Court Opinion

ID: 768150
Source: CourtListenerOpinion
Date Created: 2012-04-18 08:52:09+00
Date Added: 2024-06-11T15:24:59.116849
License: Public Domain

207 F.3d 931 (7th Cir. 2000)
Board of Education of Oak Park and River Forest  High School District No. 200,    Plaintiff-Appellee,v.Kelly E., by her parent and next friend Nancy E.,    Defendant,andIllinois State Board of Education,    Defendant-Appellant.T.H., a minor, and L.H. and S.H., individually  and as next friends of T.H.,    Plaintiffs,v.Board of Education of Palatine Community  Consolidated School District No. 15, et al.,    Defendants-Appellants,v.Illinois State Board of Education andGlenn McGee, Superintendent of Education, Third-Party Defendants-Appellees.
Nos. 99-1589, 00-1361
In the  United States Court of Appeals  For the Seventh Circuit
Argued December 10, 1999*Decided March 24, 2000

Appeal from the United States District Court for the  Northern District of Illinois, Eastern Division.  No. 98 C 2390--Morton Denlow, Magistrate Judge.
Appeal from the United States District Court  for the Northern District of Illinois, Eastern Division.  No. 98 C 4633--James B. Moran, Judge.
Before Easterbrook, Rovner, and Diane P. Wood, Circuit  Judges.
Easterbrook, Circuit Judge.

1
Does the Individuals  with Disabilities Education Act, 20 U.S.C.  sec.sec. 1400-87, entitle a local school district  to reimbursement from the state for some or all  of the expense when the district must reimburse  parents for a child's private education? A court  may direct a school district to pay for private  education "if the court ultimately determines  that such placement, rather than a proposed IEP  [individualized education program], is proper  under the Act." Burlington School Committee v.  Massachusetts Department of Education, 471 U.S. 359, 369 (1985). Such an order was entered in  both of the cases now on appeal. Magistrate Judge  Denlow, presiding by consent under 28 U.S.C.  sec.636(c), concluded that Oak Park's school  district had made so many procedural and  substantive errors in preparing an IEP for Kelly  E. that her parents are entitled to reimbursement  for private education. 21 F. Supp. 2d 862 (N.D.  Ill. 1998). District Judge Moran enforced an  administrative decision that T.H.'s parents are  entitled to reimbursement for an intensive home-  based educational program. 55 F. Supp. 2d 830  (N.D. Ill. 1999). Both school districts have  accepted these decisions; the only remaining  dispute is whether the state must chip in. Our  cases appear to be the first to present that  question to a court of appeals.

2
The magistrate judge directed the state to pay  for Kelly E.'s private education and half of her  parents' legal expenses. He gave two principal  reasons. 21 F. Supp. 2d at 883, reconsideration  denied, 1999 U.S. Dist. Lexis 1612. First, he  viewed the state as a guarantor of every local  school district's compliance with the Act, and  therefore responsible for part of the cost.  Second, he concluded that state statutes and  regulations offering to pay for private  placements at approved schools are not generous  enough to comply with Florence County School  District v. Carter, 510 U.S. 7 (1993), which the  magistrate judge understood as calling for state  reimbursement of local districts' expenses for  private education. Illinois law provides (105  ILCS 5/14-7.02):

3
A school district making tuition payments  pursuant to this Section is eligible for  reimbursement from the State for the  amount of such payments actually made in  excess of the district per capita tuition  charge for students not receiving special  education services. . . .

4
. . .

5
If a child has been placed in an approved  individual program and the tuition costs  including room and board costs have been  approved by the Review Board, then such  room and board costs shall be paid by the  appropriate State agency subject to the  provisions of Section 14-8.01 of this Act.

6
An implementing regulation adds: "A program not  approved in accordance with the requirements of  this Part shall not be used by school districts  to serve students with disabilities under Section  14-7.02 of the School Code." 23 Ill. Adm. Code  sec.401.10. This means that a non-approved  program is ineligible for reimbursement under  sec.14-7.02, not that such a program "shall not  be used" at all. Still, the magistrate judge  thought that the statute and regulation steered  school districts away from placements that might  be educationally best for students, and toward  either continued education in the public schools  or approved private placements that were  educationally less desirable (but cheaper for the  local school districts). To counteract this  incentive, the magistrate judge directed the  state to pay for half of Kelly's education even  though state law does not authorize the outlay.  By contrast, the district judge in T.H. declined  to order the state to contribute toward the cost  of the home education. The judge explained: "If  the [Palatine school] district was concerned  about its ability to recoup expenses in excess of  the district per capita tuition charge for  students not receiving special education  services, see 105 ILCS sec.5/14-7.02, it could  have worked harder to develop an appropriate  placement that was approved by the state." 55 F.  Supp. 2d at 847. Judge Moran disagreed with the  magistrate judge's conclusion that the state must  either ensure local districts' compliance or  insure their compliance costs.

7
Illinois, as appellant in the Oak Park case and  appellee in the Palatine case, leads off with a  flurry of objections to the very possibility of  litigation. Local school districts lack standing,  the state insists; if they suffer injury in fact,  they do not meet prudential standards for  adjudication; and if the local districts may sue,  still the state is not a proper defendant given  the eleventh amendment. None of these arguments  was presented in the district court--though if  they establish an absence of subject-matter  jurisdiction we must consider them anyway. But  they are feeble, individually and collectively.

8
Although, as Illinois stresses, the school  districts are not the persons for whose benefit  the Act is designed, they have been injured in  fact by the need to pay for Kelly E.'s and T.H.'s  private education. Although the injury may not be  traceable to acts of Illinois, in seeking to  recover part of their outlay the school districts  are asserting a claim for contribution. Federal  courts regularly resolve disputes about  contribution. E.g., McDermott, Inc. v. AmClyde,  511 U.S. 202 (1994); Akzo Nobel Coatings, Inc. v.  Aigner Corp., 197 F.3d 302 (7th Cir. 1999). Until  now, no one has expressed doubt that cross-claims  among joint wrongdoers present cases within the  scope of Article III. Perhaps the Act does not  authorize awards of contribution, but a party's  failure to establish a claim for relief differs  from a deficiency in subject-matter jurisdiction.  Steel Co. v. Citizens for a Better Environment,  523 U.S. 83, 89-90 (1998); Bell v. Hood, 327 U.S. 678, 682 (1946). Recast as a claim that local  districts do not fall within the zone of  interests protected by the Act and thus lack  "prudential" standing, the state's position fares  no better, if only because we have held, see  United Transportation Union v. Surface  Transportation Board, 183 F.3d 606, 611 (7th Cir.  1999) (citing cases), that prudential  considerations in general, and the zone-of-  interests test in particular, are forfeited if  not presented in a timely fashion. Illinois asks  us to overrule this line of cases, but we  decline; requiring litigants to raise zone-of-  interests arguments at an early opportunity is  compatible with, if not compelled by, decisions  of the Supreme Court. See, e.g., Air Courier  Conference v. Postal Workers Union, 498 U.S. 517,  522-23 & n.3 (1991).

9
Section 604(a) of the IDEA, 20 U.S.C.  sec.1403(a), provides that "[a] State shall not  be immune under the eleventh amendment to the  Constitution of the United States from suit in  Federal court for a violation of this chapter."  Language this direct satisfies the clear-  statement requirement. Illinois contends that  abrogation exceeds Congress' powers under sec.5  of the fourteenth amendment, see Kimel v. Florida  Board of Regents, 120 S. Ct. 631 (2000); Florida  Prepaid Postsecondary Education Expense Board v.  College Savings Bank, 527 U.S. 627 (1999); Boerne  v. Flores, 521 U.S. 507 (1997), but this is  beside the point. Having enacted legislation  under its spending power, Congress did not need  to rely on sec.5. States that accept federal  money, as Illinois has done, must respect the  terms and conditions of the grant. South Dakota  v. Dole, 483 U.S. 203 (1987). One string attached  to money under the IDEA is submitting to suit in  federal court. Bradley v. Arkansas Department of  Education, 189 F.3d 745, 752-53 (8th Cir.),  rehearing en banc granted on a different issue,  197 F.3d 958 (1999) (argued January 14, 2000).  Although sec.604(a) does not use words such as  "consent" or "waiver," it is hard to see why that  should matter. Congress did what it could to  ensure that states participating in the IDEA are  amenable to suit in federal court. That the power  comes from the spending clause rather than (as  Congress may have supposed) the commerce clause  or the fourteenth amendment is not relevant to  the issue whether the national government  possesses the asserted authority. Otherwise we  require the legislature to play games ("guess  which clause the judiciary will think most  appropriate"). What matters, or at least should  matter, is the extent of national power, rather  than the extent of legislative prevision. Thus we  hold that states must take the bitter with the  sweet; having accepted the money, they must  litigate in federal court. See also 20 U.S.C.  sec.1415(i)(2). Suit is of course limited to  enforcing the federal terms and conditions; local  school districts can't piggyback claims based on  state law. We must assume that Illinois has  complied with all of its own statutes and  regulations; school districts that want a more  generous reimbursement policy under 105 ILCS  5/14-7.02 and 23 Ill. Adm. Code sec.401.10 must  resort to a state forum. See Pennhurst State  School and Hospital v. Halderman, 465 U.S. 89  (1984). But if the IDEA itself entitles a local  school district to reimbursement from a state,  then the eleventh amendment does not stand in the  way.

10
Thus we arrive at the principal question: does  the Act prescribe a particular allocation of  expenses between local and state bodies?  Magistrate Judge Denlow did not identify a  statutory source of authority for his award  against the state, and 20 U.S.C.  sec.1415(i)(3)(A) does not by itself supply what  is needed. (In 1997 Congress extensively amended  the Act. All of our citations are to the current  version.) Uncommon as it is for a municipality to  sue a state (or the reverse) under federal law,  compare Illinois v. Chicago, 137 F.3d 474 (7th  Cir. 1998), with Chicago v. Lindley, 66 F.3d 819,  823 n.6 (7th Cir. 1995), sec.1415(i) may allow  this under some circumstances. When a parent  disagrees with a local decision about a pupil's  IEP, an administrative appeal lies to a state  agency, see sec.1415(g), and sec.1415(i)(2)  allows "[a]ny party aggrieved by the [state  agency's] findings and decision" to contest the  outcome by suit under sec.1415(i)(3). A local  board of education therefore may sue the parent  asking the court to upset the state's decision  and to restore the local board's preferred  educational plan. Perhaps, by analogy to federal  administrative law, it may sue the state as the  decisionmaker (just as employers and unions sue  the NLRB). But nothing in this subsection  authorizes awards of financial relief in favor of  local educational officials. Cases such as Texas  Industries, Inc. v. Radcliff Materials, Inc., 451 U.S. 630 (1981), and Northwest Airlines, Inc. v.  Transport Workers, 451 U.S. 77 (1981), show that  simple grants of jurisdiction along the lines of  sec.1415(i)(3)(A) do not permit courts to  reallocate loss among joint wrongdoers.

11
Title VII of the Civil Rights Act of 1964  authorizes suit in language similar to the IDEA.  See 42 U.S.C. sec.2000e-5(f)(3). A collective  bargaining agreement between Northwest Airlines  and a union representing some of its employees  contained provisions that were held to violate  Title VII, leading to an award of damages  exceeding $20 million. Blaming the union for this  loss, the employer sought an award of  contribution--and lost. The Supreme Court assumed  that an employer may be a person aggrieved for  the purpose of filing a charge under sec.2000e-  5(b) and later filing suit. Northwest Airlines, 451 U.S. at 90. But it held that the grant of  federal jurisdiction, understood in light of the  norm that federal courts do not adjust accounts  among wrongdoers without statutory authorization,  is not enough to authorize contribution. Only if  something else in Title VII authorized  contribution would such an award be proper. Texas  Industries reached the same conclusion for  antitrust litigation. Because sec.1415(i)(3) is  no more explicit about contribution than is  sec.2000e-5(f)(3), the state is entitled to  prevail unless something else in the IDEA requires  it to reimburse local school districts.

12
One possibility is sec.1403(b): "In a suit  against a State for a violation of this chapter,  remedies (including remedies both at law and in  equity) are available for such a violation to the  same extent as those remedies are available for  such a violation in the suit against any public  entity other than a State." This is the language  on which Oak Park and Palatine principally rely.  But it says only that a state is liable to the  same extent as any other public entity. It does  not say what that extent may be. If a state may  not recover contribution from a local board of  education, then under sec.1403(b) a local board  can't recover contribution from a state. Whether  a state may recover from a board, or a board from  a state, can't be answered from the language of  sec.1403(b).

13
But it can be answered, with some confidence,  by parsing sec.611 of the Act, 20 U.S.C.  sec.1411, which specifies the allocation of funds  between state and local educational entities.  Each state that receives money under the Act may  keep as much as 25% to pay for direct educational  services (a state may run schools of its own),  administration, technical assistance, training,  hearings, and subgrants for "capacity-building  and improvement". 20 U.S.C. sec.1411(f). Each  state must distribute to local educational  agencies at least 75% of the federal grant, see  sec.1411(g), under a formula that takes as its  annual base the amount each local agency received  before the 1997 amendments. That amount depended  on the number of pupils with disabilities  enrolled in each school system; a state was  required to apportion the 75% among local  districts so that each received approximately the  same amount per pupil with a special educational  program. See sec.611(d) of the former statute,  108 Stat. 3931. This system tells us two things:  first, any school district that receives less  than the allocation prescribed by sec.1411(g) is  entitled to a remedy under sec.1403(b); second,  if the local district has received its full  allocation for a given year, it is not entitled  to more.

14
The statutory allocation formula gives local  districts a stipend per disabled pupil. This  supplement per pupil is supposed to be 30% of the  average cost of primary education in the United  States. 20 U.S.C. sec.1411(a)(2). (The statute  specifies 40%, but the state is entitled to keep  a quarter of this for itself.) Many pupils with  disabilities can be educated for less than 130%  of the national average, but others cost  substantially more. Over time, things should  average out so that the grant covers aggregate  costs. Instead of directing the states to  calculate expenses for each pupil and distribute  funds among local districts accordingly, Congress  directed states to apply a formula to the total  number of pupils with disabilities. That system  would collapse if local districts could in  essence make a profit from some pupils with  disabilities (those for which the 30% supplement  exceeds the costs of special services) while  suing the states for more whenever the costs  exceeded the average per-pupil grant, as it did  for T.H. and Kelly. Then the states, having  distributed 75% off the top (as the statute  requires), would be required to dip into (maybe  exceed) the 25% retainage to cover the additional  expenses of the most costly pupils.

15
Neither Oak Park nor Palatine contends that  Illinois has distributed less than the 75% to  which the local educational agencies are  entitled. Their claims for contribution in this  case therefore boil down to arguments that each  local educational agency is entitled to an annual  base derived from 75% of the state's grant, plus  per-pupil supplements whenever the Act requires  (or permits a parent to choose) private  education. Nothing we can find in 20 U.S.C.  sec.1411 or any other section of the IDEA supports  such double dipping. A local educational agency  that has received its share of the federal  appropriation must provide for services out of  that share; it cannot collect more from the state  by way of contribution. States may of course  agree to pay more out of their own budgets; 105  ILCS 5/14-7.02 appears to represent such a  promise. But states may set their own conditions  for this largess and, as we have observed  already, federal courts are not entitled to  enforce state laws against the states themselves.

16
A few words about Carter bring this opinion to  a close. Both school districts rely heavily on  this opinion, but it has nothing to do with  relative shares of state and local districts.  Carter holds that parents may be entitled to  reimbursement for private education even though  the school they select does not meet all  requirements of 20 U.S.C. sec.1401(a)(8)--and, in  particular, does not meet all standards set by  the state's educational bureaucracy. The court  observed that officials who disagreed with the  need for private education were unlikely to give  their approval, but that they could not so easily  block parents' entitlement to obtain a good  education for their child. According to Oak Park  and Palatine, the combination of Carter with 105  ILCS 5/14-7.02 leaves them in a bind: they can't  get state reimbursement unless the private school  has been approved, but they also can't use the  lack of approval to avoid reimbursing parents for  what may be a costly private placement. That may  well be so, but it does not follow that the IDEA  requires the state to contribute more than the  amount allocated under sec.1411(g). In Carter  itself the Justices had this to say about the  school district's contention that the Court's  holding would break the bank:

17
[P]ublic educational authorities who want  to avoid reimbursing parents for the  private education of a disabled child can  do one of two things: give the child a  free appropriate public education in a  public setting, or place the child in an  appropriate private setting of the State's  choice. This is IDEA's mandate, and school  officials who conform to it need not worry  about reimbursement claims.    Moreover, parents who, like Shannon's,  "unilaterally change their child's  placement during the pendency of review  proceedings, without the consent of state  or local school officials, do so at their  own financial risk." Burlington, supra, at  373-374, 105 S.CT. 1966. They are entitled to  reimbursement only if a federal court  concludes both that the public placement  violated IDEA and that the private school  placement was proper under the Act.

18
Finally, we note that once a court holds  that the public placement violated IDEA, it  is authorized to "grant such relief as the  court determines is appropriate." 20  U.S.C. sec.1415(e)(2). Under this  provision, "equitable considerations are  relevant in fashioning relief," Burlington, 471 U.S. at 374, and the court enjoys  "broad discretion" in so doing, id., at  369, 101 S.Ct.1571. Courts fashioning discretionary  equitable relief under IDEA must consider  all relevant factors, including the  appropriate and reasonable level of  reimbursement that should be required.  Total reimbursement will not be  appropriate if the court determines that  the cost of the private education was  unreasonable.

19
510 U.S. at 15-16 (emphasis in original). Neither  Oak Park nor Palatine took advantage of the  options mentioned in the first paragraph of this  passage, and neither district contends that the  cost of private education was unreasonable and  therefore should not be fully reimbursed under  the third paragraph.

20
Whatever assistance a state may provide, beyond  the block grant that the IDEA requires, must be  worked out through the state's political and  judicial processes. The judgment in the Palatine  case is affirmed. The judgment in the Oak Park  case is vacated to the extent it requires the  state to pay for any of Kelly E.'s private  education, and the case is remanded for entry of  a new judgment in conformity with this opinion.  Illinois already has paid its assigned share of  Kelly E.'s private education in years past, but  it need not continue to do so and need not  reimburse Oak Park for any portion of the  attorneys' fees awarded to Kelly's parents.

Notes:

*
 A prior appeal in T.H. v. Palatine Board of  Education, No. 99-2493, was argued on December  10, 1999, and dismissed for want of jurisdiction  on December 15 after the court concluded that the  judgment appealed from did not dispose of all  claims and did not specify the relief to which  the prevailing party was entitled. After the  district court entered a final judgment on  January 26, 2000, the new appeal (No. 00-1361)  was submitted for decision on the basis of the  original briefs and argument.