” as defined by the Supreme Court. We dis-
agree and therefore reverse and remand for further consider-
ation.
                               I
   A.B. and D.B. are the parents of C.B., a minor who suffers
from generalized anxiety disorder, depression, and attention
deficit hyperactivity disorder. C.B.’s school district was the
Brownsburg Community School Corporation in Brownsburg,
Indiana.
A. C.B.’s Expulsion and Parents’ Petition for Due Process
   Hearing
    During the 2017-2018 school year, Brownsburg deter-
mined that C.B.’s anxiety made him eligible to receive accom-
modations under Section 504 of the Rehabilitation Act. Ac-
cordingly, Brownsburg developed an Accommodation Plan
to assist C.B. with handling his anxiety in a school environ-
ment.
     In September 2019, while the Accommodation Plan was
still intact, C.B. brought a shotgun shell to school along with
a device believed capable of discharging the shell. Because of
this incident, Brownsburg recommended C.B.’s expulsion
and scheduled a “Manifestation Determination Conference”
to assess whether C.B.’s actions were caused by or substan-
tially related to his anxiety. In October 2019, before the Mani-
festation Determination Conference, C.B.’s parents filed a Pe-
tition for Due Process Hearing with the Indiana Department
of Education. C.B.’s parents argued that Brownsburg should
No. 22-1277                                                   3

have arranged an education evaluation for C.B. because it
would have shown that C.B. was also eligible for special ser-
vices pursuant to the Individuals with Disabilities Education
Act (“IDEA”). A few days after the parents filed their petition,
the Manifestation Determination Conference took place, and
Brownsburg concluded that the shotgun shell incident was
ultimately not related to C.B.’s anxiety. Consequently,
Brownsburg expelled C.B. for the remainder of the school
year.
    Near the end of October, C.B.’s parents met with Browns-
burg to resolve the issues presented in the parents’ Petition
for Due Process Hearing. Brownsburg agreed to have a doctor
evaluate C.B. and then convene a Case Conference Committee
meeting to review the evaluation and determine whether C.B.
was indeed eligible for special services under the IDEA—
namely, implementation of an Individualized Education Pro-
gram (“IEP”).
    In November 2019, C.B.’s parents filed a Request for Due
Process Hearing with the Indiana Department of Education.
The request incorporated by reference the allegations in the
Petition for Due Process Hearing filed in October 2019, and it
also addressed actions taken by Brownsburg, including C.B.’s
expulsion, since the filing of the initial petition.
    After C.B.’s evaluation, the Case Conference Committee
met to consider the results of the evaluation, ultimately con-
cluding that C.B. did not meet the eligibility requirements for
special education services under the IDEA. But the Commit-
tee did determine that the Accommodation Plan developed
pursuant to Section 504 of the Rehabilitation Act needed to be
amended to include and accommodate C.B.’s diagnosis of
ADHD. By early December 2019, Brownsburg updated C.B.’s
4                                                   No. 22-1277

Accommodation Plan and allowed C.B. to return to school for
the spring semester.
    In the meantime, the Indiana Department of Education as-
signed an Independent Hearing Officer (“IHO”) to preside
over the pending Petition for Due Process Hearing and the
subsequently filed Request for Due Process Hearing (collec-
tively, the “petitions”). The IHO scheduled a joint hearing on
the petitions for July 20, 2020.
B. Settlement Negotiations
   In the months leading up to the Due Process Hearing, the
parties engaged in extensive settlement negotiations over the
pending petitions. By April 2020, Brownsburg had offered to
pay for a new independent education evaluation of C.B. and,
subsequently, hold another Case Conference Committee
meeting to revisit the issue of C.B.’s eligibility for an IEP un-
der the IDEA. C.B.’s parents also provided a list of compro-
mises they were willing to agree to so long as Brownsburg
agreed to pay for all attorney’s fees.
    On July 8, 2020, Brownsburg sent C.B.’s parents a letter of-
fering to accept each compromise identified by the parents in
April 2020 except for the issue of attorney’s fees—Browns-
burg was willing to pay a portion of the fees, but not the full
amount. The correspondence emphasized Brownsburg’s de-
sire to avoid a Due Process Hearing. Two days later, C.B.’s
parents rejected Brownsburg’s offer and reinstated their ini-
tial demands, including that Brownsburg (1) immediately
classify C.B. as eligible for special education services, (2) de-
velop an IEP for C.B., and (3) cover the full amount of attor-
ney’s fees.
No. 22-1277                                                   5

C. Filings with the Independent Hearing Oﬃcer
    On July 13, 2020, Brownsburg sent C.B.’s parents a draft
Settlement Agreement, offering to acquiesce to all demands
except for the issue of attorney’s fees. That same day, Browns-
burg filed a motion asking the IHO to cancel the upcoming
due process hearing and dismiss the case. Brownsburg rea-
soned a hearing was no longer necessary in light of its accom-
panying “Stipulation to Due Process Hearing Request Reme-
dies,” in which it purported to stipulate that (1) C.B. was in-
deed eligible for special services under the IDEA and there-
fore entitled to all education-related relief requests by C.B.’s
parents, and (2) Brownsburg would provide the relief.
Brownsburg did not stipulate, however, to paying all the par-
ents’ attorney’s fees. Further, it emphasized the following:
       [Brownsburg] points out that these stipulations
       were made in an extreme effort to resolve this
       case short of an administrative hearing. Alt-
       hough [Brownsburg] does not agree, they are
       willing to offer these stipulations to be ordered
       and resolve the case.
       [Brownsburg] stipulates that [C.B.] is entitled to,
       and [Brownsburg] has provided, all remedies
       requested by [C.B.’s parents] in [their] Due Pro-
       cess Hearing Request Proposal for Relief . . . and
       clarified by [C.B.’s parents] on April 24, 2020
       and July 9, 2020.
Admin. R. at HR 035 2020 AR 0383, ECF No. 24-2.
    C.B.’s parents filed their response to Brownsburg’s mo-
tion, indicating they did not object to the IHO issuing an order
acknowledging Brownsburg’s concession regarding C.B.’s
6                                                   No. 22-1277

eligibility under the IDEA. They, however, believed “the IHO
should make factual findings [regarding] . . . attorney’s fees.”
Attached to the parents’ response was a proposed order
which included language explicitly labeling the parents as the
“prevailing party” of the administrative proceedings.
    The parties submitted additional motions contemplating
how various other aspects of the administrative process
should be resolved, but on July 16, 2020, the IHO denied all
pending motions and vacated the hearing that was scheduled
for July 20, 2020. The IHO expressed frustration with the slew
of filings and declined to “go down that rabbit hole,” instead
leaving it to the parties to sort through the remaining logisti-
cal issues:
       The hearing dates will be vacated to give coun-
       sel an opportunity to decide among themselves
       whether or not they agree. This includes provi-
       sions for attorney fees over which this hearing
       officer has no jurisdiction.
Admin. R. at HR 035 2020 AR 0183, ECF No. 24-1.
D. Finding of Eligibility by Independent Hearing Oﬃcer
About two weeks later, on July 30, 2020, the IHO issued a
Finding of Eligibility and Order to Convene Case Conference
Committee. The IHO reiterated her frustration with how the
parties handled this matter, observing that C.B. had not ben-
efited from the back and forth. The IHO did however note
that:
       One bright spot of clarity is that the parties have
       agreed that the student is eligible for special
No. 22-1277                                                               7

        education under Article 7, 1 at least in the areas
        of Emotional Disability and Other Health Im-
        pairment. This hearing officer has sufficient in-
        formation before her to concur and adopt that
        agreement as fact.
Admin. R. at HR 035 2020 AR 0065, ECF No. 24-1. The IHO
continued:
        With that fact being established, it is essential
        that [C.B.] begin receiving services as soon as
        possible.
        ....
        It is found to be a fact that [C.B.] has an Emo-
        tional Disability and Other Health Impairment
        as defined under Article 7.
        As a matter of law, [C.B.] is entitled to Special
        Education Services.
        ....
        It is therefore ordered: . . . [C.B.] shall begin re-
        ceiving services as soon as appropriate arrange-
        ments can be made to implement [an IEP], but
        in no event, later than August 26, 2020.

    1 Article 7 refers to Indiana’s special education rules promulgated in

the Indiana Administrative Code at 511 IAC 7-32 through 7-49. Note that
the IDEA is a federal “law that makes available free appropriate public
education to eligible children with disabilities throughout the nation and
ensures special education and related services to those children.” About
IDEA, IDEA: Individuals with Disabilities Education Act,
https://sites.ed.gov/idea/about-idea/. Article 7 contains Indiana’s rules on
how to determine whether a child is eligible for special education services.
8                                                  No. 22-1277

    Id. at 0065-66.
E. Dismissal of the Petitions
    After the parties held another Case Conference Committee
and corresponded over the development of C.B.’s IEP, C.B.’s
parents filed a Motion for Prehearing Conference to Resolve
Pending Issues. The IHO ultimately denied the motion, stat-
ing that (1) she was not “inclined to address any further mo-
tions from the parties other than one for dismissal,” and (2)
the motion did not identify exactly what issues necessitated a
prehearing. The IHO assumed that the motion was an attempt
to get her “to make some judgment regarding the [IEP]” that
the parties were developing, but the IHO reiterated that she
“has refused and continues to refuse to make a final ruling as
to what is appropriate for [C.B.] that is not based on actual
evidence.” The IHO concluded that if C.B.’s parents ulti-
mately do not believe that the finalized IEP is appropriate for
C.B., then they can submit a request to the Indiana Depart-
ment of Education for a separate due process hearing on that
issue.
    On August 30, 2020, the IHO dismissed the petitions.
F. C.B.’s Parents File Suit Seeking Attorney’s Fees
    On September 25, 2020, C.B.’s parents sued Brownsburg
for attorney’s fees pursuant to the IDEA’s fee-shifting provi-
sion which allows fees to be awarded to prevailing parties in
administrative proceedings. See 20 U.S.C. § 1415(i)(3)(B)(i)(I).
The parties subsequently filed cross-motions for summary
judgment.
   The district court granted summary judgment for Browns-
burg, explaining that only one question is relevant when de-
termining prevailing party status: Did C.B.’s parents secure a
No. 22-1277                                                      9

“material alteration of the legal relationship between the par-
ties” through the IHO’s order? The district court answered in
the negative because the “IHO’s Eligibility Finding and order
ultimately dismissing the administrative proceeding simply
acknowledged [Brownsburg’s] Stipulation but did not re-
quire that [Brownsburg] do anything it had not already
agreed to.” C.B.’s parents now appeal.
                                II
    “We review de novo a district court’s decision on cross
motions for summary judgment, construing all facts and
drawing all reasonable inferences in favor of the party against
whom the motion under consideration was filed.” Hess. v. Bd.
of Trs., 839 F.3d 668, 673 (7th Cir. 2016).
   Section 1415 of the IDEA provides: “In any action or pro-
ceeding brought under this section, the court, in its discretion,
may award reasonable attorneys’ fees as part of the
costs . . . to a prevailing party who is the parent of a child with
a disability.” 20 U.S.C. § 1415(i)(3)(B)(i)(I). This means the
availability of attorney’s fees for C.B.’s parents hinges on
whether they should be classified as the prevailing party of
the administrative proceeding before the IHO.
    The Supreme Court defines a prevailing party as “one
who has been awarded some relief by a court.” Buckhannon
Bd. & Care Home, Inc. v. West Virginia Dep’t of Health & Hum.
Res., 532 U.S. 598, 603 (2001). “[E]nforceable judgments on the
merits and court-ordered consent decrees create the ‘material
alteration of the legal relationship of the parties’ necessary to
permit an award of attorney’s fees.” Id. at 604 (citation omit-
ted). However, a “defendant’s voluntary change in conduct,
although perhaps accomplishing what the plaintiff sought to
10                                                 No. 22-1277

achieve by the lawsuit, lacks the necessary judicial imprimatur
on the change” to characterize the plaintiff as the prevailing
party. Id. at 605.
    Here, Brownsburg filed a Stipulation in which it “agreed
to provide every student-related remedy set out in [C.B.’s par-
ents’] due process request, as well as any post-filing de-
mand(s).” Admin. R. at HR 035 2020 AR 0028, ECF No. 24-1.
Both Brownsburg and the district court view the unilaterally-
filed Stipulation as dispositive because the IHO’s Eligibility
Finding and subsequent order dismissing the administrative
proceeding were, in their view, mere acknowledgements of
Brownsburg’s Stipulation. As they see it, nothing the IHO or-
dered materially altered the relationship between Browns-
burg and C.B.’s parents.
    Brownsburg even supplements the district court’s ra-
tionale by pointing to the Code of Federal Regulations as ad-
ditional evidence that C.B.’s parents cannot be considered the
prevailing party. According to 34 C.F.R. § 300.306(c)(2), if “a
determination is made that a child has a disability and needs
special education and related services, an IEP must be devel-
oped for the child in accordance with” the requirements and
regulations as outlined by the Code of Federal Regulations.
From this, Brownsburg reasons that the moment it agreed that
C.B. was eligible for special education services, Brownsburg
became legally bound to develop and implement an appro-
priate IEP for C.B. Thus, Brownsburg argues, the material
change in the legal relationship between the parties happened
before the IHO issued its Finding of Eligibility and related or-
ders, making C.B.’s parents ineligible for prevailing party sta-
tus.
No. 22-1277                                                    11

    We conclude that Brownsburg and the district court place
too much weight on the Stipulation. There is nothing in the
record to suggest that the Stipulation filed by Brownsburg
was binding. In fact, the Stipulation’s concluding paragraphs
specifically state: “[Brownsburg] points out that these stipu-
lations were made in an extreme effort to resolve this case
short of an administrative hearing. Although [Brownsburg]
does not agree, they are willing to offer these stipulations to be
ordered and resolve the case.” Admin. R. at HR 035 2020 AR
0383, ECF No. 24-2 (emphasis added). First, Brownsburg says
it “does not agree” with these stipulations, indicating that no
formal determination on C.B.’s disability status and eligibility
for special education services had been made. The argument
that Brownsburg advances based on 34 C.F.R. § 300.306(c)(2)
necessarily fails because that regulation is triggered by a de-
termination of a child’s disability status and need for special
education services. Second, Brownsburg’s Stipulation was
“offer[ed] . . . to be ordered”—as in its terms had yet to be
ordered. Everything in the Stipulation was conditioned on ac-
ceptance of the offer by C.B.’s parents that they ultimately,
and unequivocally, declined.
    It was not until the IHO issued its Finding of Eligibility
that the legal relationship between C.B.’s parents and
Brownsburg was materially altered. Again, the IHO “found
to be a fact that [C.B.] has an Emotional Disability and Other
Health Impairment as defined under Article 7. As a matter of
law, [C.B.] is entitled to Special Education Services.” Admin.
R. at HR 035 2020 AR 0066, ECF No. 24-1. This was the first
time Brownsburg was found to have a legal obligation to pro-
vide C.B. with special education services. Therefore, C.B.’s
parents are the prevailing party of the administrative pro-
ceedings before the IHO.
12                                                    No. 22-1277

   Today we hold only that attorney’s fees could be awarded
to C.B.’s parents—we express no opinion on whether they
should be. Recall that the IDEA provides that “the court, in its
discretion, may award reasonable attorneys’ fees as part of the
costs . . . to a prevailing party who is the parent of a child with
a disability.” 20 U.S.C. § 1415(i)(3)(B)(i)(I). The district court
will determine whether to exercise that discretion and, if so,
to what degree.
                                 REVERSED and REMANDED.