Allstate Ins. Co. v. Bethlehem Area School Dist., Civ. A. No. 86-6218.

• Decision Date: 30 December 1987
• Docket Number: Civ. A. No. 86-6218.
• Citation: 678 F. Supp. 1132
• Parties: ALLSTATE INSURANCE COMPANY, Plaintiff, v. BETHLEHEM AREA SCHOOL DISTRICT and BB, a Minor by and through his Parents and Natural Guardians, JB and NB and JB and NB, Individually, Defendants.
• Court: U.S. District Court — Eastern District of Pennsylvania

678 F. Supp. 1132

ALLSTATE INSURANCE COMPANY, Plaintiff, v. BETHLEHEM AREA SCHOOL DISTRICT and BB, a Minor by and through his Parents and Natural Guardians, JB and NB and JB and NB, Individually, Defendants.

Civ. A. No. 86-6218.

United States District Court, E.D. Pennsylvania.

December 30, 1987.

Joseph F. Leeson, Jr., Bethlehem, Pa., for Allstate Ins. Co.

Larry B. Selkowitz, Harrisburg, Pa., Thomas A. Brophy, Harold R. Berk, Philadelphia, Pa., for Bethlehem Area School Dist.

Jerry A. Snyder, Allentown, Pa., for BB, JB & NB.

MEMORANDUM AND ORDER

TROUTMAN, Senior District Judge.

This case, in which the plaintiff alleges that the Court's jurisdiction is based upon federal law and diversity of citizenship, presents a situation unique in the application of statutes designed to enhance opportunities for handicapped students under the Education for All Handicapped Children Act, 20 U.S.C. § 1400, et seq. (EHA) and the Rehabilitation Act of 1973, 29 U.S.C. § 794.

Plaintiff Allstate Insurance Company seeks a declaration pursuant to the Declaratory Judgment Act, 28 U.S.C. §§ 2201 and 2202, that defendant Bethlehem Area School District, under the aforementioned federal statutes relating to the education of the handicapped, is responsible for the costs of an attendant needed by the minor defendant, BB, while he is in school.

In 1982, BB was injured in an automobile accident, resulting in the permanent implantation of a tracheostomy.¹ Because the tracheostomy is the means by which BB breathes, he needs, at all times, ready access to a trained attendant who can maintain the airway should the need arise.

Pursuant to an automobile liability insurance policy under the terms of the former Pennsylvania No-Fault Motor Vehicle Insurance Act, 40 Pa.Stat.Ann. § 1009.101, et seq. (repealed), Allstate has paid the child's medical expenses, including the cost of the attendant, since the date of the accident. When BB returned to classes in the Bethlehem Area School District in 1986, Allstate demanded that the school district begin paying the cost of the attendant during the school day, contending that the presence of the attendant is a "related service" under the EHA and Rehabilitation Act. When the school district refused, Allstate instituted the present suit, seeking the Court's declaration that the attendant is a related service for which the defendant school district is obligated to pay.

In Count II of the amended complaint, Allstate seeks a declaration against BB's parents, JB and NB, that the insurance policy, which reduces coverage for certain government benefits which an insured is entitled to receive, does not cover the cost of the attendant during the school day.

Defendant Bethlehem Area School District has moved for a stay of proceedings here, invoking the doctrine of "primary jurisdiction". The school district contends that where the legislation upon which an action is based provides for administrative procedures, the Court should defer to the expertise of the administrative agency, staying its hand until the agency has acted. Here, the school district argues, there is a comprehensive "due process" mechanism through which the term "related service" must be defined. Thus, the Court should refer the action to the appropriate education agency for its initial determination of whether the cost of the attendant is a "related service" under the EHA.

Plaintiff argues that there are no "special education issues" involved which would warrant referral to an agency. Specifically, plaintiff contends that,

The only real issue in the case concerns whether the health needs of the minor, BB, must be provided for by the Bethlehem Area School District pursuant to the Education of the Handicapped Act or the Federal Rehabilitation Act....

Therefore, the only issue remaining in this case concerns the interpretation of the insurance policy issued by Allstate Insurance Company, and an application of the facts of BB's medical condition and health needs, to the Federal Statutes....

There is no issue before this Court concerning the educational needs of the minor child."

(Answer of Plaintiff to Motion of Defendant, Bethlehem Area School District, for a Stay of Proceedings, Doc. # 15 at 2. Citations omitted. Emphasis in original.).

As a response to defendant's motion, this argument reveals a complete lack of understanding of the statutes upon which the plaintiff purportedly relies. The EHA, and in this context, the Rehabilitation Act, are not statutes to provide for the "health needs" of school-age children. The EHA was enacted, "To assure that all handicapped children 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). Moreover, the definition of "related service" in the EHA inextricably connects it to special education: "The term `related services' means transportation, and such developmental, corrective, and other supportive services ... as may be required to assist a handicapped child to benefit from special education ...". 20 U.S.C. § 1401(17).² It is, in fact the combination of "special education" and "related services" which together define the statutory term "free appropriate public education". § 1401(18). See also, Hendrik Hudson District Board of Education v. Rowley, 458 U.S. 176, 188, 102 S.Ct. 3034, 3041-42, 73 L.Ed.2d 690, 700 (1982).

Under the EHA and its implementing regulations found at 34 C.F.R. § 300, et seq. and 22 Pa.Code §§ 13 and 341,³ no student identified as exceptional or handicapped within the meaning of the EHA may be assigned to a special education program without a written Individualized Education Program (IEP). 34 C.F.R. § 300.342, 22 Pa.Code § 341.13. It is in the IEP that the related services necessary for that child to benefit from his prescribed special education program are enumerated. 34 C.F.R. § 300.346, 22 Pa.Code § 341.15.

The EHA also specifies certain procedural safeguards, § 1415, which provide, inter alia, "an opportunity to present complaints with respect to any matter relating to ... the provision of a free appropriate public education to a handicapped child.", § 1415(b)(1)(E), with the further opportunity "for an impartial due process hearing" conducted by the state or local educational agency as determined by state law. § 1415(b)(2)⁴. Any person aggrieved by a final decision of the state educational agency may seek redress by bringing an action in district court. § 1415(e)(1) & (2).

While the statute requires that the due process procedures described be available, it is through the federal and state regulations implementing the EHA that access to the procedures is prescribed. For example, 34 C.F.R. § 300.504 enumerates certain actions which may not be taken by an education agency without prior parental notification. Among these actions is the proposal or refusal, "To initiate or change the identification, evaluation, or educational placement of the child or the provision of a free appropriate public education to the child." § 300.504(a)(1) & (2). Pursuant to § 300.506, either the parent or public educational agency is permitted to "Initiate a hearing on any of the matters described in § 300.504(a)(1) and (2)". The Pennsylvania School Code, at 22 Pa.Code § 13.31-§ 13.33, further describes the procedures available to parents and school districts when they disagree as to the appropriate educational program to be provided to an exceptional child. These procedures are arranged on a continuum beginning with notification when a change is requested or recommended, through an informal conference between the parties, a full, formal due process hearing and right to appeal to the Pennsylvania Secretary of Education. The procedures may be initiated by either the parent or the school district. If either party is dissatisfied with the Secretary's decision, the final step in the administrative process, that party may then bring a civil action pursuant to 20 U.S.C. § 1415.

The requirements of the Rehabilitation Act parallel those of the EHA with respect to educating handicapped children, and the regulations implementing it for the Department of Education, 34 C.F.R. Part 104, overlap those implementing EHA. Although exhaustion of administrative procedures is generally not required before bringing a district court action under the Rehabilitation Act, Greater Los Angeles Council on Deafness, Inc. v. Community Television of Southern California, 719 F.2d 1017 (9th Cir.1982), a child covered by both the EHA and the Rehabilitation Act is required to exhaust EHA procedures before bringing a civil action under the Rehabilitation Act. 20 U.S.C. § 1415(f).⁵

From the foregoing description of procedures set forth in the statute and regulations, it is obvious that "related services" has no meaning under the EHA except as part of the full complement of special education services available through it. It is also obvious that, as the defendant school district contends, there is an elaborate administrative process under the EHA through which a child's eligibility for a particular "related service" must be established and through which disputes concerning such eligibility must proceed before the Court becomes involved.

As the Court understands the application of the foregoing procedures to the situation here present, if we grant defendant's motion to stay pending administrative proceedings, those proceedings would be initiated by the defendant parents or the defendant school district either by notice of a proposal by the district to modify BB's IEP to add the tracheostomy attendant as a related service or by the parents' request that the school district do so. If both defendants agree to the change, the school district would then begin paying for the tracheostomy attendant. Presumably, however, such agreement would not take place. The party refusing to agree to change the IEP would so...