96 F.3d 78 (3rd Cir. 1996), 95-7575, Susquenita School Dist. v. Raelee S. By and Through Heidi S.

Docket Nº:95-7575.
Citation:96 F.3d 78
Party Name:SUSQUENITA SCHOOL DISTRICT, Appellant, v. RAELEE S., By and Through her parents and next friends, Heidi S. and Byron S.
Case Date:September 18, 1996
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

Page 78

96 F.3d 78 (3rd Cir. 1996)

SUSQUENITA SCHOOL DISTRICT, Appellant,

v.

RAELEE S., By and Through her parents and next friends, Heidi S. and

Byron S.

No. 95-7575.

United States Court of Appeals, Third Circuit

September 18, 1996

Argued June 4, 1996.

Sur Petition for Rehearing Oct. 18, 1996.

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Frank P. Clark (argued), James, Smith & Durkin, Hummelstown, PA, for appellant.

Jefferson C. Crosby (argued), Gibbel, Kraybill & Hess, Lancaster, PA, for appellee.

Before: BECKER and MANSMANN, Circuit Judges, and BROTMAN, District Judge. [*]

OPINION OF THE COURT

MANSMANN, Circuit Judge.

This matter, arising under the Individuals with Disabilities Education Act ("IDEA"), 20 U.S.C. § 1415 et seq., requires that we determine whether the parents of a student eligible for programs and services under the IDEA are entitled to have their daughter's private school placement funded by the local public school district prior to the conclusion of litigation establishing the propriety of that placement. The case comes to us in an interlocutory posture; the public school district has asked us to review the district court's order denying a Motion for Stay Pending Appeal. This denial effectively directs that the student remain in the private school placement and that this placement be funded by the local public school district pending resolution of the merits of the underlying litigation. Because we conclude that the district court properly declined to enter a stay, we will affirm the order of the district court.

I.

In the academic year 1994-1995, Raelee S., a learning disabled student within the meaning of the IDEA, entered the ninth grade at Susquenita High School. In the summer of 1994, the Susquenita school district had issued a Notice of Recommended Assignment ("NORA") to Raelee's parents and proposed an individualized education program ("IEP"). As of the start of the school year, the parents had not accepted either document. Shortly after school began, however, the parents rejected the NORA and the proposed IEP, withdrew Raelee from Susquenita, and placed her in a private school for the learning disabled. They then invoked their right to a due process hearing pursuant to section 1415(b)(2) of the IDEA in order to determine whether Raelee had been properly placed and whether, accordingly, they were entitled to tuition reimbursement.

In a decision announced in April 1995, the hearing officer found that the IEP which Susquenita had proposed for Raelee was appropriate and that the school district should not be forced to bear the financial burden of the parents' unilateral decision to place Raelee in a private school. The parents appealed this decision to a three member state special education appeals panel. On June 1, 1995, the panel reversed the hearing officer's decision, finding that the proposed IEP was deficient in a number of respects and that "Raelee's educational program was not reasonably calculated to provide for meaningful education benefit." (Special Education Opinion No. 672, Typescript at 13.) Addressing the private school placement, the panel wrote:

Although the private school is dedicated to the education of students with learning disabilities and therefore represents a more restrictive placement, we find that Raelee's current needs in learning outweigh her need for integration with nondisabled peers. Thus we find the program offered by the private school appropriate for Raelee.

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Id. The panel then moved to the crux of the issue which we now confront, writing:

Parents have a right to withdraw their children from public school unilaterally ... and receive reimbursement for private school tuition when a district has failed to provide an appropriate education and when the private school meets the substantive requirements of IDEA.... Thus we find that the parents claim for reimbursement of tuition and transportation [for the academic year 1994-1995] are legally permissible.

Id. at 6. Also critical to this controversy is the panel's statement, in dicta, that "unless this order is overturned in a Commonwealth or federal district court, the private school placement shall be the pendent placement in any future disputes between the parent and the District." Id. 1

On July 3, 1995, Susquenita filed a Complaint in the Nature of an Appeal from the decision of the special education appeals panel. Jurisdiction was appropriate under the provisions of 20 U.S.C. § 1415(e)(2) which provides that "any p[arty] aggrieved by the findings and decision made [by a State educational agency] ... shall have the right to bring a civil action ... in a district court...."

In the complaint, Susquenita alleged that the education appeals panel improperly disregarded the credibility determinations made by the hearing officer, made findings of fact not supported by the record, and, most importantly for purposes of this appeal, erred when it identified the private school as Raelee's pendent placement and awarded tuition reimbursement. In a contemporaneous motion for stay pending appeal filed pursuant to Fed.R.Civ.P. 62(d) and (f), 2 Susquenita asked that the district court stay the appeals panel decision "insofar as it directs Susquenita to reimburse the parents for expenses and ... states that Raelee's placement within the meaning of 20 U.S.C. § 1415(e)(3) is a private school."

The district court denied Susquenita's motion, noting that "Rule 62(d) requires an analysis similar to that employed in evaluating a request for a preliminary injunction." (Typescript at 5.) The court identified four factors to be considered, including: 1) the movant's likelihood of success on the merits; 2) whether the movant will suffer irreparable harm if the request is denied; 3) whether third parties will be harmed by the stay; and 4) whether granting the stay will serve the public interest.

The district court evaluated each of these factors, concluding first that the likelihood of Susquenita's success on the merits was very difficult to predict. The court found, however, that, "on the current state of the record made at the administrative level, we would conclude that the likelihood of success favors Raelee S." (Typescript at 4.) The court also found the public interest factor difficult to evaluate, stating that while the public interest favored Raelee's receiving a free and appropriate education, the state of the record made it difficult to assess whether Raelee received such an education in the Susquenita School District. The court concluded, however, that "were we compelled to make such an assessment at this juncture, we would be constrained to come down on the side of [Raelee S.]." Id. The court next found that third parties would not be harmed if the stay were denied:

The only harm which we can conceive of is the financial burden which will be borne by the district during the pendency of this appeal. We have nothing before us to suggest that other students will be denied a proper or adequate education if the order compelling the district to fund her private school remains in effect during the pendency of this appeal.

Id.

Evaluating Susquenita's allegation of irreparable harm, the district court found that,

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under current caselaw, the district would not be entitled to recover funds expended to maintain Raelee in private school even if it were to prevail on appeal. The court thus found merit in Susquenita's argument that it would suffer irreparable harm if the stay were denied. The court, however, did not find this prospect of harm sufficient to justify granting the stay. "Taken together, we find that the relevant considerations do not justify granting the stay requested by the district." (Typescript at 4.)

Accordingly, the district court denied Susquenita's motion for a stay and held that Raelee's " 'current educational placement' for section 1415(e)(3) purposes will remain the private school ... during the pendency of this appeal and until further order of the court declaring otherwise." (Typescript at 5). This holding also effectively decided the reimbursement question in favor of Raelee's parents. 3 This appeal followed. We have jurisdiction pursuant to 28 U.S.C. § 1291; 4 we review the district court's order under an abuse of discretion standard. Sierra Club v. Cedar Point Oil Co., 73 F.3d 546 (5th Cir.1996).

II.

The broadest issues in this litigation are those relating to the adequacy of the IEP proposed by Susquenita; these are the merits issues yet to be addressed by the district court. The issues underlying the district court's denial of the stay are narrow, involving practical questions of where Raelee should attend school while the review process proceeds, who must pay for Raelee's placement, and when that payment must be made. Susquenita argues that it has no financial obligation to Raelee's parents because the private school is not the appropriate pendent placement. Alternatively, Susquenita contends that any financial obligation which it may have can be assessed only at the end of the appellate process. These issues of pendent placement and financial responsibility are linked; in order to evaluate the payment questions, we must first assess the legal impact of the education appeals panel directive that the private school be deemed Raelee's pendent placement during the review process.

III.

The pendent placement concept is an important feature of the IDEA. In 1975 Congress enacted legislation appropriating funds to help states defray the cost of educating children with disabilities. The IDEA, known originally as the Education of the Handicapped Act, was passed in order "to assure that all children with disabilities have available to them ... a free appropriate public education which emphasizes special education and related services designed to meet their unique needs." 20 U.S.C. § 1400(c). The IDEA resulted, in part, from a congressional determination that:

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