Court Opinion

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Opinions of the United
2008 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

5-21-2008

Deptford Twp Sch v. H.B.
Precedential or Non-Precedential: Non-Precedential

Docket No. 07-1185

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                                                  NOT PRECEDENTIAL

       UNITED STATES COURT OF APPEALS
            FOR THE THIRD CIRCUIT
                 ____________

                      No. 07-1185
                     ____________

    DEPTFORD TOWNSHIP SCHOOL DISTRICT,

                                  Appellant,

                             v.

        H.B., by her parents and legal guardians,
      E.B. and P.B.; E.B., parent and legal guardian;
             P.B., parent and legal guardian,

                          Defendants/Third-Party Plaintiffs,

                             v.

   RAYMOND SHERMAN, in his official capacity as
       Director of Special Education for Deptford
  Township School District; BARBARA GANTWERK,
           in her official capacity as Director of
      the New Jersey Office of Special Education;
ATTORNEY GENERAL OF NEW JERSEY, in his official
 capacity as Attorney General of the State of New Jersey,

                           Third-Party Defendants.

                     ____________

      On Appeal from United States District Court
               for the District of New Jersey
                  D. C. No. 01-cv-00784
      District Judge: Honorable Jerome B. Simandle

                     ____________
                                   Argued May 5, 2008

      Before: SCIRICA, Chief Judge, BARRY, and HARDIMAN, Circuit Judges.

                                  (Filed: May 21, 2008)

James F. Schwerin (Argued)
Parker McCay
1009 Lenox Drive
Building 4 East, Suite 102A
Lawrenceville, NJ 08648-0000
       Attorney for Appellant

Jamie Epstein (Argued)
1101 Route 70 West
Cherry Hill, NJ 08002-0000
      Attorney for Appellees
                                      ____________

                               OPINION OF THE COURT
                                    ____________

HARDIMAN, Circuit Judge.

       Deptford Township School District appeals the District Court’s award of

attorneys’ fees to H.B. and her parents E.B. and P.B. (Appellees) pursuant to the

Individuals With Disabilities in Education Act (IDEA). Because we conclude that

Appellees were not the “prevailing party,” we will reverse.

                                             I.

       As we write exclusively for the parties, we recount only those facts essential to our

decision.

                                             2
         H.B. is an autistic child who qualifies for educational services under the IDEA, 20

U.S.C. § 1400, et seq. H.B. began attending school in the Deptford Township School

District on February 16, 1999. Shortly thereafter, H.B.’s parents met with her educational

team to prepare an Individualized Education Program (IEP) for the upcoming school year.

See 20 U.S.C. § 1414(d). After H.B.’s parents objected to the IEP proposed by the

School District, its Special Services Director requested a mediation conference. The

parents declined to mediate and filed a petition for due process with the New Jersey

Office of Special Education. The matter was assigned to the Honorable John R. Futey

(ALJ).

         On December 6, 2000, the ALJ found that Deptford “failed to provide H.B. with a

meaningful education” and ordered it to create “a full day in-district program in a regular

education class” tailored to H.B.’s needs and to compensate the family for their costs in

educating H.B. in the interim.

         The School District appealed the ALJ’s decision to the United States District Court

for the District of New Jersey on February 15, 2001. Over three months later, the School

District requested a stay of enforcement of the ALJ’s decision, which the Court denied on

November 2, 2001. Thereafter, the School District moved for summary judgment,

arguing that the ALJ erred in finding that it failed to provide H.B. with a “free appropriate

public education” (FAPE), 20 U.S.C. § 1412(a)(1), in the “least restrictive environment”

(LRE), id. at § 1412(a)(5).

                                              3
       By order dated February 15, 2002, the District Court reversed the ALJ’s

determination that Deptford failed to provide a FAPE to H.B., but agreed that it failed to

do so in the least restrictive environment. Because no harm resulted from the lack of the

LRE, however, the District Court granted no relief. The District Court required

Appellees “to return the portion of the previous interim payment which had not been

actually spent in reliance on the ALJ’s erroneous decision,” but permitted them “to retain

funds spent in good faith reliance upon the ALJ’s determination” prior to its reversal.

       Based solely on the fact that Appellees “were allowed to obtain and retain”

compensation for interim services “to which Deptford had challenged their entitlement,”

the District Court entered an order on March 31, 2006, deeming Appellees the “prevailing

party” for purposes of 20 U.S.C. § 1415(i)(3)(B)(i)(I) and subsequently awarded them

$98,550 in attorneys’ fees.

                                             II.

       We begin by noting that the School District’s principal argument is that Appellees

were not entitled to attorneys’ fees because they did not prevail. For reasons unknown to

the Court, Appellees fail to address this argument in their brief. Instead, Appellees rely

exclusively on their argument that the School District cannot challenge the order of

March 31, 2006, in which the District Court determined that Appellees were the

“prevailing party,” because Deptford’s Notice of Appeal cites only the District Court’s

                                             4
December 22, 2006 order quantifying attorneys’ fees at $98,550. This argument betrays a

fundamental misunderstanding of our precedents.

       An award of attorneys’ fees is not a final, appealable order until the award is

quantified. Frangos v. Doering Equip. Corp., 860 F.2d 70, 72 (3d Cir. 1988);

Pennsylvania v. Flaherty, 983 F.2d 1267, 1276 (3d Cir. 1993). Under the merger

doctrine, an appeal of a final award of attorneys’ fees includes appeal of all interlocutory

orders relevant thereto. See In re Diet Drug Prods. Liab. Litig., 418 F.3d 372, 377 (3d

Cir. 2005).

       In the present appeal, the Court’s interlocutory order, which designated the

Appellees as the “prevailing party,” was directly relevant to the Court’s final order, which

awarded fees in the amount of $98,500. See 20 U.S.C. § 1415(i)(3)(B)(i)(I).

Consequently, the March 31 order merges into the December 22 order, and both are

before us.

       Generally, we review the grant of attorneys’ fees for an abuse of discretion. See

P.N. v. Clementon Bd. of Educ., 442 F.3d 848, 852 (3d Cir. 2006). Accordingly, we will

reverse the award if it “rests upon a clearly erroneous finding of fact, an errant conclusion

of law or an improper application of law to fact.” Id. (quoting Hanover Potato Prods.,

Inc. v. Shalala, 989 F.2d 123, 127 (3d Cir. 1993)).

                                              5
                                             III.

       Turning to the merits, we first note that there can be no doubt that Appellees

achieved victory in the administrative proceedings. The ALJ ruled that the School

District “failed to provide H.B. with a meaningful education” and ordered Deptford to

create “a full day in-district program in a regular education class” tailored to H.B.’s

needs. In addition, the ALJ ordered Deptford to compensate H.B.’s parents for their costs

in educating H.B. in the interim.

       After Appellees’ favorable decision at the administrative proceeding, the School

District appealed, as was its right, to federal court. The District Court reversed the ALJ’s

decision, stating:

       [T]he only relief obtained by [Appellees] was to enforce compliance with
       the ALJ’s decision prior to the time it was partially reversed by this Court,
       and [Appellees] achieved no relief upon the aspect of the ALJ’s ruling that
       was affirmed (namely, failure to provide the LRE) because [Appellees]
       could demonstrate no harm. The [Appellees] achieved this Court’s interim
       award of $88,090.61, consistent with the ALJ’s determination and before its
       reversal, because Deptford had not timely sought a stay of same, but not
       because [Appellees] proved entitlement upon this record. When it turned
       out that the ALJ’s award was reversed in relevant part, and that no remedy
       was due for failure to provide the education in the least restrictive
       environment, the Court basically ordered [Appellees] to return the portion
       of the previous interim payment which had not been actually spent in
       reliance on the ALJ’s erroneous decision. [Appellees] were, however,
       allowed to retain funds spent in good faith reliance upon the ALJ’s
       determination prior to this Court’s various rulings, and to this extent,
       [Appellees] “prevailed,” that is, they were allowed to obtain and retain at
       least a part of the funds and benefits to which Deptford had challenged their
       entitlement. (Emphasis added.)

                                              6
We find no abuse of discretion in the District Court’s factual findings, and we accept

them in toto. See F ED. R. C IV. P. 52(a)(6). Therefore, we next consider whether the

District Court committed legal error in holding that Appellees were the “prevailing party”

under § 1415(i)(3)(B)(i)(I) of the IDEA, which provides:

       Award of attorneys’ fees . . . In any action or proceeding 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.

       In a seminal decision regarding attorneys’ fees, the Supreme Court held that a

party is not a “prevailing party” unless it “prevailed on the merits of at least some . . .

claims,” or received “at least some relief on the merits.” Buckhannon Bd. & Care Home,

Inc. v. West Virginia Dept. of Health & Human Res., 532 U.S. 598, 603 (2001) (internal

quotation and citation omitted).1 Purely technical or de minimis success is insufficient.

Texas State Teachers Ass’n v. Garland Indep. Sch. Dist., 489 U.S. 782, 792 (1989).

Likewise, preliminary or interim success unaccompanied by ultimate success of some

kind is generally insufficient. See People Against Police Violence v. City of Pittsburgh,

520 F.3d 226, 234 (3d Cir. 2008) (indicating that where initial relief proves fleeting,

attorneys’ fees are inappropriate).

       1
         We have held that the teachings of Buckhannon are directly applicable to the
IDEA attorneys’ fees provision. John T. ex rel. Paul T. v. Delaware County Intermediate
Unit, 318 F.3d 545, 556 (3d Cir. 2003).

                                               7
       Indeed, last Term the Supreme Court held that “[p]revailing party status . . . does

not attend achievement of a preliminary injunction that is reversed, dissolved, or

otherwise undone by the final decision in the same case.” Sole v. Wyner, 127 S. Ct. 2188,

2195 (2007). In a similar vein, we have observed that “when a judgment in favor of a

[party] is reversed on the merits, that party is no longer a ‘prevailing party’ . . . and no

longer entitled to attorney’s fees.” Clark v. Twp. of Falls, 890 F.2d 625, 626 (3d Cir.

1989) (emphasis added).

       Applying these principles to the instant appeal, we disagree with the District

Court’s conclusion that Appellees achieved prevailing party status under

§ 1415(i)(3)(B)(i)(I) of the IDEA because they were not required to return that portion of

the ALJ’s interim award which they had already spent. The fact that Appellees achieved

only temporary relief requires judgment in favor of the School District because such relief

is not equivalent to final relief on the merits. See John T., 318 F.3d at 556, 559; J.O. v.

Orange Twp. Bd. of Educ., 287 F.3d 267, 274 (3d Cir. 2002). As noted, the District Court

expressly concluded that Appellees failed to prove their entitlement to relief on the

merits. Without such a victory, Appellees cannot be considered the “prevailing party.”

See Buckhannon, 532 U.S. at 603; Sole, 127 S. Ct. at 2196.2

       2
          Finally, we note that even if the District Court’s finding with respect to the least
restrictive environment issue rendered Appellees the “prevailing party,” an award of
attorneys’ fees would not be proper on the particular facts of this case. See Farrar v.
Hobby, 506 U.S. 103, 105, 115 (1992). As the District Court noted, the relief achieved
here was “scant and unimpressive,” and Appellees achieved no relief on the LRE issue.

                                               8
       For the foregoing reasons, we will reverse the order of the District Court awarding

fees and remand for judgment to be entered in favor of Deptford Township School

District.

Moreover, Appellees’ attorney – either through gross carelessness or worse – initially
sought fees that included 60 hours billed in a single day. See Fair Housing Council of
Greater Wash. v. Landow, 999 F.2d 92, 96 (4th Cir. 1993). On this record, we find that
fees should not have been awarded.

                                            9