Counsel v. Dow

• Decision Date: 10 June 1988
• Docket Number: Nos. 308,319,D,s. 308
• Citation: 849 F.2d 731
• Parties: 47 Ed. Law Rep. 414 Donnell COUNSEL, Plaintiff-Appellee, v. John DOW, Superintendent of the New Haven Public Schools; New Haven Board of Education; Department of Education, State of Connecticut; Gerald Tirozzi, Commissioner of Education of the State of Connecticut; and Joyce C. Driskell, Hearing Officer, Connecticut Department of Education, Defendants-Appellants. ockets 87-7518, 87-7534.
• Court: U.S. Court of Appeals — Second Circuit

Page 731

849 F.2d 731

47 Ed. Law Rep. 414

Donnell COUNSEL, Plaintiff-Appellee, v. John DOW, Superintendent of the New Haven Public Schools New Haven Board of Education; Department of Education State of Connecticut; Gerald Tirozzi, Commissioner of Education of the State of Connecticut; and Joyce C Driskell, Hearing Officer, Connecticut Department of Education, Defendants-Appellants.

Nos. 308, 319, Dockets 87-7518, 87-7534.

United States Court of Appeals Second Circuit.

Argued Nov. 16, 1987.

Decided June 10, 1988.

Jerome N. Frank Legal Services Organization, New Haven, Conn. (Lisa Iglesias, Yale Law School, 1988 Law Student Intern) for plaintiff-appellee.

Lubbie Harper, Jr., New Haven, Conn. (Lubbie Harper, Jr., New Haven, Conn., on the brief), for defendants-appellants John Dow, Superintendent of the New Haven Public Schools and New Haven Bd. of Educ.

Joseph I. Lieberman, Atty. Gen., Hartford, Conn. (Robert W. Garvey and John R. Whelan, Asst. Attys. Gen., Hartford, Conn. on the brief), for defendants-appellants Dept. of Educ., State of Conn., Gerald Tirozzi, Com'r of Educ. of the State of Conn., and Joyce C. Driskell, Hearing Officer, Connecticut Dept. of Educ.

Before KEARSE and ALTIMARI, Circuit Judges, and LASKER, District Judge. ^*

LASKER, District Judge:

This is an appeal from a decision of the United States District Court for the District of Connecticut (Nevas, J.), awarding plaintiff Donnell Counsel attorney's fees from state and local educational authorities under the Handicapped Children's Protection Act of 1986 ("HCPA"), 20 U.S.C. Sec. 1415(e)(4)(B)-(G) (Supp. IV 1986).

The appeal presents three issues: 1) whether the district court correctly determined that the HCPA's provision for retroactive attorney's fees was validly enacted pursuant to Congress' Spending clause powers and its enforcement power under Section Five of the Fourteenth Amendment; 2) whether the district court applied the proper standard and reached the correct result in determining that section 5 of the HCPA does not violate due process or the Tenth Amendment; and 3) whether the district court correctly determined that Counsel was a "prevailing party" entitled to attorney's fees from the local defendants as well as from the state defendants. We affirm the district court's determinations on the first two issues and reverse the district court on the third issue.

Background

Donnell Counsel is a mildly retarded young adult from New Haven, Connecticut. In April 1985, Counsel initiated an administrative proceeding against the New Haven Board of Education and John Dow, Superintendent of the New Haven Public Schools ("the New Haven defendants") under the Education of the Handicapped Act ("EHA"), 20 U.S.C. Sec. 1400 et seq. Counsel sought additional educational services as compensation for a two-year period during which he had been hospitalized in a state mental health facility and received little or no education. In October 1985, the hearing officer concluded that although the New Haven defendants were "fiscally responsible" for Counsel's education during the period in question,

[b]ecause the Board could not initiate decisions or effect any control over [Counsel's] obtaining an education during [that] time ..., they have not been Counsel then sought review of this administrative decision in the United States District Court for the District of Connecticut, requesting declaratory and injunctive relief, two years of compensatory education, damages, costs and attorney's fees. Counsel alleged that the New Haven defendants, together with the hearing officer, the Connecticut Department of Education and the Connecticut Commissioner of Education ("the Connecticut defendants"), had 1) wrongfully refused to recognize his right to compensatory education under the EHA, 2) denied him due process, and 3) violated the Rehabilitation Act of 1973, 29 U.S.C. Sec. 701 et seq.

negligent in providing for his education. Thus the petitioner has no basis to make a claim for compensatory education from the Board.

On July 18, 1986, after successful settlement negotiations between the parties, the district court entered a consent decree. The decree granted Counsel two years of educational services beyond the school year in which he turned twenty-one, to be paid for by the Connecticut defendants. No payments or obligations were imposed on the New Haven defendants. The decree did not make any reference to attorney's fees: at the time the decree was filed, Counsel was precluded from seeking attorney's fees by the Supreme Court's ruling in Smith v. Robinson, 468 U.S. 992, 104 S.Ct. 3457, 82 L.Ed.2d 746 (1984), which held that the EHA was the exclusive avenue through which handicapped children could pursue claims against educational authorities and that attorney's fees were not recoverable in actions brought to secure EHA rights.

In August 1986 Congress enacted the Handicapped Children's Protection Act of 1986 ("HCPA"), Pub.L. No. 99-372, 100 Stat. 796 (codified as amended at 20 U.S.C. 1415(e)(4) (Supp. IV 1986)). The HCPA amended 1415(e)(4) of the EHA to provide explicitly that

[i]n any action or proceeding brought under this subsection, the court, in its discretion, may award reasonable attorneys' fees as part of the costs to the parents or guardian of a handicapped child or youth who is the prevailing party.

20 U.S.C. Sec. 1415(e)(4)(B). Section 5 of the HCPA specifies that the attorney's fees provision applies retroactively to any action or proceeding either pending on or brought after July 4, 1984, the day before the date of the decision in Smith v. Robinson. ¹ In enacting the HCPA, Congress specifically intended to overrule Smith. See S.Rep. No. 112, 99th Cong., 2d Sess. 2-3, reprinted in 1986 U.S.Code Cong. & Admin.News 1798, 1799-1800.

Counsel then moved for attorney's fees under the HCPA. The Connecticut defendants, while conceding that Counsel qualified as a prevailing party against them and that the amount of fees requested was reasonable, argued that Congress had no constitutional authority to make the attorney's fees provision of HCPA retroactive. The New Haven defendants adopted Connecticut's arguments and, in addition, contended that Counsel was not a prevailing party with regard to them.

On May 28, 1987, the district court granted Counsel's motion for attorney's fees against both the Connecticut and New Haven defendants, awarding Counsel $2,633 in fees. ² Counsel v. Dow, 666 F.Supp. 366 (D.Conn.1987). The court concluded that HCPA Sec. 5 was a valid exercise of Congress' power under both the Spending clause and the Fourteenth Amendment, and that the provision for retroactive attorney's fees was rationally related to a legitimate legislative purpose. 666 F.Supp. at 367-69. In addition, the district court concluded that because "the local defendants ... concede that the plaintiff obtained a very limited measure of success [against them] at the administrative level," id. at

369, it was appropriate to award attorney's fees against the New Haven defendants as well as against the Connecticut defendants.

DISCUSSION

I. Congress' Authority to Enact HCPA Sec. 5

Defendants argue that the HCPA was enacted solely under Congress' Spending clause powers and that under Pennhurst State School and Hospital v. Halderman, 451 U.S. 1, 101 S.Ct. 1531, 67 L.Ed.2d 694 (1981), HCPA Sec. 5's provision for retroactive applications for attorney's fees constitutes an abuse of those powers. We conclude both that defendants misread Pennhurst's holding as to the Spending clause and that, in any event, Pennhurst does not apply because Congress enacted the EHA and HCPA under its powers to enforce the Fourteenth Amendment as well as its Spending clause powers under U.S. Const. art. 1, Sec. 8, cl. 1.

Assuming, arguendo, that HCPA was passed solely pursuant to Congress' Spending clause powers, the HCPA's provision for retroactive attorney's fees does not run afoul of the Supreme Court's decision in Pennhurst. In Pennhurst, the Court considered what it termed a question of "statutory construction," 451 U.S. at 15, 101 S.Ct. at 1538: whether a provision in a federal-state funding statute, enacted to assist participating states in caring for the developmentally disabled, could be constitutionally interpreted, after the participating states had accepted funding, as imposing enforceable obligations on those states.

In determining this issue, the Pennhurst court examined the possible sources of Congress' power to impose such conditions on the receipt of federal funds. After rejecting the argument that the statute in question was enacted pursuant to Congress' powers to enforce the Fourteenth Amendment, 451 U.S. at 15-17, 101 S.Ct. at 1538-1540, the Court examined the scope of Congress' Spending clause powers. The Court explained that as to

Congress' power to legislate pursuant to the spending power, our cases have long recognized that Congress may fix the terms on which it shall disburse federal money to the States. Unlike legislation enacted under Sec. 5, however, legislation enacted pursuant to the spending power is much in the nature of a contract: in return for federal funds, the States agree to comply with federally imposed conditions. The legitimacy of Congress' power to legislate under the spending power thus rests on whether the State voluntarily and knowingly accepts the terms of the "contract." There can, of course, be no knowing acceptance if a State is unaware of the conditions or is unable to ascertain what is expected of it.

Id. at 17, 101 S.Ct. at 1539-1540 (citations omitted).

Hence, the Court established a "rule of statutory construction" that "Congress must express clearly its intent to impose conditions on the grant of federal funds so that the States can knowingly decide whether or not to accept these funds." 451 U.S. at 24, 101 S.Ct. at 1543. Applying this principle to the legislation before it, the Pennhurst Court concluded that there was no...