Eggers v. Bullitt County School Dist.

• Decision Date: 18 August 1988
• Docket Number: No. 87-6131,87-6131
• Citation: 854 F.2d 892
• Parties: , 48 Ed. Law Rep. 796 Herbert EGGERS, Joyce Eggers, and John Eggers by Joyce Eggers, his next friend, Plaintiffs-Appellants, v. BULLITT COUNTY SCHOOL DISTRICT, William L. Dawson, Bette Porter, Linda C. Marsh, Thomas Whitt, Nan Wilkins, Bullitt County Board of Education, and Frank Hatfield, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 892

854 F.2d 892

57 USLW 2141, 48 Ed. Law Rep. 796

Herbert EGGERS, Joyce Eggers, and John Eggers by Joyce Eggers, his next friend, Plaintiffs-Appellants, v. BULLITT COUNTY SCHOOL DISTRICT, William L. Dawson, Bette Porter, Linda C. Marsh, Thomas Whitt, Nan Wilkins Bullitt County Board of Education, and Frank Hatfield, Defendants-Appellees.

No. 87-6131.

United States Court of Appeals, Sixth Circuit.

Argued May 19, 1988.

Decided Aug. 18, 1988.

Ava Crow (argued), Dept. of Public Advocacy, Protection and Advocacy Div., Sammie Lambert, Frankfort, Ky., for plaintiffs-appellants.

Eric G. Farris, Shepherdsville, Ky., Robert L. Chenoweth (argued), Bryan, Fogle & Chenoweth, Frankfort, Ky., for defendants-appellees.

Before KEITH and WELLFORD, Circuit Judges; and HORTON ^*, Chief District Judge.

KEITH, Circuit Judge.

This is an appeal from the dismissal of an action for an award of attorney's fees pursuant to the Handicapped Children's Protection Act of 1986 ("HCPA"), 20 U.S.C. Sec. 1415. For the reasons set forth below, we AFFIRM in part and REVERSE in part the district court's judgment.

I.

Appellants Herbert Eggers, Joyce Eggers and John Eggers by Joyce Eggers, his next friend, requested attorney's fees and costs for services performed at an administrative hearing and appeal brought pursuant to the Education of All Handicapped Children's Act ("EAHCA"), 20 U.S.C. Sec. 1400 et seq. Appellees moved the court to dismiss the action on the grounds that the court had no jurisdiction to award attorney's fees to parents who prevail in administrative proceedings under the EAHCA. Appellants argued that the HCPA authorized attorney's fees for prevailing parents at the administrative level.

The district court held that the HCPA authorizes attorney's fees to be awarded to parents prevailing at the administrative level. However, the court dismissed the action with prejudice on the ground that appellants' counsel are employees of the Protection and Advocacy Division of the Department of Public Advocacy, a publicly funded state agency. Joint Appendix at 25.

Following the court's decision, appellants filed a Motion to Alter and Amend Order and Judgment on July 17, 1987. This motion was overruled by the court, and appellants subsequently appealed to this court.

II.

At the time this action was filed, John Eggers was a sixteen year old student living with his parents in Louisville, Kentucky. John is a "handicapped child" as defined under the EAHCA. As a handicapped child, John is entitled to a free, appropriate public education pursuant to the EAHCA. Appellees are charged under the EAHCA with providing a free, appropriate public education to John.

During the 1985-86 school year, disputes arose regarding the appropriate educational placement and services for John. Appellants requested an administrative due process hearing on the disputed issues. Under the EAHCA, the administrative hearing is a mandatory procedure that must be utilized prior to the initiation of judicial action. See 20 U.S.C. Sec. 1415.

Appellants were represented by attorneys employed by the Protection and Advocacy Division of the Department of Public Advocacy. The Department of Public Advocacy is an independent state agency which represents individuals with developmental disabilities. It receives both federal and state funds.

The administrative hearing was held on July 25, 1986, and August 1, 1986. An administrative hearing decision was entered on September 27, 1986; appellants prevailed on the majority of the issues. Both parties subsequently appealed the hearing decision to the Exceptional Children Appeals Board ("Board"). This appeal is a mandatory administrative step that must be utilized prior to the initiation of judicial action under the EAHCA. On appeal, the Board rendered a decision wholly favorable to appellants.

III.

This case presents two issues for review. The first issue concerns whether the HCPA permits an award of attorney's fees in an action where the merits of the underlying controversy have been resolved in favor of plaintiffs at the administrative level. If such an award is permitted, then the second issue concerns whether the lower court abused its discretion in denying attorney's fees to counsel because counsel are employed by a state agency.

A.

Appellants argue that the district court was correct in its holding that the HCPA allows an award of attorney's fees to plaintiffs who prevail at the administrative level. Appellants contend that New York Gaslight Club, Inc. v. Carey, 447 U.S. 54, 100 S.Ct. 2024, 64 L.Ed.2d 723 (1980), and the legislative history of the HCPA support its position. Appellees rely on North Carolina Department of Transportation v. Crest Street Community Council, Inc., 479 U.S. 6, 107 S.Ct. 336, 93 L.Ed.2d 188 (1986), and argue that the statute at issue in Crest Street, 42 U.S.C. Sec. 1988, is consistent with the HCPA and therefore the holding of Crest Street is applicable to this action. We disagree with the position adopted by appellees and find that the district court was correct in holding that the HCPA does indeed allow an award of attorney's fees to plaintiffs who prevail at the administrative level.

Section 615 of the HCPA, 20 U.S.C. Sec. 1415, establishes administrative procedures "to assure that handicapped children and their parents or guardians are guaranteed ... safeguards with respect to the provision of free appropriate public education...." 20 U.S.C. Sec. 1415(a). These administrative procedures are mandatory. See 20 U.S.C. Sec. 1415(b)(2).

20 U.S.C. Sec. 1415(e)(4)(B) states 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." It is undisputed that appellants prevailed at the administrative level. Thus, the threshold question for review is whether a mandatory administrative hearing is an "action or proceeding" within the meaning of the HCPA.

At the time of the enactment of the HCPA, the Supreme Court in Carey had interpreted the terms "action or proceeding" to include mandatory state administrative proceedings. In Carey plaintiff brought an action alleging employment discrimination pursuant to Title VII of the Civil Rights Act of 1964 ("Title VII"). As required by Sec. 706 of Title VII, plaintiff pursued an administrative remedy. A state administrative hearing was held and plaintiff prevailed. No attorney's fees were awarded. Defendants appealed.

Meanwhile, EEOC proceedings had begun and a right-to-sue letter was issued on July 13, 1977. On August 26, the Appeal Board affirmed the administrative decision. Defendants appealed. On September 30, plaintiff filed suit in the United States District Court, alleging claims under 42 U.S.C. Sec. 1981, Title VII and the thirteenth amendment. The complaint also sought attorney's fees. The Appellate Division of the New York Supreme Court unanimously affirmed the Appeal Board's determination; defendants then filed a motion to appeal to the New York Court of Appeals. The appeal was denied, and the federal action was dismissed, except for the request for attorney's fees.

The district court denied the request; however, the court of appeals reversed and the Supreme Court affirmed. In dicta, the Supreme Court noted:

In sum, we conclude that Secs. 706(f) and 706(k) of Title VII authorize a federal-court action to recover an award of attorney's fees for work done by the prevailing complainant in state proceedings to which the complainant was referred pursuant to the provisions of Title VII.

Carey, 447 U.S. at 71, 100 S.Ct. at 2034 (emphasis added). It is important to note that one factor that the Court analyzed to reach its conclusion was "the nature of the proceedings in which respondent participated, and the relationship of those proceedings to Title VII's enforcement mechanisms...." Id. at 61, 100 S.Ct. at 2029. In this regard, the Court found that the interrelated and complementary state and federal enforcement mechanisms mandated "[i]nitial resort to state and local remedies ..., and recourse to the federal forums [was] appropriate only when the State [did] not provide prompt or complete relief." Id. at 65, 100 S.Ct. at 2031-32 (citing Alexander v. Gardner-Denver Co., 415 U.S. 36, 48-50, 94 S.Ct. 1011, 1019-20, 39 L.Ed.2d 147 (1974)).

Appellees argue that the Supreme Court's decision in Crest Street is controlling. We disagree and hold that the Court's dicta in Carey is persuasive. In Crest Street the Court was confronted with the question of whether attorney's fees under 42 U.S.C. Sec. 1988 could be awarded "in a separate federal action [brought] not to enforce any of the civil rights laws listed in Sec. 1988, but solely to recover attorney's fees." Crest Street, 107 S.Ct. at 337-38. ¹ The Court held that under 42 U.S.C. Sec. 1988's plain language and legislative history, only a court in an action to enforce one of the civil rights laws listed in the statute could award attorney's fees. Id. at 340-41.

We find that Crest Street is distinguishable from Carey and the present action. In Crest Street, the Court held that litigants who seek to enforce their rights under Title VI and who prevail in an administrative proceeding cannot bring an action solely for attorney's fees under 42 U.S.C. Sec. 1988. We note that Title VI involves an enforcement scheme that does not mandate that claimants initially pursue their grievances at the state or local level. However, in Carey the Court specifically found that one of the reasons it concluded that prevailing plaintiffs at the state level could recover attorney's fees in a separate federal court action was because of the mandatory, complementary nature of the state and federal enforcement scheme under Title VII. Carey, 447 U.S. at 65, 100 S.Ct. at 2031. Similarly, in the case at bar the administrative proceedings that a...