Ida D. v. Rivera, CIVIL ACTION No. 17-5272
| Decision Date | 19 November 2018 |
| Docket Number | CIVIL ACTION No. 17-5272 |
| Parties | IDA D., et al., Plaintiffs, v. PEDRO RIVERA, et al., Defendants. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Memorandum1
Plaintiffs Ida and Richard D., individually and on behalf of their child J.D., and Plaintiff Cynthia L., individually and on behalf of her child J.R., bring this action against Defendants Pedro Rivera2 and the Commonwealth of Pennsylvania Department of Education (collectively, "PDE") and Khepera Charter School ("Khepera"). Plaintiffs are parents who entered into resolution agreements on behalf of J.D. and J.R with Khepera, pursuant to the Individuals with Disabilities Education Act ("IDEA"), 20 U.S.C. § 1400, et seq. Plaintiffs did this to resolve claims that Khepera did not provide them with a Free and Appropriate Public Education ("FAPE"). Since entering into these agreements, Khepera has experienced financial difficulties and breached the agreements. This litigation raises questions concerning how and against whom—Khepera and/or PDE—these resolution agreements should be enforced when the local charter school no longer has the resources to satisfy its agreed upon obligations. Plaintiffs move for summary judgment against PDE and Khepera. PDE moves for summary judgment against Plaintiffs.
For the reasons below, I will grant in part and deny in part Plaintiffs' motion for summary judgment against Khepera. Additionally, I will grant in part and deny in part the cross-motions for summary judgment of PDE and Plaintiffs.
Before relaying the facts of this case, a brief overview of the IDEA is necessary. "The IDEA protects the rights of disabled children by mandating that public educational institutions identify and effectively educate those children, or pay for their education elsewhere if they require specialized services that the public institution cannot provide." P.P. ex rel. Michael P. v. W. Chester Area Sch. Dist., 585 F.3d 727, 735 (3d Cir. 2009). The IDEA provides that all states receiving federal education funding must guarantee all children with disabilities a FAPE. 20 U.S.C. § 1412(a)(1). The IDEA defines a FAPE as special education and related services that: "(A) have been provided at public expense, under public supervision and direction, and without charge; (B) meet the standards of the State educational agency; (C) include an appropriate preschool, elementary school, or secondary school education in the State involved; and (D) are provided in conformity with the individualized education program . . . ." 20 U.S.C. § 1401(9).
"The IDEA divides responsibilities for ensuring access to FAPE between State Educational Agencies ("SEAs") and Local Educational Agencies ("LEAs")." Lejeune v. Khepera Charter Sch., 327 F. Supp. 3d 785, 789 (E.D. Pa. 2018) (citing 20 U.S.C. § 1413). To receive federal funding under the IDEA, a state must submit a plan to the Secretary of Education with policies and procedures that ensure that the state is complying with the IDEA and providing students with a FAPE. 20 U.S.C. § 1412. In turn, the SEA makes funding available to LEAs that comply with the SEA's plan under the IDEA. 20 U.S.C. § 1413. "The SEA is responsible for general supervision of the implementation of the IDEA in the state, while the LEA is responsible for directly providing educational programming." Lejeune, 327 F. Supp. 3d at 789 (citation omitted). In Pennsylvania, charter schools are considered LEAs that "assume the duty to ensure that a FAPE is available to a child with a disability in compliance with IDEA and its implementing regulations." 22 Pa. Code § 711.3(a).
An LEA provides a FAPE to a child with disabilities "by designing and implementing an individualized instructional program set forth in an Individualized Education [Program] ("IEP"), which 'must be reasonably calculated to enable the child to receive meaningful educational benefits in light of the student's intellectual potential.'" P.P. ex rel Michael P., 585 F.3d at 729-30 (quoting Shore Reg'l High Sch. Bd. Of Educ. V. P.S., 381 F.3d 194, 198 (3d Cir. 2004). However, an SEA may be responsible "to provide special education and related services directly to children with disabilities residing in the area served by that local educational agency . . . if the State educational agency determines that the local educational agency . . . is unable to establish and maintain programs of free appropriate public education." 20 U.S.C. § 1413(g)(1)(B).
"To the extent a school district fails to provide a student with a FAPE, a parent may file a due process complaint on behalf of his or her child, with a subsequent hearing held before an administrative hearing officer." G.L. v. Ligonier Valley Sch. Dist. Auth., 802 F.3d 601, 608 (3d Cir. 2015) (citing 20 U.S.C. §§ 1415(b)(6), (f)(1)(A)). "A party dissatisfied with the result of that hearing may then file an action in state or federal court." Id. (citing 20 U.S.C. § 1415(i)(2). The IDEA, however, encourages parents to resolve their disputes prior to any due process hearing. See 20 U.S.C. § 1415(e),(f)(1)(B). Before a due process hearing occurs, the IDEA provides parents with the option of mediation and requires them to participate in a mandatory resolution session. Id. "In the case that a resolution is reached to resolve the complaint" during the resolution session, "the parties shall execute a legally binding agreement that is . . . enforceable in any State court of competent jurisdiction or in a district court of the United States." 20 U.S.C. § 1415(f)(1)(B)(iii).
Khepera is a charter school that is an LEA within the meaning of the IDEA. Khepera operates pursuant to a charter authorized by the School Reform Commission ("SRC") of the School District of Philadelphia. Khepera's current charter term expires on June 30, 2019. On December 14, 2017, the SRC voted to revoke Khepera's charter at the end of the 2017-18 school year. On February 20, 2018, Khepera filed a petition to appeal the revocation to the State Charter School Appeal Board. During the appeal process, Khepera's charter remains in effect. As of March 31, 2018, there were 395 students enrolled in Khepera. Khepera is still open and operating. Khepera will not be in existence beyond June 30, 2019 (if not sooner), however, because it is not seeking a renewal of its charter. Khepera's Resp. 6, ECF No. 54. Moreover, as of the date of briefing, Khepera had not offered employment contracts to teachers or administrators for the 2018-19 school year, nor had it made final offers of enrollment for any student for the 2018-19 school year
Khepera received federal financial assistance through the 2016-17 school year, but federal funds allocated for the 2017-18 school year have not been paid to Khepera. Rather, the federal IDEA funds allocated to Khepera for the 2017-18 school year were reallocated with Khepera's approval to PDE. These funds were given to PDE to make compensatory education funds available to certain Khepera special education students.
Khepera is experiencing financial difficulties. As of April 18, 2018, it owed approximately $1,400,000 to creditors. Additionally, Khepera had $250,000 in outstanding payroll obligations, and $200,000 in outstanding legal liability related to IDEA claims. It had approximately $15,000 in cash-on-hand, and the fair market value of its physical assets was less than $50,000. Khepera has stopped paying some of its debts in the ordinary course of business. It has laid off employees and ended school early for its students due to financial difficulties. Khepera's total financial liabilities exceed its total financial assets; this has been the case since fiscal year 2016.
J.D. has been identified as a student with an intellectual disability, speech communications deficits, and visual-motor deficits, related to a diagnosis of Down Syndrome. By reason of these disabilities, J.D. is eligible for and in need of special education and related services pursuant to the IDEA. J.D. began attending Khepera as a kindergarten student during the 2012-13 school year. J.D. is currently enrolled in Khepera, but he attends Our Lady of Confidence Day School ("OLC").
In 2015, J.D.'s parents, Ida and Richard D., entered into a resolution agreement with Khepera to resolve their disputes regarding J.D.'s education ("J.D. Agreement"). The J.D. Agreement was reached in the context of a resolution session provided for under the IDEA. See 20 U.S.C. § 1415(f)(1)(B). Under the J.D. Agreement, Khepera agreed to, in relevant part:
J.R. has also been identified as a student with an intellectual disability and visual-motor deficits, related to a diagnosis of Down Syndrome. By reason of these disabilities, J.R. is eligible for and in need of special education and related services pursuant to the IDEA. J.R. began attending Khepera as a kindergarten student during the 2014-15 school year. J.R. is currently enrolled in Khepera, but he attends OLC.
In 2016, J.R.'s parent, Cynthia L., entered into a resolution agreement with Khepera to resolve her dispute regarding J.R.'s education ("J.R. Agreement"). The J.R. Agreement was reached in the context of a resolution session provided for under the IDEA. See 20 U.S.C. § 1415(f)(1)(B). Under the J.R. Agreement, Khepera agreed to, in relevant part:
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